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PPBE Reform Commission Provides DAU Opportunities, Challenges

Planning, Programming, Budgeting and Execution Report graphics

PPBE Reform Commission Provides DAU Opportunities, Challenges

The Planning, Programming, Budgeting and Execution (PPBE) process defines the overall process of planning, justifying, allocating, securing and executing the resources required to support the Department of Defense’s (DoD’s) warfighting mission. As the acquisition community knows, PPBE is an important part of the “Big A” process that links requirements and acquisition with the financial resources required to deliver material capability to equip the warfighter. 

Originally created in the early 1960s, the PPBE process was well-suited for an industrial age which operated at a much slower rate of technology change and without the type of near-peer competitor challenges of today. The challenge is trying to synchronize this timeline-based process with the other elements of requirements and acquisition. 

Congress established the PPBE Commission and tasked them with conducting a comprehensive review of the entire PPBE process, from the initial planning to enactment of appropriations by Congress and execution of those resources by the Department. On March 6, 2024, the PPBE Reform Commission released its final report along with a two-page summary. If implemented, many of the recommended changes would benefit the acquisition process.

PPBE Goes to Congress

On March 20, the Senate Committee on Armed Services held a public committee hearing to receive testimony from Lara Sayer, Executive Director, PPBE, Bob Hale, PPBE Commissioner, and Ellen Lord, PPBE Vice Chair. Senator Jack Reed, Chairman, and Senator Roger Wicker, Ranking Member, opened the event by thanking the commission, laying out Congress’s concerns with the existing program and praising the commission’s efforts.

“Much of the discussion around the Fiscal Year 2022 National Defense Strategy focuses on the long-term strategic competition with China and Russia,” Reed said. “The National Defense Strategy stresses another less glamorous, albeit equally important, transformation that must occur if we are to succeed at strategic competition. That is: the need to reform the acquisition and financial performance of DoD.”

PPBE Reform Release Event

Shortly after the release of the report, Hale, Lord and Sayer sat down with Jerry McGinn, Executive Director of the George Mason University Baroni Center to discuss the commission’s work and recommendations. The report included reviewing the processes, systems, authorities and workforce currently in place and identifying potential areas for improvement. 

As a Congressional commission, the group had the authority to do a comprehensive review of all four of the PPBE phases, Hale explained. “We looked at all parts of the budget, but we focused on Defense modernization,” he said. The commission conducted more than 400 interviews with over 1,100 interviewees, including program managers and acquisition workers in every field. Given the unique relationship of PPBE reform to the acquisition process, the Commission gathered input from federally funded research centers, the Services, industry, academia and other government entities. The commission also credited the report’s initial success to bringing in stakeholders from not just DoD but also from the Hill.

“We distilled all that information into 28 actionable recommendations,” Hale said. These interviews identified a series of attributes that could be targeted to better align resources to strategy necessary to provide relevant, accurate and timely information to decision makers, including increased agility, better and more timely data, improved resource management and data analytic training and transparency across the process.

One thing that the commission wanted to ensure was that they retained the current PPBE’s strengths while mitigating its weaknesses. Among the proposed changes to the PPBE is an update to the name. The commission proposed calling the new system the “Defense Resourcing System,” using this rebranding to reinforce the need for change. Some recommended changes are relatively modest, such as reducing the amount of required documentation to reduce duplication; others are drastic, such as combining the Programming and Budgeting phases. These changes encourage “the Services to build budgets consistent with overall strategy,” Hale said. “You need budgets linked to strategy to make sure everyone moves in the same direction,” Hale continued.

“This will streamline how resourcing is done in the Department today,” Sayer said, describing how the commission’s plans include streamlining and providing the acquisition workforce with what they need to not only make better decisions but decisions at speed. The new system would use “threat-based briefings, wargaming [and] table-top exercises to drive guidance that will be fed in throughout to make informed decisions along the entire timeline.”

“Our report should be thought of as a new resourcing system,” Hale said, “not just a few new rules or process improvements.”

Speed and Innovation at Scale

Lord agreed, saying “We wanted to move up the speed and flexibility that program managers have, especially in the year of execution.” This focus on speed highlighted the main complaints raised by the PPBE process—it is too slow for modern development cycles. “If we have a system that takes 2 years to go from requirement to budget, that is not going to keep pace with our strategic competitors,” Lord said.

“Innovation is a key area,” Sayer agreed. “If you get agility, you get speed.” 

One area where speed and innovation are often impacted is the looming threat of operating under a continuing resolution. To help the Services mitigate these risks, one recommendation included allowing new starts/production increases during continuing resolutions, with the concurrence of Defense committees. 

