NAVY PPBE PROCESS

Department of the Navy

2010 Department of the Navy Human Resources Conference

April 28th, 2010

Captain Drew Flavell - Office of the Chief of the Navy Reserve

NAVY PPBE PROCESS

Navy PPBE Process - HR Conference Slide 2 Department of the Navy 2

Today’s Discussion – The PPBE ProcessToday’s Discussion – The PPBE ProcessCaptain Drew Flavell - [email protected] Drew Flavell - [email protected]

• PPBE is DoD’s resource allocation process• Planning establishes strategic prioritiesstrategic priorities and capabilities capabilities

requiredrequired to achieve the strategy

• Programming applies resources to programsprograms that provide the capabilities required capabilities required to achieve the strategic priorities strategic priorities

• Budgeting properly prices the programsprograms, develops justification and an execution planexecution plan

• Execution performs the approved planplan

• Constrained resources drive the process• Successively, within Navy & USMC, to DON, to OSD and to

OMB

• Must know requirements, and priorities among them

• Must achieve both program and TOA balance


The Federal Budget Over the Long Run The Federal Budget Over the Long Run

0

1000

2000

3000

4000

5000

6000

1970 1980 1990 2000 2010 2020 2030

DefenseOther Discretionary

Medicare

Social Security

Medicaid

Welfare & Other ServicesNet Interest

Other Retirement & Disability

$ in B

Entitlement

Programs

Discretio

nary

Programs

… … DoD competes for $$DoD competes for $$


SECDEF

Robert Gates

SOUTHCOM

GENFraser

PACOM

ADMKeating

EUCOM

ADMStavridis

CJCS

ADMMullen

CENTCOM

GENPetraeus

JFCOM

GEN Mattis

NORTHCOM

GENRenuart

VCJCS

GenCartwright

SOCOM

ADMOlson

STRATCOM

GENChilton

AFRICOMAFRICOM

GENWard

TRANSCOM

GENMcNabb

CombatantCombatantCommandersCommanders


Chief of Legislative

Affairs

Chief of Legislative

Affairs

Chief of Information

Chief of Information

Auditor GeneralAuditor General

Assistant for Administration*

Assistant for Administration*

DirectorSmall & DisadvBus. Utilization

DirectorSmall & DisadvBus. Utilization

Naval Inspector General

Naval Inspector General

Asst SecretaryOf the Navy

(Research, Dev & Acq)


(Research, Dev & Acq)

Chief ofNaval

Research

Chief ofNaval

Research

Judge Advocate General

of the Navy

Judge Advocate General

of the Navy

Secretary of the NavySecretary of the Navy

Undersecretary of the Navy

Undersecretary of the Navy

Navy Secretariat OrganizationNavy Secretariat Organization

DirectorProgramAppraisal

DirectorProgramAppraisal

DoN ChiefInformation

Officer

DoN ChiefInformation

Officer


(Manpower &Resv Affairs)


(Manpower &Resv Affairs)

Asst SecretaryOf the Navy(Fin Mgmt &Comptroller)

Asst SecretaryOf the Navy(Fin Mgmt &Comptroller)


(Installations &Environment)


(Installations &Environment)

General Counsel of the

Dept ofthe Navy

General Counsel of the

Dept ofthe Navy

Chief ofNaval

Operations

Chief ofNaval

Operations

Commandantof the

Marine Corps

Commandantof the

Marine Corps


Secretary of the NavyHonorable Ray Mabus

Under Secretary of the NavyHonorable Robert Work

Secretary of the NavyHonorable Ray Mabus

Under Secretary of the NavyHonorable Robert Work

OLARADM Miller

OLARADM Miller

DUSN forDepartmental

Plans, Policy, Oversight,

and IntegrationBill Natter

DUSN forDepartmental

Plans, Policy, Oversight,

and IntegrationBill Natter

ASN RD&A

Sean Stackley

ASN RD&A

Sean Stackley

ASN-I&E

Roger Natsuhara (Acting)

ASN-I&E

Roger Natsuhara (Acting)

ASN-FM&C

John McNair(Acting)

ASN-FM&C

John McNair(Acting)

ASN-M&RA

Juan Garcia

ASN-M&RA

Juan Garcia

CHINFORMDL

Moynihan

CHINFORMDL

Moynihan

JAGVADM

MacDonald

JAGVADM

MacDonald

DONCIORobert Carey

DONCIORobert Carey

IGVADM Winns

IGVADM Winns

Dir NCISThomas Betro

Dir NCISThomas Betro

CNRRADM Carr

CNRRADM Carr

AGR. Leach

AGR. Leach

The DoN SecretariatThe DoN Secretariat

SecNavPers Staff

SecNavPers Staff

GCGC

DUSN forBusiness Enterprise

Operations and Transformation

Eric Fanning

DUSN forBusiness Enterprise

Operations and Transformation

Eric Fanning

GC

Anne Brennan (Acting)

