Planning, Programming, Budgeting & Execution Process (PPBE)
DAU GLOSSARY DEFINITION
Note: The FY 1986 National Defense Authorization Act (NDAA) (Section 1405) required DoD and related agencies to submit a biennial budget beginning with the FY 1988 / FY 1989 submission. The biennial budget process required the submission of a two fiscal year budget every other year and the re-submission of the second year of the previous biennial budget in the alternating years. Congress continued to appropriate budget authority on a year by year basis. The FY 2008 NDAA (Section 1001) repealed that portion of FY 1986 NDAA (Section 1405) that required DoD and related agencies to submit biennial budgets. Subsequently, DoD reverted to the annual programming and budgeting cycle effective with the FY 2010 budget request.
The Planning, Programming, Budgeting, and Execution (PPBE) process is the Department of Defense (DoD) internal methodology used to allocate resources to provide capabilities deemed necessary to accomplish the Department’s missions. The major output of the Planning, Programming, and Budgeting phases of PPBE is the Defense budget request that will be included in the President’s Budget (PB) to be submitted to Congress not later than the first Monday in February for the next fiscal year than begins 1 October of the same calendar year. The ultimate objective of the PPBE process is to provide DoD components and various Combatant Commanders (COCOMs) with the optimal mix of forces, equipment, and support that are attainable within established fiscal constraints.
The primary purpose of the PPBE process is to allocate resources within the Department of Defense. Within the acquisition community, it is important for program managers and their staffs to be aware of the nature and timing of each of the events in the PPBE process, since they may be called upon to provide critical information that could be important to program funding and success. While the acquisition process is “event driven”, the PPBE process is “calendar driven”; this difference can result in timing issues for the acquisition community.
PPBE evolved from the Planning, Programming, and Budgeting System (PPBS), which was introduced into DoD in the early 1960's by Robert McNamara during his tenure as Secretary of Defense (SECDEF). PPBS was a cyclic process consisting of three distinct, but interrelated, phases: planning, programming, and budgeting. PPBS established the framework and provided the mechanisms for decision making for the future and provided the opportunity to annually re-examine prior decisions in light of the existing environment at that particular time (e.g., evolving threat, changing economic conditions, etc.).
From its initiation in the early 1960’s until 2001, the basic PPBS process remained relatively stable with documentation and submissions of individual phases of Planning, Programming, and Budgeting being developed, and decisions being made for each phase, in a sequential manner. In 2001, OSD changed the process to require a combined or integrated Programming/Budgeting phase with concurrent preparation and submission of the various Programming and Budgeting documentation and submissions, with corresponding decisions made almost in parallel; among other reasons, this change was an effort to ensure better coordination in the decision making process of these phases.
Then in May of 2003, more substantive changes were made to PPBS. Among other changes, PPBS was renamed the Planning, Programming, Budgeting, and Execution (PPBE) process. Adding “Execution” to the process was intended to give greater emphasis to the need to better manage the execution of the budget authority provided by Congress by the appropriations acts. This “execution” was to be more than simply ensuring obligation of the budget authority in a timely manner; it was to include an analysis of the comparison between what DoD said it would do with its appropriations and what it actually accomplished (i.e., outcomes achieved). This analysis better enabled DoD to prepare its Annual Performance Report (APR), which is required of all large Executive Branch agencies by the Government Performance Results Act (GPRA).
The combined Programming/Budgeting process continued until late December 2014, when the DEPSECDEF signed a memorandum that “re-set” the PPBE process to return to separate POM and BES submissions, analysis, and decisions. Although there will undoubtedly be some timing overlap in the final decision-making processes following the OSD analysis of the five year POM and the one year BES, there are expected to be separate decisions (known as Resource Management Decisions (RMDs)) effecting the separate programmatic and budgetary submissions.
In the PPBE process, the Secretary of Defense establishes policies, strategy, and prioritized goals for the Department, which are subsequently used to guide resource allocation decisions that balance the guidance with fiscal constraints. The PPBE process consists of four distinct but overlapping phases:
Planning: Planning is the first step in the DoD resource allocation process and is accomplished by almost parallel actions by the civilian side of OSD (i.e., USD Policy) and the military side (led by Joint Chiefs of Staff [JCS] with participation of the Services and COCOMs). Although USD (Policy) is the official lead for the Planning Phase of PPBE, the Chairman of the Joint Chiefs of Staff (CJCS) plays a significant role in the process. This phase begins after issuance of the National Security Strategy (NSS) by the National Security Council. The NSS includes input from multiple federal level agencies that defines specific national-level strategic outcomes that must be achieved and/or are further refined in the SECDEF’s Defense Strategy Guidance (DSG) and the CJCS’s National Military Strategy (NMS).