Target-Rich Environment for DAU

Lord sees “a target-rich environment for DAU” in terms of where DoD needs to improve speed and empower the acquisition workforce. Both during the kickoff event and previously during the Acquisition Update, Lord encouraged DAU to review the commission’s report to find areas to help the acquisition workforce. Lord said DoD needs “to strengthen the capabilities for the workforce… This workforce is not being trained and developed to the extent it is needed.”

She highlighted the challenge of attracting and retaining early and mid-career professionals “who are very good at data analytics, software,” in part because DoD requires them to work on systems that are decades old. “We advocate for strong leadership within the Pentagon to develop the workforce,” Lord said. These leaders need to provide “the incentives and rewards to take smart risks and to learn to manage risk, not just eliminate risk. “

While she highlighted topics like innovation and artificial intelligence, she also pointed to concrete areas DAU could help: training the workforce on the full breadth of their authorities, flexibilities and resources and standardization of budget books (also known as J-Books or Justification Books) to facilitate communication between Congress and the Services. During the testimony at Congress, Wicker highlighted the need for more data transparency, explaining the “transmission of data is episodic, manually input and often ineffective. It is 2024; we should have the ability to share data in real time, digitally, between the Executive Branch and Congress.”

While the commission praised the Adaptive Acquisition Framework, they also acknowledged that the acquisition community does not always know all the authorities and flexibilities they have in their arsenal. Sayer used the example of the Defense Modernization Account, an acquisition authority originally created in 1996 that allowed programs with expiring funds to use those funds in other ways, provided they took the required steps for approval. That authority has never been used, Sayer said. The workforce cannot use “authorities that aren’t included in training and [that] we don’t know they exist,” she said, with the commission hoping the acquisition workforce can learn what they’re missing. One recommendation of Sayer’s was for the Department to create a handbook on authorities tied in to the workforce’s relevant Defense Acquisition Workforce Improvement Act training.

“Right now, our collective opinion is there is enormous opportunity for leadership to do more in incentives and rewards for being creatively compliant,” Lord said, noting that the commission wanted to encourage the use of the minimum amount of bureaucracy to complete a task.

When discussing budget justification materials, or the J-Books, Lord explained that the current books are not standardized and are submitted in different file formats, including sometimes files that cannot be searched digitally. Besides the onerous task of creating the books, attempting to use the books is a heavy load for the Hill when reviewing budgets, especially during a time crunch. Standardizing J-Books would not only help inform data-driven conversations and decisions, but it would also improve transparency and reduce friction between Congress and DoD. This standardization is one area that Lord believes DAU’s influence can be used to improve the acquisition process.

Sayer reinforced this, mentioning, “the J-Books are what we use to tell Congress what we want to do,” Sayer said, and the books frequently failed to properly relay information to Congress.

More to Do

Still, Congress’s initial assessments of the commission’s work sound positive, with Reed praising the “thoroughness and practicality” of the report, while Wicker acknowledged the existing system “hasn’t delivered at relevant speed and scale” and “stifled trust between Congress and the Pentagon.”

With the Commission, Department and Congress in general agreement on both the problems and potential solutions, there remains several potential paths forward to achieving the goal set forth of reforming DoD’s PPBE process into something that will successfully deliver at speed and scale.

“We have a system that is antiquated, to be kind,” Reed said. “Unless we make some significant changes, we’re never going to be competitive in both financial responsibility as well as keeping up with our opponents. This is a question of giving our forces the equipment they need in a timely fashion. We have to follow through.”

DAU As a Thinking Partner

“Due to the close relationship between the acquisition process and PPBE process, PPBE content is included across DAU’s curricula,” said Marilyn Thomas, DAU Professor of Business Financial Management. “Financially focused DAU courses necessarily include deep orientation and training on PPBE to prepare students to work within the PPBE environment.”

DAU courses will be modified and updated to include any changes implemented from the report. “Conversely, the Department can, and should, leverage the experience and infrastructure of Defense Acquisition training to develop and proliferate the knowledge required by Defense Acquisition professionals in a new and ever-changing environment,” Thomas said. 

The courses below will help students to understand PPBE, while the workshop serves as a hands-on chance to learn specifics about the system. 

The following BFM courses will build on the knowledge gained previously:

In addition to these courses, learn more about the authorities and pathways available via the Adaptive Acquisition Framework or other resources, consider the following courses:

For those interested in learning more about the commission’s report:

Planning, Programming, Budgeting and Execution Report graphics Matthew Sablan