PPBE Reform Commission Final Report Recommendations: Issues for Congress

PPBE Reform Commission Final Report Recommendations: Issues for Congress

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INSIGHTi

PPBE Reform Commission Final Report
Recommendations: Issues for Congress
May 31, 2024
In March 2024, the Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform
issued its final report for improving the budget development process of the U.S. Department of Defense
(DOD). The commission made 28 recommendations, some with multiple parts, across five “critical
areas.” Certain recommendations were broad in scope, from replacing DOD’s 1960s-era PPBE process to
restructuring the department’s annual budget requests to Congress. See Table 1.
Table 1. PPBE Reform Commission Final Report Recommendations
Critical Area
Number
Recommendation
1
Replace the PPBE Process with a new Defense Resourcing System*
2
Strengthen the Defense Resourcing Guidance*
Improve the Alignment of Budgets to
3
Establish Continuous Planning and Analysis*
Strategy
4
Transform the Budget Structure*
5
Consolidate RDT&E Budget Activities
6
Increase Availability [Period] of Operating Funds*
7
Modify Internal DOD Reprogramming Requirements
8
Update Values for Below Threshold Reprogrammings*
9
Mitigate Problems Caused by Continuing Resolutions*
10
Review and Consolidate Budget Line Items*
Foster Innovation and Adaptability
11
Address Challenges with Colors of Money*
12
Review and Update PPBE-Related Guidance Documents
13
Improve Awareness of Technology Resourcing Authorities
14
Establish Special Transfer Authority Around Milestone Decisions
15
Rebaseline OSD Obligation and Expenditure Benchmarks
16
Encourage Use of the Defense Modernization Account
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Critical Area
Number
Recommendation
17
Encourage Improved In-Person Communications*
Strengthen Relationships Between DOD
and Congress
18
Restructure the Justification Books
19
Establish Classified and Unclassified Communication Enclaves*
20
Create a Common Analytics Platform*
21
Strengthen Governance for DOD Business Systems
Modernize Business Systems and Data
Analytics
22
Accelerate Progress Toward Auditable Financial Statements
23
Continue Rationalization of the OSD Resourcing Systems
24
Modernize the Tracking of Congressionally Directed Actions
25
Continue the Focus on Recruiting and Retention*
26
Streamline Processes and Improve Analytic Capabilities
Strengthen the Capability of the
Resourcing Workforce
27
Improve Training for Personnel Involved in Defense Resourcing*
28
Establish an Implementation Team for Commission
Recommendations
Source: Commission on Planning, Programming, Budgeting, and Execution Reform, Defense Resourcing for the Future: Final
Report, March 2024, https://ppbereform.senate.gov/wp-content/uploads/2024/03/Commission-on-PPBE-Reform_Ful -
Report_6-March-2024_FINAL.pdf.
Notes: Asterisk (*) denotes a recommendation the report described as “key.” The report did not define the criteria for
making such a determination.
Background
Section 1004 of the National Defense Authorization Act for Fiscal Year 2022 (NDAA; P.L. 117-81)
established a 14-member commission to examine the effectiveness of the PPBE process, consider
alternatives, and make legislative and policy recommendations “to improve such process and practices in
order to field the operational capabilities necessary to outpace near-peer competitors, provide data and
analytical insight, and support an integrated budget that is aligned with strategic defense objectives.”
Over a two-year period, the commission conducted hundreds of interviews with PPBE stakeholders,
including officials from the government, private sector, and academia. The commission also solicited
extensive research on the topic from federally funded research and development centers (e.g., RAND
Corporation, Institute for Defense Analyses, and MITRE Corporation), as well as academic institutions,
through DOD’s National Security Innovation Network and the Acquisition Innovation Research Center.
The commission published an interim report on August 15, 2023 and the final report on March 6, 2024.
The chair, vice chair, and executive director testified before the Senate Armed Services Committee
(SASC) on March 20, 2024. In a statement, SASC leaders said, “These findings should help the
Department develop new technologies in a streamlined, agile manner.” The explanatory statement
accompanying the Department of Defense Appropriations Act, 2024 (Division A of P.L. 117-84) stated,
“At a time when the Department’s financial statement audits continue to largely result in disclaimers of
opinion, caution is paramount when considering the relaxation of financial controls put in place to address
past systemic failures.”

