Planning, Programming, Budgeting & Execution Process (PPBE)

1. Planning, Programming, Budget Execution (PPBE) Planning Programming Budgeting Congress Execution Planning, Programming, Budgeting & Execution Process (PPBE) DEPSECDEF Oversight It’s all about Politics and Money

2. Introduction PPBE is DoD’s resource management system • Primary means for Secretary of Defense to control allocation of resources. • Aims at achieving the best mix of forces, manpower, materiel equipment, and support • SecDef reviews service inputs during every major budget exercise

3. Programming Strategic Guidance • Department of Defense • Program Budget Decisions (PBD) • Program Decision Memorandum (PDM) • Strategic Planning Guidance (SPG) • Joint Programming Guidance (JPG) • CSAF – Capability Review & Risk Assessment (CRRA) and CONOPS • Air Force – Annual Planning & Programming Guidance (APPG); POM Preparation Instructions (PPI) • AFSPC/CC – Strategic Master Plan (SMP), Commander’s Intent • COCOM – Integrated Priority List (IPL)

4. PPBE Publications • DoD 7000.14-R Financial Management Regulation • CJCSI 8501.1 Joint Staff Participation in PPBE • AFI 65-601 V1 Budget Guidance and Procedures • AFI 65-601 V2 Budget Management for Operations • AFI 65-601 V3 The Air Force Budget Corporate Process • AFSPC HOI 16-10 AFSPC Corporate Structure • AFSPC HOI 65-601 Budget Guidance and Procedures within AFSPC • AFSPC HOI 65-603 Command Financial Management Procedures • AFMC Financial Management Reference System • https://www.afmc-mil.wpafb.af.mil/HQ-AFMC/FM/FMRS/toc.htm

5. National Defense Share of the Federal Budget Non-Defense Discretionary 12% Other Social Aid 14% Homeland Defense 3% Medicare& Medicare22% Interest on the National Debt 10% Social Security 22% National Defense 17% Discretionary Spending = 32% Mandatory Spending = 68% FY04 projected outlays $2.23 trillion Source: President’s Fiscal Year 2004 Budget Request

6. PPBE Activities Programming Budgeting Enactment Strategy Prioritization Planning Execution Capabilities and Resource Analysis Feedback • Strategy and Planning (P) is the laying out of future needs and anticipated receipts • Prioritization and Programming (P) is the act of deciding what needs to fund and where to accept risk • Budgeting and Enactment (B) is detailed pricing of the things you will put resources against • Execution (E) is the approval and funding of the budget and the actual outlay of capital; often resources are not executed exactly as they were budgeted • Capabilities underlie the entire process but currently come into play especially in planning and prioritization Each of these: strategy, planning, programming, budgeting, etc. is an ongoing process that periodically interacts with other ongoing processes

7. Strategic/Planning Guidance PDM PBD QDR CPA PB SPG NSS FG JPG CPR NMS POMs NDS CPG OPlan JSCP IPL JSR

8. DoD FY08 PPBE Planning Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Strategy CSR CY05 New Administration Quadrennial Defense Review SPG JPG CY06 CPR • President and NSC develop National Security Strategy • SECDEF, OSD, and JCS set defense policies, vision, priorities, strategies, and objectives

9. FY08 Air Force Planning Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Strategic Planning Directive CY05 APPG CRRA analysis / briefings MAJCOM Roadmaps CY06 • Air Force sets service vision, objectives, and priorities • Air Force Strategic Planning Directive (AFSPD) • CRRA Analysis/Briefings • MAJCOM Roadmaps • Annual Planning & Programming Guidance (APPG) • Air Force Transformation Flight Plan describes force transformation efforts Key guidance for Air Force programming: SPG, JPG and APPG

10. JCIDS, Acquisition, and PPBE PPBE Decisions made in PPBE affect whether money will be available to fund program DOCUMENT POM AND BUDGET VALIDATE APPROVE JCIDS MS A Pre-Systems Acquisition MS B Capability Need MS C ACQUISITION Systems Acquisition Sustainment and Maintenance Decisions made in JCIDS and Acquisition affect which programs will be designated to receive funding CAPABILITY

11. PPBE ProgrammingBegging for the Money PEM

12. Program Component Definitions • Force Structure --active & reserve weapon systems, equipment, and manpower that make up the Total Force USAF and are used primarily in direct mission roles • Readiness-- capability to perform missions • Modernization-- provides the Force Structure new systems and upgrades to existing ones • Sustainability-- what it takes for the Force Structure to maintain performance of a mission for a given length of time

