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RESOURCE MANAGEMENT
2nd Quarter 2004

INSIDE
This Issue
The Army at
War—Leveraging
Fiscal Year 2003 our Resources for
Soldiers
Army Resource Management Page 8
Award Winners Business Process
Engineering
Page 21
Summary of Ethics
Rules that Apply to
DoD Employees
Page 25
This medium is approved for official
dissemination of material designed
to keep individuals within the Army
knowledgeable of current and
emerging developments within their
areas of expertise for the purpose of
professional development.

By order of the Secretary of


the Army:

Peter J. Schoomaker

General, United States


Army
Chief of Staff

Administrative Assistant to
the Secretary of the Army
Resource Management is an official professional Bulletin published quarterly and spon-
sored by the Assistant Secretary of the Army for Financial Management and Comptroller.
Unless otherwise noted, material may be reprinted provided the author and RM are
credited. Views expressed herein are those of the authors and not necessarily those of
the Department of the Army or any element thereof. RM provides a forum for expres- Joel B. Hudson
sion of mature, professional ideas on the art and science of Resource management. It is
designed as a practical vehicle for the continuing education and professional development
of resource managers through thought-provoking articles. Send all correspondence to:
Distribution: Special
Managing Editor, Resource Management, Comptroller Proponency Office, Office of the
Assistant Secretary of the Army (Financial Management and Comptroller)
Acting Assistant Secretary
ATTN: SAFM-PO, 109 Army Pentagon, Washington, DC 20310-0109. Queries may be
of the Army
made by phone to DSN 222-7413 or commercial (703) 692-7413. Please send a copy of
Financial Management
each submission to Managing Editor, SAFM-PO, ASST SEC ARMY FIN MGT, 109 ARMY
and Comptroller
PENTAGON, Washington, DC 20310-0109. Ernest J. Gregory
POSTMASTER: Please send address changes to Managing Editor, Resource Management,
Comptroller Proponency Office, Office of the Assistant Secretary of the Army (Financial Managing Editor,
Management and Comptroller)ATTN: SAFM-PO, 109 Army Pentagon, Washington, DC the Pentagon
20310-0109.
Wilett Bunton
RESOURCE MANAGEMENT

2 n d Q u a r t e r 2004 “Professional Development” PB48–04–2

Co n te n ts

Message from the Acting Assistant Secretary of the Army 2

Fiscal Year 2003: Army Resource Management Award Winners 3

The Army at War—Leveraging our Resources for Soldiers 8

The “E” in PPBE stands for Execution 10

Being Heard: The Timing and Contents of Successful UFRs 13

Army 2004 PPBE Planning Conference 19

Business Process Engineering 21

Summary of Ethics Rules that Apply to DoD Employees 25

Case Study: Walter Reed Army Medical Center Enhanced Use Lease 28

Perspectives: Leveraging Army Resources 29

Senior Army Workforce (SAW) 30

The Importance of Career Fairs 31

CP 11 Training with Industry (TWI) 32

Resource Management / 2nd Quarter 2004 1


A Message from the Acting Assistant
Secretary of the Army

(Financial Management and Comptroller)

Mr. Ernest J. Gregory

Moving Towards A New A metric more descriptive than total interest payment
is: the amount of interest paid per dollars disbursed.
Accounting System According to DFAS, the Army paid $2.7 million in interest
and penalties against total disbursements of $19.8 billion
Since 1775, the Army’s Resource Management
during the first four months of fiscal year 2003. Phrased
professionals have supported the soldier. In 2004, the Global
differently, interest and penalties equaled just .013 percent
War on Terrorism constitutes a battlefield and a threat that
of all disbursements, which constitutes an improvement
differ greatly from previous wars, and again you are being
compared to the pre-war, fiscal year 2002 rate of .018
asked to leverage resources to support our Army. I’m sure
percent. This alternate perspective tells a different story.
the resulting increase in workload and mission has directly
The fact that DFAS and the Army made timely payments
impacted your daily professional lives, and I thank you for
without generating penalties on 99.987 percent of our
your commitment. This issue of Resource Management
bills—under wartime conditions and using current manual
contains many success stories about how we’re meeting the
processes and systems—appears positive.
challenges of our Army at war. I would like to share just one
The long-term solution to the twin problems of non-
example now.
integrated processes and the Herculean manual efforts
In April 2003, we received a request to update the Under
required to execute them is not to work harder, but to work
Secretary of Defense (Comptroller) about the Army’s
smarter. We must re-engineer old business processes, enable
progress in meeting the Prompt Payment Act interest
integrated business systems and eliminate manual work. We
metric. The goal was a 40 percent reduction in interest
want to leverage the existing technology found in integrated
payments. During the first four months of FY 03, the Army
business solutions, such as those pioneered by the private
achieved a 26 percent reduction in total interest paid. The
sector, to support our re-engineering efforts. Toward that
DoD Comptroller asked: How would the Army meet the
end, we proposed to pilot an integrated enterprise resource
40 percent reduction goal?
planning (ERP) solution and asked for DoD Comptroller
We researched and evaluated the situation and
support and cooperation.
discovered some interesting facts. Even though we have
On 2 March 2004, we hosted the first meeting of
pursued electronic commerce initiatives, vendor payment
the General Fund Enterprise Business System (GFEBS)
is still, primarily, a manual process that requires DFAS to
Executive Steering Committee (ESC). Members of the ESC
match an invoice and receiving report to accounting and
include the major command resource managers, as well as
vendor pay data, which are maintained in non-integrated
representatives from select Army Staff elements, select DoD
financial systems. DFAS processes about 3.5 million
Staff elements, the Air Force and the Navy. The meeting
vendor payments annually for the Army, a rate of nearly
provided, to all those gathered, a complete update on
14,000 payments per business day. But, in fiscal years 2002
GFEBS efforts to date. Look for progress reports in follow-
and 2003, as we ramped up to fight the Global War on
on issues of our Resource Management Journal.
Terrorism, the Army’s disbursements increased dramatically.
In closing, I salute your efforts to improve our
The current metric, total dollars of interest disbursed, did
stewardship of the taxpayer dollars entrusted to us and your
not take into account this huge growth.
dedication to supporting our great Soldiers. We are a nation
and an Army at war. Because of our people, we will succeed.

2 Resource Management / 2nd Quarter 2004


Fiscal Year 2003
Army Resource Management
Award Winners
Congratulations to this year’s winners!!!
The reviewing panels have met and the Acting Assistant Secretary
of the Army (Financial Management and Comptroller) has
approved the selections for this year’s Resource Management
(RM) Awards. And here are the recipients.

Capstone Assistant Secretary Of the Army (FM&C) Civilian Award


Awards The ASA (FM&C) Civilian Award recognizes the top civilian Army employee serving in a
leadership capacity that the Assistant Secretary personally cites for outstanding contributions to the
field of resource management. This year’s ASA (FM&C) Civilian Award is awarded to Mr. Kenneth
A. Littlefield, a supervisory budget analyst and Chief of the Military Operations Branch, Budget
and Programs Division, Directorate of Resource Management, HQ US Army Corps of Engineers
(USACE). Mr. Littlefield’s efforts have been instrumental in the successful management of financial
issues and funding of the critical Restore Iraqi Oil (RIO) and Restore Iraqi Electricity (RIE) missions.
ASA (FM&C) In addition, he has worked a number of complex Global War on Terrorism (GWOT) funding issues
Civilian Award developing timely and often ingenious solutions.
Mr. Kenneth A. Littlefield
Supervisory Budget Analyst Assistant Secretary Of the Army (FM&C) Military Award
HQ, USACE The ASA (FM&C) Military Award recognizes the top military soldier serving in a leadership
FORSCOM capacity that the Assistant Secretary personally cites for outstanding contributions to the field of
resource management. This year’s ASA (FM&C) Military Award is awarded to MSG Donald Smith,
ASA (FM&C) a Finance Operations NCO at 336th FINCOM, Camp Arifjan, Kuwait. MSG Smith developed a
Military Award database of Standard Operating Procedures to provide Reserve Pay sections a means to track and pay
MSG Donald Smith Hardship Duty Pay Location each month and a source of research information needed as part of the
Operations NCO soldier verification and customer service process.
336th FINCOM
Functional Chief Representative (FCR) Special Award
Functional Chief
Representative The FCR Special Award recognizes the top civilian Army employee serving in a leadership
Special Award capacity that the Principal Deputy to the Assistant Secretary of the Army (FM&C), serving as the
CP-11 FCR, personally cites for outstanding contributions to the Comptroller Civilian Career
Mr. Arland J. Luster Program (CP-11). This year’s FCR Special Award is awarded to Mr. Arland J. Luster, a budget
Budget Analyst analyst in the Investment and Readiness Branch, Budget and Programs Division, Directorate
HQ, USACE of Resource management, HQ US Army Corps of Engineers. Mr. Luster distinguished himself

Resource Management /2nd Quarter 2004 3


in the performance of collateral duties critical to the professional SAFM-BUL is a critical element to the Army in speaking with ”One
skills, training and development of financial management careerists Voice” and has been key to getting the resources needed to continue
while at the same time providing grass roots understanding of to build sustainable momentum for Army Transformation.
financial management for non-financial management professionals. Team Leader: COL Christopher C. Romig
He developed and administered budget training through the
Team Members: LTC Kirk Davis, LTC Kathryn Yurkanin, LTC
employment of personal lecturing, facilitating group discussion,
Donna Shahbaz, Ms. Marie Hammiel, Mr. Joseph Guzowski, MAJ
and role-playing exercises. He further trained ten other instructors
Mary Williams, LTC Mark Hamilton, LTC Steve Capalbo, Mr.
in course materials and motivated them and students alike making
Howard Snow, Ms. Margaret Kulungowski, LTC John Leggieri,
budget training informative, educational and enjoyable.
LTC Thomas J. Stapleton, Ms. Brenda Davis