GC

Anne Brennan (Acting)

AAUSNE. Roberson

AAUSNE. Roberson

OPAJo. Decker

OPAJo. Decker


CNO

ADMRoughead

VCNO

ADMGreenert

DNS

VADMLocklear

Dir. Nuclear Propulsion

ADMDonald

N1

VADMFerguson

N8

VADMMcCullough

N2/N6

VADMDorsett

N3/N5

VADMCrowder

NGEN

RADMGoodwin

QDR

RADMBurke

Dir, Test & Evaluation

RDMLDunaway

Chief of Chaplains

RADMBurt

MCPON(SS/SW)West

N4

VADMLoose

Chief of Navy Reserve

VADMDebbink

Surgeon General

VADMRobinson

OPNAVOPNAV

MCPON


Presidentof the

United States

Secretaryof

Defense

CJCSJCS

Joint Staff

Functional and Geographic CombatantCommanders

DelegatedOversight

Responsibility

Military Departments/Services

ComponentCommands

Other Defense Agencies

Joint Military Community (JMC) Joint Military Community (JMC) – Reporting Relationships – Reporting Relationships


Linking to External Partners: OSD and JCSLinking to External Partners: OSD and JCS

DJS J1 J2 J4 J6

DNS N1 N2 N4 N6N3N5

OPA ASN(M&RA)

ASN(RD&A)

ASN(I&E)

ASN(RD&A)

DONCIO

ASN(RD&A)

ASN(FM&C)

N8

DIRADMIN

&MGMT

USD(Pers &

Red)

USD (I) USD(AT&L)

ASD(NII/CIO)

USD(AT&L)

USD(Comp/CFO)

USD (P)

Capability(JCS)

Specificity(OPNAV)

Stability(SECNAV)

Affordability(OSD)

J3J5

J7J8

CAPE


INDIVIDUALWARFARE ENTERPRISES

Navy Enterprise Navy Enterprise

NAE SWE USE NNFE NECC

PRODUCTIVITY DRIVERS: – Priorities– Behavioral Changes– Single Processes/ Owners

– Common Metrics– Integrated Capabilities– Transparency of Information

PROVIDERS & ENABLERS

MPT&E

AT&L

Installs

HealthCare

S&T

OUTPUT =READINESSATCOST

CNO

USFF/VCNO/ASN (RDA)

N8/ASN (FMB)

REQUIREMENTS

RESOURCESPROVIDERS

DemandSignals


PPBE Overlapping ‘Cycles’PPBE Overlapping ‘Cycles’

JAN 08JAN 08 JAN 11JAN 11JAN 10JAN 10

PR11PR11FY11 PBFY11 PB

ExecutionExecutionBudgetingBudgetingProgrammingProgramming

BudgetingBudgeting

PlanningPlanning

POM10POM10FY10 PBFY10 PB

JAN 09JAN 09


ProgrammingProgramming

PR:PR: Program ReviewProgram Review

POM: Program Objective MemorandumPB: President’s Budget

• Develop the strategy• Capability assessment • Allocate resources

• Fiscal constraints• Program balance

• Detail & accuracy• Justification• Develop the plan

• Perform the plan

ExecutionExecutionBudgetingBudgeting

ProgrammingProgrammingPlanningPlanning

TodayToday


PPBE Products In a Notional POM Cycle *PPBE Products In a Notional POM Cycle *

ExecutionBudgeting

Programming

POMOn-year

Planning

CNO InvestmentStrategy

Navy POM

Appropriation& Authorization

SecDef Guidance for the Development of the Force (GDF)

SecDef Joint Programming GuidanceNavy

Strategic Plan (NSP) CNO

Guidance

DON Budget Submits

Budget Estimate Submission

President’s Budget

SecDef Program/Budget Decisions

DON POM

USMC POM

Navy Capability Plans

* PR (off-year) products discussed in Programming module

Performance Plan

Funds Allocation

Reprogramming Request

Supplemental Request


• Five Years Defense Plan (FYDP)• Five-year period for resource allocation

• Planning years• Horizon for planning force structure & recapitalization• Anticipate FYDP resource implications (e.g. advanced procurement)

• Budget year• Congress review, authorization and appropriation

• Execution years• 1-10 prior years, depending on type of appropriation

PPBE TimeframesPPBE Timeframes

To Congress Spring 2010

0606 0707 0808 0909 1212 1313 1414 1515 1616 1717 1818 1919 2020 2121 2222 2323 2424