13. Major Force Programs (MFPs) • USED FOR INTERNAL DoD REVIEW • MFPs 1-5 AND 11 ARE COMBAT-FORCE ORIENTED • MFPs 6-10 ARE SUPPORT ORIENTED AND DEFENSE WIDE • WITHIN EACH MFP ARE SPECIFIC PROGRAMS THAT SUPPORT THE MISSION OF THE MFP • PROGRAMS DESCRIBED IN TERMS OF DOLLARS (BY APPROPRIATION), PEOPLE, AND HARDWARE

14. Virtual Major Program 12 Numbered Major Programs Program 1 - Strategic Forces Program 2 - General Purpose Forces Program 3 - C3I Program 4 - Mobility Forces Program 5 - Guard and Reserve Forces Program 6 - R&D Program 7 - Central Supply & Maintenance Program 8 - Training, Medical & Other General Personnel Activities Program 9 - Administration & Assoc. Activities Program 10 - Support of Other Nations Program 11 - Special Operations Forces A “Virtual” Major Program Crosscutting Major Programs Program S - Space Programs

15. Program Elements Program element (PE): the basic accounting unit for allocating funds to DoD programs – designated by code A program might be associated with a single PE PE/Program: 0605864F– “Space Test Program” (RDT&E, AF) A program might be split among multiple PEs Program: Global Positioning System (GPS) PEs: 0305164F – NAVSTAR GPS User Equipment 0305165F – NAVSTAR GPS Space & Control 0603421F – NAVSTAR GPS III A single PE might contain multiple programs PE: 0303601F – “MILSATCOM Terminals” Programs: Airborne Integrated Terminal, Family of Advanced Beyond-line-of-sight Terminals, Lasercom terminals, etc.

16. Program Element Milstar Example 0 60 44 7 9F Official PE Designation: Major Force Program 01 Strategic Forces 02 General Purpose Forces 03 C4I and Space 04 Mobility Forces 05 Guard and Reserve Forces 06 Research & Development 07 Supply and Maintenance 08 Training, Medical, Other Gen. Personnel Activities 09 Administration & Associated Activities 10 Support to Other Nations 11 Special Operations DoD Component (partial list) A Army D OSD C Missile Defense Agency F Air Force M Marine Corps N Navy Program Identifier R&D Category* 01 Basic Research 02 Applied Research 03 Advanced Technology Development 04 Adv. Component Dev’t & Prototypes 05 System Development & Demonstration 06 RDT&E Management Support 07 Operational System Development Codes don’t always conform to these theoretical categories (e.g., Milstar is fielded but all funds in R&D category 4) *Only the R&D Major Force Program uses categories anymore

17. FY08 PPBE AFSPC Programming Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SPG Strat. Planning Directive CY05 APPG CRRA analysis / briefings AFSPC Roadmaps AFSPC POM CY06 AFSPC POM • MAJCOMs begin the Air Force programming process • Develop initial budget inputs based on APPG, SPG, and Combatant Commander Integrated Priority Lists • Generate various budget options • Prioritize options to create organization’s Program Objective Memorandum (POM) input Prioritized, balanced POM inputs submitted to HQ USAF

18. Off-Year Programming • Off-year programming submission is not full POM • Limited to altering previous year’s PB submission • Budget Change Proposal (BCP) “Fact-of-life changes” • Requested by services and defense agencies • “Generally result from changes in pricing or program execution” • OSD rules specify what fits in this category vs. change proposals • Program Change Proposals (PCP) “Program changes” • Submitted by Service Secretaries, Under Secretaries of Defense, ASD(NII), DOT&E, CJCS, and US Special Operations Command • Must be only items that cannot be deferred to full POM in next year • Accepted proposals will be considered by SECDEF and SLRG • All submissions must be balanced – i.e., include offsets

19. Future Years Defense Program (FYDP) FYDP SECDEF Data Base 04 05 06 07 08 09 10 11 PY CY BY1 BY2 FY06 FYDP FY06 FY07 FY08 FY09 FY10 FY11 FY07 FYDP FY07 FY08 FY09 FY10 Out Years FY11 The FYDP is made up of one or two budget years, four program years, and the prior years which are in Congress and in execution

20. Extending the FYDP Baseline FY 06 – 11 POM Cycle 04 05 06 07 08 09 10 11 • The first step in the FY08 POM is to add two new years to the FYDP • During the baseline extension, the Air Force Corporate Structure (AFCS) adjusts investment programs to reflect already approved changes in production rates, etc. • The baseline extension is not used to fix broken programs or entertain new starts PY CY BY1 BY2 Out Years FY 08 – 13 POM Cycle 06 07 08 09 10 11 12 13 PY CY BY1 BY2 Out Years