Outstanding Resource Management (Below MACOM) HQ V Corps RM, USAREUR—V Corps Resource
Management team of civilian volunteers and assigned military
Organization Award deployed for Operation Iraqi Freedom (OIF) provided RM support
(Above MACOM) CFLCC C8, FORSCOM—CFLCC’s C8 office for Army forces of 140,000. The team conducted operations from
developed internal and external processes to account and distribute predeployment, through staging, attack, and then transition to
over $9.4B to two separate Joint Task Forces, three forward the formation to Coalition Joint Task Force 7 (CJTF-7) including
commands and a 1200 person Headquarters. CFLCC provided the developing new funding strategies for operations with the Coalition
commander on the ground with an actual combat multiplier, funding Provisional Authority (CPA) and the reconstruction of Iraq.
to execute his daily mission. Team Leader: COL Michael A. Toner
Organization Members: COL Billy R. Smith, LTC Michael Team Members: LTC David Goddard, MAJ Yong Cassle, Ms.
Byrd, LTC Tom Piroli, Mrs. Mary Hansen, MAJ David Cannon, Beverley Maynard-Sims, Ms. Susan Goshea, Mr. Thomas Gallant,
MAJ Robert Borders, MAJ Judy Webb, MAJ Michael Bachand, Mr. Dave Argenbright, MAJ Gregory Burke, MAJ Stephen Reed,
CPT Landon Moxley, CPT Eric Craig, SGM Shelton Milner, Ms. SPC Decaris Graham, SGT Toyera Brown, MAJ Eric Keltz, MSG
Audrey Moss, Mrs. Calma Jackson-Edwards, Mr. Reggie Smith, Danny Huffman, MS. Caroline Corwin.
SFC Thomas Hetzel, COL Robert Roome, LTC David Dolph, LTC
Douglas Smith, MAJ Terrel Boyd, MAJ Christopher Love, MAJ
Keenan Wynn, MAJ Thomas Toomer, MAJ Marcia Smith, CPT Civilian Individual Awards
Andre Tucker, CPT Michael Williams (USMC), MSG S.P. Terry
Hughes, Mrs. Wendy Edwards, Mrs. Heather Hickey, SFC Elvis Accounting and Finance
Edwards, SFC Jacqueline Durhal.
(Above MACOM) Ms. Deborah Moore, TRADOC—Ms. Moore
(Below MACOM) AEC Travel Section, ATEC—As one of the Army was responsible for Resource Manager procedures and training
organizations to serve as the test bed for the Defense Travel System concerning implementation of PowerTrack. As the TRADOC
(DTS), the Army Evaluation Center (AEC) is at the forefront of technical representative, Ms. Moore not only ensured Command
operations to ensure that DTS will meet the needs of the Army and requirements were presented during the developmental portion of
DOD. AEC Travel spent countless hours working with the various this deployment but also acted as the liaison with DoD and HQDA
help desks, providing feedback to the contractor on how to make the personnel and developed and presented a training package for
system better and working with and training travelers on how to use command Resource Management personnel.
the system. The AEC Travel Section has made a mark on the Army
(Below MACOM) Mr. Ronald Camp, USACE—Mr. Camp’s
whose real value will be seen in future costs savings.
management of finance and cost accounting operations at the
Organization Members: Gaila Ahearn, SSG Carolina Hernandez, Army Corps of Engineer Research and Development Center has
SSG Denis Moore, Karen May been crucial to its fiscal success. He was instrumental in establishing
the organization’s government travel card program, developing a
comprehensive yearend closeout plan, and significantly enhancing
Outstanding Resource Management the Corp’s lead in the assimilation of the principles of Activity Based
Team Award Costing (ABC).
(Above MACOM) US Army Congressional Budget Liaison
Office (SAFM-BUL), HQDA—SAFM-BUL has contributed to Analysis and Evaluation
the advancement of the U.S. Army’s Transformation, Readiness, (Above MACOM) Ms. Mary D. Villiva, IMA—Ms. Villiva was a
People, Military Construction Programs and the immediate funding key leader in the first year of the Installation Management Agency
requirements of the Army for Operations Enduring Freedom, Noble (IMA) Europe Region. Her knowledge and natural leadership skills
Eagle, and Iraqi Freedom in its function as a liaison with Congress. enabled a successful transition to the new IMA-E in FY03. During

4 Resource Management / 2nd Quarter 2004


the transition, Ms. Villiva expertly provided civilian and military on Terrorism (GWOT) funding issues developing timely and often
manpower guidance and analysis at both the Area Support Group ingenious solutions. Mr. Littlefield was also recognized as this year’s
and Region level. ASA(FM&C) Civilian Award recipient.
(Below MACOM) Mr. David Green, AMC—Mr. Green, through (Below MACOM) Ms. Linda N. Trenck, FORSCOM—Ms. Trenck
diligence and a thorough analysis of available information, will performed superbly as Team Leader, Budget Execution and Analysis
enable CECOM to avoid approximately $12M in costs during FY04 Team, Budget Division, Office of the Deputy Chief of Staff, G-8,
as a result of having developed a more realistic method for allocating US Army Reserve Command. She was responsible for planning,
the Defense Reutilization and Marketing Services. directing, and facilitating the work of an assigned team of seven
military and civilian personnel responsible for providing budgetary
Auditing guidance, advise and assistance to eleven Regional readiness
Commands (RRC) and 33 Direct Reporting Commands (DRC) on
(Above MACOM) Ms. Faye Ritter, AAA—Ms. Ritter led her staff to
the $1.7B OMAR, $934M RPA, and $8.3M OMA appropriations.
the successful completion of three complex and significant audits.
In doing so, she personally trained and managed an audit staff with
limited experience in funds management and control to become Comptroller/Deputy Comptroller
knowledgeable in contract administration and fund issues related to (Above MACOM) Mr. Steven Pratt, IMA—Mr. Pratt was the
the area they were addressing. She guided and supported her teams resource lynch pin for the Installation Management Agency, Europe
through the complexities involved. Ms. Ritter also kept her costumers Region (IMA-E) during the inaugural year of operations. His well-
informed throughout the audits, clearly and concisely explaining the rounded knowledge and application of the interrelationships of all
intricacies of the findings. Resource Management systems and functions within the supportive
Installation and broad Senior Mission Commander (SMC) missions
(Below MACOM) Ms. Janet Stallings, AAA—Ms. Stallings was
enabled IMA-E to successfully stand-up and strategically plan its
a Lead Auditor on one audit and Auditor-in-Charge on two
future ventures.
additional audits. In each, she performed exceptionally establishing
excellent relations with Command personnel, quickly gathering (Below MACOM) Mr. Gordon Hurd, IMA—Mr. Hurd oversaw
and analyzing significant quantities of complex data, and effectively major changes in fund allocation procedures with the development of
communicating her findings and recommendations. IMA-E while working closely with USAREUR G-8 Staff. He provided
key leadership in transforming the DRM organization to work
Budgeting effectively with two related but independent resource activities. He
coordinated development of Force Protection requirements and cash
(Above MACOM) Mr. Gregory Goehring, HQDA—Mr. Goehring,
flow until GWOT funding was provided; developed and managed
acting on his own initiative, formulated a vision and then executed
changes in procedures for governing use of IMPAC card; prepared the
a plan to bring monthly execution data into the HQDA Resource
FY03 guidance for ASG; and coordinated year-end close procedures.
Management database family. This initiative involved multiple
actions and had several intended outcomes to
benefit the HQDA Army Staff including the Education, Training, and Career
ability to obtain data more quickly, improved Development
access, improved data presentation in For those who don’t know, (Above MACOM) Mr. Arland Luster,
understandable data structures, and provided the RM Annual Awards USACE—Mr. Luster distinguished himself in
an aid to the Army’s leadership in bringing Program is sponsored by the the performance of collateral duties critical to
the metric of measuring how it consumes its ASA (FM&C) and is designed the professional skills, training and development
resources to the forefront. This enabled the to recognize and encourage of financial management careerists while at the
staff to complete the feedback mechanism same time providing grass roots understanding
between Requirements, Program/Budget, and
outstanding performance
of financial management for non-financial
now Execution putting more emphasis on of individuals, teams, and management professionals. He developed and
the ‘E’ of PPBE. organizations throughout administered budget training through the
(Above MACOM) Mr. Kenneth Littlefield,
the Army. Open to both employment of personal lecturing, facilitating
USACE—Mr. Littlefield’s efforts have been military soldiers and civilian group discussion, and role-playing exercises. He
instrumental in the successful management employees, the RM awards further trained ten other instructors in course
of financial issues and funding of the critical are an excellent opportunity materials and motivated them and students alike
making budget training informative, educational
Restore Iraqi Oil (RIO) and Restore Iraqi for the Assistant Secretary and enjoyable. Mr. Luster is also the recipient of
Electricity (RIE) missions. In addition, he to recognize the “best of the
has worked a number of complex Global War the FCR special award.
best” in the Army’s resource
management community.

Resource Management / 2nd Quarter 2004 5


(Below MACOM) Ms. Annemarie Terhorst, IMA—Ms. Terhorst (Below MACOM) CPT Darriel Burleson, TRADOC—CPT
is the educator, trainer, supporter and single-handed coordinator Burleson directs the Finance Captains Career Course for the Finance
extraordinaire for the Management Control Program and the Army Branch and is responsible for the development and instruction of
Suggestion Program for the 98th Area Support Group serving 40,000 the Disbursing Operations Course which is the basis of all Army
soldiers, civilian and family members in lower Bavaria. disbursing training across the world. His tireless efforts have made
significant impacts in developing careers for junior finance officers
who performed admirably in OEF and OIF during FY03.
Resource Management
(Above MACOM) Mr. Paul Richard, HQDA—Mr. Richard led
ASAALT efforts to fund over 100 Army Strategic Planning Board Analysis and Evaluation
requirements supporting OEF and OIF, coordinated preparation of (Above MACOM) LTC Michael Boller, HQDA—LTC Boller
25 Congressional Appeals, 21 technical fixes, and 14 responses to developed and mapped the Resource Framework, an automated
Congressional inquiries, and worked jointly with G8, G3, and Army means of depicting Army resources by key functional areas within
Budget Office to validate and prioritize 82 RDS requirements totaling the context of the CSA Transformation agenda. The outcome of
$2.9B for the FY03 Supplemental. this effort is a tool that represents a unified Army articulation of
resources which is used across the HQDA staff as our ‘one voice’
(Below MACOM) Ms. Cassandra Cooper, MEDCOM—Ms. Cooper,
expression of resource posture.
working with an almost entirely new staff at Fox Army Health Center,
overcame a beginning deficit of nearly $1M, entirely restructured (Above MACOM) LTC Crispin Monge, HQDA—LTC Monge
a Master APC file, reorganized office positions, and rebuilt a developed the concept of a single automation tool (the Manday
relationship with MEDCOM. She has built her RM division into Utility) that would accurately and consistently calculate and
a more productive and reliable organization, which improves the program both statutory and non-statutory reserve component
overall productivity of the Health Center. mandays required for schools and special training across all PEGs.

