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4 Expert Takeaways on Reforming the DoD's PPBE Process

Max Augros

April 18, 2024

4 Expert Takeaways on Reforming the DoD's PPBE Process-featured-image
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    The DoD's decades-old Planning, Programming, Budgeting, and Execution (PPBE) process for allocating resources has reached a critical inflection point. The congressionally-mandated PPBE Reform Commission recently released its final report with recommendations to overhaul the system. Decision Lens gathered a panel of experts deeply involved in defense resourcing to get their reactions and advice for practitioners at all levels. Here are the top takeaways from the insightful discussion:

    1. Aligning Strategy and Budgets is Critical

    Michael Greenberg, a former Army Comptroller, emphasized the report provides “clear and concise recommendations” the DoD can adopt quickly, such as “using priorities and criteria to align budgets to strategy” and more fully connecting strategic documents to the way the DoD allocates resources generally. He noted that "evaluating the strategy based on metrics and bringing innovation into the way we actually develop budgets" is key. Michael also advocated for restructuring budget justification materials (J-books) into a "more logical format" across DoD components and allowing more flexible carryover of funds to "avoid having to execute all the money at the end of the year."

    2. Establish Major Capability Activity Areas to increase transparency and flexibility

    Chris Gilmore, a retired Navy submarine officer, felt one of the most impactful recommendations was to restructure the budget around Major Capability Activity Areas (MCAAs). He argued this would "allow a program owner to move funds from...RDT&E to procurement to O&M" more flexibly and "capture the true ownership cost of any particular platform or program across the entire lifecycle." Chris noted this change requires joint leadership buy-in "to really have those hard discussions of where we want to take risk, what capabilities do we want to invest in, and where can we divest legacy items."

    3. Manual Tools are Holding Us Back

    Lance Despain, who served as a Marine Corps Captain and Comptroller, praised the report for highlighting the PPBE process’s lack of agility in decision-making, and that the impact of decisions is unclear. “There’s a lack of agility in the current PPBE process and the choices are not just opaque – our choices and decision-making are slow. We're still trying to use manual tools to get after shifting priorities and great power competition. I just don't think that that's getting it done. Modernization is needed to empower leaders to make better decisions," he said.

    4. Data-Driven Decisions Require Analytic Investment

    Kevin Kawasaki, a retired Army Operations Research Analyst now at Deloitte, highlighted the commission's "focus on the analytical side" and welcomed the idea of "continuous analysis." However, he cautioned that "when you look at the analytical capability within the Department of Defense, I would argue that it's kind of atrophied a little bit." Kawasaki believes that "rebuilding that analytical capability and capacity" will be necessary, especially in organizations like OSD CAPE.

    Change is Hard - But Necessary

    While all the panelists agreed that PPBE reform is necessary, they also acknowledged the challenges in implementing such sweeping changes. Chris Gilmore noted that major recommendations like "mitigating CR (Continuing Resolution) impacts, transforming the budget process and structure, and raising reprogramming thresholds will require buy-in from many parties, champions to advocate for it, and bipartisan support. It will take time."

    Greenberg concurred, estimating that "this is probably going to take three to five years to see a lot of these changes and it's going to be incremental." But he also pointed out that "we have recognition now at Congress and in DoD that we do need to change the processes."

    The Bottom Line

    The expert panel agreed that the PPBE Reform Commission's report provides a solid roadmap for evolving the defense resourcing system to be more strategically aligned, data-driven and agile. But implementing the reforms will require sustained leadership advocacy, time and significant investment in the workforce and analytic capabilities. As Lance Despain put it, "the second you realize that you're maybe not as efficient, that's when you have to actually just get started." Let's hope the Department of Defense heeds that advice. 

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