21. Air Force “Colors” of Money Appropriation Time Line One Year Two Year Three Year Five Year OPERATIONS & MAINTENANCE 3400 MILITARY PERSONNEL 3500 RESEARCH & DEVELOPMENT 3600 PROCUREMENT 3010 3020 3080 MILITARY CONSTRUCTION 3300 OPERATIONS & SUPPORT INVESTMENT

22. Appropriation Code Exercise Using your understanding of appropriation codes, match the action on the left with the appropriate Appropriation code at left. You may use the previous slides or your reference book. • 3010 • 3020 • 3080 • 3300 • 3400 • 3500 • 3600 • 3700 • You want to add 35 enlisted positions to your program • The program manager for your program needs additional dollars for development • You are reducing the number of civilian personnel supporting HQ AFSPC • You are adding dollars to procure SBIRs Satellites • The General wants a new facility to house the command post

23. Appropriation Code Exercise Using your understanding of appropriation codes, match the action on the left with the appropriate Appropriation code at left. You may use the previous slides or your reference book. • 3010 • 3020 • 3080 • 3300 • 3400 • 3500 • 3600 • 3700 • You want to add 35 enlisted positions to your program • The program manager for your program needs additional dollars for development • You are reducing the number of civilian personnel supporting HQ AFSPC • You are adding dollars to procure SBIRs Satellites • The General wants a new facility to house the command post [3500] [3600] [3400] [3020] [3300]

24. Building the AFSPC POM FY16 FY15 FY14 FY13 FY12 FY11 FY10 Force Structure Only FY09 FY08 Out Years Budget Years

25. SMC Program Funding Request Organizational Depot System Engineering Project Mgt Equipment Facilities Construction Service Mock-ups Operational Test Maintenance Development Test Test Facilities System Project Mgt Training Data Common Support equipment Initial Spares and Initial Repair Parts Facilities System Test and Evaluation Program Element Dependent Technical Pubs Engineering Data Mgt Data Work Breakdown Structure (WBS) Example

26. Combatant Commander Integrated Priority Lists (IPLs) • A list of a combatant commander’s highest priority requirements • Prioritized across Service and functional lines • Defines shortfalls in key programs that, in the judgment of the combatant commander, adversely affect the capability of the combatant commander’s forces to accomplish their assigned mission • Provides the combatant commander’s recommendations for programming funds in the PPBE • Used: • By OSD to build SPG and JPG • By Services to build their POMs • By OSD to assess Service POM submissions • By Joint Staff to shape the CSR, CPR, and CPA • By Congress to review the PB http://www.ccipl.hq.af.smil.mil

27. Program Element Monitor (PEM) • The focal point for resource allocation and protection • Single most knowledgeable person on his or her program • The program advocate • Works with the Air Staff and operator • Critical to mission success FYDP Structure Management Handbook DoD 7045.7-hWWW.FSM.RA.PAE.OSD.MIL/FSMNote: Requires a .mil address

28. PEM Roles • Know your requirements – talk to wings and others who execute the dollars • Program advocacy at the MAJCOM level • Primary responsibility is to assign dollars to various components of their PE • Work closely with the appropriate functional manager, FMA analyst and mission teams to identify program content, requirements and funding • Provide inputs during all major programming and budgeting exercises (funded and unfunded) • Validate program costs and unfunded requirements • Communicate with FMA on questions from Air Staff before putting $$ at risk

29. FY 08 – FY 13 POM Example3400 Appropriation Budget Years Out Years $K Fuel Spares Misc Supplies Civ Pay Training FY08 FY09 FY10 FY11 FY12 FY13 150160170180190200 200 220 240 250 260 270 15 15 16 17 18 20 500 520 530 540 560 580 303234363840

30. Resource Allocation Programming Information Decision System (RAPIDS) • RAPIDS is a PC-based software tool used by all AF programmers • RAPIDS is an XPP database • Focus on building the “Perfect Slide” • Creates RAPIDS Perfect Slide, Change Control Sheet (CCS), and Decision Tracker (DT) • Presents funding options to AF senior leadership PEM