Cost Analysis Budgeting


(Below MACOM) Ms. Colleen Moore, AMC—Ms. Moore provided (Above MACOM) MAJ Curtis Charleston, USASOC—MAJ
matrix support to the office of the Project Manager, Warfighter Charleston spearheaded the effort to replace the antiquated budget
Information Network-Tactical (WIN-T). She performed a multitude system as the action officer for the Implementation phase of RM-
of complex tasks with acumen and unsurpassed skill in order to Online. MAJ Charleston also formulated the specific customization
ensure that all the cost estimating inchstones were accomplished in of RM-Online to meet USASOC’s unconventional requirements.
preparation for the Defense Acquisition Board (DAB) Milestone.
She met crucial deadlines under extreme conditions and was Comptroller/Deputy Comptroller
instrumental in moving one of the Army’s cornerstone programs into
(Below MACOM) LTC David Coburn, USAREUR—LTC Coburn,
the Systems Development and Demonstration phase.
as the Comptroller USASETAF, provided support to Operation
Iraqi Freedom, Operation Enduring Freedom, and multinational
Resource Management in an Acquisition Environment peacekeeping operations in Liberia, Africa. As a direct result of his
(Below MACOM) Mr. Howard Fine, AMC—Mr. Fine developed ability to conduct financial management operations in an austere
an EXEL work file that cross-walked the contractor’s proposed environment, the 173rd Infantry Brigade (Airborne) enjoyed
Contract Line Items to the spreadsheet. The spreadsheet included unparalleled resource management and contracting support.
mathematical formulas that corresponded to the evaluation criteria Through his tireless efforts and ingenuity, LTC Coburn was able to
specified in the Source Selection Evaluation Board. Mr. Fine ensured, conduct split-based operations and simultaneously provide resource
based on SSEP criteria, that the dollar value of the Low Rate Initial management support to both the 173rd and USASETAF.
Production proposals met the Cost as an Independent Variable
threshold set by budget availability. Education, Training, and Career Development
(Below MACOM) MSG Donald Smith, 336 FINCOM—MSG
Military Individual Awards Smith developed a database SOP to provide Reserve Pay sections a
means to track and pay Hardship Duty Pay Location each month
Accounting and Finance and a source of research information needed as part of the soldier
(Above MACOM) SFC Mark Hess, USASOC—SFC Hess traveled verification and customer service process. MSG Smith is also the
to Afghanistan, Iraq, and the Horn of Africa to issue, close or audit recipient of the ASA(FM&C) Military Award.
accounts for Confidential Military Purpose Funding (CMPF). Total
responsibility of accountable funds exceeds $1M.

6 Resource Management / 2nd Quarter 2004


Resource Management Resource Management Author of the
(Above MACOM) MAJ Lance Christen, HQDA—MAJ Christen Year Award
orchestrated the FY03 OMA mid-year review for all of the Army’s
27 MACOMS. His outstanding level of coordination and first class (Civilian) Mr. John DiGenio, EUSA/USFK—Mr. DiGenio is one
MACOM support were invaluable in sustaining Army Resource of the most prolific and provocative writers in the Army today. He
Management success during a crucial time of war. He was also the has contributed articles to Resource Management, Armed Forces
driving force behind a successful year-end closeout and the initial Comptroller, Army Logistician, Army Communicator, Signal,
stages of the FY04 OMA Funding Letter building process. Phalanx, and Army AL&T. Mr. DiGenio’s published professional
papers have been well written in an easily comprehensible format.
(Above MACOM) SGT Jesse Smith, INSCOM—SGT Smith served His articles address diverse topics such as the need to develop
as the Comptroller NCOIC of the Office of Military Cooperation- leaders to guide the Department of Defense in the new millennium
Afghanistan (OMC-A) responsible for monitoring, reconciling, and the challenges facing U.S. personnel in the Korean theater. Mr.
and validating expenditures for an annual budget of $450 million. DiGenio’s endeavors to produce solid and professionally written
He validated the propriety of purchase, contracts and disbursing articles for publication have earned him the respect and admiration
documents. He also assisted in preparing requests for temporary of his colleagues and supervisors.
duty and updated financial systems and document registers.
(Military) MAJ Geoffrey Ballou, FORSCOM—MAJ Ballou, while
(Below MACOM) SSG Alysha Hopkins, INSCOM—SSG Hopkins serving as the budget officer in Bagram, Afghanistan in the Spring
served as the NCOIC of the Combined Joint Task Force 180 of 2002, authored an article that tells the stories of the heroes of
Kandahar Airfield Forward Comptroller Office from 5 Jan 03 to 9 Jul the Third US Army Resource Management office in their support
03 and NCOIC of the 116th MI Group Resource Management Office of Operation Enduring Freedom. His efforts documented the
at Fort Gordon during the remainder of the year. She helped manage extraordinary efforts and the successes of the soldiers and civilians
over $400,000 in reimbursable MIPRs, execute $133M in support of assigned and attached to Third Army during the first phase of
Coalition, US Military Forces, and civilian personnel, and execute the the Global War on Terror. Beyond providing information and
duties of the actual OIC for a period of one month. SSG Hopkins is a entertainment, the article has also been extremely valuable in
consummate professional who displays a “can do” attitude and serves capturing lessons learned that can be applied to future Resource
as an excellent role model for junior soldiers. Management deployments.
This year’s awards will be presented at “Army Day” as part of
Outstanding Intern Award the American Society of Military Comptrollers’ Professional
Development Institute in Cleveland, Ohio on June 1-4, 2004.
(Above MACOM) Ms. Connie McAuliffe, AAA—Ms. McAuliffe
demonstrated superior leadership ability and initiative by stepping The FY 2004 award program will be formally announced in July
in to run an entrance conference on her very first audit assignment, 2004 with nominations due to the Comptroller Proponency Office
when the team leader was unable to attend at the last minute. She in late October 2004. We look forward to many more nominations.
performed critical analysis at six sites and drafted site reports— Although there were several this year, not all award categories had
normally a team leader’s job rather than the trainee’s. In addition nominations.
to her assigned area, Ms. McAuliffe stepped in to assist other team
Again congratulations to this year’s winners and congratulations
members complete their reviews. Ms. McAuliffe’s suggested actions
to all who were nominated, a significant accomplishment in itself.
to the Army will make significant improvements in management
You have all demonstrated superior aptitude and outstanding
controls and strengthen the Army’s process to ensure resources are
performance. Great job!!!
safeguarded and used effectively and efficiently.
(Below MACOM) Mr. Martin Roggio, AMC—Mr. Roggio was
a key member of the first group of AMC Fellows, a workforce About the Author:
revitalization effort developed by AMC Headquarters. He also Major Andrew J. Hyatt is a Program/Budget Officer in the Comptroller
participated as a key team member in developing the AMCOM Proponency Office, Office of the Assistant Secretary of the Army
portion of the Concept Plan for Fleet Management Transfer from (Financial Management and Comptroller).
TRADOC to AMC and support the adoption of the Strategic
Readiness System/Balanced Score Card for the directorate. In
every assignment, Mr. Roggio performed at a level far beyond
that expected of an intern and has been a valued member of the
Resource Management Directorate at AMC.

Resource Management / 2nd Quarter 2004 7


The Army at War—Leveraging our They can continually measure their
organization’s return on investment based

Resources for Soldiers


on the resources consumed by the activities
that lead to the products and services for
that portion of the organization, and to
Robert W. Young measure the performance of these activities.
The Diagram below that the Consortium of
Advanced Manufacturing – International
(CAM-I) developed provides a depiction of
the cost view (ABC) and the process view
(ABM) that is an integral part of CM/ABC.
Figure 1 illustrates two views for a CM/
ABC Program. As mentioned previously,
ABC represents the consumption of resources
by activities that lead to the products and
services produced by an organization. The
Activity Based Management (ABM) view
illustrates the process leading to improved
performance from using fewer resources,
producing in less time, and/or improving the
quality of products and services.
How can one determine whether
or not their CM/ABC Program is fully
operational? A CM/ABC Program becomes
fully operational when all levels of the
organization’s managers are receiving and
reviewing cost initiatives from nearly every
individual and organizational unit within
the organization on a continuing basis. Army
Resource management can quickly become very challenging installations with an operational CM/ABC
when OPTEMPO increases dramatically or major changes Program conduct quarterly productivity
reviews in which cost initiatives from all
occur in organizational activities. There are numerous meth- organizational units are presented and
ods and tools available to assist Resource Managers (RMs) reviewed for viability. These cost initiatives
during this time, as well as during normal operations. One typically originate from workers who provide
recommendations for cost savings, increasing
valuable method available for Army RMs is Cost Management work related efficiency, and improved
and Activity Based Costing (CM/ABC). productivity. There are numerous methods
for identifying how to improve the way

C
work is accomplished. The advantage offered
M/ABC is a managerial costing 11 Business Areas, which are – Acquisition,
by ABC is that when cost savings, work
approach to measure the historical Base Operations Support, Civilian Human
efficiencies or performance improvements
cost of resources consumed by Resources, Contracting, Depots, Information
are realized, quantitative documentation of
activities that produce products Support, Institutional Training, Ordnance,
the improvements is available from the ABC
and services delivered by an organization. Research &Development Laboratories,
model. This provides a quantitative measure
CM/ABC provides costing information Supply Management, and Test & Evaluation.
of the magnitude of the cost initiative or
that allows managers at all levels of an The Army’s CM/ABC Program allows
process change in dollars.
organization to know what resources are local managers to build their own models
Historically, some improvements in one
being consumed by activities, and how that describe their organization’s operations.
organizational unit have resulted in the
much these activities are contributing to All levels of managers receive information
reduction of resources in another. Other
the delivery of the organization’s products from their model about the contribution
unit cost savings only resulted in the cost
and services. The Army’s CM/ABC of their activities that lead to products and
being transferred to the overhead for the
Program is managed through the Army’s services being delivered to their customers.