POM12POM12(‘On Year’)(‘On Year’)Every YearEvery Year

1111 2525 2626 2727

Execution Programming

Planning

1010


POM-12 TimelinePOM-12 Timeline


PPBEPPBEFocus of the decisionFocus of the decision

ProgrammingProgramming Program viewProgram view

SpaceSpace

ShipsShips

AircraftAircraft

Base SupportBase Support

IntelligenceIntelligence

MedicalMedical

FacilitiesFacilities

CommunicationsCommunications

Co

nst

ruct

ion

Co

nst

ruct

ion

Pro

per

ty R

epai

rP

rop

erty

Rep

air

Man

po

wer

Man

po

wer

Dep

ot

Mai

nte

nan

ceD

epo

t M

ain

ten

ance

Fu

elF

uel

Sp

are

Par

tsS

par

e P

arts

ForceForceApplicationApplication

BattlespaceBattlespaceAwarenessAwareness

ForceForceSupportSupport

PlanningPlanning Capabilities viewCapabilities view BudgetingBudgeting

Commodities/Appropriations viewCommodities/Appropriations view

Pro

cure

men

tP

rocu

rem

ent

RD

TE

NR

DT

EN


Achieving Resource BalanceAchieving Resource Balance

Integrationfor

ResourceBalance

Manpower

Readiness

Investment

• The right level of resources

• The right program prioritization

• The right amount of risk

• The right program tradeoffs

…among and between MANPOWER, INVESTMENTS, and READINESS


BudgetingProgramming

• Allocate resources• Fiscal constraints• Program balance



Execution

Planning

• Develop the strategy• Capability assessment

POM: Program Objective Memorandum PB: President’s Budget

• Strategy development - N3/N5 (N51)• Develop/refine military & business strategies

• Capabilities assessment - N8 (N81)• Identify and balance the warfighting & support

capabilities needed to achieve the strategy

PPPBE - (Planning)PBE - (Planning)

JAN 09 JAN 12JAN 11JAN 10



N81: Strategic AssessmentN81: Strategic Assessment

• Determination of warfare requirements, allocation of resources, program planning, and study efforts

N81/QDRDirector Assessments

N810Joint

Requirements& Acquisition

N814Warfighting

SupportAnalysis

N811Studies,

Resources& Costing

N816CampaignAnalysis

N812WarfightingAssessment

N81F*FORCEnet

N81G*Sea Shaping

N81M*Sea Basing

N81P*Sea Shield

N81T*Sea Strike

* N-81 Pillar Leads


Maritime StrategyMaritime Strategy

• The Navy is setting out a series of strategic plans to guide its way ahead in the 21st century.

• The Cooperative Strategy for 21st Century Seapower (a.k.a. CS21) is one element of a larger four-part structure that includes:

• Vision sets the ends. The Navy’s vision is Sea Power 21.

• Strategy is the ways and means to achieve the ends set forth in the vision. The new Maritime Strategy will fill this role.

• Operations, as addressed in the Naval Operations Concept, comprise the way resources are used and applied by the warfighter

• Resources are finite & the Navy Strategic Plan will establish CNO priorities and risk guidance for use by programmers in the development of the budget submission


CNO Guidance

Navy Strategic Plan

Guidance for Development of the Force

Campaign Analysis Baseline

Front End Assessment (N81)

Integrated Capability Plan (N81)

Warfighting Capability Plan (N81)

Integrated Readiness Capability Assessment (N4)

Integrated Sponsor Capability Plans (N1 & N6)

Integrated Infrastructure Requirements (N4/CNI)

Integrated Program Assessment (N81 April)

CNO Investment Strategy (N802)

CNO Approved Budget to FMB (May)

Budget Estimate Submission to OSD (July)

SEP NOVJUL 09 JAN 10 MAR

Navy Planning: Navy Planning: Assessing CapabilityAssessing Capability

POM 12POM 12PB 12PB 12 Budgeting

Planning


Programming

Execution


JAN JANJAN

Budgeting

Planning

JAN

• Develop the strategy• Capability assessment



Execution

PPBE ProgrammingPPBE Programming

• Program development• Assign resources to programs, to meet capabilities• Apply resource constraints to achieve fiscal balance

• Program review (not PR)• Balance across programs to optimize effectiveness

Programming

• Allocate resources• Fiscal constraints• Program balance

PR: Program Review

POM: Program Objectives MemorandumPB: President’s Budget


Resource ProgrammingResource Programming

• Allocation of future resources• ‘buy’ programs that provide capabilities from Planning Phase • Allocate in each year over the FYDP

• Constraints are imposed• ‘Topline’ TOA limits• Many participants have competing requirements• Guidance from ‘higher authority’ (Navy, DOD, OMB, Congress)• Fact-of-life (e.g. basing), ability to execute

• Iterative processes, within Navy and within DOD, to achieve program balance• Program development and recommendation• Program review (not to be confused with PR), adjustment and

decision

• Approved ‘program’ is starting point for budget


‘‘Resource’ in ProgrammingResource’ in Programming

• The commodity that is allocated in programming• In each FY over the FYDP• Commodities can be freely exchanged withinwithin a FY• Each has an established/approved ‘price’

• Three types of resources• Quantities: Equipment procured during a FY• End strength: Manpower planned at the end of a FY• $$$: For all other programs

Total F/A-18Total F/A-18ResourcesResources(for one FY)(for one FY)

