Defense budget reform panel at work after ‘organizational problems’

Defense News – September 19

WASHINGTON ― A select panel exploring a revamp of Pentagon budgeting is making “significant progress” with meetings and research efforts after some “organizational problems,” according to its chairman.

The congressionally mandated Commission on Planning, Programming, Budgeting, and Execution Reform, has been quietly convening for more than five months, interviewing witnesses and hiring staff, according to its chairman, former Pentagon comptroller Bob Hale. The panel ― made up of former officials from Congress, the Pentagon and industry ― has also hired two federally funded research and development centers to assist its work.

“We have made significant progress. We’ve had some organizational problems, but, since we first met in March, we’ll have our 10th meeting tomorrow,” Hale told Defense News in an interview last week. “We have finally started to hire staff; that was tied up in some of the organizational issues we confronted.”

While the panel is chartered by Congress, it’s funded by the Defense Department, and that sparked internal debates that held up its plans to hire staff, according to Hale.

Chartered by the 2022 defense policy bill to recommend improvements to the Pentagon’s 40-year-old process for allocating its immense resources, the panel’s findings could have far-reaching effects. It comes as critics say the process is too slow and cumbersome for the Pentagon to quickly buy cutting-edge technologies and outpace China.

“I spent 12 years as a political appointee in the financial area of DoD, trying to make PPBE work, and I think for the most part we did. But I never had time to step back and ask: How well is the system working? How long does it take? I hope the commission can do that,” said Hale, who served as the Department of Defense comptroller from 2009 until 2014.

Among the panel’s 13 members are its vice chair, Ellen Lord, a former undersecretary of defense for acquisition and sustainment and former chief executive of Textron Systems; former Air Force Undersecretary Lisa Disbrow; former Defense Innovation Unit director Raj Shah; Aerospace Industries Association CEO Eric Fanning and National Defense Industrial Association CEO David Norquist.

“All of us have a common goal: to see if we can make some changes in this process that will make it better able to support the warfighter,” Hale said.

So far, the panel has heard from Deputy Defense Secretary Kathleen Hicks, Pentagon Comptroller Mike McCord, DoD’s Cost Assessment and Program Evaluation director Susanna Blume and officials from the armed services. The commission has met with industry executives, former Pentagon officials and staff from Congress’s Armed Services and defense appropriations panels, Hale said.

“What we’ve done has been a listening tour as we try to hear various views and concerns people have with the PPBE system ― or support for it,” Hale said. “We’re now at how do we digest it and begin to think about areas for change. Now that we are starting to get staff on board, we can do some research and not just get expert opinion.”

Part of the spillover effect is that the panel may miss the September 2023 deadline for its interim report and March 2024 deadline for final report. In the meantime, researchers will likely focus on how to make the system more communicative and transparent to Congress and more flexible overall, Hale said.

“From the time the services begin their programming and planning process, with congressional review and contracting, it can take two to four years for an idea to go to contract,” Hale said. “That’s not going to work for high-tech stuff where technology can change in two to four months. Can we speed up the process? Are there ways to improve flexibility and execution?”

The panel has engaged the Rand Corp. to study budgeting systems in other countries, like China and Russia, and allies Australia and the UK. Another research area the panel is exploring is budgeting in the private sector and at federal agencies other than the Defense Department who have “backed off from the use of the DoD PPBE,” Hale said.