APEX Briefing
Kathleen Conley
Director, Projection Forces, Program Analysis and Evaluation
1
Outline
• Economic Outlook
• Transforming
• Current Analytic Efforts
2
U.S. Defense Priorities
Defending America Today and Tomorrow
• Deter potential adversaries and defend America and
American interests
• Counter asymmetric threats
• Fight and win the global war on terror
• Assure readiness of the Armed Forces
• Mitigate surprise
• Ensure U.S. leadership role in the world
• Transform the Department of Defense
– Reshaping military capability for the 21st Century
– Changing culture, business practices, processes and organizations
for sustained advantage
3
Compelling Need for Change
The World Has Changed
• This is a period of significant, discontinuous change with great
uncertainty:
–
–
–
–
–
–
–
Globalization
Accelerating rate of technological change
Information age
Homeland security
Non-State as well as state actors
Asymmetric as well as conventional threats
Unrestricted by conventional rules
• Falling barriers to competitive entry
– Access to highly capable, low-cost and rapidly changing technologies
– Access to capabilities in key domains – space, sea, cyberspace
• Failure to transform risks losing our competitive advantage
Those who do not see the need to change are
often those who need it the most.
4
Federal Spending by Category as a Percentage of GDP
25%
Net Interest
15%
Mandatory
10%
Non-Defense
Discretionary
5%
Defense Discretionary
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
0%
1962
Percentage of GDP
20%
5
Budget Deficit Remains Difficult Challenge
U.S. Unified Federal Budget Surplus/Deficit Projections 2004-2014
200
CBO January 2005
100
0
-100
Then Year $Billions
CBO September 2004
-200
OMB July 2004
-300
OMB February 2005
-400
-500
-600
White House
January 2005
CBO January 2005 + No Sunset on Tax Cuts + AMT
Reform + Discretionary Spending Growth at Rate of
Nominal GDP Growth + 6 years of OEF & OIF then
phased out
-700
-800
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Calendar Year
6
$500
$400
$400
$300
$300
TY$B
$500
ACTUAL
Carter
Reagan I
Reagan II
G. Bush
Clinton I
Clinton II
Fiscal Year
President during Budget Submission
G. W. Bush I
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
$100
1983
$100
1982
$200
1981
$200
1980
TY$B
President's Budget FYDP Projections
vs. Actual Defense Budget
G. W. Bush II
7
FOUO
Personnel Costs* vs. DoD Topline
$500
$400
Then Year $ Billions
DoD Topline
$300
$200
Contracts for Services**
Military Benefits***
$100
MilPers
CivPay
$0
1963
1973
1983
* Source: OUSD(C) and WHS, excludes costs not on the DoD budget (e.g., VA)
** Source: WHS, which categorizes contracts as Procurement, RDT&E, or Services
*** Retirement, DHP, Family Housing
FOUO
1993
2003
8
FOUO
Personnel Costs* vs. DoD Topline
100%
$1,000
Constant $ Topline
(right axis)
75%
$750
% of DoD Topline
Contracts for Services**
50%
$500
Military Benefits***
25%
Constant $ Billions (Base FY05)
67%
$250
MilPers
CivPay
0%
1963
1973
1983
* Source: OUSD(C) and WHS, excludes costs not on the DoD budget (e.g., VA)
** Source: WHS, which categorizes contracts as Procurement, RDT&E, or Services
*** Retirement, DHP, Family Housing
FOUO
1993
$0
2003
9
DoD Budget Authority by Appropriations Title
$200
$200
$180
$180
Military Personnel
$160
Operations and
Maintenance
$140
$140
$120
$120
$100
$100
$80
$80
Procurement
$60
$60
$40
$40
$20
$20
R,D,T&E
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
1965
1963
1961
1959
1957
1955
1953
1951
1949
$0
1947
$0
1945
Constant FY 2005 $Billions
$160
10
Transformation Principles
• Culture
–
–
–
–
Balanced risk taking
Innovation
Superior speed
Joint information, content and
awareness
• Operations
–
–
–
–
Adaptive
Joint and combined
Tailored to specific need
Use all elements of national
power
– Information driven
• Business Practice, Process and
Organization
– Streamlined
– Greater flexibility
– Timely, decision-quality
information
– Integrating processes
– Reduced cycle times
• Systems and Capabilities
–
–
–
Integrated
Networked systems
Faster to the point of need
• Precision effects
Improvement needed in all areas to strengthen
joint and integrated performance
11
The Overall Framework for Change
Historical World View
Future Objectives
Central Planning
To
Adaptive and Dynamic Planning
Fixed, Predictable Threat
To
Capabilities Against Shifting Threats
Mature Business and Organization
To
Mix of New and Mature Organizations
Inputs Based Management –
Focus on Programs
To
Output Based Management –
Focus on Results
Appropriated Funds – “Cost is Free”
To
More Market-like and price based
Segmented Information –
Closed Architecture
To
Networked Information –
Open Architectures
Stovepiped and Competitive
Organizations – “Zero sum Enterprise”
To
Aligned Organizations with common and
shared objectives
12
Historical World View
Central Planning
Future Objectives
Developing Tools
Adaptive and Dynamic
Planning
Changes to War Planning and
Support Tools
Capabilities Against Shifting
Threats
Capabilities Based Planning
Joint Operational Concepts
New Modeling Approaches
Mix of New and Mature
Organizations
SJTF, UCP realignment, OSD
changes
Inputs Based Management –
Focus on Programs
Output Based Management
Focus on Results
Global Force Management
Balanced Risk Scorecard
Metrics
Appropriated Funds – “Cost is
Free”
More Market-like and price
based
Offsets Required
Portfolio Thinking
Segmented Information Closed
Architecture
Networked Information –
Open Architectures
Horizontal Integration
GIG Standards
BMMP
Aligned Organizations with
common and shared objectives
Capabilities Equivalencies
Global Force Management
Integrating Processes/JCIDS
Fixed, Predictable Threat
Mature Business and
Organization
Stovepiped and Competitive
Organizations – “Zero sum
Enterprise”
Integrating Processes
Planning,
Programming &
Budgeting System
Strategic
Planning
Requirements
Acquisition
14
What Is the Purpose of PPBE?
