1. Planning, Programming, Budgeting, and Execution (PPBE) and Congress
LOA University:
Planning, Programming, Budgeting, and Execution (PPBE)
and
Congress
I’m __________ and I’ll be discussing PPBE with you today. First, a little about my background…….
PPBE is one of the three major decision support systems in the weapon system acquisition business. The other two, JCIDS and the acquisition management system, have already been discussed.
Roberta Tomasini
Professor of Financial Management
Defense Acquisition University

2. PPBE and Congress Outline
PPBE Phases
PPBE Process and Schedule
Congressional Enactment
This is the outline for the PPBE session.
There are couple of overview charts…
There are a few charts on the PPBE building blocks…..namely, FYDP (the Future Years Defense Program, MFP (Major Force Programs), and program elements.
This will be followed by the timing, key players, and key documents in the PPBE process.
Lastly, there are charts of the schedule for this PPBE cycle, which is FY10-15.

3. PB 17 vs Current Caps and Prior Budgets
(Dollars in Billions)
$610
$590
$570
$550
$530
$510
Original BCA Caps
$490
$470
FY10
FY11 FY12 FY13
FY Actuals
FY 2015 PB
Current Caps
FY14 FY15
FY16
FY17
FY18 FY19
FY20
FY21
FY 2013 PB/DSG
FY 2017 PB
FY 2016 PB
Original BCA Caps

4. How we hit the lower FY 2017 topline
(Dollars in Billions)
$10
$+5.0B $5
OCO Relief
$-21.8B
$-16.8B $0
Fuel Savings,
$-2.8B
Net Cut to Base Budget
FY 2017
-$5
Inflation Savings,
$-2.4B
New Efficiencies,
$-0.4B
Gross BBA cut
-$10
Net Program changes,
$-11.2B
-$15
-$20
-$25
Comparison to FY 2016 PB Plan for FY 2017

5. Cuts to hit the lower FY 2017 Topline
We will procure fewer weapons systems than planned:
9 AH-64 Apache helicopters (Army)
24 UH-60 Blackhawk helicopters (Army)
5 F-35 A Joint Strike Fighters
2 V-22 aircraft (Navy)
3 C-130J aircraft (Air Force)
4 LCAC Service Life Extension Programs (Navy)
77 Joint Light Tactical Vehicles (Marine Corps)
Aircraft procurement accounts reduced $4.4 billion
Shipbuilding reduced $1.75 billion
Other procurement accounts reduced $2.6 billion
Reduce plans for new military construction projects by $1.1 billion
Comparison to FY 2016 PB Plan for FY 2017

6. Military Construction and Family Housing,
FY 2017 Base Funding
By Appropriation Title
By Military Department
Military Construction and Family Housing,
$7.4
Military Personnel,
$135.2
Defense Wide
$94.5
RDT&E,
$71.4
Army
$122.9
Procurement,
$102.5
Air Force
$151.1
Navy
$155.4
O&M,
$205.8
FY 2017 Request: $523.9 billion

7. Military Construction and Family Housing,
FY 2017 OCO Funding
By Appropriation Title
By Military Department
Military Construction and Family Housing,
$7.4
Military Personnel,
$3.5
RDT&E, $.3
Procurement,
$9.5
Defense Wide
$8.5
Army
$25.0
Air Force 15.8
O&M,
$45.0
Navy
$9.5
FY 2017 Request: $58.8 billion

8. FY 2017 Total Base and OCO Funding
By Appropriation Title By Military Department
Military Construction and Family Housing,
$7.6
Defense Wide
$102.9
RDT&E,
$71.7
Military
Personnel,
$138.5
Army
$148.0
Procurement,
$112.0
Air Force
$166.9
Navy
$164.8
O&M,
$250.9
FY 2017 Request: $582.7 billion

9. Secretary Carter, February 2, 2016
Secretary Carter’s Priorities for This Budget
Given the current level of budget resources ($800B in Budget Control Act cuts), we
can’t reduce all risk. Instead, the Department must:
Prioritize conventional deterrence against our most advanced adversaries
Focus more on the shape than the size of the force
Seek the best balance between force structure (size), modernization (capability) and
readiness
Emphasize lethality and capability of the force rather than size
Emphasize posture rather than presence
Emphasize innovation
Attracting, retaining, and managing talent (Force of the Future)
Update war plans and operational concepts
Pursue “offset” technologies
Institutional efficiency and reform
“Today’s security environment is dramatically different … and it
requires new ways of thinking and new ways of acting”
Secretary Carter, February 2, 2016

