Fixes To Pentagon Broken Budgeting System Identified By PPBE Commission

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“BREAKING DEFENSE By Valerie Insinna

“The commission calls for the wholesale replacement of the PPBE system with a new “defense resourcing system” that aims to align the budget request more closely to strategy.“

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“The almost 400-page report, published was written by the Commission on Planning, Programming, Budgeting and Execution (PPBE), draws on two years of research and more than 400 interviews, and resulted in 28 recommendations, half of which are denoted as key changes.

“The Pentagon requires a “fundamental restructuring” of its budget-making process and new authorities to make funding more flexible in order for the department to be able to quickly respond to new threats or adopt critically needed tech, according to a new report by congressionally mandated bipartisan commission.

Among them are reforms that would allow the Defense Department to address long-held complaints about the current budget process, including giving it new authorities to move money amongst weapons programs or to start new programs even while under a continuing resolution. That’s currently forbidden, and a CR, like the one the military is currently under, keeps spending exactly as it was the previous year.

While some of the recommendations can be immediately implemented by the Pentagon, others will need congressional approval or long-term buy-in from department leadership, said Ellen Lord, the commission’s vice chair and a former Pentagon acquisition chief.

“We believe we have a substantive document here with 28 very important recommendations that will all be for naught if we do not have implementation guidance from the department, as well as language from Congress,” she told reporters.

In a statement released this afternoon, Deputy Defense Secretary Kathleen Hicks commended the commission for their work but fell short of expressing support for any of the individual recommendations.

“The Department looks forward to evaluating the additional recommendations released by the PPBE Reform Commission today, in close cooperation with Congress, the Office of Management and Budget, and other stakeholders,” Hicks said.

Critics have slammed the current budget-making process for being slow and cumbersome, with the Pentagon beginning work on a budget about two years before funding is approved by Congress. That timeline can keep the Defense Department from being able to procure new tech like software and AI at the speed that they are made available in the commercial sector, the commission said.

“One of the most consistent concerns the commission heard over the past two years is that the current PPBE process lacks agility, limiting the department’s ability to respond quickly and effectively to evolving threats, unanticipated events and emerging technological opportunities,” the commission stated in the report.

At the same time, CRs and late budgets can also inhibit the department’s ability to start new programs or begin work on key initiatives.

The commission makes several other recommendations aimed at improving the flexibility of the budgeting process, such as raising the amount of funding that the Pentagon can shift among programs without needing congressional approval — known as below threshold reprogramming — and addressing “color of money” issues that can complicate buying software or make it difficult to replace the procurement of obsolescent parts with more widely available options.

One recommendation highly sought by some in the Pentagon would allow the department to carry over 5 percent of the budgets for operations and maintenance and military personnel into the following year, reducing the rush of spending that can occur by the military at the end of the year due to the current “use it or lose it” policy.

Another recommendation focuses on mitigating budgetary problems caused by a CR and would permit the Pentagon to begin a new start program or increase a production rate as laid out in a given budget request so long as the House and Senate appropriations committees had approved a bill including the new program or higher rate.

Robert Hale, the commission’s chairman and a former Pentagon comptroller, acknowledged that changes related to the carryover budget and CR could be a tough sell for Congressional appropriators, but added he believed the commission’s recommendations “balanced congressional oversight against some needed flexibility.”

The commission also calls for the creation of an analytic software platform that would crunch financial, contracting, logistics and readiness data “to allow decision makers to see the complete sight picture as never before, driving more meaningful decisions.”

The commission, which was created by Congress through fiscal 2022 National Defense Authorization Act,  released an interim report in August that called for 13 immediate reforms.

Deputy Secretary of Defense Kathleen Hicks said then that the Pentagon would begin adopting “all actions that can be implemented now, as recommended by the Commission and within its purview.”