•
Provide Civilian Control and Strategic Direction
– Centralizes decisionmaking in the Office of the Secretary of Defense
– Manages allocation of resources to meet the Secretary’s goals
•
Create a joint (DoD-wide) program
– Integrates individual components’ inputs into a single defense program
– Ensures stakeholders have a voice; builds consensus
•
Provide financial “checks and balances”
– Promotes efficient and effective allocation of funds
– Ensures the cost of defense programs are realistic / affordable
•
Provide basis for justifying programs and budgets to the White House
and Congress
PPBE is the principal tool used by the Secretary and the Deputy
Secretary in managing the Department of Defense
15
The PPBS: Six Principles
• Decisions should be based on explicit criteria of national
interest, not on compromises among institutional forces.
• Requirements and costs must be considered simultaneously.
• Major decisions should be made by choices among explicit,
balanced, feasible alternatives.
• The Secretary should have an active analytic staff to provide
him with relevant data and unbiased perspectives.
• Open and explicit analysis, available to all parties, must form
the basis for major decisions.
• A multiyear force and financial plan is required to project the
consequences of present decisions into the future.
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5 Principles of PA&E
• PA&E will provide independent and objective
analysis.
• PA&E’s analyses and advice will be fact based.
• PA&E is committed to open thinking.
• PA&E is people-centered. We treat people fairly
and respectfully.
• PA&E operates in an environment of trust and
confidence.
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Analytic Agenda
• Department-wide agreement to make major, joint analysis
efforts more effective, efficient, relevant
• Building blocks include:
– National Security Strategy and other strategic and planning
guidance
– Scenarios and Data (Defense Planning Scenarios and MultiService Force Deployment)
– Studies and Wargames (e.g., OA-03, OA-04, OA-05, and MCS)
– Results in a package comprising a scenario, concept of operations,
and integrated data used by DoD Components as a foundation for
strategic analysis (called an analytical baseline)
• Highly collaborative and transparent: OSD, JS, Agencies,
Services, and CoComs participate
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PA&E Proposals for Ongoing Analysis*
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•
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Joint Air Dominance
Ground Forces Capabilities
Future Combat System and Army Modularity
Medical Readiness Review and Health Care Benefit Costs
Compensation Review
Supply Chain Management
Manpower Submission Process
Space Industrial Base
Future Strategic Forces
Airborne/Area Moving Target Indication/Indicator (AMTI) and Ground Moving
Target Indication/Indicator (GMTI) Tradeoffs
Airborne Intelligence, Surveillance, and Reconnaissance (ISR) Communications
Persistent ISR
Net Centric Ops
MILSATCOM Capabilities
Mobility Capabilities Study
Aerial Refueling
Tactical Airlift and & Aerial Refueling
*Subject to guidance from IPT heads 19
Biggest Challenges
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•
•
•
•
Facts and Transparency
Linking Strategy, Plans, Resources and Execution
Raising decision level to capability and portfolio
Balancing Risk
Developing, Aligning and Motivating Talent
20
PA&E Organizational Chart
DIRECTOR
PROGRAM ANALYSIS & EVALUATION
PRINCIPAL DEPUTY DIRECTOR
Brad Berkson
VADM Stanley R. Szemborski, USN
DEPUTY DIRECTOR
(STRATEGIC AND SPACE PROGRAMS)
DEPUTY DIRECTOR
(THEATER ASSESSMENTS AND PLANNING)
DEPUTY DIRECTOR
(GENERAL PURPOSE PROGRAMS)
DEPUTY DIRECTOR
(RESOURCE ANALYSIS)
Michael L. Ioffredo
Eric J. Coulter
James L. Johnson
Richard P. Burke
Intelligence, Surveillance, and
Reconnaissance Programs Division
Study and Analytical Support Division
Force Planning Division
James N. Bexfield, Director
Joseph R. Nogueira, Director
Matthew Schaffer , Director
C4 and Information Programs
Division
Economic and Manpower Analysis
Division
Jerome E. Pannullo, Director
Joint Data Support Office
Land Forces Division
James G. Stevens, Director
Mark F. Cancian, Director
Force and Infrastructure Cost
Analysis Division
Krystyna M. Kolesar, Director
Scott A. Comes, Director
Joint Warfare Systems Office
Naval Forces Division
Strategic Defensive and Space
Programs Division
Dennis K. Evans, Director
Charles P. Werchado, Director
Steven R. Miller, Director
Simulation Analysis Center
Al Sweetser, Director
Resource Management & Operations Division
Janet S. Felts, Director
Operations Analysis and
Procurement Planning Division
Tactical Air Forces Division
Programming and Fiscal Economics
Division
James L. Johnson (Acting)
Projection Forces Division
Teresa W. Gerton, Director
Kathleen M. Conley, Director
Weapon Systems Cost Analysis
Division
Steven R. Miller (Acting)
Regional Assessment and Modeling
Division
Timothy E. Bright, Director
21