The first activity of the Planning Phase of PPBE that is done within DoD is a review of all previous strategic guidance and the most current NSS. This review also examines the evolution in required capabilities and changes in military strategy and policy as documented in the DSG issued by the SECDEF. The review also includes the NMS issued by the CJCS. The NMS provides strategic direction on how the Joint Force should align the military ends, ways, means, and risks consistent with the goals established in the DSG. Also, both the DSG and NMS should be in compliance with the goals and objectives of the national level NSS. The Planning Phase also includes a review and analysis of the latest OSD developed Quadrennial Defense Review (QDR); in 2015 the QDR was renamed the Defense Strategy Review (DSR). The DSR provides the results of a comprehensive examination of potential threats, strategy, force structure, readiness posture, modernization programs, infrastructure, and information operations and intelligence. All the previously mentioned documents provide strategy-based planning and broad programming advice for preparation of the Defense Planning Guidance (DPG), which depicts a combined long term view of the security environment and helps shape the investment blueprint for the five fiscal years of the next POM to be developed by the Military Departments and Defense Agencies. For several years, the final strategy document coming out of the Planning Phase was known as the Defense Planning and Programming Guidance (DPPG); however, during 2012, the document and title of the DPPG was changed to be the Defense Planning Guidance (DPG).
Programming: The purpose of the Programming Phase is to allocate resources to support the roles and missions of the Military Departments (i.e., Army, Air Force, and Navy and Marines) and Defense Agencies. During the Programming Phase, previous planning decisions, guidance contained in the DPG and other documents, and Congressional guidance are translated into detailed allocations of time-phased resource requirements which include forces, personnel, and funds. This is accomplished through systematic review and approval processes that "cost out" force objectives and personnel resources in financial terms for five years into the future. This process gives the SECDEF and the President an idea of the impact that present day decisions will have on the future defense posture. The OSD Director, CAPE is responsible for overall coordination of the Programming Phase and is considered the official lead for this phase of PPBE. Upon submission of the POMs, DCAPE updates the Future Years Defense Program (FYDP) for the Department. The FYDP is updated the second time during the PPBE cycle when the Defense budget is submitted to OMB for incorporation into the President’s Budget.
Between 2001 and 2015, Components conducted a combined (i.e., integrated) Programming/Budgeting phase which resulted in the concurrent preparation and submission of various Programming and Budgeting documentation and submissions, with corresponding decisions made almost in parallel to ensure coordination. While there were separate programmatic and budgetary decisions, the decision making processes were intertwined. In late December 2014, the DEPSECDEF signed a memorandum that “re-set” the PPBE process to return to separate POM and BES submissions, analysis, and decisions. Although there will undoubtedly be some timing overlap in the final decision-making processes following the OSD analysis of the five year POM and the one year BES, there are expected to be separate decisions (known as Resource Management Decisions (RMDs)) effecting the separate programmatic and budgetary submissions. In 2016, they reverted back to separate decision documents for the POM and BES processes; Program Decision Memorandums (PDMs) and Program Budget Decisions (PBDs).
The programming phase begins with the development of a POM by each DoD Component. This development effort seeks to construct a balanced set of programs that respond to the guidance and priorities set forth in the DPG (which has addressed requirements in the previously named strategic documents); resources for these programs must be accomplished within OSD stated fiscal constraints. When completed, the POM provides a fairly detailed and comprehensive description of the proposed programs, including a time-phased allocation of resources (forces, funding, and manpower) by program projected five years into the future. In addition, the DoD Component may describe important programs not fully funded (or not funded at all) in the POM and assess the risks associated with the shortfalls. The senior leadership in OSD and the Joint Staff review each POM to help integrate the DoD Component POMs into an overall coherent defense program. In addition, the OSD staff and the Joint Staff can raise issues with selected portions of any POM, or any funding shortfalls in the POM, and propose alternatives with marginal adjustments to resources. Issues not resolved at lower levels are forwarded to the Secretary (or Deputy Secretary) for decision and the resulting decisions are documented in PDMs.