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Potential Issues for Congress
The commission’s final recommendations raise potential issues for Congress, such as whether to adopt
none, some, or all of the recommendations requiring congressional action; whether to support, oppose, or
condition recommendations requiring DOD action; and how to exercise oversight of any implemented
recommendations.
Congress may consider which recommendations would require congressional action through changes in
law or practice, such as modifying provisions in future annual defense authorization and appropriation
legislation and accompanying reports, and/or in United States Code (U.S.C.). In addition, Congress may
consider which recommendations may be implemented in the short term (e.g., as part of the FY2025
budget cycle) or over a longer term (e.g., five years).
In Section K, “Legislative Language” of the final report, the commission included draft legislative
provisions related to four of the recommendations:
• Recommendation 6. Increase availability of operating funds by modifying language in
operation and maintenance (O&M) and military personnel (MILPERS) appropriations in
the annual Department of Defense Appropriations Act. These funds, known as operating
funds, are typically only available for one fiscal year. The commission’s draft legislative
text would allow up to 5% of such funds to remain available for obligation in the next
fiscal year;
• Recommendation 8. Update values for funding reallocations known as below threshold
reprogrammings (BTRs), in multiple parts: 1) Increase BTR thresholds based on the
nominal growth of the appropriation relative to the amount provided in FY2003 (8A) by
amending language in the explanatory statement accompanying the annual defense
appropriations act; and 2) Allow reprogramming up to 1.5% per account, depending on
the appropriation type (8B), by adding a general provision to the annual defense
appropriations act;
• Recommendation 14. Establish special transfer authority for weapons acquisition
programs around milestone decisions during transition from development to production,
allowing DOD to shift a limited amount of funding between procurement accounts and
research, development, test, and evaluation accounts by adding a general provision to the
annual defense appropriations act; and
• Recommendation 16. Encourage use of the Defense Modernization Account, by
amending 10 U.S.C. §3136 to authorize use of the funds for time-sensitive opportunities.
Other recommendations may require changes in law and/or congressional practice. For example,
Recommendation 9 suggests allowing DOD to start or accelerate development or production of certain
weapon systems using budget authority provided in short-term funding measures known as continuing
resolutions—if the systems were requested in the President’s budget and approved in the House and
Senate (or by the relevant appropriations committees or subcommittees).
Longer term, Recommendation 4 suggests restructuring defense appropriations to emphasize major
capability activity area (e.g., mobility aviation, ground maneuver forces, surface combat ships) rather than
lifecycle process (e.g., procurement, O&M). Such restructuring could affect how DOD prepares and
submits its annual budget, and how Congress authorizes and appropriates funding for such activities. It
potentially could include conforming changes in Titles 10 and 32 of the United States Code. The
commission identified FY2027 as a target date for adopting a new DOD budget structure (i.e., in the
FY2028 President’s budget request). Similarly, Recommendation 28 suggests establishing a

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cross-functional team reporting to the Deputy Secretary of Defense to oversee and implement
recommendations for a “three-to-five year timeframe.”
Congress may consider which recommendations DOD could implement independent of, or in
collaboration with, other government agencies. For example, Recommendation 1 suggests DOD adopt a
new Defense Resourcing System (DRS) with fewer processes to replace PPBE and strengthen “the
connection between strategy and resource allocation while creating a more flexible and agile execution
process.” This recommendation and others may require formal or informal input from other entities in the
executive and/or the legislative branch.
Congress may consider how to provide oversight of implemented recommendations, particularly in terms
of assessing the effectiveness of a recommendation relative to its stated goal or objective. For example,
under Recommendation 8, if existing forms of congressional notification and/or prior approval of
department reprogramming actions are no longer provided or otherwise changed, the level and type of
congressional oversight may vary. The combined effect of recommendations could produce intended or
unintended outcomes.

Author Information

Brendan W. McGarry

Specialist in U.S. Defense Budget

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