Next-Generation Defense Budgeting Project

04.21.23 | 41 min read

Military Modernization Limited by Industrial Age Budgeting

The United States risks losing its military advantage over rapidly advancing adversaries, in no small part because the Department of Defense (DoD) and the national security community are unable to make effective and timely investment decisions. This issue underlies DoD’s well-known challenges in transitioning emerging science and technology and commercial technologies into warfighting capabilities. At the heart of these challenges are industrial age resource allocation processes, namely the Department’s Planning, Programming, Budgeting, and Execution (PPBE) system, which allocates resources years in advance, establishes categories for use of funds, sets the lens for congressional oversight, and has limited execution-year flexibility. While the PPBE system may be suitable for making long-term capital investments like aircraft carriers, these multi-year budgeting activities represent significant barriers to adopting emerging technology solutions in an era of a digitally-defined battlefield that requires joint operations. Simply said, technologies are evolving quicker than the US government’s decision-making processes will allow the US military to modernize.

The ability to integrate and operationalize new technologies will likely determine success on the future battlefield.  While DoD and the U.S. Government remain significant investors in R&D, the US private sector’s investment in R&D has grown to be five times that of the US Government forcing the DoD to become a savvy consumer and adopter of commercial technologies to compete globally. The challenges of bringing new technology providers under contract for operational capability are often discussed, but the current PPBE process is inconsistent with commercial timelines.  DoD needs to maintain access to these cutting-edge businesses to ensure that the warfighting capabilities it delivers are relevant and remain relevant.

A prime example of where alternative resource allocation processes will be required is the Joint All Domain Command and Control effort where the Department will need to experiment with many different technologies in a portfolio approach that selects the best solutions then quickly integrates and scales them into a combat C2 capability.  Transforming future concepts of operations into actionable decisions and resources may require a new construct that abandons the legacy lifecycle funding model where a technology slowly moves from research, development, test, and evaluation (RDT&E) to procurement, and concludes with operations and maintenance (O&M). The Department may need resource allocation mechanisms that can timely move funds to capture technology solutions and move them quickly from concept to fielded capability.  This approach also forces a reevaluation of how DoD conducts oversight and management.

With flexibility must come transparency and accountability.  Digital transparency is the key to effective oversight of contemporary commercial resource allocation systems. By contrast, the DoD currently relies on manual data calls with results distributed across multiple enterprise information systems to justify its budget to Congress. These documents do not share common reference points enabling Congress to understand the value being generated by numerous disparate efforts. Congress has indicated their concern with the current approach by including a provision in the last National Defense Authorization Act (NDAA) to require the Department to modernize its systems. Concurrent with this update, DoD needs to explore how it builds leadership accountability into the resourcing process.

View the congressional language on a PPBE Reform Commission passed in the FY 2022 National Defense Authorization Act

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The Day One Project conducted a whiteboarding session with 20 PPBE experts. View our list of questions about the financial barriers to DoD’s efforts to modernize the U.S. military.

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Relevant Literature

(Report) Five First Steps to a Modern Defense Budgeting System, MITRE, by Matt MacGregor, Greg Grant, and Peter J. Modigliani, August 1, 2022

The current defense budgeting system requires bold reforms to strengthen U.S. national security going forward. Effectively reforming a sixty-year-old process with many competing interests and priorities will take time, but the U.S. national security environment has demonstrated that the nation does not have the luxury of time. The following five steps are provided for DoD and Congress to consider implementing immediately.

These actions will enable DoD to focus more of its collective investments on increasing mission impact and meeting high-priority objectives of the national defense strategy.  The outcomes of these reforms will be a more responsive and adaptive resource allocation system that promotes better alignment to national goals, faster adoption of innovation, improved optionality for end users, and a more prepared military.

(Report) DOD Planning, Programming, Budgeting, and Execution (PPBE): Overview and Selected Issues for Congress, Congressional Research Service, by Brendan W. McGarry, July 11, 2022

The U.S. Department of Defense (DOD) Planning, Programming, Budgeting, and Execution (PPBE) system is a strategic planning process for allocating resources among the military departments, defense agencies, and other components. The process serves as a framework for DOD civilian and military leaders to decide which programs to fund based on strategic objectives and produces the department’s portion of the President’s annual budget request. In FY2022, Congress created a commission to study the effectiveness of the process in view of concerns over the pace at which the U.S. military is fielding commercially driven advances in software and other emerging technologies—such as hypersonic weapons, artificial intelligence, and 5G mobile technologies—relative to China and other strategic competitors.

(Report) Three Reforms to Improve Defense Resource Management, IBM Center for The Business of Government, by John Whitley, June 2022

With a budget of over $700 billion per year, the U S Department of Defense (DoD) represents the largest discretionary spending agency in the federal government Attempting to allocate and coordinate these resources to conduct operations, maintain readiness, and invest in modernization presents an enormous undertaking. But directing the allocation of resources enables the Secretary of Defense to establish and exercise control over DoD spending as an essential element of producing a strategy-driven budget. The DoD process used to allocate and manage resources involves the Planning, Programming, Budgeting, and Execution (PPBE) system established in 1961. Considered a revolution in management at the time, the now sixty-year-old system has proven a powerful and enduring tool for unifying resource allocation decisions, cementing the Secretary’s control over department operations, and focusing DoD on the future. The PPBE system has also received frequent criticism for being too bureaucratic, slow, cumbersome, and expensive…The report offers three key PPBE reforms to address these and related challenges: 1) Rebuild strategic analysis capability, 2) improve agility in allocating resources, and 3) make greater use of performance data to inform resource decision-making.

(Report) Defense Primer: Planning, Programming, Budgeting, and Execution (PPBE) Process, CRS, by Brendan W. McGarry, May 20, 2022

Planning, Programming, Budgeting, and Execution (PPBE) is the Department of Defense (DOD) process for allocating resources among the armed services, defense agencies, and other components. The annual process serves as the framework for DOD civilian and military leaders to decide which programs and force management requirements to fund based on strategic objectives. This product describes a notional PPBE process from the perspective of the Office of the Secretary of Defense (OSD). In practice, aspects of the process may differ based on current events or leadership preferences.

(NEWS) Readout of Deputy Secretary of Defense Dr. Kathleen Hicks’ Engagement During First Meeting of the Commission on Planning, Programming, Budgeting and Execution (PPBE) Reform, Department of Defense, May 18, 2022

Deputy Secretary of Defense Dr. Kathleen Hicks met today with members of the congressionally-mandated Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform during their first meeting at the Pentagon.  During her comments to the commission members, Deputy Secretary Hicks identified key areas in the PPBE process which are most likely to benefit from the commission’s guidance, as well as areas where the department is making improvements.

