and Execution (PPBE)

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Planning, Programming, Budgeting,
and Execution (PPBE)



Roberta Tomasini


Professor of Financial Management

Defense Acquisition
University

roberta.tomasini@dau.mil

703
-
805
-
3764


Life Cycle

Cost

ICE

Fiscal

Environment

Cost

Analysis

Estimate

Annual

Funding

Incremental

Funding

MFP PE BES
SPR

Funding

Policies

Planning, Programming,

Budgeting and Execution

President’s

Budget

Commitment Reprogramming

Budget Authority Obligation Expenditure Outlay

Budget

Execution

Congressional


Enactment

Force Structure

Modernization

Operational Capability

Readiness

Sustainability

POE

CCA


SAC SASC SBC


HAC HASC HBC

FM Scope: From
Requirement to Capability

Operational

Concept

AoA

Capabilities
-
Based

Assessment

Feedback

CAIV



Full

Funding
(Exceptions
)


FYDP
DPG
POM RMD

Acquisition
Program
Baseline

Budget

Resolution


Authorization

&

Appropriation


Laws

Capability
Docs

2

PPBE Outline


Overview


Better Buying Power Initiatives


Building Blocks


FYDP, MFP, Program Elements


PPBE Process and Schedule


Resource Allocation Process

3

Planning,

Programming,

Budgeting and

Execution

Joint Capabilities

Integration and

Development

System (JCIDS)

Defense

Acquisition

System


Three Major
DoD

Management Systems

QDR

4

What’s a “Program of Record”? Where is it officially defined?

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

5

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


6

Better Buying Power Initiatives

USD(AT&L) 14 Sep 10 Memo


Target Affordability and Control Cost Growth


Mandate affordability as a requirement


Drive productivity growth through Will Cost/Should Cost management


Eliminate redundancy within
warfighter

portfolios


Make production rates economical and hold them stable


Set shorter program timelines and manage to them


Incentivize Productivity and Innovation in Industry


Reward contractors for successful supply chain and indirect expense management


Increase use of FPIF, where appropriate


Use 50/50 share and 120% ceiling as point of departure


Adjust progress payments to incentivize performance


Extend the Navy’s preferred supplier program to a
DoD
-
wide pilot


Reinvigorate industry’s IRAD and protect the defense technology base


Promote Real Competition


Present a competitive strategy at each program milestone


Remove obstacles to competition


Require open systems architecture and set rules for acquisition of technical data
rights


Increase dynamic small business role in defense marketplace competition


7

Better Buying Power Initiatives(cont.)

USD(AT&L) 14 Sep 10 Memo


Improve Tradecraft in Services Acquisition


Create a senior manager for acquisition of services in each component, following the Air
Force’s example


Adopt uniform taxonomy for different types of services


Address causes of poor tradecraft in service acquisition


Increase small business participation in providing services


Reduce Non
-
Productive Processes and Bureaucracy


Reduce number of OSD level reviews…


Eliminate low
-
value added statutory processes


Reduce by half, the volume and cost of internal and congressional reports


Reduce non
-
value
-
added overhead imposed on industry


Align DCMA and DCAA processes to ensure work is complimentary


Increase use of Forward Pricing Rate Recommendations to reduce admin costs


8

“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

What Does Your Service Policy Memo Say?

9

Future Years Defense Program
(FYDP)


Computer database maintained by CAPE


Contains approved force structure and resources for
all Defense Programs


Updated two times per annual PPBE cycle:


Program Objectives Memorandum/Budget Estimate Submission
(POM/BES)


July


President’s Budget (PB)
-

February


Reflects PY, CY,
BY, + 4 Out
-
Years








3 additional years for force structure only


What’s Your Latest Approved Numbers?