The department released its implementation plan for the first 13 recommendations laid out in the interim report.”

https://breakingdefense.com/2024/03/pentagons-budget-process-needs-fundamental-restructuring-panel-says

ABOUT THE AUTHOR:

Valerie Insinna

Valerie covers the congressional and defense industry beat for Breaking Defense. Valerie has extensive national security reporting expertise, having served as the air warfare beat reporter for Defense News for five years. During that time her work was recognized by numerous awards, including the prestigious National Press Club Michael A. Dornheim Award for defense journalism. Valerie most recently covered commercial aerospace for Reuters. She also previously worked at Defense Daily and National Defense Magazine.

The Pentagon’s Presumptuous 2nd – Unfunded – Priorities List

“BREAKING DEFENSE” By Julia Gledhill

“Just days after the Department of Defense failed its fifth consecutive financial audit, the Pentagon submitted its second unfunded priorities list to Congress, requesting an additional $25 billion on top of the over $24 billion wish list submitted to Congress earlier this year.

The United States Congress should not be the Pentagon’s Santa Claus. But even if it were, who writes a second letter to ask for more when they’re already on the naughty list?”

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“Beyond the stated budget, it’s become routine that the Pentagon also hands Congress a list of programs it would like to fund but does not explicitly have money for: the unfunded priorities. While the “optional” wish list could seem like a good way to offer lawmakers and the military some flexibility, in the op-ed below, POGO’s Julia Gledhill argues it’s actually become another barrier to DoD transparency when it comes to taxpayer dollars.

Congress requires military services and commands to produce these wish lists, which outline items that don’t make it into the Pentagon’s official budget request. And while the Department of Defense has submitted these wish lists for decades, publicly available records suggest this is first time the department has sent Congress two in one year.

There are no public indications this list came from an additional request by lawmakers, either. Arriving so late in the congressional budget process, it directly appeals to a select group of decision makers finalizing the annual defense policy bill, rather than to Congress as a whole.

It’s increasingly clear that if you give the Pentagon an inch, it will take a mile. Lawmakers show the Pentagon special treatment by requiring these lists; while government-wide wish lists would of course be wasteful, it’s telling that no other department has the same requirement.

Unfunded wish lists circumvent the White House’s strategic guidance for the department and potentially harms non-defense spending; lawmakers with equities on, say, labor or agriculture committees should be against them on that basis alone. A second wish list, targeting only the top eight defense authorizers and appropriators? That should be the kind of thing that pushes other members of Congress to finally level the playing field and eliminate wish lists for good.

Being strong on defense can’t just mean throwing money at the Pentagon — it should mean prioritizing military readiness and holding the Department of Defense accountable for wasteful spending. The Pentagon has proven that it is not a good steward of Americans’ tax dollars. It hasn’t just failed its fifth consecutive audit, it was actually unable to give [PDF] auditors enough information to issue a clean opinion for the second year in a row. If the Department of Defense isn’t managing its money well now, it’s hard to believe throwing them another $25 billion will make Americans significantly safer, especially given the department’s infamous struggles with acquisition programs.

But Congress should rid itself of the Pentagon’s dreadful wish lists for an even more fundamental reason: These lists bypass the actual budgetary process. The Pentagon has developed the largest defense budget on the planet every year since at least 1949, supposedly ensuring that critical needs and priorities are properly supported in its formal budget — crying poor seems laughable.

Unfunded priority lists always circumvent and undermine the budget process, and sending Congress a second wish list during the lame duck session is outrageous because debate is essentially impossible. Committees have already held all their open discussions on the staggering $830-plus billion Pentagon budget. Now, congressional leaders have retreated behind closed doors to hash out the differences between a House version of the budget and a presumptive Senate version that itself was never actually debated or voted on by the full Senate. The Pentagon’s wish list could be a Hail Mary attempt to influence negotiations on the defense topline at the final stage in the policymaking process.

With Congress’s packed schedule, it will be up to a handful of congressional leaders to decide if and how to fund programs the Pentagon didn’t consider important enough for its formal budget request. In other words, a few individuals will likely decide whether or not they should approve an additional $25 billion on top of at least $839 billion in military spending already approved by the House.