8 Resource Management / 2nd Quarter 2004


Figure 1: Expanded ABC Model accredited by the college administration.
This was accomplished and lead to cost
savings in the millions of dollars for the
Army’s GI bill by reducing college credit
Cost View (ABC) requirements for Army personnel.
c. Community services provided to our
soldiers and their families have been
Activities are the focal improved substantially when the
point of both views Resources
culture of CM/ABC lead to increased
involvement with the local community.
Process View (ABM)

People from the local town were invited


by the Army to participate as volunteers
to support the base community service
Cost Performance
Activities activities at the Army installation,
Drivers Measures i.e. caring for horses, working at golf
tournaments, and assisting with after
school programs. The community
services were significantly improved
Cost Cost Assignment without additional costs while the
Objects volunteers received satisfaction by
donating their time to support Army
families.
Are cost savings that result from Army
CM/ABC cost initiatives taken away from the
organization? The answer is definitely, no.
entire organization. The CM/ABC Models Army leadership has clearly stated in policy
How do cost initiatives relate to our
for an organization provide cost and activity documents that the money saved using CM/
soldiers at war? The following are examples
information for the entire organization as ABC will be kept within the organization
of successful cost initiatives at Army
well as the major units of the organization. that realizes the savings for use by that
installations that substantially benefited our
By reviewing the organization’s model, effects organization.
soldiers.
that unit improvements have on the entire The Army’s CM/ABC website at
a. One Army installation where the CM/ http://www.asafm.army.mil/ceac/cm-
organization can be reviewed, and potential
ABC culture has been sustained for a abc/cm-abc.asp provides announcements
sub-optimization improvements can be
number of years noticed that phone and information relating to CM/ABC that
identified and evaluated as to their overall
calls from our soldiers overseas to home include policy memos, an ABC tutorial,
impact on the entire organization as well as
were operator assisted calls resulting in CM/ABC class briefings, and articles
on the specific unit.
expensive phone bills for our soldiers. pertaining to business improvements and
The ABC models are valuable tools for
By routing these long distance calls cost management. Starting in FY04 there are
Army installations to use for processing
directly and eliminating the need for monetary awards for the best cost initiatives
cost data in conjunction with operational
operator assistance, our soldiers were enacted by Army installations. This awards
activities. However, their value is not
able to make long distance calls at a program is described at this website along
realized until the organization from top
significantly reduced rate. These savings with directions for applying for these cash
to bottom nurtures a culture where nearly
allowed soldiers to save money and/or awards.
every member of the organization is
to talk with family longer (quality of life
actively involved in how to do their work
improvement).
faster, better, cheaper and easier. Where
b. Another cost savings initiative occurred About the Author:
this cost management culture exists, the
organizational cost initiatives are generated when Army personnel successfully Mr. Robert W. Young the Deputy Assistant
in large numbers as individuals throughout completing Army courses were Secretary of the Army for Cost and Economics,
the organization continually think about simultaneously awarded college credits. a frequent contributor to Resource
This required extensive coordination Management retired on April 1, 2004 after
business improvement and act to make these
between the college and Army school serving the Army for 34 years.
improvements happen.
personnel to have many Army courses

Resource Management / 2nd Quarter 2004 9


e
The “E” in PPBE stands for Execution Budg eting • Exec ution
Exec ution • Plan ning • Prog ramm ing •
Plan ning • Prog ramm ing • Budg eting •
dg eti ng • Ex ecu tio n
tio n • Pl an ni ng • Pr og ra mm in g • Bu
ecu
in g • Bu dg eti ng • Ex E xe cu ti on
Pl an ni ng • Pr og ra mm am m in g • B u dg et in g •
P ro gr
• P la nn in g • • E x e cu ti o
n
• B u dg et in g • E xe cu ti on u d g e ti n g
ro gr am m in g m in g • B
P la nn in g • P m
g • P ro g ra
cu ti o n • P la n n in c u ti o n
• B u d g e ti n g • E x e
B u d g e ti ng • Exe
m in g •
• P ro g ra m a m m in g
P la n n in g P la n n in g • Prog r

x e c u ti o n
• B u d g e ti n g • E
m m in g
• Pro g ra
P la n n in g

Gregory L. Goehring and Lieutenant Colonel Mike Boller

responsibility to review these submissions.


Ask how the Planning, Programming, Budgeting, and Normally, the PEGs may only “disapprove”
Execution process (PPBE) is interconnected and you can submissions if it breaks a rule:
get a fairly consistent explanation of how planning is linked • Reverses an OSD or Army Senior
to programming, the program is linked to the budget, and Leadership decision

budgeting links to execution. The really interesting ques- • Migrates OPTEMPO to/from a non-
OPTEMPO program
tion would be “what feedback does execution provide to • Adjusts OSD & Joint oversight programs
the PPBE process?” In the past, the answer to this question • Creates civilian un-affordability issue
would be “minimal, if any.” • Adjusts a centrally-managed program
• Other violations, such as creating “must
The purpose of this article is to enlighten their POM build, each MACOM is allowed fund” bill (e.g. moving money out of
you as to “how” execution can be used in the to take any future year’s funding and move it leases, without terminating the lease)
PPBE process. Not just as a budgeting tool, from one existing program to another. There After these MACOM POM submissions
but to help shape the plan and the program. are some limitations on the movements, but are completed, everything goes through the
the intent is to have the MACOMs align their HQDA and Department of Defense (DoD)
dollars and manpower to represent what Program and Budget process. The effects
Past Experience Using is actually occurring “on the ground.” This of this process could (and did) effectively
“Execution” Data In The realignment took place at the beginning of reverse the original MACOM submission.
Program/Budget the POM (i.e. the programming) process and This was often done without knowledge of
represents the MACOM Commander’s desires. the impacts on the people who execute
Prior to three years ago for Program During the POM, the Program Evaluation the budget.
Objective Memoranda (POM) 03-07, feedback Groups (PEGs), which represent the Army POM 03-07 was a tumultuous time for
from execution was limited to the Major Staff and Secretariat, are charged with the PPBE. A new administration was in place
Commands (MACOM) POM builds. During

10 Resource Management / 2nd Quarter 2004


and the rules we had known for over 3 meticulously put in all of the items that we being available during the programming
decades had changed. The POM started at knew we needed to have to make it successful. phase. What this does, is at a macro level,
its normal time, with the MACOM POM Transformation of Installation Management provide programmers with the execution
and the PEG POM completed. But fiscal and and Realigning the HQDA staff did make this data, allowing them to make wiser
defense guidance from OSD did not arrive cycle interesting, which included moving over recommendations.
at its normal time. And, before we received 48,000 civilian spaces and Billions of dollars in Once planning guidance is available, the
this crucial guidance, we received the first of funding. But, the most significant (unknown) Program Evaluation Groups (PEG) begin
many changes to the PPBE process. problems we encountered were all generated work on building a balanced and affordable
The first change we received was that by – you guessed it – execution (specifically, POM. In order to articulate Program needs,
DoD decided to have a combined POM the Army Working Capital Fund, OPTEMPO, the Director, Program Analysis and Evaluation
and BES (Budget Estimate Submission) and Depot Maintenance.) (DPAE) considers the program requirements.
submission. Specific guidance on the “how” We took our lessons learned from 04- Up until POM 02-07, requirements were
to accomplish this had to be developed, and 09 and incorporated them into POM/BES managed on charts, not stored electronically.
implemented, while we were in the middle of 05-09. The major change we incorporated The DPAE initiated action to capture and
the POM/BES cycle. Our going in position into this POM/BES build was the inclusion store requirements in data format, similar
was: POM = BES. of the MACOMs in the Civilian Manpower to the financial community’s PROBE
The Army introduced the Resource Working Group (CIMWOG). We did this snapshots, which record, in database form, the
Framework for POM/BES 03-07. Based on to spend more effort during the MACOM Army’s resource decisions. The recording of
the Army Vision, the Resource Framework POM build ensuring that HQDA understood requirements in data format ushered in major
standardized the reporting requirements what the MACOMs were trying to execute. changes to tools available to create a balanced
between the program and budget (i.e. After the HQDA review of the MACOM and affordable POM and Budget.
everyone started using the same definitions.) submissions, the CIMWOG met with each The availability of requirements data
The intent was to tie all elements of PPBE of the MACOMs, the PEGs, Appropriation allowed analysts to measure how much
together using the Resource Framework, to Sponsors, and the civilian manpower of a program was funded, in terms of
allow us to trace a change in the strategy experts in an attempt to resolve all pending percentage funding. By having open access
through to execution and to allow the disapproved transfers. The results speak for to requirements data, analysts throughout
execution to inform the program and budget. themselves: from a 10% disapproval rate (in the HQDA Staff could arrive at the same
Another major change the Army made previous years) to less than 1%. reference point (funding vs requirement) to
was the introduction into programming for And then 15 Management Initiative begin their analysis and resource discussions.
“Year-of-Execution bills”. “Year-of-Execution Decisions (MIDs) came out of OSD. Three At this point in time, the HQDA had
bills” are bills that, for one reason or another, of the MIDs have a direct impact on the available to its decision process a recorded
consistently exceed the program/budget PPBE process: statement of program requirement, historical
amounts (e.g. Military Training Specific • MID 901 (Establishing Performance and current funding profiles, and a gross
Allotment [MTSA] has been a year-of- Outcomes and Tracking Performance view of prior year’s execution data. The latter
execution bill for several years.) Prior years’ Results for the Department of Defense); was stored primarily as adjustments to prior
execution and the MACOM mid-year reviews
helped the Army Budget Office develop
• MID 910 (Budget and Performance year Budget data.
The missing link in the analyst’s toolkit
Integration initiative);
estimates on what would actually have to be was reliable, detailed execution data. While
paid in the (future) year-of-execution. The • and MID 913 (Implementation of a 2-Yr
there was limited access and paper report
PPBE Process).
thought here was: If we know it is going to access to macro level execution data, in the
be a year-of-execution bill, let’s reduce the Although this is not a discussion about summer of 2000, Army DFAS execution
budget turbulence by planning for it. the MIDs, they all have major implications data was moved into our DAQS SQL Server
We finished POM/BES 03-07 on 10 too…using execution as part of the program database family. This meant that HQDA
September 2001. The next day, the plane and budget submissions. analysts could now access execution data
hit the building. On 13 September, based using the same tools being employed
on additional top line and brand new set of Using Execution Data For to access requirements and funding
priorities, we re-built POM/BES 03-07 in information. Execution data provides the
a little over 2 weeks. Who said that PPBE POM/BES 06-11 perspective of “how” commanders spend
wasn’t flexible? The Army has been working the inclusion their dollars. Or, better stated, Execution data
POM/BES 04-09 was our first planned of execution data in the Army Resource shows the commander’s resource priorities
attempt to make POM = BES. Armed Database for a couple of years. POM/BES and how they want to execute their resources
with the previous year’s experience, we 05-09 was the first instance of this data in the future.

