PPBE Reform Commission

Pentagon budgeting panel says ‘all options’ on table for reform

Pentagon budgeting panel says ‘all options’ on table for reform

Defense News Article by Joe Gould & Courtney Albon, March 2, 2023

WASHINGTON ― A select panel exploring how to revamp Pentagon budgeting is far from Washington’s nightlife scene, but it has been hosting “open mic” events ― to find the best defense reform ideas.

The 14-member Commission on Planning, Programming, Budgeting, and Execution Reform ― mandated by Congress and made up of former lawmakers, Pentagon officials and industry executives ― is using the events to solicit an array of views during its 15-month “discovery” phase, planned to end in December. Its interim report is due in August and final report is due in March 2024.

According to a 34-page status update the panel published Thursday, the open sessions are “where subject matter experts can put forth their views in a more informal way with the commissioners and staff.” The meetings have included former and current DoD program managers, program executive officers, comptrollers and financial management officers.

“The commission has gained an extensive understanding of viewpoints on how the current PPBE system operates,” the summary states. “While some of the information gained highlights useful aspects of the current system that should be considered for retention, a majority suggests the system needs significant improvement.”

The 61-year old PPBE process is criticized inside and outside of the Pentagon as too cumbersome and slow. Among other shortcomings, it requires planners to plan for new programs more than two years before receiving funding, often causing major modernization programs and technology development to lag. While there have been calls for PPBE reform since its inception, an urgency to fix the system has grown in recent years, with critics citing it as a leading impediment to moving at the speed of commercial technology.

The commission said it held 27 formal meetings as of last month, including interviews with staff members from congressional defense panels, the Government Accountability Office and participants in the PPBE process. The panel, chaired by former Pentagon comptroller Bob Hale, met with some familiar names to defense watchers, including former Deputy Defense Secretary Bob Work and former Defense Innovation Unit Director Michael Brown.

The group has also collected input from representatives of defense firms such as Lockheed Martin, Boeing, Palantir as well as non-defense firms Ford Motor Co., PepsiCo and Walmart. The panel has called upon federally-funded research centers to include the RAND Corp.; the Institute for Defense Analysis and the Software Engineering Institute at Carnegie Mellon University.

Experts point to budgeting flaws

While the panel hasn’t adopted any official recommendations, it shared a summary of the various points of view it has received from nearly two dozen suggestions. For the next phase of the group’s work, it will evaluate the views alongside its own research to validate problems and identify potential fixes.

The feedback highlighted in the summary echoes common complaints about the Pentagon’s budgeting process — it isn’t suited for innovative technologies or programs, the “rigid” budget cycle makes it hard for non-traditional companies to work with the department and the process for approving funding is too political and potentially harmful to the Pentagon’s “long-term strategic interests.”

“Some asserted that the PPBE process functions best for acquiring and funding large-scale systems such as aircrafts, tanks, ships, and submarines but is less suitable in supporting new technologies, such as software and artificial intelligence, the optimal development of which is tied directly to advances in the commercial sector,” the summary states. “Others expressed the view that PPBE was not adequate for either type of system.”

Experts interviewed by the panel offered suggestions for improving the current resource allocation system, with some calling for a wholesale rebuilding of the process rather than incremental improvements to the PPBE. Others emphasized the need the need to prioritize software acquisition in any changes to the system, while another recommendation proposed creating a joint budgeting organization to improve collaboration among the services.

The summary notes the recommendations will help shape the panel’s pursuit of “reform in the broadest sense, meaning all options are being considered to enhance our nation’s defense.”