June 2003 Defense Acquisition University Planning, Programming, Budgeting and Execution (PPBE) Business, Cost Estimating, & Financial Management Capital

June 2003June 2003 Defense Acquisition UniversityDefense Acquisition University

Planning, Programming, Budgeting Planning, Programming, Budgeting and Execution (PPBE)and Execution (PPBE)

Business, Cost Estimating, & Financial ManagementBusiness, Cost Estimating, & Financial ManagementCapital and Northeast CampusCapital and Northeast CampusDefense Acquisition UniversityDefense Acquisition University

June 2003June 2003(Revised Nov 2003)(Revised Nov 2003)

Defense Acquisition UniversityDefense Acquisition University

Nov 2003Nov 2003 Defense Acquisition UniversityDefense Acquisition University

Decision Support SystemsDecision Support Systems

Planning, Programming & Budgeting System

Acquisition Management System

Requirements Generation System

Planning,Programming,Budgeting, &

Execution(PPBE)

NewDoDD 5000.1DoDI 5000.2

Joint Capabilities Integration & Development System

QDRQDRQDRQDR


Resource Management SystemResource Management System

PPBE is the primary resource management system for PPBE is the primary resource management system for DoD:DoD:

– Articulates strategyArticulates strategy– Identifies size, structure and equipment for military forcesIdentifies size, structure and equipment for military forces– Sets programming prioritiesSets programming priorities– Allocates resources Allocates resources – Evaluates actual output against planned performance and Evaluates actual output against planned performance and

adjusts resources as appropriateadjusts resources as appropriate


PPBE PhasesPPBE Phases

Planning Planning – Assess capabilities / review threatAssess capabilities / review threat– Develop guidanceDevelop guidance

Programming Programming – Turn guidance into achievable, affordable packagesTurn guidance into achievable, affordable packages– Six-year program (Future Years Defense Program)Six-year program (Future Years Defense Program)

Budgeting Budgeting – Test for efficient funds execution Test for efficient funds execution – Scrub budget yearsScrub budget years– Prepare defensible budgetPrepare defensible budget

Execution Review Execution Review (concurrent with program/budget review)(concurrent with program/budget review)– Develop performance metricsDevelop performance metrics– Assess actual output against planned performanceAssess actual output against planned performance– Adjust resources to achieve desired performance goalsAdjust resources to achieve desired performance goals


Old Process:Old Process: Annual, Consecutive-Phase PPBS Annual, Consecutive-Phase PPBS

FY 02-07 POM and prior:FY 02-07 POM and prior: Defense Planning Guidance (DPG) (Apr)Defense Planning Guidance (DPG) (Apr) Programming (POM Development) (May – Sep)Programming (POM Development) (May – Sep) Budgeting (BES Development / Review) (Sep – Dec)Budgeting (BES Development / Review) (Sep – Dec) Submission of President’s Budget (Feb)Submission of President’s Budget (Feb) Congressional Review of Budget Request (Feb – Aug)Congressional Review of Budget Request (Feb – Aug) Congressional Authorization and AppropriationCongressional Authorization and Appropriation Execution of Budget Authority Execution of Budget Authority

– Commit, obligate, expend, and outlay fundsCommit, obligate, expend, and outlay funds


FY 2004-2009FY 2004-2009 Defense Planning Guidance Defense Planning Guidance

““The Department’s current planning, programming, The Department’s current planning, programming, budgeting and acquisition systems are rigid, unresponsive budgeting and acquisition systems are rigid, unresponsive and ill-suited for a dynamic and uncertain security and ill-suited for a dynamic and uncertain security environment. DoD needs to streamline and integrate environment. DoD needs to streamline and integrate PPBS and the major acquisition and requirements PPBS and the major acquisition and requirements processes with particular attention paid to those areas processes with particular attention paid to those areas where technological change occurs most rapidly.”where technological change occurs most rapidly.”