Resource Management / 2nd Quarter 2004 11


Having the ‘triad’ (requirements, funding, Execution In The Future used to determine if resources were allocated
execution) of data stored together in similar appropriately in the budget. The Goal: Help
fashion supports the following approach to The Management Initiative Decisions DoD shift from an “input-based” focus to
building the Army’s POM and Budget: (MIDs) were briefly mentioned earlier, but one that is focused on achieving “outcomes”.
1. Requirements are captured at three we anticipate they will have a significant
impact on the program and budget in the
levels: requested, validated, and critical.
years to come. These MIDs all have several Summary
These begin the process of defining
what is needed to maintain a viable common threads. The first is the use of The end state is yet to be defined. It is
program. the Risk Management Framework as the likely that the Army will require a periodic
2. Funding is then applied against reporting medium. The second is the use of snapshot from which to perform consistent
requirements to achieve leadership execution data for the management of DoD. analysis. The demand for quickly accessible
guidance and to express a ‘level’ of The following paragraphs give an indication data is growing. The ideal system would be
support that is expressed as a real of where OSD is heading with the MIDs. a near real time transaction system where
metric…. “percentage of ”. This can, MID 901 (Establishing Performance detail could be obtained with periodic
in turn, be expressed subjectively Outcomes and Tracking Performance snapshots at sufficient granularity, but
as green, amber, red or any other Results for the Department of Defense) some aggregation, to support necessary
descriptive measure. intends to measure defense outputs versus staff analysis and to satisfy information
3. Execution data becomes the true its strategic goals. The Secretary of Defense requirements of OSD and Congress.
‘validator’ of the requirement, given will use execution metrics to monitor It is interesting that we are in the infancy of
funding constraints, and depicts a these performance results. The Army will changing how we do business, but importantly
level of ‘priority’ as leaders confront be responsible for cascading and refining progressing towards methods that will support
the reality of day-to-day fund metrics with the available execution data. better Programming and Budgeting and
requirements. These metrics are still under development at attain accountability. In theory this will better
These three resource components then this time, but may have a significant impact optimize how constrained Army resources are
form a spiral process that continues from on how we capture and use execution data. postured against competing demands.
cycle-to-cycle. The future of ‘execution’ data MID 910 (Budget and Performance
is promising, but there will be significant Integration initiative) directs DoD
to improve budget and performance About the Authors:
work to be undertaken. Recent emphasis
by Government leadership for performance integration. As part of this directive, the Mr. Gregory L. Goehring is the Information
metrics exponentially increases the need for Army is responsible for associating execution Management Officer for the Assistant
access to execution data. metrics with any resources requested in the Secretary of the Army, Financial Management
program/budget. The following goals have and Comptroller.
Today, the HQDA Staff has access to a
single, macro level file that incorporates feeds been set: Lieutenant Colonel Mike Boller is the
Executive Officer and Process Action Team
through DFAS from all of the legacy systems
(STANFINS, SOMARDS, etc.) This data is
• 60% of programmed dollars in FY05
Chief for the Program Development Division
Budget
of the Program Analysis and Evaluation
cleansed each month at DFAS with MACOM
participation. As a result, the data is 2-4 • 80% of programmed dollars in FY06 Directorate, under the Deputy Chief of Staff,
Budget G-8. Lieutenant Colonel Boller is a frequent
weeks old before it is readily available, but it
has been cleansed. • 100% of programmed dollars in FY07 contributor to “Resource Management”.

Another effort by the ASA-FM and DFAS Budget


is the Operational Data Store (ODS), which The execution metrics should evaluate
provides access to individual transaction level if the performance achieves levels expected
execution data. The task of integrating the from resource expenditure. The Goal:
legacy systems remains to be completed…no Integrate cost and performance data into
small task. Additionally, the data repository program and budget decision-making
is huge, thus straining available processing MID 913 (Implementation of a 2-Yr
power by large volumes of potential users. PPBE Process) specifies a 2-year cycle, the
The single greatest benefit is access to near first year being a normal POM/BES and the
real time data or now data. second year being a review of performance
(read “execution”) data. These metrics will

12 Resource Management / 2nd Quarter 2004


Being Heard The individual bricks represent one piece of
that process. Where your hand lies may be
the piece of the process where you work.
The timing and contents of Now some people have bigger hands and
they touch a couple of bricks, that is, their
successful UFRs office directly coordinates with other offices.
What people typically understand is that part
Major Bob Unger of the wall that they touch. Therefore, they
understand only a couple pieces of the PPBE
process. Overall, most understand there are
four stages, it is a long process, it starts with
planning, and it seems to end with each of us
never getting everything we ask for or need.
The more bricks you are familiar with, the
more you know about the wall, and more
importantly, the more likely you are at having
your request heard and receiving the funding
you need.
As we get started, you must understand
one key element, this article is not going to
give you the location of a secretly buried
treasure chest. It is not going to give you the
gardening secrets to grow your own money
tree. It is not going to give you a password
so you can simply login and transfer funds
from “big” Army into your account. It
will explain when UFRs are expected at
Headquarters, Department of the Army
(HQDA). It will show the elements necessary
to be a successful UFR. It will briefly review
the PPBE process. It will give you the tools

Y
ou unexpectedly deployed an there a right time to make this request? Is necessary to be more successful.
armament maintenance team there a time on the calendar that makes
in support of Operation Iraqi you more successful than others of actually Recurring Calendar
Freedom. The procurement of receiving additional funds? Are there some
The recurring calendar is a chart for
white phosphorous grenades experienced a key components that make your unfinanced
you to pull out and refer to throughout the
cost overrun due to a production problem. requirement (UFR) stronger and more
resourcing cycle. It shows the major parts of
Track pads are being shipped to Iraq by competitive?
the PPBE process in a chronological order.
air rather than the budgeted method of If you ask people on the Army or a Major
The coordinating colors flow diagonally
sea due to high OPTEMPO. The gym Command (MACOM) staff if they have
over time to show how one product follows
roof isn’t going to last as long as planned heard of the PPBE process, most will raise
another during the four phases. These are the
and needs to be replaced now. New force their hand. If you ask these same people
major products or processes within PPBE. It
protection guidelines require the assignment how many understand the PPBE process in
shows the long lead-time between planning,
of permanent guards at all installation its entirety, many hands will go down. An
which starts in the third quarter of one year,
gates. These events were unplanned and understanding of the resourcing process can
and execution, which start in the 1st quarter
were therefore not a part of your base give you the best times to submit UFRs.
nearly three years later. More importantly, it
budget. Your first thought is that you need Think of a brick wall, not too high, not
shows that at any time, at least three of the
more money. You could reevaluate your too low. Now picture yourself placing an
four phases are being worked on. This is why
current execution to see if the ability to open hand on that brick wall. The wall
it is so important to say when the money is
absorb the costs exists. More likely than itself represents the Army’s resourcing
needed, not just that you have an unfinanced
not, your second thought is to ask higher system, called the Planning, Programming,
requirement. Refer to this calendar as you
headquarters for additional funds. But is Budgeting, and Execution (PPBE) process.
follow the Influence Areas. A more thorough

Resource Management / 2nd Quarter 2004 13


Recurring Calendar

1Q '03 2Q '03 3Q '03 4Q '03 1Q '04 2Q '04 3Q '04 4Q '04 1Q '05 2Q '05 3Q '05 4Q '05 1Q '03

SPG QDR
Planning

TAP 06-23 TAP 08-25


ASPG APPG APGM ASPG APPG APGM
TAA 06-11 TAA 08-13

POM 05-09 POM 06-11 Build POM -7-11 Build


Budgeting & Programming

MACOM PEG MACOM PEG IPLs MACOM PEG IPLs


POM POM 1 POM POM POM POM
2
05 BES 06 BES 07 BES
PCP/BCP POM/BES PCP/BCP
Build Build Build
To OSD To OSD To OSD

05-09 Prog/Bud 06-11 Prog/Bud


Review Review

04 PB 05 PB 06 PB
to Cong 04 Cong Review to Cong 05 Cong Review to Cong 06 Cong Review

04 Funding 05 Funding 06 Funding


Execution

Letter 3 Letter Letter

03 MYR 03 YE 04 MYR 04 YE 05 MYR 05 YE


4
Closing Closing Closing
5

review of this calendar, and the highlights of the MACOMs will still submit changes your UFRs, I call the Influence Areas. The
the entire process, is discussed in the PPBE and emerging requirements. The Program Influence Areas can be viewed as out or
Primer section. Evaluation Groups (PEGs) will still conduct current year areas. Failure to introduce
One caveat about the recurring calendar, Management Decision Package (MDEP) your UFR at one of the Influence Areas
Office of the Secretary of Defense (OSD) briefs and realign funds. Changes will be significantly reduces your chance of
has made significant changes to the PPBE forwarded and OSD will evaluate the Army’s obtaining additional funding.
process during the 05-09 build. As a result, budget. What these are called is immaterial. Influence Area #1. In the 2nd quarter of
no Program Objective Memorandum (POM) A more complete explanation is in the each year, the MACOMs build their POM.
or Budget Estimate Submission (BES) was PPBE Primer. The MACOM POM is one of the first steps
forwarded. Instead, the services submitted of the programming phase. It is where the
Program Change Proposals (PCPs) and
Influence Areas: MACOM informs the Army staff where they
Budget Change Proposals (BCPs). This is need money, primarily through realignment
intended to force the biennial intent of the To present unfinanced requirements
or new requirements. This is the best place to
PPBE process. In theory, this will result in no to the Army Staff, and have any hope of
introduce requirements, especially those that
POM or BES build in the odd years, making receiving funds, you must understand
are recurring. By introducing requirements
the recurring calendar outdated. In reality, the process. The best places to introduce
here, the UFR competes with the fewest other

