USACE Civil Works Program Development, Defense & Execution

1. USACE Civil Works Program Development, Defense & Execution One Year on the Job Observations, Conclusions, Future Directions Gary Loew, Chief, Programs Integration Division Directorate of Civil Works U.S. Army Corps of Engineers

2. The Recent Past

3. FY97-06 Appropriations No Inflation

4. FY97-06 Appropriations vs.FY07-12 Needs Computed Expectation

5. Something Must Change!

6. Criticisms of USACE Budget &Financial Management Practices • Administration • Budget not related to vision, strategy, goals, objectives • Not observing PMA/PARTS process • Not budgeting to achieve objectives • No metrics to judge budget or execution success • Supporting materials not timely or accurate

7. Criticisms of USACE Budget &Financial Management Practices • Congress (House) • No vision, goals • “Budget is just a collection of projects.” • No future planning (five year plan) • Not defending ED&M • Supporting materials not timely or accurate • Using funds as Corps wants, not as Congress intended (reprogramming) • Using continuing contracts to circumvent intent of Congress • Funds distributed across too many projects: inefficiently funding projects to realize benefits as soon as possible • Senate does not necessarily agree with all these points

8. Criticisms of USACE Budget &Financial Management Practices • Corps divisions, districts & field offices • Budget is not responsive to local or regional needs • Complex; too much information required • Too many data calls; short suspenses • District input ignored during final decision-making • Final budget not consistent with district priorities (therefore we’ll advise Congress where we really want it; or we’ll reprogram appropriations to where they’re really needed.) • Basis for decisions changes from year to year; each new year is a crap shoot; cannot plan for the future • No planning funds • Little funding for new starts • Projects funded inefficiently • Continuing Authorities Programs politicized; inadequately funded

9. Criticisms of USACE Budget &Financial Management Practices • Stakeholders • Do not understand basis for budget decisions -- Complex, complicated • Changing decision processes and metrics from year to year; difficult to influence direction • Cannot plan strategically; inconsistent decision practices (suspensions) • Not enough money for “their” projects and programs

10. Conclusions... • Have not integrated vision/goals/long range planning into budget development • Have not truly integrated the Performance-Based budget process • Little thoughtful, quality analysis • Budget process is overly complicated • Too much data • Late changes; inconsistent, uncoordinated review process • Late, inaccurate budget materials; almost impossible to be • timely, accurate • Basis for decisions is not consistent from year-to-year • Interested parties inside/outside government cannot project, plan • Stakeholders Balkanized; little organized support the total program • Serving too many masters

11. Have we responded? How are we doing? today?

12. Have we responded?Some FY05/06 Improvements • Responded seriously to FY06 legislation • ER 11-2-189 • Reprogramming • Continuing contracts • Reporting • Accurate, timely reports • Executing legislative intent • Improved 5-year plan • (But no “top 10” list) • Agreement with OMB & Congress on content of FY07 5-Year Development Plan • OMB PARTS—serious effort to improve • Enforcing one project-one ‘capability’ rule • Restoring discipline to budgets and estimates—more timely

13. How are we doing today?Some FY05/06 Successes • FY06 Policy Implementation Guidance-45 days • 3rd Supplemental estimates and appropriations • 4th Supplemental • Improved and improving 5-Year Plan • Some Administration agreement on important budget principles (discussions continue) • Capital investment decisions are permanent • Less reliance on remaining benefit/remaining cost ratio • More use of other-than-economic decision factors (safety, environment, watershed) • Agreements with Administration & Congress on future directions • PARTS • FYDP • Willingness to discuss the larger issues

14. PRESIDENT’S MGMT AGENDA

15. Where are we headed? • Changing the Budget Process • One unifying concept of Program Development, Defense and Execution • Execute our Vision

