Office of Budget 1 Overseas Contingency Operations Supplemental Process Brief Professional...

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Office of Budget

Overseas Contingency OperationsSupplemental Process

Brief

Professional Development Institute

May 2009

Mr. Rick McKutchin/FMB-11

2Office of Budget

– Overseas Contingency Operations (OCO)• Estimate cost of continuing Contingency Operations (CONOPS)

– Operation Enduring Freedom (OEF)– Operation Iraqi Freedom (OIF)

– Recapitalization (Reset)• Restore equipment returning from OIF/OEF• Equipment replacement• Sustainment to include munitions and consumables backfill

– Other• Transportation surcharges• Equipment to counter emerging threats• Over-Strength

− Current FY 2009 and FY 2010 amounts reflect integrated BSO estimates and current COST model projections as approved by OSD/OMB

Overview

3Office of Budget

Each year presents different challenges associated with Supplemental funding.

2001 / 2002• Defense Emergency Response Fund (DERF) created to respond to 9/11 attack

• Operation Enduring Freedom

• “No-year” funds

$3.8B DON$3.8B Navy (DERF) $27M USMC (DERF)

2001

$2.8B DONOperations -$2.0B USNInvestment - $0.5B USN

Operations - $0.3B USMCInvestment – 3.5M USMC

2002

2003• Included all OIF/OEF combat operations

• All incremental costs funded

$11.5B DONOperations - $7.6B

USNInvestment - $0.5B

USNOperations- $3.3B

USMCInvestment- $0.1B

USMC

2004• Originally premised on post-war sustainment level of support

• Situation changed for OIF-2, where Marine Corps and Navy personnel rotated in to replace Army units mid-year

• Absorbed $1.6B GWOT costs from baseline



USNOperations - $2.5B

USMCInvestment - $0.3B

USMC

2005• Funded all OIF/OEF combat ops

• Restored equip returning from OIF/OEF

• Funded: higher baseline fuel and WCF cash drawdown; USMC Force Structure Change – 2 add’l rifle BNs

•Noble Eagle (Homeland Defense) funded in baseline

$13.3B DONOperations - $4.2B USNInvestment - $1.3B USN

Operations - $4.3B USMC

Investment - $3.5B USMC

4Office of Budget

Each year presents different challenges associated with Supplemental funding.

2006Request approved by OSD based on

similar OPTEMPO as 2005

• Did not support NECC/ GWOT initiatives

• Funded: MilPers and O&M full request and higher baseline fuel.

• Large initial request to fund USMC reset costs (vehicles & weps)

$16.8B DONOperations - $6.2B USNInvestment - $1.0B USN

Operations - $4.8B USMC

Investment - $4.7B USMC

2007FY07 included

surge force requirement

•Addresses Navy reset

• Support for NECC initiatives

• Includes fuel and utility re-pricing

•Funded OSD/ Congressional baseline OPTEMPO reductions





USMC

2008Original Request based on similar

OPTEMPO as 2007, excluding

surge

• Continues to address DON reset

• Amended Supp Request addressed accelerated Navy reset and surge extension

Requested

2009Request based on similar OPTEMPO as 2008, excluding

surge

• Maintains current level of effort

• Continues to address DON reset

•Reflects initial shift from Iraq to Afghanistan





USMC





USMC

Bridge Received $7.3B

Remaining Request $9.7B

5Office of Budget

Each year presents different challenges associated with Supplemental/Request funding.

TBD 2011OCO funding expected to

continue at a reduced level

Requested

2010Relatively steady-state OPTEMPO

• Maintains current overall level of effort

• Continues to address DON reset with limitations

•Continues assumed Iraq drawdown and increased OPTEMPO in Afghanistan





USMC

$ TBD DONOperations - $ TBD

USNInvestment - $ TBD

USNOperations - $ TBD

USMCInvestment - $ TBD

USMC

6Office of Budget

Guidance through FY 2009

•DoD Financial Management Regulations (Vol 12, Chap 23): Supplemental funding may be requested to cover costs resulting from unanticipated events

- “DoD Components normally do not budget for contingency operations…”

•Prior Year OUSD(C) Guidance:- In FY 2005, “the Department will identify the unfunded incremental requirements in

support of OIF, Operation Noble Eagle (ONE), and OEF.” Did not forward ONE request to Congress.

- In FY 2006, “emergency supplemental request for [CONOPS] address the incremental costs above the baseline funding needed to support specific forces and capabilities required to execute OIF and OEF.” Does not include funding for ONE.

•OUSD(C) guidance for the FY 2007 through FY 2009 Supplemental submission:- “This supplemental will address only those incremental costs which are “emergency”

in nature and are specifically required to prosecute mission objectives during FY 2007. Costs that can be deferred without immediate operational impact will not be included.”

- Supplemental to include:• “…incremental costs above the baseline funding needed to support specific forces and

capabilities required to execute OIF, OEF, and Operation Jump Start (OJS).”

• “…requested construction projects must be in Iraq or Afghanistan and be in direct support of OIF/OEF.”

