APEX Briefing

Kathleen ConleyDirector, Projection Forces, Program Analysis and Evaluation

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Outline

• Economic Outlook• Transforming • Current Analytic Efforts

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U.S. Defense PrioritiesDefending America Today and Tomorrow

• Deter potential adversaries and defend America and American interests

• Counter asymmetric threats

• Fight and win the global war on terror

• Assure readiness of the Armed Forces

• Mitigate surprise

• Ensure U.S. leadership role in the world

• Transform the Department of Defense– Reshaping military capability for the 21st Century

– Changing culture, business practices, processes and organizations for sustained advantage

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Compelling Need for ChangeThe World Has Changed

• This is a period of significant, discontinuous change with great uncertainty:– Globalization – Accelerating rate of technological change– Information age – Homeland security– Non-State as well as state actors– Asymmetric as well as conventional threats– Unrestricted by conventional rules

• Falling barriers to competitive entry– Access to highly capable, low-cost and rapidly changing technologies– Access to capabilities in key domains – space, sea, cyberspace

• Failure to transform risks losing our competitive advantage

Those who do not see the need to change are often those who need it the most.

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Defense Discretionary

Non-Defense Discretionary

Mandatory

Net Interest

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PFederal Spending by Category as a Percentage of GDP

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U.S. Unified Federal Budget Surplus/Deficit Projections 2004-2014

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Calendar Year

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OMB July 2004

CBO September 2004

CBO January 2005

CBO January 2005 + No Sunset on Tax Cuts + AMT Reform + Discretionary Spending Growth at Rate of Nominal GDP Growth + 6 years of OEF & OIF then phased out

White HouseJanuary 2005

OMB February 2005

Budget Deficit Remains Difficult Challenge

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Carter Reagan I Reagan II G. Bush Clinton I Clinton II G. W. Bush I G. W. Bush IIFiscal Year

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President during Budget Submission

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ACTUAL

President's Budget FYDP Projections vs. Actual Defense Budget

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Personnel Costs* vs. DoD Topline

FOUO

FOUO

* Source: OUSD(C) and WHS, excludes costs not on the DoD budget (e.g., VA)** Source: WHS, which categorizes contracts as Procurement, RDT&E, or Services*** Retirement, DHP, Family Housing

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Contracts for Services**

DoD Topline

Military Benefits***

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CivPay

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Personnel Costs* vs. DoD Topline

FOUO

FOUO

* Source: OUSD(C) and WHS, excludes costs not on the DoD budget (e.g., VA)** Source: WHS, which categorizes contracts as Procurement, RDT&E, or Services*** Retirement, DHP, Family Housing

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oD

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stant $ B

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Y05)

CivPay

MilPers

Military Benefits***

Contracts for Services**

Constant $ Topline(right axis)

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Military Personnel

DoD Budget Authority by Appropriations Title

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Transformation Principles

• Culture– Balanced risk taking– Innovation– Superior speed – Joint information, content and

awareness

• Operations– Adaptive– Joint and combined– Tailored to specific need – Use all elements of national

power– Information driven

• Business Practice, Process and Organization– Streamlined– Greater flexibility– Timely, decision-quality

information– Integrating processes– Reduced cycle times

• Systems and Capabilities– Integrated – Networked systems– Faster to the point of need

• Precision effects

Improvement needed in all areas to strengthen joint and integrated performance

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The Overall Framework for Change

Historical World View Future Objectives

Central Planning To Adaptive and Dynamic Planning

Fixed, Predictable Threat To Capabilities Against Shifting Threats

Mature Business and Organization To Mix of New and Mature Organizations

Inputs Based Management –

Focus on Programs

To Output Based Management –

Focus on Results

Appropriated Funds – “Cost is Free” To More Market-like and price based

Segmented Information –

Closed Architecture

To Networked Information –

Open Architectures

Stovepiped and Competitive Organizations – “Zero sum Enterprise”

To Aligned Organizations with common and shared objectives

Historical World View Future Objectives Developing Tools

Central Planning Adaptive and Dynamic Planning

Changes to War Planning and Support Tools

Fixed, Predictable Threat Capabilities Against Shifting Threats

Capabilities Based Planning Joint Operational Concepts

New Modeling Approaches

Mature Business and Organization

Mix of New and Mature Organizations

SJTF, UCP realignment, OSD changes

Inputs Based Management –

Focus on Programs

Output Based Management

Focus on Results

Global Force Management

Balanced Risk Scorecard

Metrics

Appropriated Funds – “Cost is Free”

More Market-like and price based

Offsets Required

Portfolio Thinking

Segmented Information Closed Architecture

Networked Information –

Open Architectures

Horizontal Integration

GIG Standards

BMMP

Stovepiped and Competitive Organizations – “Zero sum Enterprise”

Aligned Organizations with common and shared objectives

Capabilities Equivalencies

Global Force Management

Integrating Processes/JCIDS

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Integrating Processes

Planning, Programming &

Budgeting System

Requirements Acquisition

StrategicPlanning

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What Is the Purpose of PPBE?

