DoN Update

PB16 Overview; Fiscal Update

Director, Fiscal Management Division, N82

3 March 2015

Rear Admiral William K. Lescher, USNDeputy Assistant Secretary of the Navy for Budget

Office of Budget

Agenda

• President’s Budget 2016 – Overview

• Fiscal Landscape – FY15; PB16; POM

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• Working with FMB – Principles

2

3

Office of Budget

The Foundation – Strategic Guidance

CNOCMC

GuidanceDoDStrategic Guidance

Quad. Defense Rvw

SECNAV People; Platforms Power; Partnerships

National Security; Defense;

and Military Strategies

CNO CMC

CS21R, EF21

4

Office of Budget 5

Office of Budget

Executing the Strategy – Operational Trends

CY 13 – Operational Employment CY 14 – Operational Employment

Planned Deployed Ships **Planned deployments historically address 45% of COCOM demand

Planned Deployed Ships *

6

Office of Budget 7

Office of Budget

30 35 36 37 37 38 40 42 44 45 46 44 45 45 46 46 47 49 50

3338 43 35 36 37 40 42 42 46 47 48 47 46 50 50 51 53 53

3944

4748 54 52

5964 70 65 65 60 59 59

64 67 67 66 65

105 13

17 25

26 1721 21 16

12 14 1071 2

0

20

40

60

80

100

120

140

160

180

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20MilPers O&M Investment OCO OCO Req. ARRA SMOSF

Bil

lion

s of

Doll

ars

Numbers may not add due to rounding

Total Funding (TY)

Baseline Funding (TY)

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

$101.7 $126.3 $123.5 $133.6 $144.3 $151.6 $164.9 $166.8 $177.1 $176.8 $174.6 $163.1 $164.4 $159.3 168.0

$101.7 $116.8 $118.4 $120.9 $127.9 $127.2 $139.2 $148.1 $156.1 $156.1 $158.3 $151.6 $150.2 $149.7 $161.0 $163.7 $165.0 $167.4 $167.7

Executing the Strategy – ResourcesDepartment of the Navy Topline FY 2002-2020 (TY)

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20140

150

160

170

180

155.8

163.5

177.0

161.0

167.7

149.8148.1

164.3

PB14 PB16 BBA / BCA

$ i

n B

illi

ons

(TY)

8

Office of Budget 9

Office of Budget

Infrastructure: $2.2BMILCON $1.7BRAC $0.2 Family Housing $0.3

Procurement: $44.4BShips $16.6

Aircraft $16.1

Weapons $3.2

Marine Corps $1.1

Ammunition $0.8

Other Navy Procurement

$6.6

Summary by Appropriation GroupFY 2016 DoN Base Budget

Numbers may not add due to rounding

R&D: $17.9BBasic Research $0.6Applied Research $0.9Advance Tech Dev $0.7Adv Component Dev

$5.0System Dev & Demo

$6.3Management Support

$1.0Ops Systems Dev $3.4

FY16: $161.0B

MilPers: $46.0BBasic Pays $19.2Housing Allowance $7.7Retired Pay Accrual $6.0Health Accrual $2.0Reserve Personnel $2.6Subsistence $2.3Allowances $1.2Special Pays $1.6Other $3.4

O&M: $50.4BShip Ops & Maint $12.6Aviation Ops & Maint

$8.8Base Ops & Support

$7.6Marine Corps O&M

$6.2Combat/Weapons Support

$5.6Service Wide Support

$4.9Training and Education

$1.8Reserve O&M $1.3Environmental Restoration

$0.3Mobilization $1.3

29%

31%

28%

11%

1%

Navy: 32%

Marine Corps: 27%

Navy: 23%

Marine Corps: 61%

Navy: 1% Marine Corps: 3%

Navy: 31%

Marine Corps: 6%

Navy: 13%

Marine Corps: 3%

= The percentage of each Service’s total budget applied to each appropriation group 10

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Hard Choices High-end aviation Weapons procurement Facilities sustainment

Innovation and Reform Optimized Fleet Response

Plan Crisis Response - SPMAGTF Energy security and resiliency Innovation Task Force Headquarters Reductions Pay and Compensation

Balancing

Focused Investment Capacity; Capability;

Readiness Quality of Service Nuclear Enterprise Review Cyber Capabilities Audit Readiness

Office of Budget

Fiscal Landscape

FY15• Funds Execution• Civilian Personnel Hiring Execution• Working Capital Fund Execution to Plan• Mid-Year Review

FY16• FMB Rollout Briefings • Posture Hearings • Budget Engagement Process Improvement• Engagement Going Forward – Impact Statements

POM 17• Process – Moving toward Sequential POM/BES• PPBE Reset Teams

– Data Reduction

– Timelines12

Budget Execution

Budget Formulation

Budget Defense

Office of Budget

Working with FMB – FMB Principles

FMB Role:

Enforce High Standards in Budget Formulation and, working with FMO, in Execution

• Process Discipline

• Content Discipline

• Message Discipline

Strive to say ‘Yes’• Within Standards

Transparency; Fearless Communication

Strong Coordination/Communication across all key stakeholders

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Office of Budget

Back Up

Office of Budget

Budget Review Issue Adjudication (PBCG Process Discipline)

• FY16 Budget Hearings – aka Program Budget Coordination Groups (PBCGs) – will each build on prior efforts to resolve issues at the SES Division Director level and lower

• As such, PBCGs are not general discussion or exploratory discussion venues

• PBCG’s are limited attendance Flag/SES-level decision forums that occur in the final stage of budget development. Absent the presentation of specific and compelling data to the contrary, the program mark will stand

• Appealable to SECNAV (Large Group)

• Places a premium on Principal attendee preparation. Be well-versed on the issue and prior resolution discussions

• Strongly held opinions absent specific and compelling data are not the standard and will not be supported

• Budget Hearing issue resolution is based on principles, not positions:

• Outcome: Maximize executable budgetary support to SECNAV, CNO and Commandant priorities

Realistic and balanced funding profiles and program schedules reflecting execution history.• Cost. Schedule. Performance.

Controls risk to DON TOA from OSD/OMB and congressional marks. Requirements-driven... but the requirement itself is not the whole focus. If the program as

structured is not fully executable, the discussion emphasis is not the requirement – it’s the executability of the requirement as budgeted.

Fair. Not fair-shared. Consistent with DON Leadership testimony. Supports clear and credible budget rollout testimony

with integrity.

• Process: Focused: Agenda-driven Fact-based: Provide compelling new exhibits, revised calculations, updated obligation data for FMB

to consider Transparent and candid: Small nature of the PBCG forum allows frank and unencumbered

discussion Long-term perspective prevails over short-term focus

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16PROFESSIONAL DEVELOPMENTPROFESSIONAL DEVELOPMENT

ASMC National Capital Region: Professional Development InstituteASMC National Capital Region: Professional Development Institute

TRAININGTRAININGEDUCATIONEDUCATION16

Speed Mentoring

Polaris Room 16:30