10. FY 2017 Force Structure
Force structure assessed sufficient to execute the strategy
Major elements include:
14 SSBNs, 450 ICBMs
96 Operational Bombers (154 total)
287-ship Navy with 11 Carriers in FY 2017
(Building to a 308-ship Navy)
54+1 Tactical fighter squadrons
990k Army Total End Strength (460k Active)
(30 Active BCTs in FY 2017)
221k Marine Corps Total End Strength (182k Active)
FY 2017 Force Structure Sufficient to Execute Strategy

11. PPBE Phases Planning (OSD Policy) Programming (OSD CAPE)
Assess capabilities / review threat
Develop guidance
Programming (OSD CAPE)
Turn guidance into achievable, affordable packages
Five-year program (Future Years Defense Program)
Budgeting (OSD Comptroller)
Test for efficient funds execution
Scrub budget year
Prepare defensible budget
Execution Review (concurrent with program/budget review)
Develop performance metrics
Assess actual output against planned performance
Adjust resources to achieve desired performance goals
Brief Overview of PPBE phases: There are three phases: planning, programming and budgeting. The major difference is that we now have a review of program execution/program performance concurrent with the program and budget review (NOT Army’s PPBES)
Planning: QDR 2001 shifted the basis of defense planning from a "threat-based" model that dominated thinking in the past to a "capabilities-based" model
Capabilities-based model:
– Focuses on how an adversary might fight rather than specifically who the adversary might be or where a war might occur.
– Recognizes that it is not enough to plan for large conventional wars in distant theaters. Instead, the United States must identify the capabilities required to deter and defeat adversaries who will rely on surprise, deception, and asymmetric warfare to achieve their objectives.
Strategic Planning Guidance (SPG)/Guidance for the Development of the Forces (GDF) and Joint Programming Guidance (JPG): Marching Orders for next phase
Programming:
Components develop Program submissions based on guidance developed in the Planning phase
OSD, OMB & Joint Staff review for priority, affordability
Info captured in the FYDP
Budgeting:
Components develop budget submissions
OSD(C) reviews budget inputs, with emphasis on funds execution
Ultimate aim, to submit a defensible President’s Budget thru OMB to Congress
Execution Review
Overlays both Program Review and Budget Review processes
In past emphasis on input, “how much to spend on each program”; now emphasis is on output, “what are we getting for our money?”
Using performance metrics to examine program execution
Let’s look at the years reviewed in the PPBE process…

12. Future Years Defense Program (FYDP)
Computer Database Maintained by OSD CAPE
Contains Approved Force Structure and Resources for all Defense Programs
Updated 3 Times this PPBE Cycle:
Program Objectives Memorandum (POM) – Jun
Budget Estimate Submission (BES) Dec
President’s Budget (PB) - TBD
Reflects PY, CY, BY, + 4 Out-Years
3 additional years for force structure only
Component PPBE databases
Navy: PBIS
Air Force : ABIDES
Army: PROBE
Computer database maintained by Dir (PA&E)
Summarizes forces, equipment, and resources
Comprises one prior year (PY), the current year (CY), the “biennial” budget years (BY1 and BY2), four additional years for resources (POM) and three additional years for force structure only
It is a “living” record reflecting the decisions made in the various phases of PPBE
Updated two times per year to reflect the
POM/BES (Aug/Sep), and
President’s Budget (Jan/Feb) submissions
Why two budget years?
The process was intended to produce a two year budget. However, Congress appropriates one year at a time. So, we have “off-years/odd-years”. Originally, OSD and the Components were expected to “tweak” the 2nd year of the President’s Budget/POM as part of an off year effort
APOM by the Air Force
Mini-POM by the Army
Program Review by the Navy
However, there have been changes in this off-year/odd-year process, starting in calendar year 2003.
TRANSITION: Let’s take a look at how the FYDP is structured 16 17 18 19