- The request for supplemental funds will not:• “Restore program funding reduced to finance GWOT costs”

• “Restore Congressional reductions”

7Office of Budget

Guidance for FY 2010 and FY 2011*

•Guidance for FY 2010- Geographic area/Theater of Operatuions = Iraq and Afghanistan

• Persian Gulf; Gulf Nations, Pakistan, Kazakhstan, Tajikistan, the Horn of Africa, Arabian Sea, the Indian Ocean

- Major Equipment: Replacement only for items not programmed for replacement in the FYDP; must be executable within 12-months

- Aircraft replacement: Combat losses occurring in theater of operations

- Munitions: Replenishment of munitions expended in combat if existing stock are inadequate

- Operations: Within theater direct incremental costs- Exclusions: Training equipment; SLEPS; Family Support Initiatives;

personnel above the level requested in the President’s Budget

•Guidance for FY 2011- PR-11 Guidance: *Move items not directly related to operations in

Iraq / Afghanistan / Horn of Africa into the baseline TOA

8Office of Budget

How Estimates are Formed (O&M / MILPERS)

•Budget Submitting Offices Provide estimates via PBIS and OP-5’s

•FMB-1 Contingency Branch models the annual cost using the Contingency Operations Support Tool (COST) Model

- Fleet schedule inputs, both afloat and ground based units (ie SEABEE)

- Estimates for the number of personnel filling IA positions

- OPTEMPO standardized with OSD guidance

- Navy requirements are incremental to baseline

•Comparison made between COST and BSO estimate

•Changes or overrides to COST made as needed.

9Office of Budget

Contingency Operations Support Tool

•Sponsored by OUSD (Comptroller)

•COST Team- Comptroller

- Joint Staff

- Army, Navy, Air Force, Marines

- SOCOM, NORTHCOM

- Institute for Defense Analysis (IDA)

- Office of Management and Budget (OMB)

10Office of Budget

COST Business Rules

•Incremental Costs

•No Munitions

•No Procurement

•Credit Peacetime OPTEMPO

•Special Pays for Active Duty Personnel

•Full Pay plus Special Pays for Reserve Personnel

•Credit Reserve Drill and Training

•Transportation by Category, Mode and Route

11Office of Budget

Reset/Recapitalization

•Definition: “Actions taken to restore units to a desired level of combat capability commensurate with the units’ future mission. It encompasses maintenance and supply activities that restore and enhance combat capability to unit and pre-positioned equipment that was destroyed, damaged, stressed, or worn out beyond economic repair due to combat operations by repairing, rebuilding, or procuring replacement equipment. These maintenance and supply activities involve Depot (Sustainment) and Field Level (e.g., Organizational and Intermediate) repairs/overhauls centrally managed to specified standards. Included are Procurement, RDT&E, and Operation and Maintenance funded major repairs/overhauls and recapitalization (Rebuild or Upgrade) that enhances existing equipment through the insertion of new technology or restores selected equipment to a zero-miles/zero-hours condition.”

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Office of Budget

Investment

13Office of Budget

How Estimates are Formed (Investment)

•Budget Submitting Offices provide estimates - Input spreadsheet - “Color Top” (i.e. “Green Top”)

- Narrative Justifications

•N80 Reset list

•Naval Expeditionary Command Enterprise input

•MIP/NIP program manager input

•Emergent technologies

•CENTCOM/USMC MILCON requirements

14Office of Budget

N80 Reset List (Examples)

•Aviation- USN New Aircraft: F/A-18, MH-60R, C-40

- USN Upgrades: F-18, P-3, EA-6B

- USMC New Aircraft: V-22, KC-130J, H-1

- USMC Upgrades: AV-8B, F/A-18, C-130, helos

•Weapons- USN: Tomahawk, MK38 Gun mount mods, JSOW

- USMC: LAV upgrades, HIMARS launchers and rockets, Javelin, TOW missiles, Hellfire, Pioneer

•Ammunition- USN/USMC: Small Arms/Landing Party ammo, Airborne Rockets

•Other Equipment- USN: Construction Equipment, Tactical Vehicles, Night Vision Equipment

- USMC: Unit Ops Centers, Radios, Night Vision Equipment, Tactical Vehicles, Littoral Battlespace Sensing, Al Asad Facility Transfers, EOD Systems, Construction Equipment

15Office of Budget

NECE

• Vehicles - MRAP- HMMWV- Passenger Carrying Vehicles

• Construction Equipment- Earth Moving Equipment- Cranes- Miscellaneous Construction Equipment

• Standard Boats- 7m Rigid Inflatable Boat (RIB)- Riverine Multi-mission Craft- Riverine Command and Control craft- Force Protection (small and large)

16Office of Budget

Emergent Technologies

•Mine Resistant Ambush Protected (MRAP) Vehicles

CAT I Representatives CAT II Representatives CAT III

HMMWV after IED MRAP After IED

17Office of Budget

MILCON (Examples)

•Horn of Africa – Infrastructure Camp Lemonier, DJIBOUTI - Electrical Power Production- Water Production- HQ Dining Facility- Fuel Farm- Full Length Taxiway

•Grow the Force (FY 09 and prior)- Support for Blount Island- Intel Battalion- JIEDDO Battle Courses

•Child Development Centers

•FY 2010 = 0

18Office of Budget

Cost of War Reporting

Importance of accurate and timely reporting

What is information used for?

•To monitor current year OCO funding execution

•Justify future requirements through validation of program execution

Who needs it?

DON; OSD; DFAS ; OMB and Congress

•Due to FMB-1 – 8th of each month

•Due to DFAS – 16th of each month

19Office of Budget

Cost of War Improvement Project

•Cost of War Improvement Team established to analyze the OCO CoW estimation and reporting methodologies

•Implementation Complete- Conducted site visits to both Navy Fleets and their subordinate operating

units, personnel commands, acquisition commands, and regional commands

- Also conducted site visits to USMC systems commands and expeditionary units

- Issued guidance in September 2008 to Department of the Navy activities• Summarize best practices and data commonalities

• Standardize cost reporting and modeled methodologies

• Ensure reliable, repeatable, and defendable output

•Compliance Validation / Testing Underway Now- Ensure BSO’s have implemented proper procedures to capture CoW

accounting data

- Preliminary Findings will be presented to Senior Navy leadership

20Office of Budget

Amended FY 2009/FY 2010/2011

•TBD/Discussion

Office of Budget 1 Overseas Contingency Operations Supplemental Process Brief Professional...

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