Wish lists aren’t typically publicly accessible, either. Media outlets and organizations often gain access to parts of them, but by and large, only lawmakers see them. Bloomberg News appears to be the only outlet to gain access to the Pentagon’s latest list, making it extremely difficult for the public to evaluate the Pentagon’s request.

Lawmakers should be offended by the Pentagon’s audacious move to submit a second wish list because it encourages some of the most powerful members of Congress to make significant additions to the defense budget without substantive feedback from their colleagues. Plus, it’s impossible for a department already struggling with financial mismanagement to develop fiscal discipline when Congress funds its wish list requests outside the formal budget process. By repealing statutory requirements for the military to produce these unfunded priorities lists, Congress could encourage military branches and commands to critically analyze and reshape their budgets. In so doing, the military would begin to make the tradeoffs necessary to improve financial management and military readiness.

After all, neither Congress nor the Pentagon can address the security threats of tomorrow without accountability and oversight today. Increasing the amount of money the Pentagon handles, much less the weapon systems it develops, only exacerbates its management challenges.

The United States Congress should not be the Pentagon’s Santa Claus. But even if it were, who writes a second letter to ask for more when they’re already on the naughty list?”

Julia Gledhill is an analyst in the Center for Defense Information at the Project On Government Oversight.

https://breakingdefense.com/2022/12/the-pentagons-second-unfunded-priorities-list-is-an-accountability-travesty-congress-should-act/

How The Pentagon Can Save Over $1.2 Trillion

Image: “The Fiscal Times“

“DEFENSE NEWS”

“To reach the $1.2 trillion-plus reduction, spending cuts would come from three general areas:

• Force structure and weapons procurement reductions.
• Overhead and efficiencies.
• Nuclear weapons, missile defense and space.“

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“The Pentagon could save more than $1.2 trillion with a number of tweaks to its spending plan for the next decade, including canceling the creation of a Space Force and nuclear weapons projects, according to a report by the Center for International Policy.

The report, “Sustainable Defense: More Security, Less Spending,” offers new strategies that challenge the National Defense Strategy by encouraging more diplomacy (specifically in regard to the Iran nuclear deal) and less military confrontation to cut costs. It also says the NDS “exaggerate[s] the challenges posed by major powers” like China and Russia.

The report offers Congress several solutions to reduce Defense Department spending in the short term, including restricting overseas contingency operations funds, cutting the Pentagon’s private contractor workforce by 15 percent, blocking plans for the Space Force, avoiding placing weapons in space and rolling back the nuclear modernization plan. Capitol Hill is in the middle of a funding debate over fiscal 2020 military spending.

The Defense Department’s top-line budget hit $691 billion in FY10 and generally decreased until FY16, when the budget saw an increase and continued since, reaching $686 billion in FY19. The White House has proposed a $750 billion budget for FY20.

Recommendations from the report call for a reduction in end strength for the Army and Marine Corps. If this approach is adopted, the Army’s active-duty force would see about a 13 percent reduction in planned end strength, from 488,000 to 426,000. The Marine Corps would see a reduction in its active infantry battalions and combat and support units, and an approximately 15 percent reduction in end strength, from 186,000 to 157,000.

The Navy would also face cuts to the current size of its fleet from about 297 ships to 264 under the report’s recommendations. This would interrupt the Navy’s goal of building a 325-ship fleet by 2028, the report adds.

The report suggests eliminating efforts to produce a new nuclear, air-launched cruise missile, known as the Long Range Standoff Weapon, which it calls “redundant.” This would save $13.3 billion over a 10-year period, the report claims. The Pentagon could also save $30 billion over 10 years by canceling plans for a new intercontinental ballistic missile.

On the U.S. nuclear strategy overall, the report recommends the country move toward “a posture of sufficiency — a large enough arsenal to deter attacks on the United States and its allies. No additional capability is needed.”