14 Resource Management / 2nd Quarter 2004


UFRs and on more equitable ground within interest. An Influence Area #2 UFR may emergent requirements or a requirement
each MACOM. There is a review process then not be carried as a high MACOM that has significantly changed since its earlier
to determine which new requirements the priority, further reducing the chance of validation. Once the collection phase for
Army staff accepts. While this is really the receiving funds. These are the major steps for the UFRs and exemptions is complete, the
first opportunity for the MACOM to state submitting UFRs in the out years: database is forwarded to the Army G3 for
what they need in the future, it is truly not prioritization. The exemptions are reviewed
the focus of most MACOMs. MACOMs, • Identify MDEP/PEG (new MDEPs come
first. Since the programs in the OMA
especially their subordinates, are not staffed from PAED)
appropriation have been validated, it is more
for large-scale programming and focus • Prepare UFR (possibly Schedule 1 report) likely that a percentage of funding is taken
more on execution. Approved requirements
submitted to Influence Area #1 will not see
• Ensure MACOM understands the UFR from all programs in the form of a tax rather

funding for 20-24 months. • MACOM prioritizes and forwards to than the termination of one or two programs
to pay the adjustments or new UFRs. An
HQDA
Influence Area #2. This is the second out exemption then becomes just that, a program
year opportunity to present a UFR. In the • POC/sponsor briefs MDEP manages if
that is exempt from being reduced. The
3rd and 4th quarter of each year, MACOMs, necessary
basic criterion to become an exemption is
COCOMs (Combatant Commands), • MDEP manager briefs PEG (may require that the program cannot withstand a single
and staff functionals present limited or separate program validation) dollar cut without becoming completely
special requirements. There should be an
explanation why these requirements were
• PEG prioritizes all their MDEPs and ineffective or the risk of cutting an additional
distributes constrained funds dollar is unacceptable. The goal is
not presented in Influence Area #1. It may to have as few exemptions as
be due to inadequate or premature costing Influence Area #3.
possible, thereby reducing the
data. It may also be that the Army G3 has not This Influence Area is
percentage cut to the non-
the first of the current
yet validated the requirement. While some
year areas. Between
Failure to introduce your exempt programs.
requirements compete successfully over the Once the exemptions
summer, this is not the best time to present Influence Area #2 UFR at one of the Influence are determined, G3
unfinanced requirements. The playing field is and Influence Area
less equitable as the needs of each MACOM #3, there is about a Areas significantly reduces prioritizes all the UFRs.
These are typically
year where we are
are reviewed in support of their missions and
unable to present your chance of obtaining grouped into critical–
the required capabilities across the Army. must fund now, critical–
UFRs. In July and
The focus of the PEG POM is the validation
August, the MACOMs,
additional funding. can fund later, needs to
of funding for all their requirements and the be funded, and should be
distribution of resources across programs and to a lesser degree the
funded categories. Because truth
according to the risk categories in The Army PEGs and staff functionals,
changes over the course of the year, it
Plan (TAP) and the operational needs. once again have a chance to present
is often desirable to postpone as many UFRs
The introduction of new requirements will their Operations and Maintenance, Army
as possible till mid-year when an analysis on
compete in the PEGs prioritization and (OMA) unfinanced requirements as part of
the execution rates and program effectiveness
Army G3’s overall prioritization of all Army the OMA Funding Letter process. The OMA
can be completed. Similar to Influence Area
programs. Some people argue the concept appropriation has the most flexibility of
#2, UFRs presented in this area compete
of last in is first out, meaning the special all appropriations; this may be largely due
with a greater number other UFRs on a
requirements introduced into this phase to the fact that this appropriation contains
less equitable playing field since funding
carry a higher probability of being used the majority of the service’s discretionary
guidance will likely apply to a limited
as a bill-payer during the program budget spending. As such, the Funding Letter serves
amount of UFRs.
review. In truth, if funding was diverted to as an operations order or list of instructions,
These are the major steps in for Influence
this new “higher” requirement; it is not likely for the subordinate commands to follow
Area #3. The steps are similar for the other
to become a bill-payer later. Funding for concerning their allocations.
current year Influence Areas, but are based
requirements presented at Influence Area #2 The first step of the Funding Letter
more on actual execution.
should not be expected for 14-20 months. process is to analyze where Congress actually
One major difference between Influence gave us money. The “where” is arguably • Prepare UFR (OMA only)
Areas #1 and #2 is that in Area #2, the UFR more important than the amount. The Army
Budget Office (ABO) reviews Congressional
• Ensure MACOM understands the UFR
initially competes at the PEG level. At the
PEG level, the UFR competes directly with adjustments. They also collect a list of • MACOM prioritizes and forwards to
ABO
other command UFRs or UFRs of PEG requested UFRs and exemptions for the
OMA appropriation. The UFRs should be

Resource Management / 2nd Quarter 2004 15


data so the UFR can be easily categorized lets the higher headquarters know if this is a
• ABO submits UFRs (and exemptions) to
and grouped in the database. The basic UFR that should be programmed. If the UFR
Army G3
elements of the UFR are the activity, MDEP, is funded once, is an obligation or precedence
• Army G3 recommends exemptions and appropriation, title, the POC, and the made to pay this bill annually? Time phasing
prioritizes UFRs shortfall. The activity tells everyone where lets them know if the program requires all its
Influence Area #4. This is the mid-year the UFR came from. The MDEP tells what funding up front or can the program be paid
review. Like Influence Area #3, this Influence program the UFR supports. Depending on incrementally. Is there a cutoff date for the
Area is focused on the OMA appropriation the program and the headquarters receiving funding? If the funding is tied to a specific
and is another opportunity to submit the UFR, the Army Program Element (APE) event and the event has passed, there may
UFRs. The initial focus is on the MACOMs may also be needed. The appropriation tells no longer be a bona fide need. The type of
current execution and if they have any what types of funds are needed to support funding addresses the color of money, the
unexpected deviations in spending plans the UFR. In the out years, Influence Areas #1 appropriation, required for the UFR. Partial
due to unforeseen circumstances. Where and #2, the appropriation has less relevance funding acceptability considers if the UFR
most Influence Areas are not intended to since the database has not yet been submitted can accept less than 100%. Some projects,
be opportunities to reintroduce existing to the appropriation sponsors in ABO for the like construction, require full funding. It is
UFRs, the mid-year review is just that. The BES development. The current year influence not practical to build a house if your not
MACOM may submit new UFRs, as well as areas must have appropriation data. The going to pay for the roof. Inversely, if your
those it delayed in hopes of under-execution title is the name of the UFR. It should tell UFR requires $15M but there is only $12M
in other areas. While it is hopeful that each what is being purchased. The POC should be available, should your UFR be considered
MACOM would find slack in other areas of someone who can answer questions about or should the next item on the total UFR
their budget, it is likely that they will bring the UFR, not the person who typed the UFR list be addressed that costs $12M or less.
more UFRs to big Army. Once again, the or entered the information into the database. Manpower implications are often overlooked.
UFRs are collected by ABO, prioritized by Lastly, you must include the shortfall. This is For example, an activity requests $6M to
Army G3, and funded according to guidance the amount of funding your program needs. increase production but no thought is given
of Army Senior Leadership. It should also include the validated amount to workload. The activity receives the funding
Influence Area #5. This is the year-end and the current funding level. This gives a as requested. To use the additional funds,
closing. This influence area provides another better perspective on the necessity of the the existing personnel are put on overtime,
review of each unit’s execution. It is likely UFR. which creates a new UFR. One of the worst
that spending was not executed as planned. The second part of the UFR is the things you can do is receive funding for a
Therefore, some lower priority programs or narrative. This is the meat of the UFR. It UFR that generates another UFR. The last
high priority programs that were delayed should not be lengthy, but direct and to consideration looks at restrictions. Does the
may receive funding. While some MACOMs the point. Do not include bias or become program come with special considerations?
will not have high priority UFRs to spend emotional, just give the facts. If your Is the program part of a ceiling, a maximum
their money on, other MACOMs may have program is not common or well known, give that can be spent? Does the program have
several key UFRs. As such, funds can be the mission of your organization and how congressional interest? Is the program
redistributed as necessary. the funding of your UFR will enhance or fenced? Is the program part of a reimbursable
reinforce your mission. Then describe the program, which restricts the acceptance
major aspects of the UFR. Here are some of appropriated dollars? Is the program
UFR Components considerations for the narrative: part of a non-appropriated funds (NAF)
Every command varies in the format account? These are some of the common
and content of their UFRs, yet there are • One time or recurring
considerations when writing the narrative.
some common components. Some of • Time phasing The third element of the UFR is the
these components may seem obvious but • Cutoff date justification. This is the impact if the UFR
are sometimes overlooked or ignored.
Other parts are just memory joggers to be
• Type of funding is not funded. It should be presented in
a positive manner. It should relate to the
considered as the UFR narrative is developed. • Partial funding acceptability
audience. If the UFR can be related to success
Similar to the Influence Areas, the proper • Manpower implications of other activities or commands, there will
utilization of the key components can give
you greater chance of funding.
• Restrictions be more support for the UFR. Link the
impact to current guidance or directives.
Simply stating that you need additional
The UFR has three basics parts: the Use key words or phases from the guidance.
funding is not enough. Several considerations
heading, the narrative, and the justification. It shows you have read, and understand,
must be taken into account when
The heading contains that mandatory what is required of your activity. Some
determining the UFR. One time or recurring

16 Resource Management / 2nd Quarter 2004


unsuccessful UFRs have impacts that say, strategy. Section II assigns a risk category to POM. This is where the MACOMs inform
“Without funding, we can not execute this each capability. There is also a definition of HQDA of how they would like to realign
program” and “This program is supported by risk for the MACOMs and PEGs to refer to funds or manpower. The realignment is done
XXX.” These statements do not provide the as they begin to evaluate and prioritize their with Schedule 8 reports. It requests a transfer
details needed to make an informed decision. programs. due to a change in mission, requirements,
Remember, the impact is the key. If the only Section III of the TAP is the Army cost factors, or some other reason. It is a zero
part read is the funding shortfall and the Programming Guidance Memorandum or balance realignment of TOA. The MACOMs
impact, make it good. APGM. The APGM provides broad, general also introduce new requirements due to a
guidance for building the POM so that the change in mission or new guidance. This
PPBE Primer appropriate resources are programmed is done through Schedule 1 reports. These
to achieve the Army Vision and PEGs to are taken to the PEGs to compete in part
The PPBE primer explains the major effectively meet Army Senior Leader and two of the POM build, the PEG POM. The
elements of the PPBE process, those Combatant Commander priorities. The PEG POM is where the MDEPs are briefed,
highlighted on the Recurring Calendar. It is publication of the APGM signifies the end of validated, and funded to an acceptable level.
not intended to explain every aspect of PPBE the planning phase. This is based on the MACOM schedule 1
or the organizations involved in PPBE. A Another key product of the planning reports, planning guidance, PEG priorities,
more thorough review of the entire process phase is the publication of the Total Army and the amount of funds available. The
can be found in “How the Army Runs,” Analysis (TAA). The TAA looks at the actual process varies from PEG to PEG. The
specifically chapters 9 and 10 or AR 1-1. number of soldiers (combat, combat support, G3 validates the actual need for a program
and combat service support), government while the PEG validates the amount of
Planning civilians, and contractors needed to execute funding. Although the individual PEGs do
The planning process kicks off specified and implied missions. It is a much of the work, the Program Evaluation
the whole thing. At the Army nine-year planning horizon. It and Analysis Directorate (PAED) control this
level, it is the opportunity determines the required part of the process.
for leadership to Army force structure Once all the requirements are determined
provide a strategy, a The planning process through modeling and and funds are spread by the PEGs, the results
vision, and goals. simulation. The major are reviewed by PAED. PAED will take a
The plan is based kicks off the whole thing. steps are the operating historical look at each program’s funding
force inputs, the to ensure there are not large unjustified
on guidance from
the President
At the Army level, it is the generating force fluctuations. These fluctuations often become
inputs, and force areas where OSD or Office of Management
and the National opportunity for leadership feasibility review. and Budget (OMB) will adjust the Army’s
Security Advisor,
the Chairman of to provide a strategy, a Remember, this is still funding strategy. Once the Army Senior
the Joint Chiefs of the planning phase, Leadership approves the requirements,
Staff, the Secretary of vision, and goals. therefore this product is the POM is prepared and a consolidated
Defense, and others. The relatively unconstrained. list of all six PEGs is sent to the G3 for
guidance comes in many prioritization. This becomes the Army’s
formal and informal publications. Programming 1-n list and serves as a guideline to make
This guidance allows the Army to write adjustments as funding levels or guidance
The Integrated Priority Lists (IPLs) come changes. The POM is then sent to ABO.
the Army Strategic Planning Guidance, from the COCOMs. This is their one direct
section I of the TAP. The TAP is generally way to influence the resourcing process.
published every-other year in coordination Since the COCOMs are the ones who Budgeting
with a full six-year POM. Section I is the actually coordinate the maneuver of forces Once the programming phase was
generic direction for the Army. It does for operations, it is important to give them complete, the database moves from the
not address funding and is more of an a voice on what items they need. Although programmers in PAED to the appropriation
unconstrained path. the IPLs are another form of guidance, they sponsors in ABO. The ABO realigns the
Section II of the TAP is the Army follow the guidance from the planning phase, data from a perspective of MDEPs to
Planning Priorities Guidance. It lists the as applicable, and usually arrive during the appropriations. This is necessary because
two core competencies of the Army, six programming phase. Congress provides funding according to
strategic objectives, and the capabilities. A POM is roughly a list of programs an appropriations; it is how the Army receives
These capabilities are prioritized according organization wants funded. The POM build its funding. While PAED reviewed programs
to their relevance in the Army’s overall really has two parts. First is the MACOM based on historical inputs, the appropriation