Budgeting: On 11 Dec 2014, the DEPSECDEF signed a memorandum, SUBJECT: Planning, Programming, Budgeting and Execution “Re-set”, that announced the decision that DoD was to “return to a more sequential budget development process beginning with the Fiscal Year (FY) 2017 budget build.” This decision was made on the basis the change would “provide more opportunities to align the Department’s programs and budgets with both strategy and guidance, allowing the Department to produce better, more defensible budget submissions to Congress.” Because the FY 2017 budget build would occur during calendar year 2015, each responsible Component would be required to develop a separate POM and BES during that calendar year. The POM will cover FY 2017 – FY 2021 and the BES will cover only FY 2017. Later guidance issued by USD (C) and DCAPE provided information pertaining to specific dates by which specific actions were to be accomplished during calendar year 2015 and the release of the President’s Budget to Congress no later than the first Monday in February of the next calendar year (i.e., 2016).
The USD (Comptroller) is responsible for overall coordination of the Budgeting Phase and is considered the official lead for the Budgeting phase of PPBE. Although DoD Components will probably start preparation of their BES before they complete their POM, under the PPBE re-set process the budget submission will not be due until several weeks after submission of the POM. During the OSD review and analysis of their POM submission, Components will finalize their BES. Upon receipt of the BES, USD (C) budget analysts begin their review of the budget requests. As part of that review process, the analyst will typically focus on four specific aspects of the budget request: (1) use of the proper funding policy for the appropriation category involved; (2) proper pricing of the effort for which funds are requested; (3) proper phasing of the work efforts – especially for acquisition programs; and (4) efficiency of budget execution in the current year and projected executability of the requested funds in the budget year. The budget analyst may provide “advance questions” to the Component in an effort to obtain additional information about the requests. Normally for most appropriation categories, the budget analyst will also hold a budget review with a knowledgeable representative of the Component to obtain more information about the requests. Per agreement between OSD and OMB, senior budget examiners from OMB participate in this DoD budget review process at this point to preclude the necessity of OSD submitting the Defense budget to OMB for a separate review prior to it being integrated into the PB as is required for all other federal agencies. Following this fall budget review process, the USD (C) budget analyst will prepare a draft budgetary PBDs for the appropriation categories for which he/she is responsible for review. When considered appropriate by a senior OSD representative, the issue addressed in the draft RMD could be provided the Component for comment – although this would be done on an exception basis. The PBD is then forwarded to the Secretary (or Deputy Secretary) for final decision. At the discretion of the Secretary or Deputy Secretary, a Component might be allowed to request a reevaluation of the PBD; if this process is allowed, it is known as a “Major Budget Issue (MBI)” meeting. For the past several years there have been few of these meetings. After all budgetary RMDs have been signed, Components are normally given a short period to update their budget figures to reflect those final decisions and to prepare budget justification materials that will be provided to OMB for incorporation into the President’s Budget. Upon submission of the Defense budget at this time, the FYDP is updated the second time during the annual PPBE cycle.
Execution Review: There are two separate but related aspects of Budget Execution or Execution Review. One aspect is the evaluation of how well currently available appropriations are being obligated and expended (i.e., measurement of the percentage of appropriated funds obligated and expended versus the OSD goals for the appropriation involved). While this is important in many ways, the other aspect is at least equal but perhaps more important; the comparison between what DoD said it would accomplish with its appropriations and what it actually accomplished (i.e., outcomes achieved). To the extent performance goals of an existing program are not being met, the execution review may lead to recommendations to adjust resources and/or restructure programs to achieve desired performance goals. This analysis then enables DoD to prepare its Annual Performance Report (APR), which is required of all large Executive Branch agencies by the Government Performance Results Act (GPRA). The first aspect addresses the question of “are the appropriated funds being obligated and expended?” The second addresses the question of “are the desired outcomes from using those funds being achieved?” The report to Congress and the public required by GPRA is intended to evaluate the effectiveness of the Executive Branch of the federal government is accomplishing the goals set forth in the President’s Budget – as modified by Congress in the various Appropriation Acts presented to the President to sign into law.