Canceling plans for a Space Force would save the department $10 billion over the same period, the report says. Plans for the Space Force were adopted by the House Armed Services Committee on Thursday during its markup of the National Defense Authorization Act. The language of the bill renames the organization Space Corps and places it under the purview of the Department of the Air Force.

The report states that the U.S. is much safer today than it once was, adding that while international terrorist organizations remain a threat, their existence does not warrant an expansion of military force.

“[T]the wars of the last 18 years — including large-scale counterinsurgency efforts, nation building, and global terrorist-chasing, as occurred in Iraq, Afghanistan, and beyond — have done more harm than good, in some cases disastrously so,” the report asserts. It suggests abandoning policies that led to war and reducing the size and geographic reach of the military to “stop unnecessarily risking the lives of U.S. troops.”

The report also claims Russia and China pose no threat to the U.S. in terms of conventional military power. Rather, the competition with those countries lies in “economic dominance (particularly with China) and diplomatic influence.”

The report says the most urgent national security risks lie in climate change, cyberattacks, global disease epidemics, and income and wealth gaps. “

https://www.defensenews.com/pentagon/2019/06/19/how-the-pentagon-can-save-over-12-trillion/

Hamstrung Again By the One Year Budget Cycle

Once again, the US Government one year budget cycle is playing havoc with your tax dollar.

“DEFENSE ONE”

“Rather than addressing the looming budget caps that will snap back in January, the fiscal 2016 budget resolution the Senate passed Tuesday on a party-line vote uses the Pentagon’s Overseas Contingency Operations Fund (OCO) — a war chest not subject to the caps — to simply go around them.

The budget conference report sets about $523 billion for national defense, plus roughly $90 billion for OCO, for a total of $613 billion. Defense Secretary Carter called it a road to nowhere and stated. “We think that the amount of money we have requested and the manner in which we have requested it meets the national security strategy of the United States.” He continued, “We need to get a longer horizon…You cannot do defense or national security with a one-year-at-a-time approach.”

http://www.defenseone.com/politics/2015/05/road-nowhere-defense-secretary-slams-gop-defense-budget/112072/?oref=defenseone_today_nl

The One Year Budget Cycle Must Go

By Ken Larson

Photo Courtesy “Dabble With” dot com

Having  dealt with the funding process in the government contracting industry  (both large and small business) for over 40 years through many  administrations and much frustration, I can discuss with some credibility a major weakness in the huge machine we call the US  Federal  Government — the one year budget cycle. Its tail end is whipping everybody.

A huge reason for much of the largess in this entire area is the one year budget cycle in which the US Government is entrenched. About mid-summer every agency begins to get paranoid about whether or not they have spent all their money, worried about having to return some and be cut back the next year. They flood the market with sources sought notifications and open solicitations to get the money committed. Many of these projects are meaningless. Then during the last fiscal month (September) proposals are stacked up all over the place and everything is bottle-necked.

If you are a small business trying to get the paperwork processed and be under contract before the new fiscal year starts you are facing a major challenge. Surely the one year cycle has become a ludicrous exercise we can no longer afford and our government is choking on it. It is a political monstrosity that occurs too frequently to be managed.

Government must lay out a formal baseline over multiple years (I suggest at least 2 fiscal years – ideally 4 – tied to a presidential election)  – then fund in accordance with it and hold some principals in the agencies funded accountable by controlling their spending incrementally – not once year in a panic mode.

Naturally exigencies can occur. A management reserve can be set aside if events mandate scope changes in the baseline due to unforeseen circumstances. Congress could approve such baseline changes as they arise. There is a management technique for the above that DOD, NASA and the major agencies require by regulation in large government contracts.    It is called “Earned Value Management” and it came about as a result of some of the biggest White Elephant overruns in Defense Department History.

http://www.smalltofeds.com/2008/05/earned-value-management-systems.html

We have one of the biggest White Elephants ever in front of us (a National Debt in excess of $18Trillion)

http://www.usdebtclock.org/

We must get this mess under control, manage our finances and our debt or it will manage us into default.