(Commentary) Digital transformation is a key to maintaining US overmatch against China, Russia, Breaking Defense, by John Whitley, May 18, 2022

… DoD should expand digitalization into more capability and technology areas, including new development efforts and sustainment of current forces. Office of the Secretary of Defense organizations like Research and Engineering, Acquisition and Sustainment, and Cost Assessment and Program Evaluation could provide priorities for expansion while the Military Departments identify specific programs. The PPBE Commission could focus on expanding business practice innovation like digital transformation in its reform recommendations.

(Commentary) Fear Not the Demise of Venture Capital Funding For Defense, War on the Rocks, by Rebecca Gevalt, May 3, 2022

Is the sky falling on tech startups and venture capitalists eager to break into the defense sector? “Time is running out for Silicon Valley,” tweeted Katherine Boyle, a partner with Andreessen Horowitz, the day before last year’s Reagan National Defense Forum. She went on to say: “After five years of [the Defense Department] saying ‘we want to work with the best startups,’ we have, at most, two years before founders walk away and private capital dries up.” Breaking Defense echoed Boyle’s sentiment, writing that the Davos-style gathering of defense leaders, politicians, and technology leaders was full of “an air of foreboding.”

(Commentary) Modernizing the Military May Require Modernized Oversight, Real Clear Defense, By Elaine McCusker & Dan Patt, April 27, 2022

From tours of Silicon Valley to testimony on the Hill, the Department of Defense is acknowledging its struggle to effectively harness advancing commercial technology and compete with a rapidly modernizing and expansionist Chinese military. Notably, members of Congress, Department officials, and industry associations are pointing to the process for planning and approving its budget as a culprit. The most frequently cited complaint is that starting a new acquisition requires insertion in the budget request two years ahead of time, and waiting up to another year to get funds approved by Congress. Holding the Department accountable is critical, but for our military to remain competitive, we must adapt oversight to flexible processes.One opportunity for potential improvement is a recently formed Congressional Commission tasked with recommending actionable improvements to the Department’s Planning, Programming, Budgeting, and Execution (PPBE) process. The PPBE system is essential to internal management and decision-making. But it also supports Congressional oversight as it divides spending into required pieces, delivers annual detailed budget requests and reports, and produces reams of justification documentation. As a result, the military departments, the offices of the secretary of defense, and Congress are all stakeholders in the PPBE process and its products.

(News) Data visibility, granularity, accuracy are keys to better PPBE, Federal News Network, by Tom Temin, April 25, 2022

That famous military aphorism – no battle plan survives first contact with the enemy – could also apply to Defense Department budget planning. The process, formally known as Planning, Programming, Budgeting and Executing, or PPBE, takes place over a five year horizon. And anything can happen to affect plans. Especially in times of great technological change and the transformation of the military across a number of domains, long term planning and budgeting become particularly problematic. “The modern world as it is, has really brought us into a phase where that long term plan is an ever-evolving series of short, iterative plans,” said Kevin Connor, the chief product officer at Decision Lens. “What we’ve tried to do is build a solution that helps people understand that there’s a reconciliation of the longer term view and vision, with the shorter term decisions required to stay on track and adapt to changing conditions.”

(News) How The Army Will Balance Contingency and Long-Term Needs, Federal News Network, by Tom Temin, April 19, 2022

Douglas Bush, the newly-confirmed assistant secretary of the Army for Acquisition, Logistics and Technology, known as the ASA (ALT), has a short list of priorities on which he plans to focus.
Top among them, is to establish a more rapid and repeatable process “for moving things out of research and development and into production.” It may not be a new idea, but it’s becoming a more urgent one as the world threat situation changes and military leadership works to maintain the armed services strategic advantages.

(Commentary) Persistent Knowledge Gaps in the Chinese Defense Budget, Joint Force Quarterly, by Frederico Bartels, April 14, 2022

The People’s Republic of China (PRC)’s People’s Liberation Army (PLA) presents the most significant military challenge to the United States and its allies. It is therefore imperative for us to understand PLA funding to enhance our understanding of the role of the military instrument in PRC foreign policy. This article discusses the current knowledge of how much funding is available for the PLA and the gaps in that knowledge, some solutions that attempted to close these gaps, and some areas prime for further development. The cost of a military for a society is not only a theoretical question; it also reveals part of the relative importance of the military in that society. In the case of the PRC, many unknowns remain regarding the cost of the PLA. Such murkiness is expected: The ruling Chinese Communist Party (CCP) constructed a notoriously ambiguous government in which members manipulate statistics and facts to fit its desired narrative. When it comes to disclosing to the international community its military expenditures, CCP leadership announces a single figure on its defense budget annually. This figure falls short of what other countries release publicly and does not tell the whole story or reveal the whole amount that is dedicated to national defense.

(Commentary) An open letter to the PPBE Reform Commission, Definitive Logic, April 4, 2022

We welcome the Congressional initiatives to improve Planning, Programming, Budgeting and Execution (PPBE). We encourage the Commission to invite public participation in its activities. This will provide greater transparency to taxpayers and give all stakeholders the opportunity to contribute ideas for improvement. However, the current initiatives are neither big enough, complete enough, or bold enough to power new mission outcomes.

(Commentary) Budget Reform Can’t Succeed Without Congress, War on the Rocks, by Matt Vallone, April 6, 2022

Department of Defense’s Planning, Programming, Budgeting and Execution program has been variously called “a relic of the past,” a “root cause of … bloat” and “the primary factor behind the decline in U.S. defense productivity and innovation.” As a result, there are a variety of proposals for reforming this much-maligned process, and a growing consensus that reform is necessary to ensure success in a strategic competition with China. This consensus is best embodied by the creation of a new Commission on Planning, Programming, Budgeting and Execution in the FY2022 National Defense Authorization Act that was signed into law last year.

(Report) Improving Defense Resourcing: Recommendations for the Commission on Planning, Programming, Budgeting, and Execution Reform, The Heritage Foundation, by Frederico Bartels, March 24, 2022

Its core, the Defense Department’s planning, programming, budgeting, and execution (PPBE) process is a technical approach to a political issue. While technical problems need to be addressed by the financial management community of the Defense Department, politics will determine many of the big questions that determine the defense budget. It is impossible to avoid politics when the ultimate arbiter of the defense budget is Congress. The commission on PPBE reform needs to work within the limitations of that reality. The commission has the opportunity to improve how the Defense Department allocates its resources and how it plans for future developments. It needs to seize that opportunity to create lasting change that will enable the department to be more agile and more responsive to the changing demands of national defense.

(News) Navy executive: DoD budget process must keep up with real needs, Federal News Network, by Tom Temin, March 22, 2022

Planning for the future – ensuring sufficient money, people and things are there to support the strategy – is neither simple nor linear. Threats change, the Navy must move resources and deploy numbered fleets in different ways. Congressional priorities change, and even then appropriations are almost never available on the first day of a fiscal year.Beyler said her challenge is balancing all this against the multi-year spending system known as the planning, programming, budgeting and execution process. PPBE starts with a document known as the POM, or Program Objective Memorandum. The core of the PPBE, originally known as PPBS, was established under Robert S. McNamara in the 1960s and has undergone alterations from time to time. Congress recently established a commission to study reform, but it won’t have even an interim report until early 2023.