13. PPBE Process – Planning Phase Lead by USD (P)
YEAR 1
YEAR 2
Elapsed Time: Months
FEB/MAR
APR/MAY
President
National Security Council
CIA/DIA/JCS/OSD
CIA – Central Intelligence Agency
COCOM – Combatant Commander
CPR – Chairman’s Program Recommendation
DIA – Defense Intelligence Agency
DPG – Defense Planning Guidance
JCS – Joint Chiefs of Staff
NDS – National Defense Strategy
NMS – National Military Strategy
NSS – National Security Strategy
OSD – Office of the Secretary of Defense
QDR – Quadrennial Defense Review
SCMR – Strategic Choices and Management Review
USD(P) – Undersecretary of Defense (Policy)
Planning Phase focus:
Threat vs. Capabilities
Update strategy
Guidance for programming &
budgeting
NSS
Every
4 Years
Guidance for POM/BES submission and OSD Integrated Program/Budget Review
OSD
NDS
QDR
DPG
New slide - Removed reference to SPRs
Level
With one exception, this slide depicts the “new” annual Planning phase that is to be used for the PPBE cycle starting in Calendar Year 2010 and which will, ultimately produce the Defense portion of the President’s Budget for FY2012. The one exception to the annual process is the QDR which is conducted in the 1st year of an administration and submitted to Congress in the 2nd year.
The DPPG replaces the GDF (Guidance for Development of the Force) and the JPG (Joint Programming Guidance) and is signed by the SECDEF.
The FEAs are intended to address major issues for the SECDEF early in the POM/BES review process. For the Calendar Year 2010 process the SECDEF has selected eight major issues.
The Director, CAPE is the Executive Secretary for the FEAs and tri-chairs the process with the VCJCS and the USD(P). Issues nominated but not selected for the FEA review process will be addressed by the DEPSECDEF through the Deputy’s Advisory Working Group (DAWG).
JCS
NMS
Level
CPR
(JCS,
COCOMs,
SERVICES)

14. FY 18–22 Program/Budget Review Schedule
Feb Fiscal Guidance
27-30 Jun Component POM Briefs to 3-Stars
30 Jun Component POM Submissions Due (Line item/PE level of detail)
29 Jul Issue Nominations Due
15 Aug Issue Nomination Disposition
15 Aug–10 Nov 16 Program Review
10 Nov PDMs
1 Dec BES due to OSD
1 Dec Budget Justification Material due to OSD
Dec 16 – Jan Budget Review
TBD PBDs
TBD Budget Lock
TBD President’s Budget Released
Source: Joint CAPE & USD(C) memo dated 26 Feb 2016

15. Notional Enactment Process and Timeline
President’s Budget to
Congress
Notional Enactment Process and Timeline
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
HBC
HEARINGS
FLOOR
BUDGET
RESOLUTION
MARKUPS
CONCURRENT
RESOLUTION
CONF
HEARINGS
SBC
MARKUPS
FLOOR
HASC
HEARINGS
MARKUPS
FLOOR
FLOOR
Authorizations
Act
AUTHORIZATION
CONF
FLOOR
SASC
HEARINGS
MARKUPS
FLOOR
HAC
HEARINGS
MARKUPS
FLOOR
FLOOR
Appropriations
Act
APPROPRIATION
CONF
HEARINGS
MARKUPS
FLOOR
FLOOR
SAC
Version 3.4,

16. Backups

17. Key PPBE Action Officers
AIR FORCE: Program Element Monitor ( PEM )
Works for Air Force SAE (SAF/AQ)
Each Air Force program element is assigned a PEM
Interfaces with Using Commands, Material Command, Air Staff, Air Secretariat, OSD, and sometimes Congress
A PEM may be responsible for more than one program element
ARMY: Department of Army Systems Coordinator (DASC)
Works for Army SAE (ASA/ALT)
Interfaces with Using Commands, Developing Commands, Army Staff, Army Secretariat, OSD, and Congress
NAVY: Requirements Officer ( RO )
Works for resource sponsor on OPNAV staff (e.g., Navy Aviation resource sponsor is N98)
Interfaces with Using Commands, Systems/Developing Commands, OPNAV Staff, Navy Secretariat, and OSD
Importance of Headquarters Action Officers in the PPBS process
Each service does it somewhat differently with different players. AF = PEMs, Navy = ROs, Army = DASCs
Important point about AOs is that it is absolutely essential the PMO stay connected to, and maintain open lines of communication with the PPBS AOs . This is especially true during POM build when Services are RESOURCING and prioritizing programs. Though it is important that PMO’s know what AOs are up to, it is equally important that PMO’s ensure that AOs know what is going on in their programs and keep them up to date and informed. PPBS Action Officers field questions about programs from Congress, OSD, Users, etc. on a regular basis--and they don’t always have time to confer with the PMO.