31. Change Control Numbers (CCNs)

32. Unclassified vPARCS FREQ TEST SETS Short description of option : BACKGROUND (U) The AN/FPQ - 16 Perimeter Acquisition Radar Attack Characterization System (P ARCS) is a phased - array radar executing the Missile Warning and Space Surveillance missi ons. Nation's most capable missile warning sensor; system covers over 28 percent of all Space surveillance Network observations. Change control number for option ADJUSTMENT : (U) Replaces failing low, medium, and high frequency radar test sets; critical for maintaining msl warning/space surveillance mission performance - number one equipment risk to the PARCS operational mission. FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 $M: 06R2S204SN Total net option adjustment in $M 3.6 3.7 3.9 4.0 4.1 4.2 4.2 4.3 CURRENT PRG ADJUSTMENT 2.8 4.4 0.8 0.0 0.0 0.0 REV PGM TOTAL 6.7 8.3 4.9 4.2 4.2 4.3 MPWR PROCUREMENT FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Low Freq Test Set Procurement and manpower 0 0 1 0 0 0 0 0 OFF 0 0 0 0 0 0 0 0 Med Freq Test Set 0 0 0 1 0 0 0 0 ENL 0 0 0 0 0 0 0 0 High Freq Test Set 0 0 0 1 0 0 0 0 CIV 0 0 0 0 0 0 0 0 IMPACTS : - (U) COCOM: ND & ST SPG: Yes CONOPS: HS, NR & SC UFR: No I - CRRA: 2.2, 2.3, 2.5, 2.7, 2.10, 2.15. - (U) REQUIREMENT: CJCSI 6210.02 15 Jul 97 & 6811.01 10 Jan 94, E AP - CJCS Vol VI Jun 99. Option discussion and impacts - (U) Disconnect replaces 28+ year old equipment original test se ts. No significant improvements/modifications have been accompli shed. - (U) Purchases low, medium and high frequency radar test sets; p arts/vendors for current systems very limited/nonexistent. - (U) Frequency test sets are 15 years beyond design, and compose d of 80 percent nonservicable components. -- (U) Test sets required to trouble shoot, repair, test, and cali brate all radio frequency (RF) components. - (U) ESC estimates 80% probability of test set failure during th e next three years. Unclassified Date: 3/25/2004 2:43:30 PM Page 16 of 43 RAPIDS Perfect Slide

33. Change control number Option description matches above Total net adjustment in $M matches above Fine level detailwhere funding adjustments are made Procurement and manpower RAPIDS Change Control Sheet

34. Honest Credible Clear Concise Specific Factual – not emotional Timely Operational consequences Delays to warfighter capabilities Not acquisition slips Business case Greater cost to government Failure to meet contractual obligations Policy compliance Inconsistent with Air Force, OSD, or Congressional guidance Writing Effective Impact Statements A good statement is … Impacts should discuss … Impacts should be … • Proportional to proposed cuts • Summarized in the first sentence

35. Ds, Is, and OsBalancing the Program Math (D + I = O) • Disconnect (D): Funding shortfall (a “Bill”) in approved program due to mismatch between program resources and approved program content • Example: Re-negotiation of contract for GPS satellites • Initiative (I): Proposal for additional funds (also a “Bill”) which adds to an on-going program or is a new start • Example: Develop a new satellite system • Offset (O): Resource (a “Billpayer”) identified to help pay for disconnects and initiatives--not “tied” to any particular disconnect or initiative • Example: Delay SBIRS to fund another requirement BILLS BILL PAYERS Caution: This year’s offset may also be next year’s disconnect

36. Validating Disconnects • Fund Requires resources • Restructure Adjust program content • “Kill” Terminate the program An approved program, or a portion of an approved program, which has become unexecutable because of a mismatch between its resources and the content approved by SecAF and CSAF in the previous baseline Three options for programmers: There is a fourth option…accept the risk In theory more than in fact, disconnects should be addressed before initiatives are funded – Why?

37. Requirements POM

38. Defending Your Program • Strategic Planning Guidance (SPG) • Joint Programming Guidance (JPG) • COCOM Integrated Priority List (IPL) • AF Vision--Global Engagement • AF Annual Planning Programming Guidance (APPG) • AF Capabilities Investment Strategy (AFCIS) • Financial Justification Books, SAF/FM • AF Posture Statement • AF Handbook for Congress • EAF Program Action Directive • Program Budget Decision (PBD) • Tie to CONOPS

39. PEM ParadesYour chance to articulate your program! POM

40. FM Budget Exec DR Requirements Programming Planning XP LC Logistics AFSPC Corporate Structure AFSPC Council Chair: CV Decision orProduct AFSPC Board Chair: 2 Ltr* FMA Budget Exec DR SEIO AFSPC Group Chair: 3 Ltr* Requirements Others as Required Programming XPP XPX Planning XPP “Secretariat” Role: - Take attendance - Ensure minutes are published by POC - Coordinate with Presentations personnel - Facilitate programming discussions - Coordinate/facilitate “process” as requested XPP Secretariat LCX/FM DPEM/DLR Matrix Team Lead AFSPC/XPP Action Officers Others as Required * Activity Determines Chair AFSPC HOI 65-603 AFSPC Command Financial Management

