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Acquisition Planning and Management, and the Federal Budget Process

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Title: Acquisition Planning and Management, and the Federal Budget Process


1
(No Transcript)
2
Acquisition Planning and Management, and the
Federal Budget Process
Breakout Session 601 Names Ginny Wydler,
Senior Associate, Booz Allen Hamilton Paul
Tetrault, Senior Associate, Booz Allen
Hamilton Date July 20, 2010 Time 400 515
pm
1
3
Agenda
  • Acquisition Planning
  • Developing agency needs
  • Acquisition Strategies
  • Programming, Planning, Budgeting Execution
    Process
  • PPBE Timeline and Lifecycle Map
  • Alignment with the Acquisition Process
  • Case Study IT System
  • Case Study IT Service
  • Summary

4
Three Major Management Systems
Effective Interaction is Essential for Success
  • Planning,
  • Programming,
  • Budgeting and Execution

Capabilities Definition and Requirements
Development
Systems Acquisition
5
System Enterprise View
  • Strategic Requirements Planning Process (SRPP)
  • Key component of Planning Phase
  • Identifies strategic requirements and
    capabilities
  • Links Strategic Plan and programs
  • Output is the Integrated Planning Guidance (IPG)
  • Programming and Budgeting
  • Develop 5-year Future Year Plan (FYP)
  • Ensures high priority programs are funded within
    guidance
  • Programs prioritized and balanced
  • Acquisition Management Process
  • Key process in the Execution Phase of PPBE
  • Goal is to effectively provide capabilities to
    users which meet the strategic requirements of
    the SRPP and the constraints of the PB Process
  • Provides a framework of efficient review and
    approval of acquisitions

6
What is Acquisition?
  • The Federal Acquisition Regulation (FAR 2.101)
    defines acquisition as follows
  • Acquisition means the acquiring by contract
    with appropriated funds of supplies or services
    (including construction) by and for the use of
    the Federal Government through purchase or lease,
    whether the supplies or services are already in
    existence or must be created, developed,
    demonstrated, and evaluated. Acquisition begins
    at the point when agency needs are established
    and includes the description of requirements to
    satisfy agency needs, solicitation and selection
    of sources, award of contracts, contract
    financing, contract performance, contract
    administration, and those technical and
    management functions directly related to the
    process of fulfilling agency needs by contract.

7
Acquisition Process
  • Governed by Laws, Regulations, Policies, Guidance
  • Structured into discrete phases separated by
    major decision points (Acquisition Decision
    Events (ADE). Focuses on Key activities
  • Process forms the basis for comprehensive
    management and informed decision-making
  • Phases and decision points tailored to meet the
    phased budget plans for the work/program schedule

8
An integrated life cycle
9
Acquisition Process
  • PM initiates the process
  • Conducts acquisition planning
  • Describes agency needs in writing
  • Obtains program and budget approval
  • Submits procurement request to contracting
    officer
  • Contracting Officer awards and administers the
    contract
  • Develop and issue RFP/RFQ
  • Review/evaluate proposals recommends selection
  • Awards contract/order
  • Appoints COTR

10
Developing Agency Needs
  • Acquisition Planning
  • Acquisition Plan written plan reflecting the
    specific actions necessary to execute the
    approved strategy
  • Formal individual acquisition plan gtXXX
  • Describe/develop requirements
  • Statement of Work (SOW) Details work to be
    performed
  • Statement of Objectives (SOO) Performance-based
    broad objectives of the product or service
  • Performance Work Statement (PWS) Specifies
    outcomes not how to do the work
  • Evaluation Factors for competitive actions
    (Section M)
  • Market Research collecting and analyzing
    information about capabilities

11
Methods of Acquisitions
Speed and Ease
12
Contract Types
  • Types of Contracts
  • Firm fixed price, Fixed quantity at a set unit
    price
  • Labor hour, Time and Material
  • Provides for a mix of labor at set rates up to a
    maximum dollar amount
  • Cost Plus
  • Contractor bills for all costs and receives a
    fee that is set at time of award costs could be
    more or less

13
Solicitation Types
  • Competitive Full and Open Competition
  • Competitive Government-wide (GWAC)
  • Competitive GSA Schedule
  • Sole Source/Limited Competition
  • Federally Funded Research and Development Center

14
Contract Administration (Post Award)
  • A Federal employee must monitor contractor
    performance
  • May require a team of people, sub COTRs and
    agents
  • Inspection and testing requirements
  • Government Furnished Equipment
  • Invoice review and approval
  • Prompt pay act
  • Closeout