Resource Management / 2nd Quarter 2004 17


sponsors in ABO take a historical review government for the next year. The President is not to introduce several new UFRs but
based more on execution and outputs. Their covers highlights of the PresBud in his to have enough generated slack in under-
data shows how and where the dollars were State of the Union address. The complete executed areas to cover the shortfalls in the
spent. The appropriation sponsors also PresBud, with all the budget justification over-executed areas.
have a more thorough understanding of material, is then due to Congress in the first The last part of the execution phase is
appropriation law and can determine what week of February. By 15 April, Congress the year-end close. Here each command
type of funds are needed for what programs. will make a counteroffer to the PresBud. and ABO ensures all dollars were spent
The final product of the budgeting phase is The rest of the Spring and Summer is spent judiciously. There may be an opportunity to
the BES. with the members of the Executive Branch address limited UFRs. These are usually high-
As the budgeting phase ends, the database justifying their budget to Congress. visibility items that are not time sensitive. As
is presented to both OSD and OMB. OSD An area that is new to the process the books are then closed, there is a review of
and OMB review our budget submission involves PCPs and BCPs. In the odd years, metrics to see if the allocated dollars actually
against Executive, DoD, Joint, and other or mini-POM years, OSD is no longer generated the desired outcome.
guidance. The database is also reviewed accepting a POM or BES. In a push to force
against the requests of the COCOMs. This is the services to develop biennial budgets,
Conclusion
one way OSD/OMB keep the services from OSD only accepts PCPs and BCPs in the
growing their requirements exponentially. odd years. These are minor changes to The PPBE process is very long and time
OSD/OMB will try to find efficiencies the existing budget so the services can consuming. It is designed to ensure that
and realign funds between the services focus more on measuring outcomes of the a strategy is developed and the resources
or separate defense agencies. The review budget, as directed by the Government are prudently allocated in support of that
conducted by OSD is called the Program Performance and Results Act and the strategy. Every organization and command
Budget Review (PBR). President’s Management Agenda, and less has ideas on how they can support the
The PBR is done through Program time on budget build. The PCPs are intended strategy and the resources they would need
Decision Memorandums (PDMs) and for items that affect the POM years, are to be more effective. Since resources are
Program Budget Decisions (PBDs). The OSD significant changes in scope or direction, limited, the Army must evaluate what is the
PAE office sends PDMs to change the Army’s and change more than $250M in the budget. minimum level of effectiveness acceptable
budget, primarily in the programming years. Conversely, BCPs focus on the budget year, by assigning levels of risk. As shortfalls or
The USD Comptroller office sends PBDs minor changes in scope or fact-of-life, and is emergent requirements are identified, the
to change the Army’s budget, primarily intended for changes less than $250M. successful person understands when to
in the budget years. The PBDs come first introduce the UFR and what components the
UFR must include. This is the key to being
in a coordinating version where the Army Execution heard.
is informed of the intention of OSD. The
Army has about three days to respond to The new fiscal year starts for the
each PBD. OSD then considers the Army’s government on 1 October. Congress
appropriates the money for the government About the Author:
response and sends a signed version. Then
signed version tells the Army how the budget around this time. Since it has been nearly Major Bob Unger is currently a Budget
has been changed. If the Army still disagrees, a year since the Army has seen this budget, Analyst for the Deputy Chief of Staff, G3 and
the Deputy Assistant Secretary of the Army many things have likely changed. First ABO the PPBC Executive for Planning.
for Budget or Army Senior Leadership can reviews all the appropriations. This is to see
negotiate a settlement directly with OSD. if the money we asked for is in the places we
The final chance to change a signed PBD asked for it. To receive additional funds in a
is a Major Budget Issue. This is where the low priority area, does not necessarily equate
Secretary of the Army (SA) and Chief of to a “good deal” to the Army. To address
Staff of the Army (CSA) discuss the situation the changes in the OMA appropriation, a
with the Deputy Secretary of Defense data call is requested by ABO. The intent
(DEPSECDEF). here is not to readdress previous decisions
Once the PBR is over, all the Services’ but submit truly emergent requirements.
budgets are compiled with the rest of Accepted UFRs during the funding letter
the government’s budgets to create the process means that other requirements must
President’s Budget or PresBud. The PresBud be decremented by an equal amount.
is the amount of money the President ABO monitors execution of funds for all
and OMB think it will take to run the commands. The mid-year review compares
spending plans to actual spending. The desire

18 Resource Management / 2nd Quarter 2004


Army 2004 PPBE Planning
the presentation by Lieutenant General
Phil Kennsinger, Commanding General,
United States Army Special Operations
Conference Command. General Kensinger described the
changes and new technologies provided in
Mr. Roy Capozzi the program and budget that continuously
improve the capabilities of special operations.
Accompanying General Kensinger was
Sergeant First Class Frank Antenori, who
recounted the Battle of Debka Pass in Iraq
where two “A Teams” with Kurdish militia,
outgunned and out manned, used high
technology and extraordinary courage to
defeat elements of an Iraqi task force that
included T-55 tanks, armored personnel
carriers, and motorized infantry.

Development of the FY 06-11


POM/BES
The conference evaluation questionnaire
showed that the conference was successful
in achieving one of the most important
conference objectives, supporting
development of the FY 06-11 POM/
BES. Responses to three questions were
particularly revealing:

C
Question % Responding
ontinuing the effort to integrate support an Army at war and its soldiers. But YES
all phases of PPBE, the Assistant at the same time, we must plan and resource
Secretary of the Army (Financial Was the conference information
Army transformation—building a future force
Management and Comptroller) relevant/needed? 91%
ready to meet a broad array of challenges.
and the G-8, PAED jointly sponsored the Building on the objectives of the Summer Do you feel more prepared for
latest edition of the annual event formerly 2003 Army Resource Managers’ Conference POM/BES development 87%
known as the POM/BES Offsite. The and the FY05-09 POM BES Offsite, the Was the information provided
conference took place 5-9 January 2004 specific conference objectives were: new news? 68%
at the Georgetown University Conference
Center. 325 Army planners, programmers,
• Maintain a focus on supporting the
warfighter. These responses confirm the value of
financial, and manpower managers
registered representing 25 major commands • Support development of the FY06-11 an annual PPBE Planning Conference as a
POM/BES. training event. The conference provides an
and operating agencies, 11 program
executive offices, 19 HQDA offices, and 3 • Provide MACOMs and other stakeholders essential training mechanism to overcome
turbulence from the significant personnel
military educational institutions. a forum for input into the resourcing
process. turnover in the PPBE community. The need
was particularly acute this year because of
Conference Theme and
• Identify program, budget, and execution
the significant changes occurring to the
issues.
PPBE process.
Objectives • Foster team building and information
exchange.
The overarching conference theme The Agenda
“Resourcing a Relevant and Ready Army”
The conference began with working
was taken from themes used by the Chief of Supporting the Warfighter level, breakout sessions on Monday. Major
Staff. “Resourcing a Relevant Army” served to
One of the conference highlights was command, operating agency, and PEO
remind the attendees that Army PPBE must

Resource Management / 2nd Quarter 2004 19


presentations provided a preview of the speakers to share unique and invaluable Comptroller from 1994 to 2001. The award
requirements that would be forwarded to the perspectives with the attendees. General recognizes individual contributions in
Headquarters later in January. The sharing of George W. Casey, Jr., the Vice Chief of support of military and civilian professional
issues produced lively discussions resulting Staff of the Army, provided the conference development and comptroller career
in a better understanding between field and keystone address. Reinforcing the conference management. Mr. Ginnetti’s wife and children
headquarters representatives. theme, General Casey reminded the attendees were in attendance for the presentation of the
The general session of the conference that we are a Nation at war facing difficult award.
began on Tuesday and continued through challenges and that we must adapt. Mr.
noon on Friday. LTC Mike Boller, the Kenneth Kreig; Director of Defense Program Looking to the Future
Executive for Programming to the Planning, Analysis and Evaluation; and Ms. Robin
Program, Budget Committee and a key Cleveland; Associate Director for National The collaborative efforts of
contributor to Army PPBE changes over Security, Office of Management and Budget; OASA(FM&C) and PAED in sponsoring
the last several years, shaped the conference provided insights into their respective the integrated 2004 PPBE Planning
agenda and presented several sessions. agency’s current issues and perspectives. The Conference resulted in an overwhelming
The conference presentations covered the Honorable Dr. Dov Zakheim; the Under success. OASA(FM&C) has decided to
spectrum of PPBE phases and included Secretary of Defense, Comptroller; provided continue the series of resource management
briefings on issues and process. Many general an update on the Defense Department’s conferences and will schedule two events
officers and senior civilian executives took current budget strategy and insights into the a year. One event will be Army day at the
advantage of the conference to personally timing of the FY 05 supplemental. American Society of Military Comptrollers
make presentations. The topics included: Professional Development Conference
following the Memorial Day weekend. The
Copies of each of the briefings are Presentation of the Neil other conference will be the integrated
available at the PAED website at http:
//www.paed.army.mil/PPBE_Offsite/2004_ Ginnetti Award 2005 PPBE Planning Conference currently
PPBE_Planning_Conference.htm. A PAED/ The first presentation of the Neil R. schedule for the week of 10 January 2005.
DAQS user ID and password are required Ginnetti award was made during the
for access. conference. The award was presented to
About the Author:
Ms. Terry Placek. It commemorates the
Mr. Roy Capozzi, a Program Manager and
Guest Speakers selfless service and enormous contributions
Research Fellow at Logistics Management
made by the late Mr. Ginnetti who was the
The conference was very fortunate in Principal Deputy Assistant Secretary of Institute in McLean, Virginia, assists
obtaining a number of distinguished guest OASA(FM&C) and ODCS, G-8, on a wide
the Army for Financial Management and
range of projects.