15

16

17 18

14

13

12

10

Strategic Forces

General Purpose Forces

Command, Control, Comm, Intell & Space

Mobility Forces

Guard & Reserve Forces

Research and Development

Central Supply & Maintenance

Training, Medical, & Other Personnel Activities

Administration and Associated Activities

Support of Other Nations

Special Operations Forces

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

N

A

V

Y

D

E

F



A

G

E

N

C

I

E

S

O

T

H

E

R

DOD APPROPRIATIONS

A

I

R



F

O

R

C

E

A

R

M

Y

MAJOR
FORCE
PROGRAMS

Future Years Defense Program

(FYDP)

11

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 )



0203752A
-

Aircraft Engine CIP



0204136N
-

F/A
-
18 Squadrons



0207163F
-

AMRAAM


PROGRAM 3 ( C3, INTEL & Space)



0303158A
-

Joint Command and Control Program (JC2)



0307207N
-

Aerial Common Sensor (ACS)



0305164F
-


NAVSTAR GPS (User Equipment)

A
-

ARMY

N
-

NAVY

M
-

MARINE

F
-

AF

D
-

OSD

C
-

MDA

E
-

DARPA

J
-

JCS

S
-

DLA

BB
-

SOCOM

DBD
-

DFAS


Ref: DoD 7045.7
-

H

Program Elements

12

CIA


Central Intelligence Agency

COCOM



Combatant Commander

CPR



Chairman’s Program Recommendation

D, CAPE


Director, Cost Assessment & Program
Eval

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

SPR



Strategic Portfolio Review

USD(P)


Undersecretary of Defense (Policy)

VCJCS



Vice Chairman, Joint Chiefs of Staff


APR/SEP

PPBE


Planning Phase

President

National Security Council

CIA/DIA/JCS/OSD


(JCS,

COCOMs,

SERVICES)

NMS

DPG *

NSS

Planning

Phase focus:




Threat vs. Capabilities



Update strategy



Guidance for programming &


budgeting

NDS

OSD

Level

JCS

Level

QDR


FEB/MAR

To DoD “Large
Group”/Integrated
Program/Budget
Submission &
Review

SPR

D, CAPE/VCJCS/

USD(P)

CPR

Every

4 Years

*

Note:
DPG is the current name of this document but is
subject to change from one cycle to the next. Other names
used previously include Defense Planning & Programming
Guidance (DPPG) and Joint Programming Guidance (JPG).

Guidance for POM/BES submission and
Integrated Program/Budget
Review

PPBE


Integrated Program/Budget Review

Components/

Defense

Agencies

BES

PB

MBI

Adv Questions/

OSD/OMB Budget Hearings

JUL


JAN/FEB

OCT

Issue

Resolution

SECDEF/DEPSECDEF

SLRG & DMAG

POM

OSD/

CAPE

CPA

DEC

NOV

JCS

USD(C) &

OMB

BES



Budget Estimate Submission

CAPE



Cost Assessment & Prgm Evaluation

COCOM



Combatant Commander

CPA


Chairman’s Program Assessment

CPM



Capability Portfolio Manager

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

FYDP

Update

FYDP

Update

3
-
Star Group

Program

Review focus:



Compliance with DPG


CPMs

Budget

Review focus:


-

Pricing


-

Phasing


-

Funding policies
-

Budget execution


RMDs

Services / PEO / PM

Answer / Reclama

DoD

“Large Group”