Qty

3

$/each

$75,000K

Subtotal

$225,000K

Endstrength 25

$/each $120K

Subtotal $3,000K

Flt Hours 3,000

$/hour $5,000

Subtotal $15,000K$243,000K


Resource Integration (N80)Resource Integration (N80)

Dir, ProgrammingN80

Head, ProgramPlanning andDevelopment

Head, POMStrategy, R3B

Dep Director

Readiness

MPT&E

FORCEnet

SeaBasing

Sea Shield

Sea Strike

SeaShaping

DatabaseMgmt

N80 “Pillar Leads”

Integrationfor

ResourceBalance

POM Strategy

• R3B Secretariat/Issue Coord

• CNO Investment Strategy

• Develop POM guidance, controls, timelines

• Emergent OSD, Joint, Fleet, USMC Requirements

Program Development

• Support balanced investment (warfighting) requirements

• Monitor programs throughout


Manpower, Personnel, Training & Manpower, Personnel, Training & Education (N1)Education (N1)

• Provide the right person in the right place at the right time• Strive to satisfy personal goals and improve their quality of life• Provide meaningful and rewarding career opportunities, promote and

retain the best• Ensure fair and equitable treatment of all hands, by all hands, at all

times

Manpower

N1Manpower, Personnel, Education & Training

Chief of Naval Personnel

N12Total Force ProgrammingManpower & Information Resources Management

N11Civilian Community Management

N13Military Personnel

Plans & Policy

N10MPN FinancialManagement

N16Chief Information Officer

MPT&E InformationManagement


Readiness & Logistics (N4)Readiness & Logistics (N4)

• Provide relevant policy, resources, structures and mechanisms to meet leadership defined readiness requirements of Navy operating forces and their associated shore installations

• Enable a responsive, adaptive and efficient logistics support structure that facilitates that readiness and supports the integration of Naval forces into the joint force

Readiness

N4Fleet Readiness & Logistics

N42Strategic Mobility &Combat Logistics

N40Logistics, Planning & Innovation

N43Fleet Readiness

N41Supply, Ordnance &Logistics Operations

N46Ashore ReadinessN45

Environmental Protection& Readiness


Investments (N8F, N8(x))Investments (N8F, N8(x))

• CNO’s principal advisor for warfare capability requirements and integration• Conduct warfighting analysis and programming to support PPBE

• Fleet’s OPNAV focal point for warfighting & joint requirements

Dir, Warfare IntegrationN8F

Oceanographer/Navigator of

the Navy(N84)

Expeditionary Warfare(N85)

Surface Warfare(N86)

Submarine Warfare(N87)

Air Warfare(N88)

Special Programs

(N89)

Dep Director

WarfareIntegration(N6F/N83)

Investment


Resource SponsorResource Sponsor

• Responsible for an identifiable group of resourcesresources constituting certain warfare or supporting tasks• Interrelated programs or parts of programs in several mission

areas• Ensuring an effective and balanced program within assigned

fiscal controls• Assisting during internal-Navy budget reviews in order to maintain

a balanced program

CNO

DNS

SYSCOMS COMUSFFC

CNICOther Ech 2

Readiness InvestmentManpower N8(0)

Wears the “hat”

Process Coordinator

SECNAV:AAUSN


Programmatic options to “fix” disconnects

Resource Sponsor ActionsResource Sponsor Actions

• Fund Requires resources

• Restructure Adjust program’s required results

• Reengineer Revise processes to use fewer resources

There is a non programmatic option…accept the risk

Most often, accepting risk involves delaying funding or assuming the problem can be fixed in execution

Most often, accepting risk involves delaying funding or assuming the problem can be fixed in execution


Unfundeds (Risk)

Most Dear

FY12New Funded

Content

Least Dear

Funded

Unfundeds

Most Dear

FY06/07Existing

Funded Content

Least DearOffsets

New Requirements

Most Dear

FY12/17Funded Content

Least Dear

RSMost Dear

FY09New Funded

Content

Least Dear

Most Dear

FY09New Funded

Content

Least Dear

Most Dear

FY09New Funded

Content

Least Dear

Most Dear

FY12/17New Funded

Content

Least Dear

Unfundeds

Programming ProcessProgramming Process

• Adjust program content by moving resources from lower priority content to content of higher priority

• In each successive activity, the services adjust the content of the FYDP based on new or changing requirements

• Low priority programs gave way to fund higher priority programs


• In general, there are four sources of offsets• Reducing or delaying investments

• Cutting RDT&E funds, delaying modernization, stretching procurement

• Reducing/accepting risk in readiness• Cutting operational and formal skills training budgets, eliminating

forward basing

• Divesting forces • Planes, ships, readiness, people

• Reducing infrastructure• Base support, tech refresh, ranges and minor facilities