18. FY 2017 budget – Some Significant Items
USD (Comptroller)
DAU – EPMC 15-05
FY 2017 budget – Some Significant Items
$12.5 billion (2.4% of TOA)
• 63 F-35 - $10.5 billion: F-35A (43); F-35B (16); F-35C (4) (FYDP: $59B)
10 new warships - $20.2 billion (2 SSN; 2 DDG; 2 LCS; 1 LHD; 3 others)
Cyber capabilities - $6.8 billion (up from $5.5B)
Rotary Lift aircraft - $6.7 billion
Unmanned Systems - $3.2 billion
Long Range Strike Bomber - $1.4 billion ($12.1 billion in the FYDP)
Space Programs - $7.0 billion (zero satellites)
Ground Vehicles - $4.1 billion
Ammunition - $5.0 billion (up from $3.9 billion)
Precision Guided Missiles - $2.3 billion
Ballistic Missile Defense - $9.1 billion $7.5 billion)
Ohio Replacement Program - $1.9 billion ($13.2 billion in the FYDP)
Nuclear Enterprise - $6.1 billion (of which $1.6 billion went to NNSA)

19. PB 2017 Focus on Technology Innovation
Funds science and technology to further innovation (FY 2017, $12.5 billion; FYDP, $65.0 billion)
Creates new connections with commercial sector
Establishing experimental defense innovation units
IN-Q-TEL
Funds innovative “offset technologies” to bolster conventional deterrence (FYDP, $18B). Examples:
Assured positioning, navigation and timing
Large displacement unmanned undersea vehicles
High speed strike weapons
Arsenal plane
Hypersonics
Low-cost unmanned systems
High-Velocity Projectiles from “powder guns”
DoD needs to accelerate delivering new capabilities

20. Major Investments in the FY 2017 Budget
(Quantities/Dollars in Billions)
Aircraft
FY 2017
FYDP
F-35 Joint Strike Fighter (USAF, USMC, USN)
63/$10.1
404/$56.3
F/A-18 (Navy)
2/$0.4
16/$2.2
KC-46 Tanker Replacement (Air Force)
15/$3.1
75/$15.7
AH-64E Apache helicopters (Army)
52/$1.1
275/$5.6
MQ-9 Reaper
24/$1.1
24/$3.9
Shipbuilding
Virginia Class submarines (Navy)
2/$5.2
9/$29.4
DDG-51 AEGIS Destroyers (Navy)
2/$3.4
10/$18.3
Littoral Combat ships (Navy)
2/$1.3
7/$5.6
Space
Evolved Expendable Launch Vehicle (Air Force)
5/$1.8
23/$9.4
Global Positioning System (Air Force)
--/$0.8
10/$5.6
Requires Funding in 5-Year Plan + FY 2017 OCO
*Includes Base + OCO Procurement and RDT&E Funding

21. Resource Allocation Process Overlap
CY14
CY15
CY16 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
FY14
Cycle
Execution
2nd Yr
3rd Yr
FY 14 and prior
FY15 Cycle
Enactment
Execution
2nd Yr
3rd Yr
FY 15
FY 15 and prior PB
FY16
Cycle
Planning
Program/Budgeting
Enactment
Execution
2nd
FY 16-20
DPG
FY POM
FY 16 BES
FY 16
FY 16 and prior PB
FY17
Cycle
Planning
Program/Budgeting
Enactment
Exec
FY DPG
FY POM
FY 17 BES
FY 17
FY17 & prior PB
FY18
Cycle
Planning
Program/Budgeting
FY DPG
FY POM
FY 18 BES
DPG – Defense Planning Guidance
PB – President’s Budget
POM – Program Objectives Memorandum
BES – Budget Estimate Submission

22. Bipartisan Budget Act of 2015
FY 16 (Base) Revised Security Revised Non-Security
Current Law (BCA 2011) $523B $493B
Revised Cap (BBA 2015) $548B $518B
Delta $25B +$25B
FY 17 (Base)
Current Law (BCA 2011) $536B $504B
Revised Cap (BBA 2015) $551B $519B
Delta $15B +$15B
Total Federal Govt Discretionary Base increase $80B (FY 16 $50B; FY 17 $30B)
Defense
FY 16 Base -$12B (PB 16 $534B - $522B BBA 2015)
FY 16 OCO +$7B (PB 16 $52B - $59B BBA 2015)
FY 16 Net $5B
FY 17 Base -$21B (PB 16 $547B - $526B BBA 2015)
FY 17 OCO +$2B (PB 16 $57B - $59B BBA 2015)
FY 17 Net -$19B