15
Agenda
  • Acquisition Planning
  • Developing agency needs
  • Acquisition Strategies
  • Programming, Planning, Budgeting Execution
    Process
  • PPBE Timeline and Lifecycle Map
  • Alignment with the Acquisition Process
  • Case Study IT System
  • Case Study IT Service
  • Summary

14
16
The Budget Process
  • Budgeting is about prioritizing and planning
    resources to meet the mission without redundancy
    and gaps.
  • Influenced by Threats, Risks, National Strategy
  • Federal Agencies use the Planning, Programming,
    Budgeting and Execution (PPBE) system to govern
    the allocation of resources.
  • Considered an annual process its really a
    long-term strategic process, with an outlook of
    several years
  • Planning is a 5 to 10 year outlook
  • Programming is a 1 to 5 year outlook
  • Budgeting is a justification and request for
    annual resources (or multiple years in some
    cases) and
  • Execution is the annual use of funds according to
    the budget plan

17
Programming, Planning, Budgeting Execution
Process
  • The PPBE process is part of an integrated suite
    of business processes designed to align resources
    to requirements in order to fulfill capability
    gaps and minimize duplication in fulfillment of
    Agency strategic goals
  • Planning establishes strategic priorities and
    capabilities required to achieve the strategy
  • Programming applies the resources to programs
    which provide the capabilities required to
    achieve the strategic priorities
  • Budgeting properly prices the programs, develops
    justification, and an execution plan
  • Execution performs and monitors the approved plan
  • Reporting includes annual reports (including
    performance and accomplishments) and agency level
    financial position reports

18
PPBE aligns investments to strategy and
efficiently spending
  • Overall process
  • Executive branch (OMB) proposes a budget from the
    President to Congress
  • Congress authorizes and appropriates funding
    through Acts of Congress
  • Executive Agencies execute funds through
    individual budgets for programs and operations
  • Activities are built around the Federal Fiscal
    Year, October - September
  • Challenges to PPBE Process
  • Complexity of budget structure
  • Accuracy of cost performance data
  • Complexity of operating structures
  • Conflicting stakeholder demands
  • Alignment of data between program budget
  • Dependencies across the Enterprise

Sustaining a multi-year PPBE process requires
dedicated resources and managing key decisions
PLANNING (FY 3)
19
Planning
POTUS
  • 5-10 year extended planning period the
    overarching direction and priorities
  • strategic goals and objectives
  • projected operating environment
  • operational assessments
  • mission needs and priorities

SECDEF
CJCS
OSD
Annual Program/Planning Guidance
18
20
Programming
New Requirements
Linked to Planning
Most Dear FY10-15 Existing Funded Content Least
Dear
Unresourced, prioritized requirements at the
beginning of the exercise
Most Dear FY06/07 Existing Funded Content Least
Dear
Unfundeds
Prioritized baseline at the beginning of the
exercise
  • Key to this phase is must allocate limited
    resources between competing requirements
  • Must align with strategic goals and Secretary's
    priorities
  • Requirements must be prioritized between base
    activities and new/unfunded initiatives
  • Final output Secretary's Resource Allocation
    Decisions (RADs)

19
21
Budgeting
Dept and Staff Build PBR
Agency Review
RMD
Submit Justification Documents Electronic Data
Pass to OSDs databases
Budget Review
Program Review
Submit Justification Documents To Congress
Budget shows a financial plan for accomplishing
goals and objectives Full costs of programs
identified in compliance with Presidents
Management Agenda Final output Budget to
Congress for approval and appropriation of funds
22
Budget Execution and Reporting
Strategy
National Security Strategy
National Security Strategy
National Military Strategy
National Defense Strategy
Chairmans Program Recommendation
Strategic Planning (ongoing)
Quadrennial Defense Review
Integrated Priority List
Planning Process (ongoing)
ICRRA
Annual Planning Programming Guidance
Strategic Planning/CRRA (ongoing)
Planning
Strat Planning Guidance
Joint Programming Guidance
Enhanced Planning Process (ongoing)
Programming
Division POM Developed Delivered
Dept POM Developed
Budgeting
Dept Budget Prepared Submitted
Program Budget Reviews
Presidents Budget Submitted
Enactment
Congressional Review Debate Marks
Budget Enacted
Execution
Budget Execution Planning
OM Execution Plans
Investment Budget Review
OM Budget Review
Budget Execution
23
Appropriations by Funding Type can influence
Execution
  • One-year Appropriations
  • OM
  • Personnel
  • Two-year Appropriations
  • Research and Development
  • Three-year Appropriations
  • System Procurement
  • Hardware Procurement
  • Other Procurement
  • Five-year Appropriations
  • Construction