(Commentary) The Program Side of the Valley of Death, MITRE, by Pete Modigliani, March 17, 2022

The DoD’s Valley of Death continues to be a major issue as it struggles to rapidly exploit leading defense and commercial technologies for the next generation of military capabilities. The future of warfare will be won by those nations that can effectively harness artificial intelligence, autonomy, cyber, quantum, and related leading technologies… and adapt its way of fighting. The Valley of Death discussions point to the issues with the long timelines for budgeting and the bureaucracy to capture and scale promising science and technology prototypes and projects. Yet the one area that is rarely discussed is the program side of the Valley of Death.

Grassley Pushes For Financial Management Oversight At Department Of Defense, Office of Chuck Grassley, March 15, 2022

WASHINGTON – Today, Sens. Chuck Grassley (R-Iowa) and Bernie Sanders (D-Vt.) urged the Commission on Planning, Programming, Budgeting and Execution Reform to help bring much-needed financial accountability to the Department of Defense (DOD). The letter, which comes after Grassley passed a new policy directing the commission to analyze and propose improvements to financial management systems, highlights the need for this oversight and explains expectations for the commission as they begin conducting their review.

(News) Cyber Command Prepares to Gain Significant Budget Control, FEDSCOOP, by Mark Pomerleau, March 14, 2022

U.S. Cyber Command is preparing to wield much greater budget control over major cyber programs, shifting funds away from the Army and Air Force programs that currently procure systems on behalf of the command and its forces.

Pentagon Needs a Six-Pillar Foundation, The Hill, By Matt MacGregor, Pete Modigliani, and Greg Grant, March 7, 2022

The defense budgeting system is more reflective of Soviet-era bureaucratic structures than the vibrant U.S. capitalist model. As illuminated in multiple studies and papers, this antiquated budget system has produced a Joint Force that is rapidly losing its military advantage to advanced peer rivals like China and Russia. More specifically, the current Planning, Programming, Budgeting, and Execution (PPBE) system isn’t timely, strategically aligned, responsive, or transparent.

Defense Innovation Bumps Up Against a Cold War Budget System, Federal News Network, Tom Temin, February 22, 2022

Pentagon planners know the U.S. military needs new technologies, new innovations, if it hopes to stay on top. But many of the innovation initiatives don’t gain scale. Jerry McGinn says that’s because of the 1960s-era planning, programming, budgeting and execution (PPBE) process the Defense Department uses. He is executive director of the Center for Government Contracting at George Mason University, and he joined the Federal Drive with Tom Temin in studio.

Acquisition Next: A Playbook to Break Industrial Age Shackles, George Mason University’s Center for Government Contracting, By Jerry McGinn and Eric Lofgren, February 8, 2022

Defense acquisition in the 21st century is still driven by policies and practices devised in the 1960s, optimized for the assembly lines of the industrial age. Meanwhile, the broader economic system has entered the digital age. Modern engineering and business practices have dramatically accelerated product development cycle times.For the Department of Defense to keep pace, approaches based on linearity and prediction must be replaced with modularity and iteration. The Center for Government Contracting looked for this approach in real-world programs. Interviews with more than 75 professionals from a variety of backgrounds gave evidence that a paradigm shift is already underway. They helped identify the recommendations that form the foundations of this playbook.

The Pillars of The Modern Defense Budgeting System for The Planning, Programming, Budgeting and Execution (PPBE) Commission, MITRE, By Matt MacGregor, Pete Modigliani, and Greg Grant, February 2, 2022

This paper frames the challenges inherent in the current system and presents a framework for transformation to a PPBE system that is strategic, collaborative, agile, transparent, and accountable to outcomes. This is the first in a three-part series on modernizing the defense budget, which is designed to contribute to the strategic reforms being considered by the PPBE Commission. The second and third papers will outline targeted reforms to address key challenges and a vision for the 21st Century defense budgeting system.The FY22 National Defense Authorization Act authorized the Department of Defense (DoD) to establish a PPBE Commission to make recommendations on improving the fielding of “operational capabilities necessary to outpace near-peer competitors…and support an integrated budget that is aligned with strategic defense objectives.” The 2018 National Defense Strategy (NDS) openly acknowledged that the United States had allowed its military advantage to erode over the last two decades, when defense priorities focused on counterterrorism to the detriment of peer competition. While the NDS laid out a number of goals to recovery, including prioritizing “speed of delivery, continuous adaptation, and frequent modular upgrades” and recognizing that DoD’s “current processes are not responsive to need,” change at the scale and urgency needed has not occurred. As the Director of the Defense Innovation Unit (DIU), Mike Brown, recently said, DoD is losing its technological edge and “losing it at a rapid rate.”

Stepping Back from Acquisition Reform: How Our Resourcing Processes Drive Defense Outcomes, National Defense Industrial Association, by Jon Etherton, Corbin Evans, Nick Jones, Rachel McCaffrey, Robert Van Steenburg, Jacob Winn, January 25, 2022

As the United States pursues transformative technologies to maintain its competitive advantage, we recognize that resourcing processes will significantly impact our success at delivering these capabilities quickly and efficiently.We need to take a fresh look at the budget and resourcing process in Congress and DoD, including the Planning, Programming, Budgeting and Execution (PPBE) as it exists today, by describing the resourcing processes, identifying stakeholders, and defining incentives and disincentives in the system. NDIA hopes this report will help stakeholders interested in national security understand current friction points, which can potentially lead to more effective material and ideological support for innovation.

Three steps to help defense innovation break free from its shacklesDefense News, Jerry McGinn and Eric Lofgren, January 20, 2022

It seems like every year there is another commission, task force or board that studies the defense acquisition system. Fiscal 2022 continues the pattern with the rather bureaucratic-sounding Commission on Planning, Programming, Budgeting, and Execution reform. This time, however, there is good reason to sit up and take notice. While defense innovation initiatives over the past three administrations have made progress, the Department of Defense cannot gain ground on strategic competitors until the rigid and linear PPBE process is addressed. This commission presents a golden opportunity for the DoD to break out of its industrial-age shackles.

Stepping Back from Acquisition Reform: How Our Resourcing Processes Drive Defense Outcomes, National Defense Industrial Association, by Jon Etherton, Corbin Evans, Nick Jones, Rachel McCaffrey, Robert Van Steenburg, Jacob Winn, January 25, 2022

As the United States pursues transformative technologies to maintain its competitive advantage, we recognize that resourcing processes will significantly impact our success at delivering these capabilities quickly and efficiently.

We need to take a fresh look at the budget and resourcing process in Congress and DoD, including the Planning, Programming, Budgeting and Execution (PPBE) as it exists today, by describing the resourcing processes, identifying stakeholders, and defining incentives and disincentives in the system. NDIA hopes this report will help stakeholders interested in national security understand current friction points, which can potentially lead to more effective material and ideological support for innovation.