SPR

Mar 12



Defense Planning Guidance (DPG) Issued



Mar 12



Fiscal Guidance Issued


May
-
Aug 12


Strategic Portfolio Review (SPR) Results


3 Aug 12


Component Program/Budget
Submissions Due



30 Jul
-
10
Aug
12


Component POM
Briefs to
3
-
Star/DMAG


31
Aug
12


Issue
Nominations Due


4
Sep
12


Budget
Justification Material Due to
OSD/OMB


14 Sep 12


Issue Nomination Disposition


Sep
-
Oct 12


SPR Re
-
engagement


Sep
-

Nov 12


Program/Budget
Review
and Issue Team Analysis



21 Dec 12


Budget Lock



4
Feb
13


President’s
Budget Submitted to
Congress

FY
14

18
Program/Budget
Review Schedule

15

FY 13


D

J

J

F

M

A

M

J

A

S

O

N

J

J

F

M

A

M

J

A

S

O

N

D

J

J

F

M

A

M

J

A

S

O

N

D



FY 12

Cycle

Execution

FY 12 and prior



Program/Budgeting

Execution

FY 14



Planning

CY12

CY13

CY14


Enactment

Execution

FY 13 and prior

Enactment

FY 15

Planning

2nd Yr

2nd Yr

2nd

Enactment

3rd Yr

3rd Yr

FY 14 and prior

FY 15
-
19 DPG

Exec

FY15 &
prior

Planning

Program/Budgeting

Program/Budgeting

PB


President’s Budget

FY 14
-
18

DPG


Resource Allocation Process Overlap


FY 16
-
20 DPG


FY 15
-
19 POM

FY 15 BES

FY 14
-
18 POM

FY 14 BES

PB


PB


PB


DPG


Defense Planning Guidance

FY 16
-
20 POM

FY 16 BES

BES


Budget Estimate Submission

POM


Program Objectives Memorandum

FY 13

Cycle

FY 14

Cycle

FY 15

Cycle

FY 16

Cycle

BACKUP Charts

17

Most Probable Cost (MPC)


AKA Most Likely Cost


50% chance of overrunning/
underrunning

on a normal
curve


The Fin Mgt
Reg

(
DoD

7000.14R) says budget to MPC


2006 DAPA Rpt: 80% confidence level (CL) recommended


Air Force SAE (Mr. Van Buren) memo dated 17 Mar 10
says NLT mean (typically 55
-
65% CL) or “expected value”


OSD CAIG using 50% CL


WSARA 2009 Section 101


DCAPE must issue guidance on confidence levels for cost
estimates for MDAP and MAIS programs


FY11 Defense Authorization Bill revision


MDAP and MAIS programs must disclose confidence level, and


“ensure that such confidence level provides a high degree of
confidence that the program can be completed without the need for
significant adjustment to program budgets”

18

Capability Portfolio Managers

(CPMs)


9 Portfolios are Based on Existing Joint Capability
Area (JCA) Structure


Civilian/Military Co
-
Leads Designated by
DEPSECDEF


Have No Independent Decision Making Authority


Afforded Access to JROC, DAB & Other Established
Component Forums


Shall Establish or Identify Existing Portfolio
-
Level
Governance for Each Portfolio



19

Capability Portfolio

and

Tier 1 JCA

CPM

Civilian

Lead

CPM

Military

Lead

Senior
Warfighting
Forum (SWarF)

Lead *

CPM

Joint
Staff

OPR *

Functional

Capability

Boards *

Command and Control

ASD (NII)

JFCOM

JFCOM

J
-
3

J
-
8

Battlespace Awareness

USD (I)

STRATCOM

STRATCOM

J
-
2

J
-
2

Net Centric

ASD (NII)

STRATCOM

STRATCOM

J
-
8

J
-
8

Logistics

USD
(AT&L)

TRANSCOM

TRANSCOM

J
-
4

J
-
4

Building Partnerships

USD (P)

Director, J
-
5

JFCOM

N/A

J
-
5

Protection

USD
(AT&L)

Director, J
-
8

STRATCOM

N/A

J
-
8

Force Support

USD (P&R)

Director, J
-
8

JFCOM

N/A

J
-
8

Force Application

USD
(AT&L)

USD (P)

Joint
Requirements
Oversight
Council (JROC)

JFCOM

SOCOM

STRATCOM

J
-
8

J
-
8

Corporate Management &
Support

DCMO

Director, Joint
Staff

N/A

N/A

N/A

* As designated by the Chairman of the Joint Chiefs of Staff (CJCS)

Capability Portfolio Managers

(CPMs) Leadership

20

Senior Leader Review 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

* Or Principal Deputy

21

Defense Appropriations

“Colors of Money”

RDT&E

PROC

MILPERS

O&M

MILCON

Military Personnel (MILPERS)


Active & Reserve Forces

Operation & Maintenance (O&M)


Active & Reserve Forces


(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

22