US Department of Defense Planning, Programming, Budgeting, Execution

PPBE

2

PPBE Process

Programming Budget Execute Planning

FY-14 FY-15 FY16-20 FY-20+

• Planning: Strategic Vision, Initial Program Evaluation

• Programming: Program development, Program Competition

• Budgeting: Program defense, Allocation of Funds, Supplemental

• Execution: Monitor, In Close Adjustments

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PPBE Planning, Programming, Budgeting and Execution

DoD’s process for:

Strategic planning Predict and describe the most likely future strategic environment

Define the military capabilities it requires

Resource allocation Assign assets to meet identified missions according to established priorities

Program integration Identify and analyze mission shortfalls and duplications

Suggest alternatives for minimizing or eliminating them

Budget formulation Produce an annual budget to Congress linking missions to requested funding

Result: 4 Concurrent Processes running at the same time.

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• 1961: PPBS introduced by SecDef R McNamara

• 1986: Congress authorized biennial budgeting

– Two budget years in PresBud; continue one-year appropriations

– DoD implemented on-year (rigorous)/off-year (on-margins) PPBS

– In-practice, rigorous process continued annually

• 2003: Management Initiative Directive 913 established PPBE (vice PPBS)

– Reduces annual ‘churn’, introduces process stability

– Enforces on-year (POM)/off-year (PR) cycle

– Creates Budget execution as a formal process phase

– Continues concurrent OSD program & budget reviews

– Installs Quadrennial Defense Review is planning centerpiece

– Ensures Significant change in near-term process as unlikely

PPBES Historical Background

5

PPBE Ethereal to Reality

QDR

Ship To

Objective Maneuver

OMFTS Army 2010

and beyond

EMW

Force 21

RMA

AND BEYOND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FY15 FY14 FY13 FY12 FY11 FY10 FY09

Detailed

1-year Budget

Stra

tegy &

Vis

ion 2

025

Sea Power 21

National Security Strategy

National Military Strategy

CINC Integrated Priority Lists

Defense Planning Guidance

Commandant’s Planning Guidance

National Defense Strategy

Unconstrained

6

PPBE Stages

PLANNING PROGRAMMING BUDGETING EXECUTION

15+ YEARS Unconstrained 6 YEARS Constrained 2 YEARS Constrained Appropriation

Dependent

(Capabilities Required) (Fiscal Reality) (Public Law) (Spending)

FY (FY)

Forces & Support

Level Objectives to

Accomplish the

Mission

Objectives Translated

into Resource

Requirements

Time-Phased

Financial

Execution

Expenditures

IAW

Budget

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Defense Within the U.S. Budget Process

Defense Department

prepares a budget

President submits

budget to

Congress

Defense Department uses PPBE system to link defense strategy to resources

Budget Legislation

(Authorization & Appropriation)

President’s

Budget

Congress has the power to

“help” the process, i.e. F-22

and JSF Alt Engine

Secretary of Defense

submits

budget to

President’s Office of Management

and Budget

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PPBE Overlapping ‘Cycles’

Today JAN 12 JAN 15 JAN 14

PR15

FY15 PB

Execution Budgeting

Programming

Budgeting

Planning

POM14

FY14 PB

JAN 13

POM16

FY16 PB Programming

PR: Program Review

POM: Program Objectives Memorandum

PB: President’s Budget

Develop the strategy

Capability assessment Allocate resources

Fiscal constraints

Program balance

Detail & accuracy

Justification

Develop the plan

Perform plan

Execution Budgeting

Programming

Planning

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FY15 FY16 FY17 FY18 FY19

FY14 FY15 FY16 FY17 FY18 FY19

PR-17

POM-14

PR-15

POM-16

PPBE = Overlapping Budget Cycles

• FY-14 Execute (E)

• PB-15 Defend/Testify (B)

• POM-16 Plan / Program (PP)

POM for 2 Years

Adjust 2nd Year

FY17 FY18 FY19 FY20 FY21

FY16 FY17 FY18 FY19 FY20 FY21

POM = Program Objective Memorandum

PR = Program Review

FY = Fiscal Year

PB = Presidential Budget

• Long-Term Vision for Defense

• Based on

– President’s National Security Strategy (NSS)

– Joint Chief of Staff National Military Strategy (NMS)

• Results in Strategic Planning Guidance (SPG)

– Combines each service specific ‘vision’ of the future

$ Not Fiscally Constrained

PPBE Overview: Planning

When money is free, lots of things are good ideas.

• Open, Competitive Process

• Produces POM

• Translates objectives into balanced program that best fills Defense needs

within available resources

• Guided by plans and policy decisions

$ Fiscally Constrained

PPBE Overview: Programming

Conflict between ‘buy now’ vs future vision.

Money is NOT FREE – lots of good ideas will not get funded

• First two years of POM

• Emphasis on first year

• Precise pricing

• Executable programs

– Meets spending benchmarks

• Services submit to OSD

• OSD modifies via PBDs

– OSD Directives / pet projects, etc

Becomes part of the President’s Budget, forwarded to Congress first Monday in February

PPBE Overview: Budgeting / Execution

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Summary

• PPBE is DoD’s resource allocation process – Planning establishes strategic priorities & capabilities required to achieve strategy

– Programming applies resources to programs that provide capabilities required to

achieve the strategic priorities

– Budgeting:

• Properly prices the programs

• Develops justification

• Creates execution plan

– Execution performs the approved plan

• Constrained resources drive the process

– Must achieve both program and Total Obligation Authority (TOA) balance