1. APEX 39 CAPE Priorities & Opportunities
Jamie Morin
OSD CAPE
9 September 2014
PLCC B6

2. Agenda Introduction to CAPE PPBE Process & Building PB15 PB15 Summary
New Defense Strategy
Expected Themes in PB16
End Game Speculation
Continuing Challenges

3. Introduction to CAPE
Independent advisor to SECDEF and DEPSECDEF on programmatic resource allocation issues and decisions
Secretary of Defense Robert McNamara established “Systems Analysis” in 1961 (McNamara’s “Whiz Kids”) to analyze nearly every aspect of the DoD budget
Name changed to Program Analysis & Evaluation (PA&E) in 1970s
Weapons Systems Acquisition Reform Act (WSARA) of 2009 changed the name to Cost Assessment & Program Evaluation (CAPE)
Focus on reducing cost overruns and schedule delays (ICEs, AoAs, etc.)
Play a key role in the Planning, Programming, Budgeting, & Execution (PPBE) process
Links the defense strategy to resources
“Big P” versus “little p”
Established in 1961 by Secretary McNamara to analyze nearly every aspect of the DoD budget
Originally named Systems Analysis
Changed to Program Analysis and Evaluation (PA&E) in the 1970s
Weapons Systems Acquisition Reform Act (WSARA) of 2009
Established the Director of Cost Assessment and Program Evaluation (D,CAPE), a Presidentially appointed, Senate confirmed position
Transferred PA&E staff to CAPE
Addressed shortcomings in DoD acquisition processes
Required realistic cost estimation throughout the acquisition cycle
Expanded the need to provide guidance for Analyses of Alternatives (AoAs)
Serve as an independent advisor to the Secretary and Deputy Secretary of Defense on programmatic resource allocation issues and decisions
Develop innovative options to assist the Secretary achieve objectives (e.g., EASE)
Manage the Program Review process and work with Comptroller to build the budget submission for Congress
Provide accurate, objective analysis to the Secretary & Deputy Secretary
Research topics selected by the Secretary for in-depth analysis (e.g., LRS and Munitions FEAs)
Conduct trade-off analyses to better inform decisions
Reassess major programs as DoD needs and capabilities evolve
Provide analytical support for long and short term tasks (e.g., Strategic Choices and Management Review (SCMR))
Consult with the USD(AT&L) and USD(C), Service Secretaries, and head of the Defense Agencies on matters of cost estimation in DoD
Issue guidance on cost estimation for and review cost estimates of MDAPs and MAISs
Issue guidance on life-cycle management and sustainability costs in MDAPs and MAISs
Manage the 3-Star Programmer’s Group meetings that feed much of the content presented at the Deputy’s Management Action Group (DMAG)
Inform other processes across the Department (e.g., JROC, JCIDS, etc.)

4. PPBE Process & Building PB15
CAPE’s focus is on FY16 and beyond (informed by what’s happening today
Strategic Choices & Management Review (SCMR) was completed in the summer
Provided insight that was used to adjust Service toplines in fiscal guidance
Fiscal guidance emphasized that we have less of a need for large ground forces, but that we should protect forces needed for Asia/Pacific conflicts

5. PB15 Summary Navy Air Force Army Marine Corps Efficiencies
Cruiser modifications (innovative)
Air Force
Cut A-10s and legacy modification; Protected F-35, Tanker & Bomber
KC-10s
Army
GCV
Helo restructure
Force structure targets
Marine Corps
Focused on readiness

6. PB15 Topline We’re still living with uncertainty
FY15 Opportunity, Growth, & Security Fund ($26B for DoD)
Readiness Enhancement
-- Training adds in Army
-- Spares and logistics in Navy
-- Unit training in USMC
-- Flying hours in Air Force
Installation support increase
-- All Services increase base sustainment
-- All Services add MilCon funding
Investment increases
-- Army helicopters (56)
-- Navy P-8 (8), E-2D Aircraft (1)
-- USMC Light Armored Vehicle and minor procurement
-- Air Force F-35 (2), C-130J (10), MQ-9 Aircraft (12)
FOR FY15–19:
Blue minus Green = PB14 minus PB15 = $113B
Green minus Red = PB15 minus BBA/BCA = $115B
What do we know?
Continuing Resolution
Election year
New defense strategy
Reduced reliance on OCO
What don’t we know?
No new budget deal
What topline OMB will submit
How to address unfunded $$
Long term health of force

7. New Defense Strategy QDR & PB15 Strategy
Attempt to measure delta in sequestration in terms of the strategy
Secretary’s speech suggests a much less capable force
How much less capable?
In what areas?
What can we do about it?
How do we maximize the performance of a sequestered force?

8. Expected Themes in PB16 Budget disconnects Uncertainties What we know
Topline levels
BRAC authority
Compensation
Other unknowns
What we know
Continuing Resolution likely in the fall
Elections this fall
Debt ceiling suspended until March 2015
What we DON’T know
No new budget deal
Long term health of force (depends on where we are in the out-years)

9. End Game Speculation Submit a higher, non-sequestered budget level
Need a plan to prepare a budget at at sequestered budget levels if we do not get the topline we want

10. Balancing Challenges Fiscal Uncertainty
Topline
Timing
OCO
Action on prior requests
Strategic & Operational Challenges
Shift to Asia – away game, geography, & A2AD
EM Spectrum Dominance
Commercial technological pacing vs DoD OODA Loop
Adversary cost imposition
Internal Cost Pressures
People
Acquisition
Operations and Support

11. BACKUP

12. Principal Deputy Director LtGen Robert E. Schmidle Jr.
CAPE Org Chart
DIRECTOR, CAPE
Jamie M. Morin
Principal Deputy Director
LtGen Robert E. Schmidle Jr.
Front
Office
Team
Cost Assessment
Deputy Director
Rick Burke
Program Evaluation
Deputy Director
Scott Comes
Analysis & Integration
Deputy Director
Vacant
Program, Data, & Enterprise Services
Deputy Director
Joseph Nogueira
Economic and Manpower Analysis
Weapon Systems Cost Analysis
Advanced Systems Cost Analysis
Operating and Support Cost Analysis
Land Forces
Naval Forces
Tactical Air Forces
Projection Forces
Irregular Warfare
C4 and Information Programs
Strategic Defensive & Space Prgms
Force and Infrastructure Analysis
Intelligence, Surveillance, & Rec.
Program Analysis
Simulation Analysis Center
Force Structure & Risk Assessment
Enterprise Services
Joint Data Support
Program Resources & Information Systems Management