Operations
RD
Procurement
Construction
24
Alignment with the Acquisition process
Program Initiation
IOC
FOC
Technology Development
Production Deployment
Operations Support
Materiel Solution Analysis
Engineering and Manufacturing Development
Technology Contract
Maintenance Contracts
Production Contract
Design Contract
Development Contract
  • The Budget Process supports contract awards in
    each phase of a program

25
Agenda
  • Acquisition Planning
  • Developing agency needs
  • Acquisition Strategies
  • Programming, Planning, Budgeting Execution
    Process
  • PPBE Timeline and Lifecycle Map
  • Alignment with the Acquisition Process
  • Case Study IT System
  • Case Study IT Service
  • Summary

24
26
Case Study IT System
  • DHS Program to Update Nations Alert and Warning
    capabilities

27
The Evolution of Emergency Broadcasting
1951 - 1963
1963 - 1997
1997 - 2006
2006
CONELRAD
EBS
EAS
Upgrade Initiative
  • Originally called the Key Station System, the
    CONtrol of Electro-magnetic RADiation (CONELRAD)
    was established in August 1951.
  • Participating stations tuned to 640 1240 kHz AM
    to initiate the following sequence
  • Shut down 5 sec
  • Return to air 5 sec
  • Shut down 5 sec
  • Transmit tone 15 sec
  • Several shortcomings and vulnerabilities

Modernize and integrate the nations alert and
warning infrastructure. Integrates new and
existing public alert and warning systems and
technologies Provides authorities a broader
range of message options and multiple
communications pathways Increases capability to
alert and warn communities of all hazards
impacting public safety.
EBS was initiated to address the nation through
audible alerts. It did not allow for targeted
messaging. System upgraded in 1976 to provide for
better and more accurate handling of alert
receptions. Originally designed to provide the
President with an expeditious method of
communicating with the American Public, it was
expanded for use during peacetime at state and
local levels.
  • EAS jointly coordinated by the FCC, FEMA and NWS.
  • Designed for President to speak to American
    people within 10 minutes.
  • EAS messages composed of 4 parts
  • Digitally encoded header
  • Attention Signal
  • Audio Announcement
  • Digitally encoded end-of-message marker

Source The Broadcast Archive Maintained by
Barry Mishkind The Eclectic Engineer
28
Program Vision
Television
Provide Timely Alert And Warning To American
People To Preserve Life And Property
Radio
Cell Phone
Alerting Authorities Federal, State,
territorial, tribal, and local
Computer
Home Phone
Program Aggregator
Public Signage
29
Program Background
  • PMO stood up in April 2007
  • Budget projected at 25M per year thru 2014 with
    initial 70M in Hurricane Katrina Funds
  • Initial focus on Presidential Alerts
  • Governance process similar to DoD Milestone as
    adapted by DHS (ORD, MSN, AoA, AS, ILSP, FRD etc)
  • Program redirections/budget impacts/ GAO have all
    impacted progress

30
DHS Acquisition Directive 102-01 made budget
process changes
  • FROM
  • MD 1400 Investment Management
  • Multiple versions in various states of of
    release and usage
  • Focused on Investments
  • - Limited to capital assets
  • Separate Processes for Resourcing, Acquisition,
    and Requirements
  • - Non-functional Department
    requirements process
  • - Devolving acquisition processes
  • TO
  • 102-01 Acquisition Directive
  • Compliments new acquisition line of Business
    Directive (MD 252-07)
  • Accompanied by robust how-to Instruction
    document
  • Focus on Delivery of Capability through Programs
    and Projects
  • Includes all efforts related to delivery of
    capabilities, e.g., services,
    interagency agreements)
  • Interoperable Decision Support Systems
  • Interfaces between requirements, PPBE, and
    acquisition are defined
  • 3 processes are mutually aware



PPBE Planning, Programming, Budgeting Execution
31
Speed Bumps
  • Mission changes wider focus on usage by State
    and Local communities
  • GAO reports and help from the Hill
  • Budget reductions and earmarks
  • Staffing turnover
  • Governance process growing pains

32
Lessons Learned
  • Document your way ahead and solicit buy in from
    stakeholders
  • Expect your funding will change
  • Prioritize project components
  • Remain flexible

33
Case Study IT Services
  • Naval Marine Corps Intranet Outsourced IT services

34
Budgeting for Services
  • Major Programs are procured with formal Budgets
  • General services are procured in two ways
  • Line in the Organizational budget
  • Embedded (hidden) within a Program or Operation
  • Examples include
  • Training, 1 of budget, upwards of 3-5 hidden
    costs
  • Information technology, both line item and
    embedded
  • Facilities, centralized or special interests
  • Little way to trace or account for hidden spending