Three Steps to Help Defense Innovation Break Free from Its Shackles, Defense News, Jerry McGinn and Eric Lofgren, January 20, 2022

It seems like every year there is another commission, task force or board that studies the defense acquisition system. Fiscal 2022 continues the pattern with the rather bureaucratic-sounding Commission on Planning, Programming, Budgeting, and Execution reform. This time, however, there is good reason to sit up and take notice. While defense innovation initiatives over the past three administrations have made progress, the Department of Defense cannot gain ground on strategic competitors until the rigid and linear PPBE process is addressed. This commission presents a golden opportunity for the DoD to break out of its industrial-age shackles.

Reforming The Defense Department’s Planning, Programming, Budgeting, And Execution Process, War on the Rocks, Thomas Spoehr and Frederico Bartels, January 13, 2022

Last year, the U.S. defense budget exceeded $700 billion. Most metrics would put it among the largest enterprises in the world. Nevertheless, the Defense Department’s planning, programming, budgeting, and execution (PPBE) process that governs how the department decides to allocate its resources is a relic of the past. It is a very slow process that relies on predictability when no such predictability exists. Further, to its critics among Washington policy wonks, the system represents the root cause of many ills: The slowness of the defense acquisition system, the lack of military agility in adopting new technologies compared to our own civil society, waste and bloat, and infighting leading to suboptimal decision-making.

Desperately Needed: 21st Century DOD Budget Process, The Hill, Ronald Marks, January 10, 2022

In the recently passed FY22 Pentagon budget, Congress has ordered a review of how the U.S. Defense Department (DOD) asks for and gets its yearly money. A reasonable question as, by dollar expense, it is the largest military in the world and half of the discretionary budget of the entire federal government. The Congressionally appointed group is to be called the “Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform.” It’s a dull name for a crucial process.

2022 Defense Authorization Bill (Once Again) Looks to Reform How DOD Buys Tech, NextGov, By Brandi Vincent, December 29, 2021

The latest military spending authorization comes with plans to increase the Pentagon’s pace and scope of technology innovation. Though generally pleased with the bill, former federal officials warned new bureaucratic hurdles within it could stymie that work.

Pentagon’s Ponderous Budget Process Is Next Target for Congressional Reform, Federal News Network, Jared Serbu, December 29, 2021

After having spent several years tinkering with the Defense Department’s acquisition rules, Congress is turning its attention to one of the other main factors that bogs down the DoD procurement system: The byzantine apparatus the Pentagon and lawmakers use to actually fund each military program.

In the crosshairs is what’s known as the Planning, Programming, Budgeting and Execution (PPBE) process, an early Cold War-era construct that, translated to the modern era, means Defense officials usually wait at least two years after they realize they need a new technology before money arrives to start solving the problem.

New Defense Budget Commission Could Be Last Hope for Fixing DoD Spending, Breaking Defense, Bill Greenwalt, December 13, 2021

As the NDAA inches closer to being enacted for the 61st consecutive year, hidden in its 2,165 pages is a requirement to stand up a commission to review how funds are budgeted and appropriated for defense. This one provision may well initiate the wonkiest, but also potentially the most important review of defense management since the establishment of the Department of Defense in 1947.

Bad Idea: Managing Defense Requirements, Budgets, And Acquisitions Via Programs, Defense360, Peter Modigliani, December 10, 2021

Don’t bring a knife to a gun fight. The quickest way to lose a war with a near-peer adversary in the 21st Century is to fight with 20th Century systems. The average Department of Defense (DoD) aircraft is 30 years old. Further, DoD launched most of its ships, submarines, and satellites in the last century. The best way to sabotage DoD’s ability to modernize is to impose industrial age structures, processes, and culture on this massive bureaucracy. DoD executives, Combatant Commanders, and Congress have stressed the need for DoD to rapidly exploit leading technologies to retain its military advantage. Yet DoD still operates with enterprise processes and management practices designed around programs from 60 years ago. These program-centric constraints drive longer timelines, fewer quantities, and higher costs that erode DoD’s military advantage and increase operational risks.

Why DoD Is So Bad at Buying Software, FCW, Lauren C. Williams, November 8, 2021

The Defense Department is one of the world’s largest technology organizations, but it has trouble buying IT, particularly software. It can take years for DOD to make it through the process for buying technology — whether it’s software to operate a fighter jet, tactical radios or the latest version of Microsoft Office — and by that time, the technology can be out of date.  “Software advances every 12 to 18 months, so you’re at least one iteration if not two iterations behind in the decisions that you made to get the program going in the first place,” Dean Hullings, global defense solutions strategist at Forescout Technologies, told FCW. It also “opens up doors for other people to say, ‘Well, wait a minute. We weren’t part of this. We have capabilities, too.’ And that prolongs the actual acquisition process.”

Financing the Fight: History and Assessment of DoD Budget Execution Processes, CSIS, Robert Hale, November 2, 2021

The Department of Defense (DoD) has a process for utilizing approved budgets, known as budget execution, that seeks to achieve three goals: meeting national security needs effectively, complying with relevant laws and regulations, and pursuing efficiencies in the DoD budget in order to hold down costs. The process has evolved significantly over the years. Until about 1900, DoD and other federal agencies enjoyed a great deal of flexibility during budget execution, sometimes ignoring congressional restrictions or using funds appropriated for one purpose to pursue another without congressional approval. In response, controls began to be tightened.

(Report) Cumbersome Defense Reprogramming Process Hampers National Defense and Should be Streamlined, Heritage, by Frederico Bartels, October 13, 2020

Once Congress appropriates funds, the Department of Defense can request changes to how these funds will be used through a process called reprogramming. From first planning to the full year of execution, the defense budget takes around three years, so facts of life and the changing landscape of national defense will demand budgetary changes. Currently, this reprogramming process involves at least 12 different offices and takes between three months and six months. The process should be reformed for both speed and precision.

Harnessed Lightning: How the Chinese Military is Adopting Artificial Intelligence, Center for Security and Emerging Technology, Ryan Fedasiuk, Jennifer Melot, and Ben Murphy, October 2021

This report examines nearly 350 artificial intelligence-related equipment contracts awarded by the People’s Liberation Army and state-owned defense enterprises in 2020 to assess how the Chinese military is adopting AI. The report identifies China’s key AI defense industry suppliers, highlights gaps in U.S. export control policies, and contextualizes the PLA’s AI investments within China’s broader strategy to compete militarily with the United States.

Senate Commission to Fix Defense Budgeting Is Right on The Mark, War on The Rocks, John Whitley and Gregory Pejic, September 24, 2021

It is one of history’s great ironies that a major factor in defeating Soviet communism was one of the largest centrally planned economies in the world — the U.S. Department of Defense. The Senate’s defense authorization bill puts the Defense Department’s central planning process — called the Planning, Programming, Budgeting, and Execution (PPBE) system — back in the spotlight with its call for a reform commission. At over $700 billion per year, the Defense Department is by far the largest discretionary spending account in the federal government. It is no surprise, then, that its half-century-old PPBE process has been a regular target of criticism and calls for reform.