23. Bipartisan Budget Act of 2015 Cont.
Debt ceiling suspended until March 2017
Revenue sources:
Tightening tax rules for business relationships
Selling off crude oil reserve
Auctioning off government controlled wireless spectrums
Spending adjustments
Make changes to Medicare and Social Security

24. OSD/OMB Budget Hearings
PPBE – Program/Budget Submission/Review
Yr 2 JUL SEP
OCT
NOV
DEC
Year 3 JAN/FEB
DoD
“Large Group”
BES – Budget Estimate Submission
CAPE – Cost Assessment & Prgm Evaluation
COCOM – Combatant Commander
CPA – Chairman’s Program Assessment
DMAG – Deputy’s Management Action Group
FYDP – Future Years Defense Program
MBI – Major Budget Issues
OMB – Office of Management and Budget
PB – President’s Budget
POM – Program Objectives Memorandum
RMD – Resource Management Decision
SLRG – Senior Leader Review Group
3-Star Group
OSD/
CAPE
Issue
Resolution
POM
Issue
Teams
SECDEF/DEPSECDEF
SLRG & DMAG
CPA
JCS
Components/
Defense
Agencies
Program Review focus:
Compliance with DPG
RMDs
BES
USD(C) &
OMB
Adv Questions/
OSD/OMB Budget Hearings
MBI
This slide shows the FEAs, initiated in the previous chart (Planning Phase) continuing to be conducted into the Integrated Program/Budget Review time period. The issues included in the FEAs are to be resolved through the Large Group (similar in make-up to the Defense Senior Leadership Conference, as listed in DoD D , DoD Senior Governance Councils). The output of the Large Group, as well as that of the DAWG-addressed issues that were not selected by the SECDEF for FEAs, is provided to the SECDEF/DEPSECDEF. All other POM issues are addressed under the existing process led by the CAPE.
Asterisks (TBD) indicate that the organizations may be re-named or realigned, or that activities (MBI and reclama process) may or may not be conducted. Asterisks were placed based on feedback from OSD POCs.
The results of the review process for both the BES and the POM will be documented, as appropriate in RMDs. It is expected that an RMD will have two annexes – one for program-related decisions and the other for budget-related decisions.
DoDD specifically addresses the membership of the Defense Senior Leadership Conference, the Senior Leader Review Group, and the Deputy’s Advisory Working Group. The membership of the “Small Group”, the “Large Group”, and the “Large Group Plus” has been referred to in the media but not codified as of May 2010. PB
FYDP
Update
FYDP
Update
FYDP
Update
Services / PEO / PM
Answer / Reclama
Budget Review focus:
- Pricing Phasing
- Funding policies - Budget execution

25. FY 2017 Budget Supports Planned force structure levels
Service readiness recovery plans
A safe, secure and reliable nuclear force at New START levels
Force of the Future initiatives
Modernization:
DDG modernization and SSN upgrades
Surface ship advanced munitions and sensor technologies
Investment in space capabilities
Hypersonic research and development
Cyber tools for Combatant Commanders
Army aviation modernization plan
Marine Corps vehicle modernization plan
Key reform proposals (e.g., TRICARE)

26. PPBE Overview (3/3):“Will Cost” vs “Should Cost” USD (AT&L) and USD(C) 22 Apr 11 Memo
Used for programming and budgeting
Used for acquisition program baselines (APBs)
Used for all reporting requirements external to DoD
Should Cost
Scrutinize every element of government and contractor costs
3 ways to develop should cost estimates:
Bottoms –Up estimate
Determine specific discrete and measurable items
Use competitive contracting and contract negotiations to identify should cost savings (old FAR definition)