Tasked the Senior Executive Council, under the leadership Tasked the Senior Executive Council, under the leadership of the SECNAV, to provide a systematic approach for of the SECNAV, to provide a systematic approach for replacing these processesreplacing these processes


Management Initiative Decision Management Initiative Decision (MID) 913(MID) 913

Major Initiatives:Major Initiatives: Quadrennial Defense Review (QDR) shifted from the Quadrennial Defense Review (QDR) shifted from the

first to the second year of a new administrationfirst to the second year of a new administration Move to a two-year cycleMove to a two-year cycle Off-year Off-year Strategic Planning Guidance (SPG)/Joint Strategic Planning Guidance (SPG)/Joint

Programming Guidance (JPG)Programming Guidance (JPG) is optional (at the is optional (at the discretion of SECDEF); will not introduce major discretion of SECDEF); will not introduce major changes in off-yearchanges in off-year

Off-year review focus on execution and performanceOff-year review focus on execution and performance Create a single standardized programming and Create a single standardized programming and

budgeting system for data collection and managementbudgeting system for data collection and management


MID 913MID 913

Changes to Program/Budget/Execution Review:Changes to Program/Budget/Execution Review: Transition to a true biennial processTransition to a true biennial process Incorporate metrics and cost models Incorporate metrics and cost models

– Focus on outputs: what are we getting for our money?Focus on outputs: what are we getting for our money?

Over time, metrics will become the analytical Over time, metrics will become the analytical underpinning to ascertain whether the appropriate underpinning to ascertain whether the appropriate allocation of resources existsallocation of resources exists


DEPSECDEF Direction forDEPSECDEF Direction forFY 2005 - 2009 SubmissionFY 2005 - 2009 Submission

No DPG-05No DPG-05– Components comply with DPG-04 and PDM directionComponents comply with DPG-04 and PDM direction

No FY05-09 Program Objective Memorandum (POM) or No FY05-09 Program Objective Memorandum (POM) or Budget Estimate Submission (BES) submittal to OSDBudget Estimate Submission (BES) submittal to OSD

Components instead submit Program Change Components instead submit Program Change Proposals (PCPs) or Budget Change Proposals (BCPs)Proposals (PCPs) or Budget Change Proposals (BCPs)– Both BCPs and PCPs will be cost neutral (offsets required)Both BCPs and PCPs will be cost neutral (offsets required)– PCPs resolved thru Program Decision Memorandums (PDMs) PCPs resolved thru Program Decision Memorandums (PDMs) – BCPs resolved thru Program Budget Decisions (PBDs)BCPs resolved thru Program Budget Decisions (PBDs)


Program Change ProposalsProgram Change Proposals(PCPs)(PCPs)

Identify areas to take additional risk (offsets)Identify areas to take additional risk (offsets)– Offsets may be used for other initiativesOffsets may be used for other initiatives

Limited to items that exceed $250 million across FYDPLimited to items that exceed $250 million across FYDP– Threshold at individual programmatic issue levelThreshold at individual programmatic issue level– May address smaller issues if serious programmatic problemMay address smaller issues if serious programmatic problem– If less than $250 million, may submit as BCP if budget year is If less than $250 million, may submit as BCP if budget year is

affectedaffected

Must comply with PDM decisionsMust comply with PDM decisions Combatant Commanders may submit up to six Combatant Commanders may submit up to six

prioritized PCPs regardless of dollar valueprioritized PCPs regardless of dollar value Full budgetary data submitted for accepted PCPsFull budgetary data submitted for accepted PCPs


Budget Change ProposalsBudget Change Proposals(BCPs)(BCPs)

Generally limited to fact-of-life changes:Generally limited to fact-of-life changes:– Cost increasesCost increases– Schedule delaysSchedule delays– Management reform savingsManagement reform savings– Workload changesWorkload changes– Budget execution experienceBudget execution experience– Congressional actionCongressional action