Presentation Is Key: Why the Pentagon’s Budget Data Needs a Makeover, Defense News, Jennie Matuschak, September 23, 2021

Within the fiscal 2022 defense budget request, the Department of Defense has invested in the next generation of leading emerging technologies and capabilities. Ironically, at the same time, the way in which the funding of these new capabilities is organized is entirely outdated. As a pleasant surprise, however, the FY22 National Defense Authorization Act, which had its House Armed Services Committee markup hearing earlier this month, requires the DoD to provide reports on how to improve defense budget-related materials.

Is It Time for OTAs to Go Mainstream?, Breaking Defense, Stan Soloway and Jason Knudson, September 1, 2021

During the first fifty years that they existed, total spending through Other Transaction Authorities (OTAs) was far below $1 billion per year. Then, five years ago, Congress expanded the OT authority beyond its initial research and development parameters to include follow-on scale production — and everything changed. Since then, OT use has grown nearly twenty-fold and could approach or exceed $12 billion by the end of the current fiscal year. Even though a significant portion of the most recent growth came as OTs were used to assist in the development of the COVID vaccine, the growth has still been tremendous.

Defense Budgeting System Hinders Rapid Acquisition of Commercial Technology, Says Procurement Researcher, Government Matters, August 18, 2021

The Defense Department’s current budget system plans funding for five years out. Now the Senate Armed Services Committee wants to reform DoD’s planning, programming, budget and execution (PPBE) process.

The Space Force Wants to Manage Acquisitions by Portfolio, C4ISRNET, Nathan Strout, August 4, 2021

The U.S. Space Force believes it could improve the way it develops space capabilities by thinking in terms of portfolios, rather than developing each program of record independently. When asked about the need for acquisition reforms, Deputy Assistant Secretary of the Air Force for Space Acquisition and Integration Shawn Barnes said the Space Force had enough flexibility in issuing contracts to do what it needs to do. However, he said the service could do better by thinking in terms of portfolios rather than single platforms.

Other Transactions Authorities: After 60 Years, Hitting Their Stride or Hitting the Wall, IBM Center for the Business of the Government, Stan Soloway, Jason Knudson and Vincent Wroble, August 2021

The term “Other Transaction Authority” (OTA) stems from statutory provisions that allow certain federal agencies to enter into transactions with commercial entities using nontraditional procurement methods and contract terms. In this report, the authors address how OTAs have evolved over the last several decades; how different Defense agencies have used OTAs; what that experience teaches other agencies about using OTAs effectively; and the impact of OTAs on the COVID-19 vaccine initiative.

Lawmaker Proposes Restructuring Funding Through Mission-Based Pilot, Breaking Defense, Jaspreet Gill, July 28, 2021

A lawmaker on the House Armed Services Committee is proposing a mission-based pilot program that would restructure funding so that it’s tied to specific missions, instead of specific hardware. Speaking at a virtual Hudson Institute event last week, Rep. Seth Moulton (D-MA) said he wants to include this pilot in this year’s defense policy bill. “We can’t just change what we buy, we also have to change how we buy it,” Moulton said. “Software is going to win wars, so we need to change our buying habits. . . . And that means we have to have more flexible, quick funding that directly addresses the operational challenges our troops are facing . . . so that’s why I’m working to establish what we’re calling a mission-based pilot which would experiment with a new way of budgeting to fix these issues.”

The Modernization Quandary, National Defense Industrial Association’s Emerging Technology Institute, Mark Lewis and Alan Shaffer, July 26, 2021

Since the end of the Cold War, a number of factors have con- verged that together pose a significant national security challenge for the Department of Defense and United States as a whole. These factors include a series of decisions, or in some cases a lack of decisions, that has resulted in delays in defense modernization pro- grams. Such delays have occurred at the same time as a dramatic increase in the capability of near-peer competitors, accompanied by an erosion of domestic industrial capacity in critical sectors. Any solution to this national security challenge—looking to address defense modernization—will have to acknowledge the significant budget pressures on the Department of Defense as it maintains legacy systems and capabilities, all while responding to the needs and expectations of executive branch leadership, Congress, and the American people. This is the Modernization Quandary.

COVID-19 Contracting: Actions Needed to Enhance Transparency and Oversight of Selected Awards, GAO, July 26, 2021

In response to COVID-19, as of March 2021, the Departments of Defense, Health and Human Services, and Homeland Security obligated at least $12.5 billion using a contracting mechanism that gave them the flexibility to quickly respond to urgent pandemic needs. This mechanism—known as an other transaction agreement—is not subject to certain federal contract laws and requirements but allowed the agencies to customize the agreements. Agencies cited the timeliness of awards as a major factor for using these agreements, including awards that accelerated COVID-19 vaccine manufacturing.

Senate NDAA Pushes for More Domestic Production, Increased Cyber Authorities, FWC, Lauren C. Williams, July 23, 2021

The bill calls for a commission on budget reform through an independent review of DOD’s Planning, Programming, Budgeting, and Execution (PPBE) process. Additionally, DOD’s comptroller, CIO, and chief data officer would have to submit a plan on consolidating the IT systems used to manage data and support the PPBE process.

Can JADC2 Fly Without Budget Reform, FWC, Lauren C. Williams, July 22, 2021

The Defense Department’s plan to seamlessly connect its communications, platforms, systems and sensors through Joint All Domain Command and Control (JADC2) could be thwarted without real budget reform. Tim Grayson, director of the Defense Advanced Research Projects Agency’s Strategic Technology Office, said that preparing for future battles means “disaggregating” monolithic platforms into distributed capabilities that can adapt and fit together to deliver whatever effects are needed for a mission.

Former Modernization Official Says DoD’ Optimized for Fairness,’ Not Speed, Inside Defense, Jaspreet Gill, July 21, 2021

The Defense Department needs to overhaul its acquisition system if it wants to outpace China in cutting-edge weapons development, according to a former Pentagon modernization official. Mark Lewis, formerly the acting deputy under secretary of defense for research and engineering, now runs the new Emerging Technologies Institute at the National Defense Industrial Association.

Full Committee Hearing: “Non-Governmental Views on The Fiscal Year 2022 Department of Defense Budget”, House Armed Services Committee, July 20, 2021

To receive testimony from non-governmental witnesses on the Fiscal Year 2022 Department of Defense budget.

Faster Weapon Buys: Try Evolutionary Innovation, Breaking Defense, Elaine McCusker and Dan Patt, July 2, 2021

At a time when political consensus on anything can be hard to reach, there is general agreement that the United States military must modernize to fend off a rising China and meet other national security needs. Bringing defense capability into the future usually generates thoughts of new weapons. However, much of the needed modernization must come from changes in how the Department of Defense operates: from process to concepts of operation to digital connectivity.

