Note: The article below is excerpted and re-organized content based on a virtual conference hosted by the American Society of Military Comptrollers (ASMC) with presenters MG Cameron Holt (US Air Force), Mr. Michael Duffey (Equinox Global Solutions, LLC Partner), Mr. George Kovatch (Kovatch LLC President), and US Army Consultant Hon. John Whitley.
In the first session of the ASMC’s Data Analytics & Decision Support Virtual Conference, John Whitley started by providing an overview of the Department of Defense’s (DoD) planning, programming, budgeting, and execution (PPBE) process, describing how it has interacted with U.S. counterterrorism efforts in the past and how it needs to change in response to China’s accelerated development of military capabilities.
Near-peer competitors. Speaking on the decline of the DoD’s PPBE process during its counterterrorism operations, Mr. Whitely said “we largely downsized the planning process about fifteen years ago, because that process had become very bureaucratically intensive.” Without a new planning process, the DoD has struggled to set priorities in response to China’s growth in military capabilities and unclear next steps.
China as a short-term threat. If China enters a conflict within four years, then the DoD would prioritize fleet readiness and positioning.
China as a long-term threat. If China intends to take military action by 2049, the DoD must prioritize long-term modernization investments.
Mr. Whitley suggested the DoD must prepare for both contingencies but needs a new and robust PPBE process to correctly prioritize its response to China.
Redesigning the PPBE process requires decentralization. Too many layers of communication, requests, and permissions between the U.S. Congress and the DoD’s leadership and program executives delays the military’s modernization. According to Michael Duffey, a redesigned PPBE process must utilize business analytics that maintain transparency and accountability to Congress’ oversight committees while allowing executives and commanders to “make decisions about reallocating funding to optimize how they’re applying resources to achieve their local mission.” In this view, Mr. Duffey underscores the benefit of giving military leadership more freedom to move money within their own portfolios without “continually requiring ‘mother-may-I's’ back to the mothership.”
Redefine Success. The bureaucracy of the current PPBE process creates bad spending incentives. In George Kovatch’s opinion, “the measures for success right now are largely just based on spenddown. If the only goal is to spend all your money before it expires, then you tend to use it on anything that is ready to be executed and not on those items that are going to accomplish the main goal.”
This is another symptom of an overly centralized process. Major General Cameron Holt informed the group that “China is less centrally planned and micromanaged in the way they fund their national security than we are. They have more access to our commercial technology than the DoD does. The barriers to entry are so high and the PPBE process is so micromanaged in its execution that it hamstrings the whole thing.”
A procedural solution. Toward the end of the discussion, Major General Holt offered an alternative to the centralization plaguing the DoD’s funding process. “I for one believe there are analogies in the private sector that we could look to that are already effective at changing those perverse [spending] incentives into positive incentives,” he said. “If each PEO or wing commander were given the ability to move and optimize their spend across their portfolio, I guarantee that the acquisition process and the competition for ‘best athlete’ amongst different capabilities within a portfolio would change overnight.”
Changes in the process must take Congress into consideration. Major General Holt has a recommendation, “How would Congress oversee this? Instead of annual oversight, Congress could switch to quarterly reviews – which is the model for the private sector – for the four oversight committees.”
A decentralized PPBE process must embrace spending flexibility down to the PEO level. To achieve this, it must condense the many layers of communication and permissions between the chain of command and Congress while maintaining accountability and transparency. Ensuring trust while increasing freedom at the local level of military financial leadership will optimize spending and enhance the ability of the warfighter to flexibly counter a rapidly modernizing Chinese military.
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