35
Outsourcing IT Services
  • Navy Marine Corps Intranet (NMCI) largest
    outsourcing effort within the Federal Government
    9B, 10 years
  • Awarded October 2009, ends October 2010
  • Initiative based on cost drivers for
    infrastructure upgrade 3.9B investment and
    maintenance, cheaper alternatives
  • Rules for NMCI funding General IT Budget
  • Naval CIO had budget authority and controlled IT
    funds investments, NMCI priority
  • Naval FM had spend rules froze dollars within
    accounts, withholds for NMCI
  • Navy and Marine Corps Organizations owned budget
    dollars Discretion on who and when to deploy
    NMCI under fixed costs for desktop and network
    services, seat management

36
What Issues to Consider
  • Reasons to consider seat management?
  • Free staff to focus on core missions (41)
  • Improve service delivery (41)
  • Eliminate daily management headaches of managing
    the desktop (39)
  • Reduce costs (32)
  • Easier implementation of new software (32)

Eliminate all decentralized purchases of
IT Eliminate use of sweep-up IT
spending Eliminate shadow armies of IT
support Eliminate desktop changes by
users Eliminate user downloads from Internet
37
NMCI Philosophy
  • Buying commercial services using commercial
    practices
  • Outsourcing for cost reduction, obsolescence, and
    inventory management
  • Buying a capability with seat management
  • All costs for desktop, network services, timed
    refreshment of hardware and software,
    standardized software loads for all users,
    24-hour help desk, information assurance
  • Reduce costs of IT infrastructure and investment
  • Navy would have spent 3.9B up front
  • Outsourcing moves investment to industry, with
    Navy costs stretched over the 10 years
  • No need for program structure, merely buy COTS

Actual per seat costs 6,039 (INPO) 6,200 (GSA
sampling) 8,000 (Gartner) 12,331 (SAM) Navy
goal of lt4,500 per seat (actual FY98 costs)
38
Program and Contract Approach
  • Program approach no PMO, users determine needs
  • No Program of Record designation, commercially
    available
  • IT Departments responsible for capital investment
    analysis
  • Oversight approach no need for oversight
  • Not a Major Acquisition, no program staff needed
  • Buying commercial, no systems development under
    COTS
  • Budget approach no Program Element
  • General IT Budget line from each user
    organization
  • Annual appropriations for IT Services
  • Contracting approach Mandatory Requirements
    contract
  • Annual guaranteed payment to Vendor
  • SOO with SLAs, incentives and penalties
  • Funding approach Draw from annual budget
  • Mix of funding types (Working Capital Fund,
    Operation and Maintenance, annual procurement, RD

39
Lessons Learned
  • Big ticket items draw attention
  • Congress, GAO, OMB, User interest caused
    adjustments to the deployment plan
  • There is a need to budget for a major investment
    effort
  • Current NMCI has a Program Element number in
    budget
  • PM NMCI is a functioning program office
  • Navy and Defense now provide oversight
  • The Planning portion of PPBE has critical
    decision points
  • This can trigger programmatic and contracting
    approaches
  • Buying seat services roles up all the segments of
    IT, which brings into play the allocation of
    funding types and auditable spend

40
Changes to Major IT buying
  • The FY2010 National Defense Authorization Act
    (NDAA) codified into law new processes for IT
    Programs, and directed a new acquisition process
    for IT Systems
  • IT programs will execute multiple, rapidly
    executed releases of capability that allow
    requirements to be prioritized based on need and
    technical readiness, allow early operational
    release of capability, and adapt to changes
    driven by field experience
  • A portfolio of IT systems, with staggered
    deployment and refresh, with be the approach to
    acquiring the capability
  • Stepping away from rigorous IT Oversight and
    Approvals
  • Recognizing the budgeting process will be based
    on diverse user needs, deployments and
    refreshment cycles

Maybe NMCI wasnt so far off.
41
Summary
  • The budget and acquisition processes and
    organizations are tightly linked
  • Needs/Gaps are addressed through Strategic
    Requirements Planning process (Office of
    Policy/Joint Requirements Council)
  • Resources are identified, obtained, and allocated
    through the Programming and Budgeting cycle
    (CFO/Program Review Board)
  • Acquisitions are managed through the
    CPO/Acquisition Review Board)
  • Conducting an acquisition to meet approved
    requirements demands an integrated process that
    involves close cooperation between the PM, the
    CFO and PCO

42
Points of Contact
Ginny Wydler 703 377-5577 Wydler_Virginia_at_bah.com
Paul Tetrault 703 917-2737 Tetrault_Paul_at_bah.com
43
QUESTIONS?
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