• Some will argue for a fifth source: efficiencies

Sources of OffsetsSources of Offsets


Programming - Fiscal GuidanceProgramming - Fiscal Guidance

DoN$148B

Air Force$143B

Army$139B

Other$81B

USN$120B

USMC$25B

DoD DoN USN

N8F$54B

N4$27B

N1$30B

Other$4B

N6$5B

• OSD issues Service TOA controls across the FYDP

• SECNAV approves DoN ‘Blue – Green’ split

• N8 distributes Resource Sponsor shares for SPP development

SRB$2B

**Numbers may not add due to rounding to nearest $Billion.


CongressActions

N80POM/PR

WARNORDPLANORD

FRAGORD(s)

Fact of LifeUnfundeds

Sponsor Program ProposalSponsor Program ProposalMany Inputs, Two OutputsMany Inputs, Two Outputs

Each Sponsor has an internal process to:

Explore options• Capabilities balance• Program balance• Resource balance

Allocate across FYDP• Endstrength• Investment• Readiness, support,

etc. TOAMake recommendations

• Database issue details• Briefing to BODN8

ProgramGuidance

FiscalGuidance

SPPSPPBriefingBriefing

N81Invest

Strategy

CNO‘Path

Ahead’

COCOMIPLs

CCIPs

FY09FY09 FY11FY11 FY15FY15……..PriorityPriority

11........ww

Above Core Issues(Unfunded)

FY09FY09 FY11FY11 FY15FY15……..

11........pp

Core Issues(Funded)


‘EndGame’

POM/PR ‘Endgame’POM/PR ‘Endgame’Iterative, Fast-PacedIterative, Fast-Paced

Resource Sponsors submit SPPs

Integrate SPPs (N8)

Pre T-POM Assessment (N8 with USMC)

Revise SPPs and build T-POM (N8)

CNO approve Navy POM

JAN MARNOV MAY JUL

• N8-led ‘process’ to balance the Navy POM• N80 compiles SPPs to create the Tentative-POM (T-POM)• N81 assesses degree the T-POM achieves the Investment Strategy• N80 assesses for resource and program balance across the FYDP, and

compliance with other guidance • R3B/BoD reviews the T-POM

• Identify guidance ‘busts’, recommend options to CNO• CNO involved early and often

• CNO Guidance provides adjusted guidance to optimize T-POM balance

AUG


POM to BSOs

POM to OSD

OSD/CAPE POM Issues

DoD Senior Level Review (SLRG, DAWG)

DepSecDef Resource Management Decisions

JUL SEPMAY NOV JAN

BSO Budget submits

FMB review and markup

SecNav budget decisions

BSOs & FMB develop BES

Budget Estimate Submission to OSD/C

OSD/C review and Resource Mgmt Decisions

Major Budget Issues

DepSecDef decisions

Develop & submit President’s Budget (Feb 1)

Program Review Program Review Concurrent with BudgetConcurrent with Budget

PR12PR12FY12 PBFY12 PB Budgeting

Planning


Programming

Execution


OSD Program Review ProcessOSD Program Review Process

OSD Issue Team

(w/ DoN member(s))

Pre SLRG or DAWG

(DEPSECDEF)

SLRG/DAWG(SECDEF)

SECNAV/CNO attends

briefings

CAPE/ 3-Star Meeting

N8 AttendsIssue Papers or

Briefing

CAPEComptroller

VCJCSSECDEF

3-Star

OSD Issue Team- Analysis - Programmatics- Alternatives - Courses of Action

Briefing and/or Paper

RMD

Courses of

Action

Courses of

Action

SLRG/DAWG

Out-of-Court CAPE/ N8/N80 negotiate issues

Courses of

Action


Planning

PPPPBBEE: Budgeting: Budgeting

JAN 08 JAN10

POM10POM10FY10 PBFY10 PB Execution

Programming

JAN 09

POM12POM12FY12 PBFY12 PB Planning

POM: Program Objectives Memorandum

PR: Program ReviewPB: President’s Budget

• Detail & accuracy• Prior year execution• Justification and defense

• Performing as appropriated

ProgrammingBudgeting

• Program balance• Fiscal constraints

PlanningPR11PR11FY11PBFY11PB Programming

Execution

JAN11

Budgeting

Budgeting


Applying Fiscal Granularity Applying Fiscal Granularity

Asst Secretary of the Navy(Financial Mgmt & Comptroller)

Dir, Fiscal MgmtFMB/N82

FMBB/N82B: Asso. Director

FMBEAsst for

Appropriation Matters

Investment &Development

DivisionFMB2/N822

Program/Budget Coord

DivisionFMB3/N823

Civ Resources &Business Affairs

DivisionFMB4/N824

Budget Policy& Procedures

DivisionFMB5/N825

Operations Division

FMB1/N821


Appropriation SponsorAppropriation Sponsor

• The senior executive in the DON responsible for • Supervisory control and broad decision-making authority over a designated

appropriation • Assisting in solving funding deficiencies during budget formulation• Representing Navy before Congress