16. Our Vision will drive the Budget Vision Senior Level Accountability Goals Objectives USACE/Admin./ Congressional Agreement USACE FYDP Regional FYDPs Incorporate Principles & Metrics Budget Review & Adjustment Incorporated into OMB/PMA/PARTS Standards Performance Standards & Metrics Performance Management Command Management Review SES Accountability

17. Example

18. VISION THE CORPS OF ENGINEERS WILL PLAN, DESIGN, CONSTRUCT, OPERATE AND MAINTAIN THE NATION’S WATER RESOURCES INFRASTRUCTURE TO MEET LOCAL, REGIONAL AND NATIONAL CURRENT AND FUTURE NEEDS WITH COST-EFFECTIVE, SAFE AND ENVIRONMENTALLY SUSTAINABLE PROJECTS.

19. CW STRATEGIC GOALS Goal 1. Sustainable development. Goal 2. Repair past and prevent future environmental losses. Goal 3. ENSURE THAT PROJECTS PERFORM TO MEET AUTHORIZED PURPOSES AND EVOLVING CONDITIONS Goal 4. Reduce vulnerability to natural and man-made disasters Goal 5. World-class public engineering organization

20. OBJECTIVES-NAVIGATION • For each Objective, there is a corresponding objective for all relevant business lines. • OMB will have agreed to all Goals, Objectives and Standards!! EXAMPLE: Goal 3, Objective 1: Navigation Business Line OBJECTIVE: PROVIDE SAFE, COST-EFFECTIVE, ENVIRONMENTALLY SUSTAINABLE NAVIGATION CHANNELS TO SUPPORT NATIONAL ECONOMIC GROWTH AND DEVELOPMENT ACCOUNTABLE PERSON: DIRECTOR OF CIVIL WORKS

21. NAVIGATION BUSINESS LINEQUANTIFY OBJECTIVE • THE OBJECTIVE MUST STATE A DESIRED OUTCOME • EXAMPLE: THE USACE NAVIGABLE WATERWAYS WILL TRANSPORT 1.2 BILLION TONS OF COMMERCE IN 2007 • ACCOUNTABLE: CHIEF, CW OPERATIONS

22. NAVIGATION—METRICS President’s Management Agenda (PMA) Performance Assessment Rating Tool (PART) PERFORMANCE STANDARDS • STANDARDS MAY BE OUTCOME AND OUTPUT • 1. Transport 1.2 billion tons • 2. No more than 5% channel non-availability • 3. Restore project storm damage within 60 days • APPROVED BY: C/Programs, ASA(CW) and OMB • PERFORMANCE METRICS • 1. Tonnage transported • 2. 95% channel availability • 3. Restore project storm damage within 60 days

23. BUDGET & FIVE YEAR DEVELOPMENT PLAN (FYDP) • Divisions are responsible for Waterways budgets and FYDPs to achieve objectives for their waterways. • Chief, Operations is responsible to budget and to execute the program to achieve his objectives • Chief, Programs is responsible to develop, defend the budget, to execute the appropriation and administer the performance review process to achieve objectives, as measured by performance standards • C/Programs is responsible for USACE FYDP to achieve objectives

24. Bottom Line All budget decisions will be consistent with our vision, and will be formulated to achieve agreed-upon metrics and principles • As we improve FYDP process, we will address some ‘larger issues’ with policy makers • We do not discount time or difficulty involved with some of these changes and issues By FY09, FYDP will begin to drive budget decisions

25. Newton’s First Law Still Applies • Inertia reigns in the budget process. • The total amount of funds available will not change unless acted upon by an outside force

26. How Can We All Contribute? • USACE: Provide the vision, goals in objectives in an open, collaborative way. • Administration: Listen, “walk the performance-based budget talk.” • Stakeholders: • Contribute to vision, Goals, Objectives, Metrics • Communicate! • Adopt the Vision to be the desired future state of water resources development • Create national desire for a water resources infrastructure that will serve this Nation’s economic, quality of [all] life and defense needs, today and into the future. • Support the budget that enables the vision

28. Questions?