Under Secretary of Defense (Comptroller) Dov S. Zakheim today announced changes that will streamline the department's planning, programming, and budgeting system. This improved Planning, Programming, Budgeting, and Execution (PPBE) process is expected to revolutionalize internal DoD budget efforts, increase effectiveness and add additional emphasis to execution.
The changes come as a result of Deputy Secretary of Defense Paul Wolfowitz direction to the Senior Executive Council to study and recommend improvements to the overall DoD decision-making processes. Today, Wolfowitz signed the management initiative decision that implements recommended changes to the PPBE.
Zakheim noted that no legislative changes are required and that the Congress will see the same budget justification as it has in the past.
The DoD will evolve from an annual program objective memorandum and budget estimate submission (BES) cycle, to a biennial (two-year) cycle starting with an abbreviated review and amendment cycle for FY 2005. The department will formulate two-year budgets and use the off-year to focus on fiscal execution and program performance.
The two-year cycle will guide the department's strategy development, identification of needs for military capabilities, program planning, resource estimation and allocation, acquisition, and other decision processes. This change will more closely align DoD's internal cycle with external requirements embedded in statute and administration policy.
The Quadrennial Defense Review (QDR) will continue to serve as the department's major statement of defense strategy and business policy. It also will continue to be the single link throughout DoD that integrates and influences all internal decision processes. Section 922 of Public Law 107-314, the Bob Stump National Defense Authorization Act for fiscal year 2003, amended section 118 of Title 10 of the United States Code to align the QDR submission date with that of the President's budget in the second year of an administration.
The off-year defense planning guidance (DPG) will be issued at the discretion of the secretary of defense. The off-year DPG will not introduce major changes to the defense program, except as specifically directed by the secretary or deputy secretary of defense. There will be no DPG for fiscal 2005.
Rather than a program objective memorandum during the off-year, the department will use program change proposals to accommodate real world changes, and as part of the continuing need to align the defense program with the defense strategy.
The department will use budget change proposals (BCPs) instead of a budget estimate submission during the off-year. BCPs will accommodate fact-of-life changes (e.g., cost increases, schedule delays, management reform savings, workload changes, etc.) as well as changes resulting from congressional actions.
The FY 2005 execution reviews will provide the opportunity to make assessments concerning current and previous resource allocations and whether the Department achieved its planned performance goals. Performance metrics, including the program assessment rating tool, will be the analytical underpinning to ascertain whether an appropriate allocation of resources exists in current budgets. To the extent performance goals of an existing program are not being met, recommendations may be made to replace that program with alternative solutions or to make appropriate funding adjustments to correct resource imbalances.