How Congress Must Reform Its Budget Process to Compete Against China In AI, The Hill, William “Mac” Thornberry (R-Texas), opinion contributor, June 26, 2021

The 30 NATO leaders were clear-eyed and direct in the Brussels Summit Communiqué, “We face multifaceted threats, systemic competition from assertive and authoritarian powers, as well as growing security challenges to our countries and our citizens from all strategic directions.” The key question is how well the United States, its allies, and partners will meet those “threats, competitions, and challenges,” especially in an era when technology is moving far faster than government decision-making.

Changing Current “Use It or Lose It” Policy Would Result in More Effective Use of Defense Dollars, The Heritage Foundation, Frederico Bartels, June 23, 2021

The Department of Defense manages around $700 billion annually based on plans developed at least two years before their execution. Once appropriated, any movement of plan resources often requires congressional acquiescence. In this environment, even estimates off by as little as 0.01 percent can equal $70 million—real money, even for the federal government. Attention should be paid to the phenomenon of “use it or lose it”—how expiring budget authority adversely affects the management of department resources. Congress should change the financial rules that govern the obligation rate of these defense funds, allowing some of these funds to be rolled over to the next fiscal year and accelerating reprogramming and transfers.

Hicks Seeks to Unify Service Experiments with New’  Raider’ Fund, Breaking Defense, Sydney Freedberg Jr., June 21, 2021

The Pentagon needs to create a unified “innovation ecosystem” from the services’ experiments, Deputy Secretary Kathleen Hicks said today. So it will create a Rapid Defense Experimentation Reserve – RDER, pronounced “Raider.” Organizations across the Defense Department can propose experiments and compete for RDER funding, with winners determined based on how well they bring in multiple services and entities to work on joint concepts. “We’re building out some experimentation funding and incentives that we can start using right away,” Hicks told the Defense One Tech Summit this afternoon.

Pentagon Wants to Use Its Biggest It Program to Test’ Colorless’ Software Appropriation, Federal News Network, Jared Serbu, May 31, 2021

The Defense Department is still in the early stages of an experiment to change how it funds software development, but it’s already planning to put that test on rocket fuel, owing mostly to the addition of a huge Navy program. As part of its 2022 budget proposal, the Pentagon is asking Congress to dramatically expand the number of dollars it’s allowed to expend through a pilot effort to test a new “color of money” for software, including by using it for the single biggest IT program in the federal government.

It’s Time for A Fresh Look at Resourcing Defense, National Defense, Hawk Carlisle, May 27, 2021

NDIA’s support of budget stability rests on our belief that Defense Department planners, programmers and comptrollers can most effectively manage resourcing limitations if they have accurate knowledge about funding levels, specifically in the near term and more generally in the mid- and long-term. We continue to believe budget stability is critical to ensuring our warfighters have the capabilities, training and support to enjoy decisive advantages across the spectrum of conflict.

Shake Off the Pentagon’s Industrial-Age Bureaucracy, Defense One, Dan Ward, Matt MacGregor and Pete Modigliani, May 12, 2021

The greatest threat to America’s ability to win conflicts is its own defense bureaucracy. Archaic executive- and legislative-branch processes hinder the military’s ability to adapt to a dynamic array of threats powered largely by readily available commercial technologies in cyber, artificial intelligence, autonomy, hypersonics, and space.

Reform The Pentagon’s Budget Process, Or Lose Our Military and Tech Advantages, The Hill, Dov Zakheim, April 2, 2021

What do artificial intelligence, quantum computing, the Defense Innovation Unit and reprogramming requirements have to do with one another? The answer is, “Everything.” For unless both Congress and Department of Defense (DOD) seriously reform the manner in which they move funds from one appropriations account to another, the DOD’s ability to introduce new technologies rapidly will be seriously compromised — and with it, potentially, the nation’s defenses.

The Final Report, National Security Commission on Artificial Intelligence, March 19, 2021

Artificial Intelligence (AI) technologies promise to be the most powerful tools in generations for expanding knowledge, increasing prosperity, and enriching the human experience. The technologies will be the foundation of the innovation economy and a source of enormous power for countries that harness them. AI will fuel competition between governments and companies racing to field it. And it will be employed by nation states to pursue their strategic ambitions.

A Bridge Fund Can’t Solve the Pentagon’s Emerging Tech Problem, Defense News, Eric Lofgren and Matt MacGregor, March 15, 2021

Over the last five years, the Pentagon organized a charm offensive to attract new entrants into its technology base. With the lure of quick contracts and follow-on potential, thousands of entrepreneurs have been enticed into seeking defense work. This enthusiasm risks being short-lived without more examples of small contracts leading to larger procurements. The oft-cited problem is the multiyear process for lining up funds, first for a more substantial prototype and then for a program of record. The Pentagon’s prototyping guide clearly diagnosed the problem: “When the initiation of a prototyping project is stymied or the developed prototype never makes it past the ‘valley of death’ due to inappropriate or unavailable funds, the transformative effect of prototyping can be lost.”

PPBE Reform Event: An Imperative for Winning the Great Power Competition, Acquisition Talk, Eric Lofgren, March 11, 2021

“… in my mind, I equate planning and budgeting and consider the terms almost synonymous, the budget being simply a quantitative expression of operating plans.” That was Robert McNamara in August 1961 testifying to Congress. The weapons program is the analytical framework that connects plans and budgets in the Pentagon’s Planning-Programming-Budgeting-Execution (PPBE) process. Programming the budget makes perfect sense where information is relatively complete about relevant alternatives. It’s simply an engineering problem with known constraints.

Competing In Time: How DoD Is Losing the Innovation Race to China, Breaking Defense, Bill Greenwalt, March 9, 2021

If the new DOD task force on China is serious about looking at the state of our technology competition, it needs to understand that the balance of technological power has shifted – and it has primarily been a self-inflicted wound.  The best ideas no longer arise in a US defense industry encumbered by 60 years of Stalinist-style central planning and security controls, but from commercial sources that once were primarily in the U.S. and are now globalized.

Competing In Time: Ensuring Capability Advantage and Mission Success Through Adaptable Resource Allocation, Hudson Institute, William Greenwalt and Dan Patt, February 25, 2021

The keystone of the Department of Defense’s institutional architecture is not acquisition, but rather the budgeting process. This governs its ability to allocate funding to achieve national security objectives, links together requirements and purchasing, sets the calendar of the department, controls changes to investment priority, and serves as the mechanism for Congress to exercise its constitutionally granted appropriations powers. While there have been dozens of acquisition reform efforts, the budgeting process has been nearly untouched since 1961.