- preparing and reviewing witness statements- responding to questions and briefing Congressional members or staff- reviewing Committee reports and for preparing consolidated appeals

• Recommending the reprogramming of funds within the appropriation during budget execution

CNO

DNS

SYSCOMS COMUSFFC

CNICOther Ech 2

Readiness InvestmentManpower FMB/N82

Wears the “hat” Process Coordinator


Budget Submitting OfficeBudget Submitting Office

• A DON office responsible for• Preparation, compilation, and submission of budget estimates and supporting

materials• Delivering prescribed exhibits and ensuring that subordinate offices submit

materials on time• Ensuring submissions are consistent with DON Review and OSD/OMB budget

decisions• During budget execution, ensuring budget plans are accomplished within

available fundingCNO

DNS

SYSCOMS COMUSFFC

CNICOther Ech 2

Readiness InvestmentManpower FMB

Wears the “hat”

Process Coordinator


1. Budget guidance is issued

2. Current/prior fiscal year execution is reviewed

3. Disconnects between guidance and execution are identified

4. Exhibits are prepared and submitted (BSO)

5. Exhibits are reviewed and analyzed; adjustments are recommended (FMB) via Issue Papers

6. Appeals are submitted (BSO)

7. Meetings are held to resolve outstanding issues

8. Approved budget is submitted to next level

Note budgeting is a bottom-up exercise. Planning and programming are top-down.And, this process repeats FOUR times!

How to Build a BudgetHow to Build a Budget

Navy BSONavy BSO

Navy FMBNavy FMB

OSD (C)OSD (C)

OMBOMB

CongressCongress


PR to OSD (ref: 14 Aug 2009)

OSD/CAPE PR Issues (Aug 14 – Sep 14)

DoD Senior Level Review Group Review (Sep-Oct)

DepSecDef Resource Management Decisions (Sep –

Dec)

JUN AUGAPR 10 NOV JAN 11

BSO Budget submits (6 Jul)

FMB review and markup (2 Jul – 12 Aug)

SecNav budget decisions (12 Aug)

Budget Estimate Submission to OSD/C (14 Aug)

OSD/C review (Aug 14 – Sep 14)

DepSecDef decisions – RMDs (Sep – Dec)

Develop & submit President’s Budget (Dec 4)

President’s Budget Released (Feb 1)

Concurrent Program & Budget ActivitiesConcurrent Program & Budget Activities


What’s an “Exhibit”?What’s an “Exhibit”?

• Additional detail beyond database numbers• Walks from year to year with explanation• Examples:

• Three key exhibit formats:• Horizontal” (fiscal years from left to right)• “Vertical” (like a checkbook register)• “ Hybrid” (fiscal data at top; written justification below)

Appropriation Exhibit Title Broken Down To:

MILCON C-1 BA, State, Base, Project

MILPERS M-1 Budget Activity and project

O&M OP-5 BA and AG/SAG

Procurement P-5 BA and Budget Line Item (BLI)

RDT&E R-2 BA and Program Element (PE)


What Do Budgets Look Like?What Do Budgets Look Like?

Let’s look at part of the DoN FY11 O&M Budget (758 pages total)

http://www.finance.hq.navy.mil/fmb/11pres/BOOKS.htm


Reading Budget Exhibits:Reading Budget Exhibits:Price Growth vs Program GrowthPrice Growth vs Program Growth

A “horizontal” exhibit example (OP-32) – see handout

If quantity stays the same but cost changes, that’s PRICE growth. Examples: - Inflation- Foreign currency- Utility rates- Fuel fluctuations- Pay raises

If quantity changes, that’s PROGRAM growth.


Leading Players in the ProcessLeading Players in the Process

Congressional Oversight CommitteesCongressional Oversight CommitteesCongressional Oversight CommitteesCongressional Oversight Committees

House of Representatives• Budget Committee (HBC) -- Budget Resolution• Armed Services (HASC) -- Authorization• Appropriations Committee (HAC) -- Appropriations

Senate• Budget Committee (SBC) -- Budget Resolution• Armed Services (SASC) -- Authorization• Appropriations Committee (SAC) -- Appropriations


4

House CompletionTargetfor FY09 Approps Bills

ConcurrentBudgetResolution

Defense / MilconAppropriationBills

PBTo Hill

30

House

Senate

House

Senate

4

DefenseAuthorizationBill

House

Senate

MARFEB APR MAY JUN JUL AUG SEP OCT NOV

FYBegins

1

Note: All timeframes projected/approximate

Congressional Budget TimelineCongressional Budget Timeline

HBCHearings

SBCHearings

Markup

Markup

Floor

Floor

CONF

Floor

Floor

CONF

Floor

Floor

PublicLaw

Floor

Floor

PublicLaw

CONF

HASC Hearings

SASC Hearings

Markup Floor

Markup Floor

HAC Hearings

SAC Hearings Floor

Markup

Floor

Markup


• Agriculture• Commerce, Justice, Science• Defense• Energy and Water• Financial Services• Homeland Security• Interior • Labor, HHS• Legislative Branch • Military Construction / VA• State / Foreign Operations• Transportation / HUD

