At a hearing this week, U.S. Senator Deb Fischer (R-Neb.), a senior member of the Senate Armed Services Committee, questioned Robert F. Hale and Ellen M. Lord, the Chair and Vice Chair of the Commission on Planning, Programming, Budgeting, and Execution Reform. Senator Fischer asked about the Commission’s final report findings and the urgent need to modernize the Department of Defense’s Planning, Programming, Budgeting, and Execution (PPBE) process.

During the hearing, Senator Fischer highlighted the need for the Department of Defense to implement the recommendations of the Commission’s final report and improve their budgeting processes.

Click the image above to watch video of Sen. Fischer’s remarks

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On the Importance of Changing Budget Structure:

Senator Fischer: 
I also like where you’re looking at making sure that you change the budget structure so that military programs, they’re all listed in the same part of the budget. Because it’s really difficult to look through the entire Department of Defense budget to figure out what a certain program’s cost is going to be.

Ms. Lord, the report highlighted the importance of aligning the budget requests with an overall strategy, but it also underscored the difficulty in achieving this symmetry under the current PPBE process. Can you explain to this committee what the importance is in being able to rectify that gap, so that the Department is able to react and be in a good position to compete against a technologically advanced adversary like China?

Vice Chairwoman Ellen M. Lord: Absolutely, we begin with deconstructing the National Defense Strategy into a new guidance document that is much clearer about what should be done and what should stop being done.

But, that begins with articulating a clear direction, so we don’t have different military services and agencies going and building budgets according to their interpretation of what is being asked to be done, and only to find out eight months later that their interpretation was different than senior leadership.

Secondly, we begin this analysis cycle earlier. And, we want to make sure that we leverage force structure, material, services all together in wargaming, tabletop exercises, and what-if scenarios. That requires data being in a central repository, or able to be pulled out, to do modern data analytics. So that you can run you know, hundreds of what-if scenarios to optimize, if you will, force structure, the number of ships, the number of planes, all these different things.

So, the idea is to get in there and do many, many more what-if scenarios earlier, so that when this is communicated clearly to Congress, and you ask questions, there’s data driven answers to come back to justify why a certain pathway was taken.

On the Department of Defense’s Risk Averse Culture:

Senator Fischer: 
Secretary Lord, I mentioned just the continuous analysis that needs to happen here. I think the Department has a risk-averse culture. So how’s that going to play?

Vice Chairwoman Ellen M. Lord: We believe that leadership is incredibly instrumental in setting culture, and that there needs to be motivations and rewards for taking smart risks. We often treat risk in terms of risk elimination, versus risk management.

We believe we need to take smart risks. And what we’re doing is trying to delegate down to the PEOs and the PMs who are closest to the problem, and make smart decisions with how to spend money to really come up with something that’s of utility for the warfighter.

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