27. PPBE Building Blocks (3/3) Program Elements
A - ARMY
N - NAVY
M - MARINE
F - AF
D - OSD
C - MDA
E - DARPA
J - JCS
S - DLA
BB - SOCOM
DBD - DFAS
PROGRAM ELEMENT (PE): Smallest aggregation of resources normally controlled by OSD
- PE NUMBER: Used to track and identify resources; seven digit number followed by an alphabetic suffix
PROGRAM 2 ( GENERAL PURPOSE FORCES )
A - Aircraft Engine CIP
N - F/A-18 Squadrons
F - AMRAAM
PROGRAM 3 ( C3, INTEL & Space)
A - Joint Command and Control Program (JC2)
N - Aerial Common Sensor (ACS)
F - NAVSTAR GPS (User Equipment)
Program Elements are the lowest level of detail in the FYDP database.
Program Elements are a tool OSD uses to track resources by program, system, or function so they can see how much is being spent on them.
PEs can be very broad, containing several programs. They also can be very specific, covering a single component of a weapon system. It all depends on the visibility OSD wants to maintain.
These are some examples of Program Elements (PEs), use F-22.
Seven digit code followed by a letter suffix designating the applicable component or agency.
The first two digits indicate the MFP to which the PE belongs. Although a PE is limited to a specific MFP, it is not in most cases, limited to a single Appropriation.
All programs and all resources have PEs. The entire FYDP database can be listed by PE. There are a few thousands of them.
Most acquisition programs have two program elements: one that begins with “06” for the development effort and one that begins with something other than “06” for the production and O&S effort.
Ref: DoD H

28. PPBE Building Blocks (2/3) Future Years Defense Program (FYDP)
DOD APPROPRIATIONS
Military Construction
Military Personnel
RDT&E
Procurement
Ops & Maintenance
Other D E F O A
Strategic Forces
(1) T I A
General Purpose Forces
(2) R G H E E
Command, Control, Comm, Intell & Space
(3) N F N R
MAJOR FORCE PROGRAMS A A
Mobility Forces
(4) O C R V I
Guard & Reserve Forces
(5) R M Y C E
Teaching Points:
Data is divided into 11 “Major Force Programs” (MFP) for DoD internal management uses during the planning and programming phases of PPBE.
Data is also divided into five Appropriation categories (plus one catch-all “other” category, which simply represents the various other appropriations that exist -- although we in the acquisition community are not normally very interested in their details) for use by Congress when reviewing budget requests and enacting budget authority.
Data is also divided into service or component categories.
Important to note here that the data in any single category (for example: RDT&E, Army or Strategic Forces) from any one of the three major divisions (i.e., Appropriation, Component or MFP) can contain data from any or all of the remaining two major divisions (for example: Strategic Forces could contain data from all five appropriations and all four Components).
The lowest level of detail in the FYDP database is the program element, which is explained on the next chart…..
Research and Development
(6) Y E S
Central Supply & Maintenance
(7)
Training, Medical, & Other Personnel Activities
(8)
Administration and Associated Activities
(9)
DOD COMPONENTS
Support of Other Nations
(10)
Special Operations Forces
(11)

29. PPBE Overview (1/8) Three Major DoD Management Systems
Planning,
Programming,
Budgeting and
Execution
QDR
Joint Capabilities
Integration and
Development
System (JCIDS)
Defense
Acquisition
System
-DoD has three Decision-making Support Systems
-1. AMS (Acquisition Management System)
-- how we acquire weapon systems
-- primary document is DoDI
-- also referred to as little “a” acquisition
-- event driven process
2. JCIDS
--determines what is needed
-- primary document is CJCSI 3170, which is capabilities-based with more emphasis on jointness
-3. PPBE
-- resource allocation in DoD – providing warfighter with best mix of forces, equipment and support attainable under fiscal constraints
-- increased emphasis on using performance metrics to focus on output, return on investment
-- Calendar driven
-QDR: the major statement of defense strategy and business policy
--MID 913 states that QDR is the single hierarchical link integrating all internal decision processes
-JCIDS and AMS are event-driven; PPBE is calendar-driven, backing off from the PB
-All three circles form “Big “A” Acquisition

30. Senior Leader Review Group
AKA “The Large Group”
Secretary of Defense
Deputy Secretary of Defense
Secretary or Under Secretary of the Army
Secretary or Under Secretary of the Navy
Secretary or Under Secretary of Air Force
Chairman Joint Chiefs of Staff
Vice Chairman Joint Chiefs of Staff
Under Secretary of Defense (AT&L)*
Under Secretary of Defense (Policy)*
Under Secretary of Defense (Comptroller)
/Chief Financial Officer*
Under Secretary of Defense (Intelligence)*
Under Secretary of Defense (P&R)*
Commandant or Assistant Commandant
of the Marine Corps
Director of Administration and Management
Chief or Vice Chief of Staff of the Army
Chief or Vice Chief of Naval Operations
Chief of Staff or Vice Chief of the Air
Force
General Counsel
ASD (Legislative Affairs)
ASD (Networks & Information
Integration/Chief Information Officer
ASD for Public Affairs
Director, Cost Assessment and Program
Evaluation
Director, Joint Staff
Deputy Chief Management Officer
Chief, National Guard Bureau
This is the membership of the Senior Leader Review Group, chaired by SecDef.
* Or Principal Deputy