41. RAPIDS Decision Tracker (DT) Captures/consolidates Corporate Structure decisions during Group and Board meetings

42. Program Mission Description Identify & develop critical enabling technologies for OCS, DCS, & SSA Supports concept development, acquisition program, and rapid reaction warfighting needs Provides “Seed Corn” for new capabilities to counter emerging and changing threats Program Status Enables focused technology development for capabilities responding to Space Control CRD Since FY01, DoD has advocated increased Space Control capability fielding SCT baseline insufficient to support increased SSA/OCS technology needs (e.g., space-based techniques, signal processing) Quad Chart Example Space Control Tech Program Facts • OSD established Space Control Technology PE (63438) to fund Space Control Technology (SCT) Program directed by Congressional plus-up • FY99: Funded $10M/yr Baseline thru FYDP • FY02: Space Range RDT&E added to PE • FY04: DCS-Survivability RDT&E added to PE • Adjustment addresses non-DCS Space Control technologies AEF Global Strike Global Mobility Global Response X X X X Space & C4ISR Nuclear Response Homeland Security X X X

43. Getting To the Bottom Line (GTBL) • GTBL is where we stuff it all into a five pound sack • There is only so much money • Critically important programs won’t get funded • Questionable long term decisions will be made to achieve short term goals • At least some decisions will be based solely on military judgment because there isn’t time for analysis • Some well programs will get broken and many broken programs will not get fixed • The clock is a tyrant Consider the long term consequences of short term actions

44. Submit POM to Air Force HQ USAF FY06-11 Program Objective Memorandum Preparation Instructions Follow guidance in PPI

45. FY08 PPBE Headquarters Air Force Programming Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SPG Strat. Planning Directive CY05 APPG CRRA analysis / briefings MAJCOM Roadmaps AFSPC POM JPG CY06 Air Force Corporate Process AFSPC POM • HAF “Air Force Corporate Structure” integrates, reviews, edits, and prioritizes all MAJCOM POM submittals • Racks and stacks inputs across entire Air Force • Four levels of review: Panel, Group, Board, and Council • Submits final result to SecAF and CSAF for approval • AF/XPP owns corporate process for HAF Headquarters Air Force finalizes the AFSPC POM

46. PPBE Corporate Example Funded Unfundeds Offsets AFCS $2.9B New Requirements Most Dear FY06 New Funded Content Least Dear 1200 issues $12.5B Unfundeds Most Dear FY04 Existing Funded Content Least Dear $9.6B Unfundeds ~$12.5B $2.9B • We adjust program content by replacing low priority content with content of higher priority • In the FY06 POM exercise, there were 1200 issues to be considered and deliberated (disconnects, initiatives, and offsets) • The AFCS was responsible for vetting those issues; they funded $2.9B and identified $2.9B of “less dear” programs to serve as offsets • At the end of the POM, the database was adjusted • The requirements that remained unfunded may compete again next time • (Along with the offsets)

47. Offset Impact Ratings Fact of Life (1): Found money; no impact on program execution Easy Take (2): No political baggage; completely within AF purview; little or no affect on combat capability; continue execution of basic mission at reduced level; re-phasing Medium Take (3): Not totally within AF purview; no excessive OSD opposition; some level of risk; requires changes in basic mission, but work arounds available Hard Take (4): Significant opposition outside AF likely; significantly increases risks; substantial mission impact Thermonuclear (5) Hands Off

48. Budget Estimate Submission (BES) • The BES is a repricing of the POM • SAF/FM must adjust program dollars to real price costs based on “actuals” • Civilian Personnel - measured in work-years • Military Personnel - end-strength adjustments • Working Capital Fund - Reprice for Supply and Depot business area workload requirements • Vetted through Air Force Corporate Structure (AFCS) • Updates FYDP • Each Service adjusts its program based on repricing and forwards as a combined POM/BES to OSD Comptroller Bottom Line: Budget is dependent on Pricing data

49. Automated Budget Interactive Data Environment System (ABIDES) • Houses ALL USAF program and financial data • It provides users with the ability to retrieve stored data and present that data in various report formats • Includes appropriation categories for forces, manpower and dollars • Think of ABIDES as a huge filing system (data to 1962)

50. Update the FYDP RAPIDS ($$$$) Change OSD Comptroller PA&E Program Control Data System Numbers (Flying Hours) (CCNs) Manpower ABIDES Data System (End strength) F&FP FYDP ODS ABIDES Subsets