asmc – middle georgia chapter 9 feb 2012 luncheon planning, programming, budgeting, and execution...
TRANSCRIPT
ASMC – Middle Georgia Chapter
9 Feb 2012 Luncheon
Planning, Programming, Budgeting, and Execution (PPBE) Update
Julian “Rob” Roberts Professor of Financial Management
Defense Acquisition University – South RegionHuntsville, AL
Outline
• PPBE Process and Schedule– Changes and updated terms
• “Will Cost” vs “Should Cost”
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Resource Management System
PPBE is the Primary Resource Management System for DoD:
• Articulates strategy
• Identifies size, structure and equipment for military forces
• Sets programming priorities
• Allocates resources
• Evaluates actual output against planned performance and adjusts resources as appropriate
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PPBE Phases
• Planning (OSD Policy) – 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
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4 Major Changes in the FY 12-16 PPBE CycleDepSecDef memo, dated 9 Apr 10
• DPPG (was GDF and JPG; now DPG for FY 13-17)• One budget year (was two on the “on years”)
– Makes this an annual budget cycle vs a biennial budget
• Focus on a 5-year period– Changed FY12-17 period to FY 12-16
• DOD conducting Front End Assessments– Eight issues with SecDef oversight via the “Large Group”– All other issues led by DepSecDef via the DAWG (now DMAG)
NOTE: FY 13-17 PPBE Cycle has six issues
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Front End AssessmentsSecDef memo, dated 31 Mar 11
• Security Force Assistance• Institutionalize UAVs• Family Programs and Mental Healthcare• Anti-Access / Area Denial• Research and Development• Cyber Capabilities
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CIA – Central Intelligence AgencyCOCOM – Combatant CommanderCPR – Chairman’s Program RecommendationD, CAPE – Director, Cost Assessment & Program EvalDIA – Defense Intelligence AgencyDPPG – Defense Planning & Programming GuidanceFEAs – Front End AssessmentsJCS – Joint Chiefs of StaffNDS – National Defense StrategyNMS – National Military StrategyNSS – National Security StrategyOSD – Office of the Secretary of DefenseQDR – Quadrennial Defense ReviewUSD(P) – Undersecretary of Defense (Policy)VCJCS – Vice Chairman, Joint Chiefs of Staff
APR/SEP
PPBE – Planning Phase
PresidentNational Security CouncilCIA/DIA/JCS/OSD
(JCS,COCOMs,
SERVICES)
NMS
DPPG
NSS
Planning Phase focus:
• Threat vs. Capabilities• Update strategy• Guidance for programming & budgeting
NDSOSDLevel
JCSLevel
QDR
FEB/MAR
To DoD “Large Group”/Integrated Program/Budget Submission & Review
FEAsD, CAPE/VCJCS/
USD(P)
CPR
Every 4 Years
DPG for FY13-17 cycle
PPBEIntegrated Program/Budget Review
Components/Defense Agencies
BESPBMBIAdv Questions/
OSD/OMB Budget Hearings
JUL JAN/FEBOCT
Issue Resolution
SECDEF/DEPSECDEFSLRG & DMAG
POM
OSD/CAPE
CPA
DECNOV
JCS
USD(C)/OMB
BES – Budget Estimate SubmissionCAPE – Cost Assessment & Prgm EvaluationCOCOM – Combatant CommanderCPA – Chairman’s Program AssessmentCPM – Capability Portfolio ManagerDMAG – Deputy’s Management Action GroupFYDP – Future Years Defense ProgramMBI – Major Budget IssuesOMB – Office of Management and BudgetPB – President’s BudgetPOM – Program Objectives MemorandumRMD – Resource Management DecisionSLRG – Senior Leader Review Group
FYDPUpdate
FYDP Update
3-Star Group
Program Review focus:• Compliance with DPPG
CPMs
Budget Review focus: - Pricing - Phasing - Funding policies - Budget execution
RMDs
Services / PEO / PM Answer / Reclama
DoD“Large Group”
FEAs
“Will Cost” vs “Should Cost”USD (AT&L) and USD(C) 22 Apr 11 Memo
• Will Cost• 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 govt 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)
• Model Programs• Air Force : JSF, Global Hawk, SBIRS, EELV, AEHF
• Army: Joint Air Ground Missile, UH-60M, GCV, Paladin Product Improvement (PIP), NETT Warrior
• Navy: JSF, E-2D, Presidential Helo, LCS, Ohio Replacement Program
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Air ForceImplementation of Will-Cost & Should-Cost Mgt
SAF/FM and SAF/AQ - 15 Jun 11 Memo
• Applies to ALL ACATs (ACAT I, II and III); required at all milestone decisions and annually
• “Non-advocate Will Cost-Estimates”– Previously, specific requirements for these estimates for ACAT I programs only– Now, same requirements (“same level of rigor”) will also apply to ACAT II and III– Aims to provide sufficient resources to execute the program under normal
conditions, encountering average levels of technical, schedule, and programmatic risk (usually no less than the mean confidence level, typically between 55-65%)
– “Used as basis for all budgeting and programming decisions”– “Basis for all metrics and reporting external to the department”– Shall be approved by office/entity outside of program office chain-of-command
(AKA “ICE”)
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Air ForceImplementation of Will-Cost & Should-Cost Mgt
SAF/FM and SAF/AQ - 15 Jun 11 Memo
•“PMs must begin to drive leanness into their programs by establishing Should-Cost estimates at major milestones”
– Designed to drive productivity improvements– Used as an internal management tool to incentivize performance to targets– Based on realistic technical and schedule baselines and assumes success-
oriented outcomes from implementation of efficiencies, lessons learned, and best practices
– At a minimum, PMs are expected to identify specific discrete measurable items or initiatives that achieve savings against the Will-Cost estimate
– ACAT I, II & III programs on the Acquisition Master List will present Should-Cost estimates at their next major milestone
•Difference between Will Cost (budget) and Should Cost will be held at Service level (initially for the five pilot programs only)
– PMs to brief execution with respect to Should Cost at Spring Program Review (SPR) and Investment Budget Review (IBR)
– PM requests release of “difference” at these reviews– Funds released via joint decision by SAF/AQ and SAF/FM (SAF/AQX and SAF/FMB
for ACAT II and III)11
Questions?
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