• Provide Civilian Control and Strategic Direction – Centralizes decisionmaking in the Office of the Secretary of Defense– Manages allocation of resources to meet the Secretary’s goals

• Create a joint (DoD-wide) program– Integrates individual components’ inputs into a single defense program– Ensures stakeholders have a voice; builds consensus

• Provide financial “checks and balances”– Promotes efficient and effective allocation of funds– Ensures the cost of defense programs are realistic / affordable

• Provide basis for justifying programs and budgets to the White House and Congress

PPBE is the principal tool used by the Secretary and the Deputy Secretary in managing the Department of Defense

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The PPBS: Six Principles

• Decisions should be based on explicit criteria of national interest, not on compromises among institutional forces.

• Requirements and costs must be considered simultaneously.

• Major decisions should be made by choices among explicit, balanced, feasible alternatives.

• The Secretary should have an active analytic staff to provide him with relevant data and unbiased perspectives.

• Open and explicit analysis, available to all parties, must form the basis for major decisions.

• A multiyear force and financial plan is required to project the consequences of present decisions into the future.

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5 Principles of PA&E

• PA&E will provide independent and objective analysis.

• PA&E’s analyses and advice will be fact based.• PA&E is committed to open thinking.• PA&E is people-centered. We treat people fairly

and respectfully.• PA&E operates in an environment of trust and

confidence.

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Analytic Agenda

• Department-wide agreement to make major, joint analysis efforts more effective, efficient, relevant

• Building blocks include:– National Security Strategy and other strategic and planning guidance– Scenarios and Data (Defense Planning Scenarios and Multi-Service

Force Deployment)– Studies and Wargames (e.g., OA-03, OA-04, OA-05, and MCS)– Results in a package comprising a scenario, concept of operations,

and integrated data used by DoD Components as a foundation for strategic analysis (called an analytical baseline)

• Highly collaborative and transparent: OSD, JS, Agencies, Services, and CoComs participate

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PA&E Proposals for Ongoing Analysis*

• Joint Air Dominance• Ground Forces Capabilities• Future Combat System and Army Modularity • Medical Readiness Review and Health Care Benefit Costs• Compensation Review• Supply Chain Management• Manpower Submission Process• Space Industrial Base• Future Strategic Forces• Airborne/Area Moving Target Indication/Indicator (AMTI) and Ground Moving Target Indication/Indicator

(GMTI) Tradeoffs• Airborne Intelligence, Surveillance, and Reconnaissance (ISR) Communications• Persistent ISR• Net Centric Ops• MILSATCOM Capabilities• Mobility Capabilities Study• Aerial Refueling• Tactical Airlift and & Aerial Refueling

*Subject to guidance from IPT heads

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Biggest Challenges

• Facts and Transparency• Linking Strategy, Plans, Resources and Execution• Raising decision level to capability and portfolio• Balancing Risk• Developing, Aligning and Motivating Talent

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PA&E Organizational ChartDIRECTOR

PROGRAM ANALYSIS & EVALUATION

Brad BerksonPRINCIPAL DEPUTY DIRECTOR

VADM Stanley R. Szemborski, USN

Resource Management & Operations Division

Janet S. Felts, Director

DEPUTY DIRECTOR(STRATEGIC AND SPACE PROGRAMS)

Michael L. Ioffredo

Intelligence, Surveillance, and Reconnaissance Programs Division

Matthew Schaffer , Director

C4 and Information Programs Division

Scott A. Comes, Director

Strategic Defensive and Space Programs Division

Dennis K. Evans, Director

DEPUTY DIRECTOR(THEATER ASSESSMENTS AND PLANNING)

Eric J. Coulter

Study and Analytical Support Division

James N. Bexfield, Director

Joint Data Support Office

James G. Stevens, Director

Joint Warfare Systems Office

Simulation Analysis Center

Al Sweetser, Director

Projection Forces Division

Kathleen M. Conley, Director

Regional Assessment and Modeling Division

Timothy E. Bright, Director

DEPUTY DIRECTOR(GENERAL PURPOSE PROGRAMS)

James L. Johnson

Force Planning Division

Joseph R. Nogueira, Director

Land Forces Division

Mark F. Cancian, Director

Naval Forces Division

Charles P. Werchado, Director

Tactical Air Forces Division

James L. Johnson (Acting)

DEPUTY DIRECTOR(RESOURCE ANALYSIS)

Richard P. Burke

Economic and Manpower Analysis Division

Jerome E. Pannullo, Director

Force and Infrastructure Cost Analysis Division

Krystyna M. Kolesar, Director

Operations Analysis and Procurement Planning Division

Steven R. Miller, Director

Programming and Fiscal Economics Division

Teresa W. Gerton, Director

Weapon Systems Cost Analysis Division

Steven R. Miller (Acting)