The commission tasked with reforming the Pentagon’s budget planning process has issued its final report, which includes calling for the wholesale replacement of the current system with an approach that better matches “budget with strategy” and provides greater resourcing flexibility.
The Planning, Programming, Budgeting and Execution (PPBE) commission calls for implementing a new Defense Resourcing System (DRS), detailing 28 recommendations it said would likely take several years to fully build out, while noting several actions the Pentagon could act on quickly to begin the reform process.
“The environment in which we live right now is very, very different than 60 years ago, for a variety of reasons. We have a complexity of multiple geopolitical threats emerging in different places. We also have a technology ecosystem that is very, very rapidly evolving,” Ellen Lord, the commission’s vice chair who was previously the Pentagon’s top acquisition chief, during a Defense Writers Group discussion with reporters on Wednesday. “I am a huge advocate of making big changes. I think there’s been a lot of very good work over, particularly, the last 10 years or so [at] making incremental changes. However, given strategic adversaries, given the posture around the world right now, I’m not sure our current [PPBE] system is able to meet the current threats.”
Lord added that DRS, as proposed in the final report, would offer a “more streamlined set of processes” for budget planning efforts, to include allowing DoD’s program executive offices and program managers to make budget changes within the year of execution, building in more flexible reprogramming ability and facilitating more rapid transitioning from research and development into procurement.
“No longer would we have to wait two years [for the budget cycle] because of some of the flexibilities in the year of execution that we’re talking about,” Lord said. “I look at DRS as a much more comprehensive resourcing system that responds to requirements.”
The 14-member commission was mandated by the fiscal year 2022 National Defense Authorization Act, with Senate Armed Services Committee Chair Jack Reed (D-R.I.) having led the call for PPBE reform (Defense Daily, Feb. 1 2022).
Reed has previously said the Pentagon’s budget planning process has been largely unchanged since the 1960s and it’s “likely too slow and cumbersome to meet many of DoD’s requirements to adopt new technologies in a rapid, agile manner” (Defense Daily, May 14 2021).
“What we’re looking for in DRS is, one, some streamlining because there’s some duplication that is developed in the PPBE process and I think we can get rid of it. And we suggested specific ways to do that, [such as] combining, for example, the programming and budgeting phases of PPBE,” Bob Hale, chair of the commission, told reporters on Wednesday. “If I were DoD, I think I’d pick a few [recommendations] that I was comfortable with that I could do fairly quickly to try to get some momentum. But [also] get started on the bigger issues too, if they’re going to support it, like transforming the structure of the budget because it’ll take time.”
The PPBE commission released an interim report last August, which included an initial set of recommendations aimed at improving the department’s ability to foster innovation, providing greater funding flexibility and bolstering engagement with Congress (Defense Daily, Aug. 16 2023).
Deputy Defense Secretary Kathleen Hicks said on Wednesday the department has finalized an implementation plan for 13 of the recommendations from the interim report that could be implemented now.
“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.
The commission notes the final report is the product of two-years of research and discussions with over 400 subject matter experts and includes recommendations ranging from transforming how DoD structures its budgets to modifying reprogramming requirements and reviewing and consolidating budget line items.
“We would like to see language drafted today to go into the bills. We would like to see the [deputy secretary of defense] put out a directive memo saying, ‘Tell me in 30 days how you’re going to implement some of these [recommendations] in the next 12 months, the next 24 months,’ that type of thing,” Lord said on Wednesday.
The commission has also recommended the creation of a common platform at DoD to track and analyze budget planning and resourcing data.
“In this day and age, we really need systems that are searchable and sortable, both for ease of use within DoD as well as by the Hill,” Lord said. “In order to leverage data analytics provided by AI and other mechanisms, we need data links and we need data that is transparent and accessible.”
The report also calls for legislative recommendations that would allow for the ability to start some new programs and initiate procurement increases under a continuing resolution, both of which are restricted under stopgap funding measures, if those plans have been approved by the congressional defense and appropriations committees.
“We felt we balanced congressional oversight against some needed flexibility. And it’s worth it in the commission’s view because it’s so important to not stop new starts for four to six months, which we’re doing right now,” Hale said.
Both Hale and Lord reiterated that a key recommendation from the report would be the establishment of a cross-functional implementation team at DoD to track the enactment of the commission’s recommendations.
“[This] team needs to be meeting regularly with [congressional] staff and members to say where they’re headed and see if that’s going to be acceptable to Congress. If we don’t do this jointly between Congress and DoD, a lot of it will never happen,” Hale said.