he budgeting method that has come to be known as the Planning, Programming, and Budgeting System (PPBS) – or Planning, Programming, Budgeting, and Execution (PPBE) within the context of the US Department of Defense (DoD) – was created in the early 1960s by then Secretary of Defense Robert McNamara with the view of aggregating the independent budgetary processes of the service headquarters.
Since its implementation in the DoD, ‘programming’ was subsequently adopted in a number of Western countries, but was quickly dismissed – for example in Canada – as being inappropriate to their needs because it was seen as creating a distance between policy priorities and their financial execution.
Following the end of the Cold War, the DoD initiated a technical assistance programme that exported a version of programming to almost all the legacy–that is, not created from scratch – and new defence organisations of the former communist states in Central and Eastern Europe: Poland; Bulgaria; Romania; Hungary; Albania; the Czech Republic; Ukraine; Slovakia; Estonia; Latvia; Lithuania; Slovenia; Macedonia; Georgia; Moldova; Croatia; and Azerbaijan.
These engagements consisted of undertaking formal advice and assistance projects, as well as producing assessments. It should be noted that these programmes were initiated despite an academic literature that is critical of programming as an instrument of public finance by finding the method at best problematic, and at worst a failure.
Thanks to my colleague Jim for the pointer to Thomas-Durell Young’s 2016 paper, Is the US’s PPBS applicable to European post-communist defence institutions? I think you could have guessed it: the efforts to install PPBS in these countries failed.
In sum, all of the countries discussed have reported the failure of PPBS to enable them to develop achievable and costed defence plans. This is despite the fact that many of these defence institutions have influential PPBS directorates in their ministries of defence where financial decision-making is highly centralised.
I normally argue that such cost analyses are not only intensive in time and effort, they often get the answer wrong. It is not possible to predict the input-output functions that result in the array of alternative weapons systems. These are discovered in the act of development, competition, evaluation, and selection. Costed plans will always make sense, but they should be informative of incremental decisions. Costed plans should not be executed to regardless of what is learned in the process. Here’s TD Young:
To be blunt, what is needed is for policy directorates to recognise that if their guidance is to be implemented by programmers, such guidance and priorities must be expressed in financial terms. In short, money is policy
The author concluded that PPBS had failed because planners could not hand down costed policy for the programmers to go execute. That just pushes back the real question. Is a cost-benefit analysis prior to program initiation feasible? Is it wise to tie the hands of officials in the future so far in advance?
The usual assumptions seem to be that the United States is the only place where people are smart enough to run such a planning system. Others are not disciplined enough. But perhaps we fool ourselves, and the high quality of our people are the only thing from the system collapsing under the weight of PowerPoints.
The more you push cost and planning and programming up the hierarchy and forward in the acquisition chain of events, the more time will elapse until it gets executed on, and the more the plan will be obviously error ridden with the benefit of hindsight.
One final thought. The author points to the Air Force having the best, most thorough, planning for PPBE in DoD. The Army comes next and the Navy is the worst, which manifests in the unrealistic nature of their 30-year shipbuilding plan. But it is interesting that the reverse is true among the services in terms of technical expertise supporting weapons development and fielding. The Navy tends to be the best.
It strikes me that our problems with acquisition are exactly analogous to the Russian vs NATO approaches to the military, here with us as Russia.
Russian – General staff is supreme, top down implementation, lower level soldiers are mere craftsmen and implementers.
US – strong depth of retained talent, and high levels of training allow decision making to be delegated to the lowest level.
A way to sell it then would be maybe that we need to believe in our doctrine for acquisition, not just for fighting. Strong in house talent in order to push acquisitions to the lowest level. I think you might overrate the benefits of diversity of options overly much – just like in fighting, you can only delegate to the extent that there is doctrine and training such that things don’t fall apart. There needs to be enough coherent strategy promulgated by leadership to ensure that acquisition officers are acquiring things well suited for the conflicts the US will realistically fight. (Ex one of your featured pieces praises Google without noting that they’re widely considered nearly the most dysfunctionally managed major Silicon Valley player and their constant false starts and stops without long term strategy leaves them widely distrusted.)
Just some non-expert and random thoughts.
Great comments! Completely agree with taking some operations principles and applying to acquisition. And certainly delegation only works if you have training, evaluation, and coherent strategic intent. I think Rickover’s view of leadership is basically right: spend a lot of time recruiting the right people, training them, and continually communicating the values and direction of the organization. I stand by diversity of options though. The thing lacking in non-market environments like Google R&D or internal to DoD is the evaluation capability to kill things or scale things. Markets do that well. I’d argue bureaucrats can do it decently if incrementally based on empirical evidence then on analyses that require predictions 10-30 years in the future. So the content of strategic leadership matters. But your point stands!
Thinking out loud here. Two more operations principles to be emphasized: Jointness and unity of command, both entirely lacking in acquisition. I believe somewhere you proposed independently funding the acquisition/research labs separately. Maybe we can think of this in a “Goldwater-Nichols” sort of way as creating joint “acquisition commands”.
DoD often says they need to buy like a venture capitalist, which to them just appears to mean “quickly”, but VCs often invest in ideas, general tech, & people rather than individual products per se. Ie exactly the opposite of the outcome of a competitive contract.
So, rather than a prototyping fund or whatever, we need mission oriented acquisition groups that each have the tools to work with every stage of acquisition. Jointness not just among forces but with civilians, scientists, industry, and finance. So there should be say an artillery acquisition group, and a jet group, or whatever. And all of them have something like a “fast grants” fund for research grants, an investment fund for small or early stage companies, actual artillery officers or pilots or whatever on loan who will rapidly field test prototypes, and the ability to award competitive large-scale contracts. The division of pure science, research, and acquisition is an administrative fiction in reality, goal should be to keep promising products or people moving right along the development path.
I agree with diversity of options being the ideal, but it could be very badly done. Google is always starting and cancelling things to allegedly get in a better market position, but never following through. Now their word is mostly garbage. There would have to be coordination with the services or combatant commanders to ensure this doesn’t happen with DoD. And I think what you’re saying varies in relevance – I think true we can afford to incrementally experiment with bombs. But for the navy’s fleet, they should figure out what they’d realistically need against China and start building that immediately. Increment on the ships of a given class yes, but there probably needs to be fairly definite decisions about what sorts of ships to commit to.
Anyway, fascinating blog. Hopefully I’m doing some justice to your ideas, since I know nothing about military issues.