Interim PPBE Reform Commission Report Insights
Section 1004 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 created an independent “Commission on PPBE Reform” and directed the Commission to assess all four phases of the PPBE process and make recommendations for improvements with findings in an Interim and Final Report. The Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform released an a 193-page Interim Report on August 15, 2023. The Commission interviewed over 560 individuals and organizations with knowledge and expertise of the DoD PPBE process and related topics. A panel of senior DoD-experienced commissioners assembled on the same day of the report’s release to provide a discussion-based summary on the scope of the reform effort, the challenges, and potential recommendations.
Interim Report Highlights. To fulfill its Congressional mandate, the Commission is pursuing further research to support five broad goals of PPBE reform as addressed throughout the Interim Report:
- PPBE-related relationships between DoD and Congress -
- As one of its Key Actions That Can Be Implemented Now, the Commission urges that DoD provide an annual mid-year update briefing covering budget execution and identifying new developments that impact the budget proposal currently before Congress.
- PPBE processes to enable innovation and adaptability
- The Commission is considering several alternatives to modify reprogramming authorities and policies, such as authorizing below-threshold reprogramming (BTR) at the account level and speeding up new start approvals.
- Mitigating negative effects of Continuing Resolutions (CR) while still maintaining congressional oversight, including allowing new starts and reprogramming under a CR if approved by the defense committees in their respective bills.
- Alignment of budgets to strategy
- The Commission is examining ways to strengthen the Defense Planning Guidance (DPG) to provide greater specificity, particularly in terms of areas for taking risk, linking the DPG to force sizing and shaping constructs, areas to invest in or divest of capabilities, and roles and missions for the Services.
- Budget structure transformation to show all colors of money associated with a platform rather than prioritizing the phase of the program’s development and fielding.
- Color of money aligned to an organization’s purpose or mission rather than activities performed specifically with the money.
- PPBE business systems and data analytics
- Recommends DoD continue, and if possible, accelerate consolidation of the data systems used by the OUSD(C) and CAPE so that one system handles all data during both the programming and budgeting phases.
- Recommends that the DoD establish both classified and unclassified enclaves to share information electronically between DoD and Congress, to include the electronic transmission of budget justification books in a manner that makes them searchable, sortable, and able to be updated electronically by both the Congress and DoD.
- Capability of the DoD programming and budgeting workforce
- Improving recruiting and retention for both CAPE and Programming and Budgeting through direct hires, incentives, and bonuses.
These proposed actions and recommendations, and more, are not considered final until the March 2024 report is published. For a quick view of recommendations and actions, page 2 lists Key Potential Recommendations and Key Actions That Can Be Implemented Now. The full list is shown in Chapter IX on page 82.
Of the fourteen total commissioners, five participated in a subsequent one-hour panel discussion. These leaders offered deep knowledge and experience plus a rich dialogue concerning the challenges and constraints imposed by the existing PPBE architecture. A range of topics were discussed, which included better training for DoD's Congressional Liaisons; adding more structure to DoD's briefings to Congress; reforming Justification Books (“J-Books”); strengthening Defense Planning Guidance; creating a more continuous planning phase rather than a single analytical piece of work for one programing cycle; and possible recommendations to increase appropriations to a two-year minimum availability instead of one-year, two-year availability for certain appropriation account activities such as Permanent Change of Station accounts, and a recommendation for an allowable 5%-10% carryover across fiscal years for O&M and MILPERS. The panel also discussed leveraging ADVANA (DoD’s big data platform, derived from “Advancing Analytics”) to expand and enhance ADVANA capabilities to support enterprise PPBE analytics.
Perspectives from a Logistics and Product Support Point of View. Increasing appropriations to a two-year minimum availability would allow those in sustainment and in the field to smooth out the start/stop nature of expenditures during the course of the year and allow for more practical use of funds, such as using O&M funds for valuable sustainment priorities versus a rush to towards ‘less than ideal’ expenditures at year’s end, a practice that is currently employed regularly to ensure all budgeted funds are executed to avoid taking cuts in subsequent years.
Below Threshold Reprogramming at the account level would allow for greater flexibility in sustainment operations given the changes that can and do occur within the two-year window between programming and execution years. This may also alleviate fears of losing money-in-motion that can be seen as fair game for applying to higher level priorities. By nature, reprogramming funds often occurs due to a changing landscape—posture changes against new threats, a shift in priorities, and unknown unknowns at the time programming initially occurs.
The CR changes, if implemented, could be positive for situations such as recapitalizations where a weapon system platform is moved from one mission set to another, and therefore creates a new start for the year. it could help with procurement of any specialized parts or support equipment for the new mission during a CR. This recommendation could maintain the forward momentum of such activities and meet DoD and Presidential priorities outlined in annual budget submissions.
The Commission’s proposed recommendations on color of money changes could significantly change the way DoD views, manages, and presents programs and platforms within the PPBE process and to Congress. Plus streamlining colors of money to an organization’s purpose or mission instead of the activities performed specifically with that money could simplify accounting and execution of funds within the organization.
An accelerated push for consolidated data systems to handle all data during programming and budgeting would be impactful. The addition of a digital thread to capture the multitude of manual data entries could further be used to enhance auditability, traceability, and clarity.
Did You Know? A clear and direct linkage of the budget to strategy was one of the primary objectives for originally establishing the PPBES. Just a few related available resources and references include:
- Planning, Programming, Budgeting & Execution (PPBE) Process ACQuipedia Article
- CRS Report “DOD Planning, Programming, Budgeting, and Execution (PPBE): Overview and Selected Issues for Congress (July 11, 2022)
- DAU News - PPBE Reform Commission March 2023 Status Update, DAU News - Commission on PPBE Reform Interim Report Launch Event
- DAU News - INTERIM REPORT - Commission on PPBE Reform
- CLCL 011 Product Support Affordability & Cost Fundamentals Credential