302(b) Allocations (and Appropriations)302(b) Allocations (and Appropriations)


Authorization Process Authorization Process (Armed Services Committees)(Armed Services Committees)

• Defines the scope and content of programs and authorizes their appropriation level

• Provides statutory authority to establish or maintain a government program or agency

• Legislative vehicle for Congress to address policy issues and concerns and exert its oversight role

• Must have Authorization for:• Pay Raise• End Strength• New Start Programs• MILCON projects


Appropriation ProcessAppropriation Process(Appropriation Committees)(Appropriation Committees)

• Provides authority to DoD to obligate funds for defense programs

• Usually approved at the “account” level, e.g. Combat Training Ranges

• Obligation authority usually for a specified period

• “Policy” language not permitted

• Bulk of defense funding provided by three appropriations acts

• DoD Appropriations

• Military Construction Appropriations

• Energy and Water Appropriations


Types of Appropriations ActsTypes of Appropriations Acts

• Regular Appropriations Acts• 12 individual bills

• Provides budget/obligation authority for the next FY

• Continuing Resolutions (CR/CRA)• Enacted when 1 or more of the 12 regular bills have not

become law by Oct 1

• Provides stop-gap funding at level usually no higher than lowest of levels approved by HAC, SAC or prior fiscal year

• Restricts authority to current programs only - no new starts

• Supplemental Appropriations Acts• Provides funds for emergency or unforeseen expenses for

current fiscal year


Coordination is KeyCoordination is Key

OLA

• Liaison for authorization matters

FMBE

• Liaison for appropriation matters

DoNPIC

• Department of Navy Program Information Center

REMEMBER:

• Whenever you deal with Congress or Congressional Staff, ALWAYS adhere to the coordinated DoN, DoD, and Administration position


FY10 Budget ExecutionFY10 Budget Execution

DEC 09 MAR 10SEP 09 SEP 10

FundsApportioned

N82 Year-end Reapportionment

N82 Midyear Review

BSOExecution

Supplemental/Omnibus Reprogramming

Auth/AppnLaws

JUN 10

CRA

POM10POM10FY10 PBFY10 PB Budgeting

Planning


Programming

Execution


Three (and ½) Execution Phases:Three (and ½) Execution Phases: Summary Summary

Obligation:Obligation:Legal

encumbrance;Specified amount

for purpose or product when an order is placed

Expenditure:Expenditure:Authorization for

funds from Treasury

resulting from presentation of a voucher or claim

Outlay:Outlay:Cash paid

by the Treasury

2

3

1

1 ½

Deobligation: reversal of an obligation due to contract mod, order cancellation, completion of task. etc


Three Execution TimeframesThree Execution Timeframes

Phase Oblig. De-Obl. Expend Outlay

Current(1 yr +) Expired(5 yr +) X

Cancelled X X X X

1 2 3


Execution Activities: Execution Activities:

External ReprogrammingExternal Reprogramming

• Moving funds from one appropriation to another

• Cannot be done without approval of Congress (all 4 committees)

• Annual “Omnibus” reprogramming falls into this category

• Also some limits prohibiting reprogramming within an appropriation

• Difficult way to increase program value

APNAPN O&MNO&MN


Congressional Reprogramming GuidelinesCongressional Reprogramming Guidelines

Must ask Congress to… Must notify Congress to…• Move funds between any

appropriations• Increase any “major procurement”

quantity• Affect a Congress Interest Program• Shift > $10M MILPERS• Shift > $15M O&M• Shift > $20M or 20% Procurement• Shift > $10M or 20% RDT&E• Begin any new start > $20M• Terminate procurement ($20M) or

RDT&E ($10M)

• Begin a new start • Shift < $20M Procurement• Shift < $10M RDT&E• Execute safety mod < $20M• Terminate RDT&E < $10M

All requests are submitted and approved by USD(C) before transmittal to Congress

www.dod.mil/comptroller/execution/Final_Budget_Execution.pdf

Via Prior-Approval Reprogramming Request (a.k.a. “Above Threshold Reprogramming”)


Funds Usage Expectations: Funds Usage Expectations: Stay Within The LawStay Within The Law

Public Law says…

• 31 USC 1301: Appropriated funds may be used only for the purposes for which the appropriation is made

• 31 USC 1517: No officer or employee may authorize an obligation in excess of the amount available in an appropriation or subdivision thereof

In any given year you cannot exceed either the authorized Outlay amount or Total Obligation Authority

“fiduciary responsibility”


Other Execution Activities: Mid-Year ReviewOther Execution Activities: Mid-Year Review

• Budget performance is monitored against plans developed during the budget formulation process• Program performance

• Obligation and outlay phasing

• O&M accounts required to perform an execution review and submit the results for approval