Bureaucratic resource allocation processes—especially planning, budgeting, and appropriations—are a critical engine for maintaining an edge in a long-term military competition. In the 1950s, this realization was mechanized by the US, when fast-paced military developments with shifting directions were used to drive cost into ponderous Soviet planning processes. Ultimately, Soviet strategists also recognized that agility in resource allocation would ultimately determine the outcome of competition given a sufficiently long horizon.

The PPBE’s inflexibility increases the difficulty of rapidly shifting funding to emergent innovations that appear promising, as new programs must typically wait more than two years to be included in the budget. Additionally, the PPBE encodes divisions between research, production, and operations activities that stymy iterative or feedback-based development.

Five By Five: Five Disciplines And Five Strategic Initiatives For The Pentagon In The Digital Age, MITRE, Pete Modigliani, Dan Ward, and Matt MacGregor, February 25, 2021

The Department of Defense (DoD) embarked on a new era for acquisition, with a relentless focus on accelerating the delivery of new operational capabilities. While much progress has been made in recent years, the new administration has an opportunity to build on the latest enterprise transformations and take them to the next level. The task ahead requires aligning and streamlining enterprise processes, shaping culture and incentives, and leveraging partnerships across the DoD, Congress, industry, and our allies. This paper proposes a set of five key disciplines and five strategic initiatives to meet the challenge of accelerating and strengthening our national defense posture in the Digital Age.

Pentagon’s Dated Budget Process Too Slow to Beat China, New Report Says, Defense News, Joe Gould, February 25, 2021

A new report argues for a sweeping overhaul of the Pentagon’s 60-year-old defense budgeting and appropriations process, so it can match the fast-moving commercial sector and outpace China’s technological development.

Emerging Technologies and Their Impact on National Security, Senate Armed Services Committee Hearing, February 23, 2021

To receive testimony on emerging technologies and their impact on national security.

The Pentagon Needs Budget Agility to Compete with China, Defense One, Bryan Clark and Dan Patt, February 12, 2021

Congress put defense acquisition under a microscope during the last decade, pressuring Pentagon officials on slow or failing programs and creating new ways to identify future needs, buy equipment, and develop software. These efforts yielded some successes, like the Middle-Tier Acquisition Path that bypasses DoD’s laborious requirements system to let program managers prototype their way to a new weapons system. Unfortunately, DoD’s newfound acquisition agility will be wasted unless it also gains more budget latitude.

Pentagon Advisory Boards Need to Offer 10x Ideas, not 10% Ones, Defense One, Steve Blank, Raj Shah, and Joe Felter, January 30, 2021

The Defense Department is at a crossroads. Incremental improvements are no longer good enough to keep up with China; the Pentagon needs substantive and sustained changes to its size, structure, policies, processes, practices, technologies, and culture. The last administration asked most of the Pentagon’s 40-plus boards for advice on small improvements — with a few notable exceptions, such as the Innovation Board’s Software Study and the work of the National Security Commission for AI — the latter an independent effort chartered by Congress.

Former Pentagon Comptroller: Observation and Opportunities for America’s Defense Budget, AEI, Elaine McCusker, January 11, 2021

As we look back at an inexplicable and difficult year, the time is right for a fresh start. One such start should involve continued aggressive and unafraid changes to how the U.S. Department of Defense is resourced. It is time for a responsive and resilient approach to the budget that will help restore military competitiveness, respond to domestic and international partner futures, and generate new ideas with Congress.

Bad Idea: The “Use-It-Or-Lose-It” Law for DoD Spending, CNAS, Robert F. Hale, December 15, 2020

Year-end spending sprees. Increased violations of federal financial laws. Bad press for the Department of Defense (DoD). All these unfortunate events stem in part from a law requiring that DoD’s operating funds be spent in the year they are appropriated. Congress can significantly improve the effectiveness of defense spending by changing this “use it or lose it” law.

Department of Defense Other Transaction Authority Trends: A New R&D Funding Paradigm?, CSIS, Rhys McCormick, December 8, 2020

As the DoD and congressional leadership have sought ways to maintain continued U.S. technological superiority against global competitors like China and Russia, OTA agreements have become an increasingly popular tool. Between FY 2015 and FY 2019, DoD OTA obligations increased from $0.7 billion to $7.4 billion, a 712 percent increase. Neither contracts, grants, nor cooperative agreements, OTAs are a more flexible acquisition approach that enables specific federal agencies to access goods and services outside of traditional acquisition processes.

Future of Defense Task Force Report 2020, House Armed Services Committee, September 23, 2020

The gravity and complexity of threats emerging to challenge the United States is proliferating as technological advancements in artificial intelligence, quantum information science, and biotechnology transform society and weaponry at an exponential rate. This is occurring as adversarial capability is increasing to the point where the United States may soon lose the competitive military advantage it has enjoyed for decades.

The DoD Budget Process: The Next Frontier of Acquisition Reform, George Mason University, Eric Lofgren, July 29, 2020

The budget process is the “master controller” of virtually everything that is done in the Department of Defense, yet it hasn’t seen real reform since 1961. The current waterfall process from the industrial era requires prediction and control of programs from two years out, and then locks them in for five or more years into the future. Defense acquisition studies have repeatedly asserted the need to move away from program-centric stovepipes and toward portfolio-centric management. Yet half of all Research, Development, Test & Evaluation programs proposed for FY2021 are less than $29 million, with limited flexibility to take advantage of new opportunities. This paper explores the wisdom of the traditional budget process based on organization rather than program. It proposes a 21st century agenda for budget reform, including specific examples of how pro- gram elements can be consolidated and appropriations reclassified. The goal is to empower mission-driven organizations, allowing them to accelerate innovation by embracing an uncertain learning process through portfolio management.

Sharpening The U.S. Military’s Edge: Critical Steps for The Next Administration, CNAS, Michèle Flournoy and Gabrielle Chefitz, July 13, 2020

and bolder steps to keep its military-technological edge over great power competitors such as China, or it could lose that edge within the decade. If the Pentagon’s own reported wargames and analysis are to be believed, the planned force that is enshrined in the current Department of Defense (DoD) program and budget may well be insufficient to deter or defeat Chinese aggression in the future. It is difficult to overstate the catastrophic consequences of the altered balance of power that would result: a United States no longer able to credibly protect its interests, allies, and partners in the very region on which the future prosperity and security of Americans will most depend.

Software Acquisition and Practices (SWAP) Study, Defense Science Board, May 2019

The FY18 National Defense Authorization Act (NDAA), §872 directed the Secretary of Defense to task the Defense Innovation Board “to undertake a study on streamlining software development and acquisition regulations.”  The Defense Innovation Board submitted their final SWAP report to Congress on 3 May 2019, which included 10 primary recommendations and 16 additional recommendations to address the most critical statutory, regulatory, and cultural hurdles facing the Department of Defense when modernizing software acquisitions.  Shortly thereafter, the Department transitioned into the implementation phase of the top ten recommendations highlighted by the DIB.