31. OSD Budget Review - Micro Level
Phasing
Development to Production (Concurrency)
Schedules: Acq Milestones, Testing, Contract Award
First/Fourth Quarter new starts are at risk
Pricing
Basis of Estimates for programs and Cost Exhibits
Contract data
Inflation, Learning curves, Production rates, Unit costs
Policy - Annual, Incremental and Full funding
Execution - likelihood budget request can be executed
Historical (3-5 years) track record
Obligation Rates, Expenditure Rates
Availability of prior year funds for budget year efforts

32. Defense Appropriations “Colors of Money”
Military Personnel (MILPERS)
Active & Reserve Forces
Operation & Maintenance (O&M)
(civilian Salaries, supplies,
spares, fuels, travel, etc…)
Environmental Restoration
Former Soviet Union Threat
Reduction
Overseas Humanitarian,
Disaster, & Civic Aid
Procurement
Aircraft
Missiles
Weapons
Weapons & Tracked Combat
Vehicles
Ammunition
Other Procurement
Shipbuilding & Conversion
Marine Corps
Defense wide procurement
National Guard & Reserves
Research, Development, Test &
Evaluation (RDT&E)
Basic Research
Applied Research
Advanced Technology Development
Advanced Component Development
& Prototypes
System Development & Demonstration
RDT&E Management Support
Operational Systems Development
Military Construction (MILCON)
Facilities
Family Housing
Base Realignment & Closure (BRAC)
Other
Defense Health Program
Chemical Agents & Munitions
Destruction
Drug Interdiction & Counter-Drug
Activities
Joint Improvised Explosive Device
Defeat Fund
Rapid Acquisition Fund
Office of the Inspector General
RDT&E
PROC
MILPERS
O&M
MILCON
Teaching Point:
In the unlikely case the term “colors of money” is not familiar. This also shows a break out of the major appropriations.
The different RDT&E budget categories are also referred to as different colors of money by some.

33. DoD Budget Overview (1/4) FM Scope: From Requirement to Capability
Planning, Programming,
Budgeting and Execution
Life Cycle
Cost
Annual
Funding
Cost
Analysis
Estimate
ICE
Funding
Policies
Full
Funding (Exceptions)
FYDP DPG POM RMD
MFP PE BES
CAIV
CCA
Fiscal
Environment
Incremental
Funding
POE
AoA
Congressional
Enactment
HAC HASC HBC
SAC SASC SBC
President’s
Budget
Budget
Resolution
Authorization
&
Appropriation
Laws
This chart is intended to show how we get from “Requirement” to “Capability” from a Financial Management perspective…..
Starting with the lower left cloud, “Operational Concept”, as this is where it all starts for any discipline in acquisition. Operational Concept is the same as JCIDS plus. It includes the capability documents generated through the JCIDS process as well as a capabilities- based analysis and all acquisition programs have an acquisition program baseline (APB), which is a signed document between the program manager and the milestone decision authority in the acquisition chain of command. The agreement is on cost, schedule and performance parameters for a specific program.
Operational concept leads to the first major area of Financial Management (FM), “Cost Analysis”. This includes doing a cost estimate, which is the foundation for the rest of the FM process.
The second major area of FM is “Funding Policies”. This involves taking the cost estimate and turning it into a budget. Understanding funding policies is an important part of developing the budget.
The third major area of FM is “PPBE”. This is the DoD process for allocating resources. We take a budget and submit it up the chain to get buy-in from our service/agency and OSD. This session will focus on this area.
The end of the PPBE process is the president’s budget submission to Congress. This leads to the fourth area of FM, “Congressional Enactment”.
The end of “Congressional Enactment” is the Authorization and Appropriation laws, which leads to the fifth and final area of FM, “Budget Execution”. Budget execution relates to actual appropriated funds.
Now let’s focus on PPBE.
Acquisition Program Baseline
Operational
Concept
Force Structure
Modernization
Operational Capability
Readiness
Sustainability
Feedback
Commitment Reprogramming
Capabilities-Based
Assessment
Capability Docs
Budget Authority Obligation Expenditure Outlay
Budget
Execution