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Planning, Programming, Budgeting, and Execution (PPBE). Roberta Tomasini Professor of Financial Management Defense Acquisition University [email protected] 703-805-3764. FM Scope: From Requirement to Capability. Planning, Programming, Budgeting and Execution. Life Cycle Cost.

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Planning programming budgeting and execution ppbe

Planning, Programming, Budgeting, and Execution (PPBE)

Roberta Tomasini

Professor of Financial Management

Defense Acquisition University

[email protected]

703-805-3764


Planning programming budgeting and execution ppbe

FM Scope: From Requirement to Capability

Planning, Programming,

Budgeting and Execution

Life Cycle

Cost

Annual

Funding

Estimate

Cost

Analysis

FYDP DPG POM RMD

Funding

Policies

ICE

Full

Funding (Exceptions)

MFP PE BES SPR

CCA

CAIV

Fiscal

Environment

Incremental

Funding

POE

AoA

Congressional

Enactment

HAC HASC HBC

President’s

Budget

SAC SASC SBC

Budget

Resolution

Authorization

&

Appropriation

Laws

Acquisition Program Baseline

Operational

Concept

Force Structure

Modernization

Operational Capability

Readiness

Sustainability

Feedback

Commitment Reprogramming

Capability Docs

Capabilities-Based

Assessment

Budget Authority Obligation Expenditure Outlay

Budget

Execution


Ppbe outline

PPBE Outline

  • Overview

  • Better Buying Power Initiatives

  • Building Blocks

    • FYDP, MFP, Program Elements

  • PPBE Process and Schedule

  • Resource Allocation Process


Planning programming budgeting and execution ppbe

Three Major DoD Management Systems

Planning,

Programming,

Budgeting and

Execution

QDR

Joint Capabilities

Integration and

Development

System (JCIDS)

Defense

Acquisition

System

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


Planning programming budgeting and execution ppbe

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 resourcesas appropriate


Ppbe phases

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


Better buying power initiatives usd at l 14 sep 10 memo

Better Buying Power InitiativesUSD(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


Better buying power initiatives cont usd at l 14 sep 10 memo

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


Will cost vs should cost usd at l and usd c 22 apr 11 memo

“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?


Future years defense program fydp

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?

1617 18

14

15

13

12


Future years defense program fydp1

Future Years Defense Program (FYDP)

DOD APPROPRIATIONS

Military Personnel

Military Construction

Ops & Maintenance

Procurement

D

Other

RDT&E

E

F

O

A

(1)

T

Strategic Forces

A

I

H

G

General Purpose Forces

(2)

R

E

E

Command, Control, Comm, Intell & Space

(3)

N

R

N

F

A

A

MAJOR FORCE PROGRAMS

C

Mobility Forces

(4)

O

V

R

I

R

Guard & Reserve Forces

(5)

Y

M

E

C

Research and Development

(6)

Y

S

E

Central Supply & Maintenance

(7)

Training, Medical, & Other Personnel Activities

(8)

Administration and Associated Activities

(9)

DOD COMPONENTS

Support of Other Nations

(10)

Special Operations Forces

(11)


Program elements

Program Elements

A - ARMY

N - NAVY

M - MARINE

F - AF

D - OSD

C - MDA

E - DARPA

J - JCS

S - DLA

BB - SOCOM

DBD - DFAS

  • 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)

Ref: DoD 7045.7 - H


Planning programming budgeting and execution ppbe

President

National Security Council

CIA/DIA/JCS/OSD

PPBE – Planning Phase

APR/SEP

FEB/MAR

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

  • Planning Phase focus:

  • Threat vs. Capabilities

  • Update strategy

  • Guidance for programming &

  • budgeting

NSS

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

SPR

D, CAPE/VCJCS/

USD(P)

Every

4 Years

NDS

QDR

DPG *

OSD

Level

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

* 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).

JCS

NMS

CPR

Level

(JCS,

COCOMs,

SERVICES)


Planning programming budgeting and execution ppbe

PPBE – Integrated Program/Budget Review

DEC

NOV

JAN/FEB

JUL

OCT

DoD

“Large Group”

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

SPR

3-Star Group

OSD/

CAPE

Issue

Resolution

POM

SECDEF/DEPSECDEF

SLRG & DMAG

CPMs

CPA

JCS

Components/

Defense

Agencies

  • Program Review focus:

  • Compliance with DPG

RMDs

USD(C) &

OMB

BES

Adv Questions/

OSD/OMB Budget Hearings

MBI

PB

FYDP

Update

FYDP

Update

Budget Review focus:

- Pricing - Phasing

- Funding policies - Budget execution

Services / PEO / PM

Answer / Reclama


Planning programming budgeting and execution ppbe

FY 14–18 Program/Budget Review Schedule

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


Resource allocation process overlap

Resource Allocation Process Overlap

CY12

CY13

CY14

J

F

M

A

M

J

J

A

S

O

N

D

J

F

M

A

M

J

J

A

S

O

N

D

J

F

M

A

M

J

J

A

S

O

N

D

FY 12

Cycle

Execution

2nd Yr

3rd Yr

FY 12 and prior

FY 13

Cycle

2nd Yr

Enactment

Execution

3rd Yr

FY 13

FY 13 and prior

PB

FY 14

Cycle

Program/Budgeting

2nd

Execution

Planning

Enactment

FY 14-18

DPG

FY 14

FY 14 and prior

FY 14-18 POM

FY 14 BES

PB

FY 15

Cycle

Program/Budgeting

Enactment

Exec

Planning

FY 15-19 POM

FY 15 BES

FY 15-19 DPG

FY15 & prior

FY 15

PB

FY 16

Cycle

Program/Budgeting

Planning

FY 16-20 DPG

FY 16-20 POM

FY 16 BES

DPG – Defense Planning Guidance

PB – President’s Budget

POM – Program Objectives Memorandum

BES – Budget Estimate Submission


Backup charts

BACKUP Charts


Most probable cost mpc

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”


Capability portfolio managers cpms

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


Capability portfolio managers cpms leadership

Capability Portfolio Managers(CPMs) Leadership

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


Planning programming budgeting and execution ppbe

Senior Leader Review Group

  • 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

  • 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

* Or Principal Deputy


Defense appropriations colors of money

Defense Appropriations“Colors of Money”

MILPERS

O&M

PROC

RDT&E

MILCON

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

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


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