• Realignment of funds made in accordance with urgent “unfunded” requirements

• Remaining reserve may be released to help finance approved unfunded requirements


Execution Activities: Fiscal Year CloseoutExecution Activities: Fiscal Year Closeout

• Annual appropriations must be fully obligated by 30 September each year

• 4th quarter intense effort to pull back unobligated funds and reissue to other unfunded requirements

• Funds not obligated cannot be restored and any underexecution will cause reductions in the following fiscal year level of available funding

• Obligation adjustment can be made during the 5 year expired status

• After that period, adjustments must be financed with an appropriation currently available for the same purpose


USSTRATCOM USTRANSCOM

USCENTCOM USEUCOM USPACOM USSOUTHCOM

Geographic Combatant Commanders

Functional Combatant Commanders

USJFCOM USSOCOM

USNORTHCOM

President of the United States

Secretaryof

Defense

CJCSJCS

Joint Staff

DelegatedOversight

Responsibility

USAFRICOM

Joint Process - Combat Commands Joint Process - Combat Commands – Reporting Relationships – Reporting Relationships


Warfighters

CJCS, JCS, JS, Combatant Commanders (COCOMs)

Function/Purpose: • Advise President and

SecDef on strategic direction of armed forces

• Fight and win nation’s wars• Advocate for warfighting

(program and resource) requirements to enable that outcome

• Submit budget proposals for combatant command activities

Resource Providers

• Services/Military Departments

• Function/Purpose: • Organize, train, and equip• Prepare and submit budgets• Prepare and provide forces to

employ in time of war• Serve as “executive agent” for

combatant commands

Different Responsibilities: Different Responsibilities: Warfighters vs Resource ProvidersWarfighters vs Resource Providers


Combatant Command PriorityNear term warfighting

requirements

Service PrioritiesNear term readiness

Longer-term modernization

• Creates tension in the resource allocation process• Can be healthy

• promotes balance between near-term/unconstrained COCOM focus and long-term/constrained Service focus

Balancing Competing Objectives: Balancing Competing Objectives: Combatant Commanders and ServicesCombatant Commanders and Services


USMC - HQMC OrganizationUSMC - HQMC Organization

Commandant, USMC

ACMC

DMCS

Counsel for the CommndantChaplain of the Marine CorpsSergeant Major of the Marine Corps

Special Projects Directorate

Marine Corps Logistics Command

Marine Barracks Washington, DC

Marine Corps Recruiting Command

Marine Corps Combat Development Command

DC, AviationDC, Installation

& LogisticsDC, CombatDevelopment

DC, Plans,Policies & Operations

DC, Manpower& Reserve Affairs

DC, Programs& Resources

Command, Control, Comm &

Computers

Dir, Health Services

Dir, Intelligence

Dir, Public Affairs

Staff Judge Advocate

Legislative Assistant

Inspector General

Marine Corps Systems Command

Marine Corps National Capital Region Command

Director, Safety Division


HQMC OrganizationHQMC Organization

• HQMC/P&R coordinates USMC PPBE• Principal participants build the USMC program

Programs& Resources

Asst. CommandantACMC

Aviation

CommandantCMC

Installations& Logistics

Plans, Policy& Operations

Manpower &Reserve Affairs

Command, Control, Comms & Computers

LegislativeAssistant

InspectorGeneral

Intelligence Health Affairs

Public Affairs Judge AdvocateAdmin &

Resource MgmtHistorical

Programs& Resources

Asst. CommandantACMC

Aviation

CommandantCMC

Installations& Logistics

Plans, Policy& Operations

Manpower &Reserve Affairs

Command, Control, Comms & Computers

LegislativeAssistant

InspectorGeneral

Intelligence Health Affairs

Public Affairs Judge AdvocateAdmin &

Resource MgmtHistorical


USN and USMC IntersectionsUSN and USMC Intersections

N88

N85N8

Liaison(O-4)

P&RBlueCell

• Shared Resources:• Blue/Green Split

• Jointly predetermined funding ratio between Services• “BISOG” – Blue in Support of Green

• Funds held at USN level that support USMC programs

N43 FHP Lead

(O-5)


DoN Budget as a Share of DoDDoN Budget as a Share of DoD

Navy 72%

Direct 7%Marine Corps

17%

Indirect 4%

* PB 08 Increase experienced from Grow-the-Force~5%

DoD TOA

TOA TY$B FY10 FY11 FY12 FY13 FY14 FY15POM08 USMC 20.6 21.2 21.7 22.3POM08 DoN 124.1 127.4 130.1 132.4POM08 B-G Split 14.2% 14.3% 14.3% 14.4%POM10 USMC 27.2 28.0 28.7 28.6 29.2 30.0POM10 DoN 133.3 138.1 141.6 144.3 149.7 152.3POM10 B-G Split 17.0% 16.9% 16.8% 16.5% 16.3% 16.5%

Change + 2.8% +2.6% +2.5% +2.1% - -

NAVY PPBE PROCESS

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