May involve FYDP years if total cost is less than May involve FYDP years if total cost is less than $250 million and budget year is affected$250 million and budget year is affected

Offsets requiredOffsets required Backed up with appropriate budget exhibitsBacked up with appropriate budget exhibits


Who Submits PCPs/BCPsWho Submits PCPs/BCPs

Under Secretaries of Defense (USDs)Under Secretaries of Defense (USDs) ASD (Network and Information Integration)ASD (Network and Information Integration) Director, Operational Test & Evaluation (DOT&E)Director, Operational Test & Evaluation (DOT&E) Chairman, Joint Chiefs of StaffChairman, Joint Chiefs of Staff Secretaries of Military DepartmentsSecretaries of Military Departments Combatant Commanders (COCOMs)Combatant Commanders (COCOMs)

– Submit PCPs through J-8Submit PCPs through J-8– Submit BCPs through Service Executive AgentSubmit BCPs through Service Executive Agent

Directors of Defense AgenciesDirectors of Defense Agencies– Submit PCPs through OSD Principal Staff AssistantSubmit PCPs through OSD Principal Staff Assistant– Submit BCPs to OSD ComptrollerSubmit BCPs to OSD Comptroller


Year 1 (Review and Refinement):Year 1 (Review and Refinement):Early National Security Strategy (NSS)Early National Security Strategy (NSS)Off-year Off-year SPG/JPGSPG/JPG as required (at discretion of SECDEF) as required (at discretion of SECDEF)Limited Changes to Baseline ProgramLimited Changes to Baseline Program

Year 2 (Formalize the Agenda):Year 2 (Formalize the Agenda):Quadrennial Defense Review (QDR) – Aligned with PB submission in Quadrennial Defense Review (QDR) – Aligned with PB submission in

second year of an administrationsecond year of an administrationFiscal Guidance IssuedFiscal Guidance IssuedOn-year On-year SPG/JPGSPG/JPG (implementing QDR) (implementing QDR)POM/BES SubmissionsPOM/BES Submissions

Year 3 (Execution of Guidance):Year 3 (Execution of Guidance):Off-year Off-year SPG/JPGSPG/JPG as required (at discretion of SECDEF) as required (at discretion of SECDEF)Limited Changes to Baseline ProgramLimited Changes to Baseline Program

Year 4 (Ensuring the Legacy):Year 4 (Ensuring the Legacy):Fiscal Guidance IssuedFiscal Guidance IssuedOn-year On-year SPG/JPG SPG/JPG (refining alignment of strategy and programs)(refining alignment of strategy and programs)POM/BES SubmissionsPOM/BES Submissions

Four Years in the Biennial CycleFour Years in the Biennial Cycle Corresponding to Four-Year Presidential TermsCorresponding to Four-Year Presidential Terms


JPG

PresidentNational Security CouncilCIA/DIA/JCS/OSD

JCSCOCOMsSERVICES

NMS JPD

NSS

CPR

SPG

APR/MAY

JCS, OSD,COCOMs,SVC HQs,ETC.

SEP DEC MAR

SECDEF

1st Year 2nd Year

1st year of a new administration

Planning PhasePlanning Phase

COCOM – Combatant CommanderCPR – Chairman’s Pgm RecommendationJPD – Joint Planning DocumentJPG – Joint Programming GuidanceNSS – National Security StrategyNMS – National Military StrategyQDR – Quadrennial Defense ReviewSPG – Strategic Planning Guidance

Strategyalso reflected in QDR

(2nd year of new administration)

Notes• SPG replaces Draft Defense Planning Guidance (DPG)• JPG replaces DPG


PBDs

PDM

ServicesPEO/PM,SVC HQsCOCOMs

BESPBMBI

Adv Ques/Hearings

AUG JAN/FEBOCT

Issue Resolution

SECDEFSLRG

POM

OSD/OMB

CPA

DECNOV

Services / PEO / PM Answer / Reclama

JCS

OSD/OMB

BES – Budget Estimate SubmissionCOCOM – Combatant CommanderCPA – Chairman’s Pgm AssessmentMBI – Major Budget IssuesPB – President’s BudgetPBD – Program Budget DecisionPDM – Program Decision MemoPOM – Program Objectives MemoSLRG – Senior Leadership Review Group

