Throw out the budget-making process that has been in place in the Pentagon since the Kennedy administration for a “defense resourcing system” to tie spending to strategy, was the key recommendation from a congressionally appointed bipartisan panel’s report released Wednesday.
That was but one of the 28 recommendations included in the commission’s almost 400-page report to improve spending flexibility, including providing a mechanism to start programs even when Congress hasn’t approved a full year’s budget, and reacting to new threats.
Entitled “Defense Resourcing for the Future,” the commission on planning, programming, budgeting and execution reform spent two years taking testimony from 400 witnesses in more than 40 sessions, Robert Hale, commission co-chair, said.
Hale, a former Pentagon comptroller, said he overcame his own skepticism about what the panel could do and agreed, “process [not just substance – what’s actually in the budget] needs a look-see.” The idea behind his thinking was to find ways to give Congress and the president “more bang for which bucks.”
The recommended reforms are “much more than acquisition,” Ellen Lord, co-chair, added. As a former chief weapons buyer for the Department of Defense, she said the recommendations do not take away recent congressional pushes to overhaul acquisition. Those efforts can be looked at as “a subset of all that’s in this report.”
Speaking to the Defense Writers Group, Lord said the proposed system “is much more comprehensive than” the Joint Requirements Oversight Council’s work and more flexible than the existing planning, programming, budgeting and execution process.
First reactions on Capitol Hill were favorable. Sens. Jack Reed (D-R.I.) and Roger Wicker (R-Miss.) said in a joint statement, that “the department’s cumbersome and outdated financial and resource system management practices have acted as a drag on America’s acquisition system.”
Reed is chair of the Senate Armed Services Committee, and Wicker, ranking member; and a number of the panel’s recommendations will need congressional approval.
What the two senators were referring to is the two-year-long process from building the budget to having it congressionally approved. Lost during that time are advances in technology, like artificial intelligence, that would have already been put to use in the private sector, and new conditions – like the Russian invasion of Ukraine or Hamas’ attack on Israel.
Lord and Hale used the words “speed” and “agility” often in describing the value of the recommendations to the Pentagon and Congress.
“One of our overarching goals is spend to need” in making the recommendations, said Lord.
The report details a three-step process – strategy, resource allocation and execution under the new system.
The report says among other advantages of shifting to the Defense Resourcing System, it “provides greater specificity, particularly in terms of area of risk-taking, better links to force sizing and shaping constructs, and draws on CAPE’s [Cost Assessment and Program Evaluation office] programming experience, analytic ability, and functions to add specific programming direction to the services and DoD components.”
For senior leaders, it would provide a standardized way to track a specific program or initiative from start to finish.
It also would be “streamlining the production of the budget submission to OMB and the Congress.”
Standardizing this data and “the unsexy” digitizing the process are essential in ways the commercial sector handles the same tasks, said Lord. Hale said, “we need a cross-functional team” to serve as a transitional group for up to five years to make the new system work. “You want a formal training program … rather than on-the-job” as different offices, agencies and the services do now. Each has their own way of justifying programs and tracking them, both agreed, making it difficult for outsiders to major progress.
Lord added, “we have to have transparency” in this movement from industrial age production models to a digital era.
Inside the Pentagon, Deputy Defense Secretary Kathleen Hicks was handed a copy of the full report before meeting with the two co-chairs to discuss the findings. Noting that she “endorsed all 13 recommendations in the commission’s interim report that could be implemented” immediately, Hicks said she will be evaluating the other findings with the Office of Management and Budget, Congress “and other stakeholders.”
Lord saw Hicks’ request to have the report early “as a very positive sign that she was highly engaged.”
In noting the report’s recommendations, Hicks praised the commission for calling for “on-time defense appropriations. Today, the department is less than a week away from releasing our FY 2025 budget request, even as we still await FY 2024 appropriations, more than five months late and counting.”
The full budget is to be released Monday.
Lord told the reporters’ group, “Our government is one of our larger deterrents in modernizing our military’s capability – and that’s our mandate … to modernize the department.” One way to do that under continuing resolutions is for Congress to give the Pentagon specified authorities to go ahead with newstarts, like the Columbia-class ballistic-missile submarine program.
The Navy’s top priority program has received a special exemption in each of the continuing resolutions for the current fiscal year.
The new system would provide that flexibility without requiring congressional approval. Reprogramming unspent money at the end of the fiscal year would have the same flexibility under specific conditions.
Lord and Hale hoped the Pentagon would go for some “quick wins” on the recommendations, but both realized it could take years of winning go-aheads in the Pentagon and on Capitol Hill to modernize the process.
Hales said it was great having a consensus report, but having “having any of [the recommendations adopted] are a step in the right direction.”