Software is Never Done: Refactoring the Acquisition Code for Competitive Advantage, Defense Innovation Board, March 12, 2019

U.S. national security increasingly relies on software to execute missions, integrate and collabo- rate with allies, and manage the defense enterprise. The ability to develop, procure, assure, de- ploy, and continuously improve software is thus central to national defense. At the same time, the threats that the United States faces are changing at an ever increasing pace, and the Department of Defense’s (DoD’s) ability to adapt and respond is now determined by its ability to develop and deploy software to the field rapidly. The current approach to software development is broken and is a leading source of risk to DoD: it takes too long, is too expensive, and exposes warfighters to unacceptable risk by delaying their access to tools they need to ensure mission success. In- stead, software should enable a more effective joint force, strengthen our ability to work with allies, and improve the business processes of the DoD enterprise.

(Report) Final Report, Section 809 Panel, January 2019

The Advisory Panel on Streamlining and Codifying Acquisition Regulations (Section 809 Panel) was created in Section 809 of the FY 2016 National Defense Authorization Act (Public Law 114-92). The panel consisted of 16 members required to be recognized experts in acquisition and procurement policy with diverse experiences from the public and private sectors. The panel was charged to deliver recommendations that could transform the defense acquisition system to meet the threats and demands of the 21st century.

A History of Thought in Defense Acquisition, International Cost Estimating and Analysis Association, Eric Lofgren, June 2017

This paper explores the origins of the consensus view that arose in the years between World War II and the early 1970s by surveying and interpreting some of the most important thinkers in defense acquisition. It will explain how the modern acquisition process descends from antiquated nineteenth century concepts of scientific management founded on a deterministic, closed-system, view of the natural sciences and a rejection of liberal principles for social organization. The paper will first discuss military unification and its organizational consequences. Then, a pair of chapters on program budgeting and systems analysis, two processes that laid the foundation for a fourth chapter on the Planning-Programming-Budgeting System. Finally, the challenges of defense contracting and the role of the cost estimator will be discussed.

(Report) The Labyrinth Within: Reforming the Pentagon’s Budgeting Process, CNAS, by Michelle Shevin-Coetzee, February, 2016

The current austere fiscal environment has brought the debate over the defense budget to the forefront of policymakers’ agendas. Technical terminology once deemed irrelevant for policy discussions – continuing resolutions, excepted personnel, furloughs, government shutdowns, and sequestration – is both seeping into the Pentagon’s daily lexicon and familiarizing the public discourse. Evolving figures and budget scenarios have begun to overshadow a much-needed discussion on the appropriate size and shape of the force. Confronted by shrinking and unpredictable budgets, as well as persistent international challenges, the Pentagon requires a more agile and efficient system to align strategy with resources. Created during the early stages of the Cold War, the modern Planning, Programming, Budgeting, and Execution (PPBE) process is designed to do just that. Yet as that process unfolds today, it is deeply flawed, preventing the Pentagon’s budgetary preparations from progressing in the comprehensive and coordinated manner that was intended. In particular, there are three discrepancies between PPBE’s “theory” codified in Pentagon directives and the more disjointed “practice” by which senior officials undertake this process: an unrealistic timeline, a stove-piped analytic system to model scenarios, and a reliance on Overseas Contingency Operations funding. Until these constraints are addressed, DoD cannot budget properly for the future security environment and is forced, therefore, to endure additional and unnecessary risk.

Weapon System Acquisitions: Opportunities Exist to Improve the Department of Defense’s Portfolio Management, GAO, August 27, 2015

The Department of Defense (DOD) is not effectively using portfolio management to optimize its weapon system investments, as evidenced by affordability challenges in areas such as shipbuilding and potential duplication among some of its programs. Best practices recommend assessing investments collectively from an enterprise-wide perspective and integrating requirements, acquisition, and budget information, but several factors inhibit DOD’s ability to do so.

The Fast Follower, Coming Up Behind Development Leaders, Defense AT&L Magazine, David Pearson, May-June 2015, p.35

Let’s face it: In many technical domains, the Department of Defense (DoD) no longer is the world’s leader. DoD often finds itself on the outside looking in at many of the latest technical advances after losing its place as the dominant tech customer. DoD faces a shrinking defense industrial base and a more global tech marketplace and competes with the rise of consumer electronics that have short product life cycles.

DOD Should Streamline Its Decision-Making Process for Weapon Systems to Reduce Inefficiencies, GAO, February 24, 2015

The acquisition programs GAO surveyed spent, on average, over 2 years completing numerous information requirements for their most recent milestone decision, yet acquisition officials considered only about half of the requirements as high value. The requirements, in total, averaged 5,600 staff days to document.

Best Practices: An Integrated Portfolio Management Approach to Weapon System Investments Could Improve DoD’s Acquisition Outcomes, GAO, March 30, 2007

Over the next several years, the Department of Defense (DOD) plans to invest $1.4 trillion in major weapons programs. While DOD produces superior weapons, GAO has found that the department has failed to deliver weapon systems on time, within budget, and with desired capabilities. While recent changes to DOD’s acquisition policy held the potential to improve outcomes, programs continue to experience significant cost and schedule overruns. GAO was asked to examine how DOD’s processes for determining needs and allocating resources can better support weapon system program stability. Specifically, GAO compared DOD’s processes for investing in weapon systems to the best practices that successful commercial companies use to achieve a balanced mix of new products, and identified areas where DOD can do better. In conducting its work, GAO identified the best practices of: Caterpillar, Eli Lilly, IBM, Motorola, and Procter and Gamble.

(Report) Beyond Goldwaters – Nichols: Defense Reform for a New Strategic Era (Phase II), CSIS, by Clark A. Murdock, July, 2005

Beyond Goldwater-Nichols: U.S. Government and Defense Reform for a New Strategic Era – Phase 2 Report is the result of an enormous effort by many dedicated, talented, and knowledgeable professionals whose incalculable contributions led to the success of this project. All are owed significant praise and appreciation for their commitment to research, counsel, funding, and production of this report.

(Report) Beyond Goldwaters – Nichols: Defense Reform for a New Strategic Era (Phase I), CSIS, by Clark A. Murdock, March, 2004

The Beyond Goldwater-Nichols (BG-N) study team concludes that the U.S. national security apparatus requires significant reforms to meet the challenges of a new strategic era. As part of its transformational efforts, the Department of Defense (DoD) must adapt not only to the post-Cold War, post-9/11 security environment but also must cope with many “hidden failures” that, while not preventing operational success, stifle necessary innovation and continue to squander critical resources in terms of time and money. Many organizational structures and processes initially constructed to contain a Cold War superpower in the Industrial Age are inappropriate for 21st century missions in an Information Age.

The Need for A National Budget, Report of the Commission on Economy and Efficiency on the Subject of the Need for a National Budget, June 27, 1912

If we follow the accepted usage of most civilized nations, we must conclude that a budget is a collection of documents assembled by an officer who is at the head of or is responsible for the administration and submitted to the legislative branch of Government.