Concurrent Program/Budget ReviewConcurrent Program/Budget Review

UpdatesFYDP

UpdatesFYDP

3-Star Group

Notes• 3-Star Group replaces Program Review Group (PRG)• SLRG replaces Defense Resources Board (DRB)


PBDs

PDM

ServicesPEO/PM,SVC HQsCOCOMs

BCPsPBMBI

Adv Ques/Hearings

AUG JAN/FEBOCT

Accepted PCP Resolution

SECDEFSLRG

PCPs

OSD/OMB

CPA

DECNOV

Services / PEO / PM Answer / Reclama

JCS

OSD/OMB

BCP – Budget Change ProposalCOCOM – Combatant CommanderCPA – Chairman’s Pgm AssessmentMBI – Major Budget IssuesPB – President’s BudgetPBD – Program Budget DecisionPCP – Program Change ProposalPDM – Program Decision MemoSLRG – Senior Leadership Review Group

Off-Year Program/Budget ReviewOff-Year Program/Budget Review

3-Star Group

UpdatesFYDP

Notes• 3-Star Group replaces Program Review Group (PRG)• SLRG replaces Defense Resources Board (DRB)


FY03

DJJ F M A M J A S O NJJ F M A M J A S O N D JJ F M A M J A S O N D

FY02 Execution

FY02 and prior

FY03

Program/Budgeting Execution

FY04

FY04

FY05 Planning

CY02 CY03 CY04

Enactment Execution

FY03 and prior

Enactment

FY05

Planning

2nd Yr

2nd Yr

2nd

Enactment

FY06

3rd Yr

3rd Yr

FY04 and prior

FY 05-09 DPG FY 05-09 PCPs

Exec

FY05+

FY 05 BCPs

Planning

Program/Budgeting

Program/Budgeting

DPG – Defense Planning Guidance PCP – Program Change Proposal BCP – Budget Change Proposal

FY04-09

DPG

Cancelled

Resource Allocation ProcessResource Allocation Process

FY 06-11 SPG/JPG

FY 04-09 POMFY 04-05 BES

FY 06-11 POMFY 06-07 BES


FY 2005 - 2009 Program/Budget FY 2005 - 2009 Program/Budget ScheduleSchedule

Aug 1Aug 1 PCPs due to OSD (PA&E)PCPs due to OSD (PA&E) Aug 15Aug 15 PCP Dispositions issuedPCP Dispositions issued Sep 1Sep 1 Detailed info submitted for accepted PCPsDetailed info submitted for accepted PCPs Oct 1Oct 1 BCPs due to OSD (Comptroller)BCPs due to OSD (Comptroller) Nov 1Nov 1 PDM issuedPDM issued Nov 21Nov 21 1st Round PBDs completed1st Round PBDs completed Nov 24Nov 24 Top line guidance from OMBTop line guidance from OMB Dec 9-10Dec 9-10 Major Budget IssuesMajor Budget Issues Dec 12Dec 12 Final FY 2005 Budget DecisionsFinal FY 2005 Budget Decisions Dec 19Dec 19 FY 2005 President’s Budget LockFY 2005 President’s Budget Lock Jan/FebJan/Feb Lessons LearnedLessons Learned


Additional InformationAdditional Information

OSD PA&E website (Program Review)OSD PA&E website (Program Review)http://www.ra.pae.osd.mil/pr/index.htmhttp://www.ra.pae.osd.mil/pr/index.htm

Documents

June 2003 Defense Acquisition University Planning, Programming, Budgeting and Execution (PPBE) Business, Cost Estimating, & Financial Management Capital