A critical look at PPBS: the unfunded priority list - Logistics Today - planning, programming and budgeting system

Air Force Journal of Logistics, Winter, 2001 by Clarence Johnson

The Air Force resource allocation process operates within the framework of the Planning, Programming, and Budgeting System.

Prelude to Crisis

The Chinese use two brush strokes to write the word crisis. One brush stroke stands for danger, the other for opportunity. In a crisis, be aware of the danger--but recognize the opportunity.

Richard M. Nixon

PPBS

The Air Force resource allocation process, to include the unfunded priority list (UPL), operates within the framework of the PLANNING, PROGRAMMING, and BUDGETING SYSTEM (PPBS). To appreciate the UPL process, one must first understand how the UPL fits into the overall PPBS.

The PPBS produces:

... a plan, a program, and a 2-year budget for the Department of Defense (DoD) with the ultimate objective of furnishing the combatant commanders with the best mix of forces, equipment, and support attainable to meet the current and future threat within fiscal constraints. (5)

The PPBS sprang from Secretary Robert S. McNamara's Defense Department in 1961 and remains surprisingly effective and resilient for its age.

Prior to the PPBS, there was no integrated central process within DoD for systematically consolidating, reviewing, and analyzing service programs. Formal review at the level of the Office of the Secretary of Defense (OSD) usually took place during annual budget reviews. The exercise of management through the appropriation structure required by Congress made it difficult to relate budgets to military missions. To overcome this deficiency, Secretary McNamara established the PPBS. (6)

An integral part of the national planning system, the PPBS consists of three discrete phases that work together to acquire and allocate defense resources: planning, programming and budgeting.

Given the reduced defense spending the department has witnessed over the last 8 years, the President's Budget (PB) Request has been consistently insufficient to address all Air Force funding requirements. (7) Each programming cycle, the shortfall is first realized as the major commands (MAJCOM) work to develop their program objective memorandum (POM) inputs. Each MAJCOM is provided a starting budget allocation-planning figure (bogey), which lately has fallen well below the individual MAJCOM requirements. (8) Those requirements that fall below the available MAJCOM funding allotments are forwarded to the Air Staff with the MAJCOM POM inputs as unfunded requirements. The most significant unfunded requirements are documented in the integrated POM at Force Tab P. At the end of the budgeting process, Tab P is reviewed, and its entries are typically grouped into the following four categories: people, infrastructure, readiness, and modernization. Each of the corresponding lists is then prioritized. (9) The Air Force corporate process then reviews the individual unfunded lists and uses them to develop a single, integrated top-20 list. This integrated top-20 list--along with the four prioritized, segregated lists accompanying it--is then forwarded to the Chief of Staff of the Air Force for review and approval. Once approved, the Chief forwards the unfunded requirements to Congress. This product has come to be known as the Chiefs UPL. (10)

Not Enough Food for the Nest

Most people would succeed in small things if they were not troubled with great ambitions.

Henry Wadsworth Longfellow

There is a euphemism among those who work within the Air Staff resource allocation process that the, "Air Force has never met a requirement it didn't like." (11) Responses to this expression are mixed. Some laugh at it, while others find no humor in it whatsoever. The fact remains that the Air Force's requirements continue to outpace its funding year after year. In such a fiscally constrained budget environment, it is inevitable that tough decisions have to be made, and resources for certain funded activities must be reduced or reapportioned to pay for critical emerging requirements. At issue, however, is the reduction and reapportionment of resources belonging to funded programs to pay for new UPL initiatives that have not been properly programmed and budgeted.

Czelusniak and Rodgers define program instability as:

...the reallocation of funding to other near-term priorities external to a program. These kinds of repeated funding excisions ultimately lead to sizable program cost growth. This growth contributes no added value whatsoever to the system being developed or produced. (12)

This article focuses on the instability funded modernization programs experience as a result of unfunded requirements associated with UPL projects.

According to the Air Force PPBS Training Program Reference Book released in 2000, the UPL is defined as follows:

The UPL is a corporately approved list of unfunded programs within a focus area chosen annually by the Chief of Staff. These programs are designated to receive funding should additional money become available. Prior areas of focus have included modernization, readiness, people, and quality of life. Programs included on the list are those that are completely unfunded. Programs that are underfunded or otherwise impaired are not candidates for the UPL. (13)