Overview of PPBE Budgeting


and General Issues Planning Programming Execution

PPBE changes G-3 Overview G-8 Overview Budget Overview


POM/BES calendar Total Army MACOM guidance RY 05 Submission
Analysis FY 06-11 and FY 06/07
challenges
Well Being Army Strategic Resource Processes Congressional
Planning Guidance Issues
Operational Army Program Emerging Metrics
Requirements Priorities Requirements
Development Guidance
Chief of Staff Strategic Planning Army Program Update on
Focus Areas Guidance Guidance Financial Systems
Prioritization BIC/Reset

20 Resource Management / 2nd Quarter 2004


Business Process Engineering Strict Project Discipline to
Manage Unprecedented
Volume
Continuous Improvement through Rigorous The United Services Automobile

Project Management and a Process Associations’ (USAA)members, however,


have come to expect world-class service

Engineering Discipline from the Association, and failing to answer


members’ queries was not an option. The
Association needed to move quickly to
support the members and to maintain
regulatory compliance. Fortunately, USAA
has a rigorous project management discipline
to ensure the appropriate review, approval,
and implementation of business process
changes in cases like this. Under this flexible
and adaptable process, a team of experts
immediately set to work analyzing the
problem and studying alternatives.
One of the initial suggestions for
managing application volume involved
closing the Internet portal once the
Association had received the maximum
number of applications it could process
within three days. Under this scenario, online
users could be stopped after completing
a mortgage application, and asked to log
on the next day to submit their work. The
project team conducted a usability test on
this process using actual members, and found
that it was not the optimal solution, so they
moved quickly to develop other alternatives.
Within a short time, the project
management team had developed, tested,
Major Geoffrey T. Ballou are required to provide homebuyers with and recommended several viable courses of
(USAA) United Services Automobile a written “Good Faith Estimate” (GFE) of action. Based on the team’s work, “Mortgage
Association Training With Industry closing costs within three days of receiving Services hired temporary operators to field
a loan application.2 RESPA’s requirements, incoming calls, authorized member service
however, began to cause problems for representatives to work overtime and set up
many lenders during the recent boom in a triage to handle the most urgent calls, such
A Refinancing Frenzy...

T
new mortgages and home refinancing. as requests for new home loans, first.”5 This
itle VIII of the Civil Rights Act With interest rates at 40-year lows, is just one example of the process that USAA
of 1968 is commonly known as consumers rushed to lock in both low uses to decide which ideas make it to design
the Fair Housing Act. It marked rates and home equity gains, generating and production, and which ones do not
the beginning of Congressional $5.9 trillion in new mortgages in 2002- make it past the “review” stage.
reforms designed to break down barriers 2003, and cashing out more than $100 Their rigorous approach to project
in sales and rentals of housing, and billion of home equity.3 Many lenders management combined with a process
make home ownership more accessible were not prepared for this tremendous engineering discipline is USAA’s method
for all citizens.1 Other housing laws and surge in volume, and consumers’ mortgage of continuously improving its business
amendments followed this Act, including queries often went unanswered across the operations. This multi-faceted approach is
the Real Estate Settlement Procedures Act nation4 as lenders struggled to comply with known in the Association as Business Process
(RESPA) of 1974. Under RESPA, lenders RESPA’s processing requirements. Engineering, or BPE.

Resource Management / 2nd Quarter 2004 21


with the country’s changing demographics
and with its members’ evolving needs.
Figure 1: Acronym Soup... BIC vs. BPE Because of the evolutionary nature of the
How similar are the DoD’s BIC program and USAA’s BPE program? Mr. Association’s growth, each new company
Ernest J. Gregory, Acting Assistant Secretary (FM&C) wrote “The BIC…has launched with a full set of departments, i.e.
created an environment that places a premium on improving func- accounting, human resources, marketing,
tional processes and on making better use of our financial resources.”7 data processing, payroll, collections, etc.
This statement describes exactly the mission of the Business Process The Association’s senior leaders
Engineering Effort at USAA... recognized that there was great opportunity
for cost savings by consolidating many
of the departments that were duplicating
functions across the company. Consolidating

The military counterpart to this process


is found in the Department of Defense
Figure 2: We’ve always done it that way…
Business Initiative Council (BIC), featured in
the 3rd Quarter, 2003 Resource Management Ever wonder where your keyboard design came from? The first success-
(see Figure 1). The BIC “...was chartered ful typewriter was produced in 1873 by Christopher Sholes, but a problem
to improve the efficiency of DoD business quickly arose: people began typing so fast that the keys got jammed as
operations by identifying and implementing the levers flew up to strike the paper and got stuck together. Mr. Sholes
business reform actions...”6 This is very fixed this by developing a keyboard that placed the most frequently used
similar to USAA’s BPE process, offering an keys as far apart as possible, thereby guaranteeing maximum inefficiency!!
avenue to efficiently receive and review ideas That’s right, the keyboard you use at work was designed expressly to slow
for possible implementation. A program you down. So, the next time you are considering a process change, you can
like this is critical to USAA and the DoD, look at your keyboard, question why the process works the way it does, and
where employees continually offer excellent know that there’s a better way.8
suggestions, and where neither organization
is content to rest on its many past successes.
For an example of the need for a systematic
program to manage change, please see Figure
2 for a description of inefficiency that we
a keen ability to focus on both operational these departments would also allow for
embrace as a way of life. USAA, however, has
and strategic issues simultaneously, he is increased customer service, since metrics and
attacked inefficiency at every opportunity,
able to balance the cost-cutting needs of performance measurement would fall under
and I had the chance to talk with one of their
the organization with the requirement only one operation, rather than five or six
leading change advocates.
for excellent, seamless service. One of his operating within different companies.
primary responsibilities is streamlining These consolidated operations came to be
Managing Change procedures within the Association. known as Centers of Excellence, or COE’s.
During my Training with Industry The traditional view of operations at USAA,
experience at USAA, I have been given broad Developing Centers of and indeed in most legacy organizations,
access not only to training opportunities, is the typical hierarchical structure (lines
but also to key leaders in the organization.
Excellence @ USAA and boxes) shown in Figure 3. The COE
So, while conducting research for this Although the reengineering program is view, in contrast, consolidates the common
paper, I jumped at the chance to interview truly multi-faceted, the core of the Business functions of each separate unit, tying them
the Vice President for Enterprise Process Process Engineering effort at USAA is together operationally and strategically, while
Engineering who is responsible for the eliminating redundant processes. The reducing long-term expenses by eliminating
reengineering projects. He is charged with Association, by virtue of its development, redundant functions and by improving
selecting the projects, and then developing had many opportunities for eliminating responsiveness. (Figure 4)
and implementing the new processes that redundancies. Founded by 25 Army officers
will help USAA on its journey to “Best in in 1922, USAA was initially solely an
Class.” His name is Scott Kaeppel, and he has insurance cooperative. As the years went by,
the boundless energy of a reformer. With USAA began adding companies to keep up

22 Resource Management / 2nd Quarter 2004


The Center of Excellence to
Drive all Others Figure 5
The drive toward project management Employee-Identified Opportunities in Marketing Reorganization…
excellence took root in a large-scale COE
effort that worked to consolidate the • Improve how data and analysis are shared
different project management communities • Better align segment-driven strategies with company product strategies
throughout the company. Several companies,
including Property & Casualty, Life, Bank, • Strengthen product design and engineering processes
and the Investment Management Company • Improve business knowledge, standardize terminology and reduce rework
had their own methods for managing change
and executing projects. Before the COE effort • Simplify, standardize and automate
could take root across the Association, these
had to be combined, and that happened in
August of 2002.
The drive of this effort was to develop
a “…consistent approach to process and
project management across the enterprise… Centers of Excellence combined are moved into the COE. In this
case, for example, the companies and staff
”9 in effect consolidating the team to be in Action agencies “…maintain[ed] their existing
responsible for consolidating all other
The Project Management and Process compliance offices, at current staffing, for
teams. Tim Handren, Senior Vice President
Engineering COE, once formed, moved issues specific to their areas.”12
of Enterprise Business Operations described
quickly in their transformation efforts,
the step as critical to USAA’s journey toward
excellence:
focusing first on the marketing functions. The Unified Command
Previously, every company within USAA
“owned” a complete marketing department.
Center—A Department of
“Project Management at USAA is better than Based on the results of a process review Defense Center of Excellence
it’s ever been, and possibly the best in corporate in which employees identified specific Although they may use a different term to
America today. Creating centers of excellence opportunities for improvement, the team describe it, the Pentagon recently announced
is the next logical step to accelerate USAA’s moved to consolidate key marketing a Center of Excellence transformation.
functions within one Center of Excellence Under the new program, the service-run
achievement of the desired operating state and
(see Figure 5). During the assessment, the operations centers will merge into one
a process organization.”10
team recognized that “…sharing some Unified Command Center and “Resources
highly specialized functions will streamline and Situation Awareness Center,” according
cumbersome activities and establish to an October 16th DoD memorandum.14
consistent, world-class processes.”11 A Pentagon spokesman further elaborated,
Another example that perhaps is more stating that, “The services will not run
Figure 3 analogous to the Services is the effort to separate ops centers, however they will
consolidate compliance centers across have designated areas to meet their Title 10
the company. The compliance centers responsibilities.” This is very similar to USAA
are responsible for ensuring that all of transformations: consolidating the common
the Association’s activities comply with functions, while keeping “unique functions”
federal, state, and industry regulations and out at the company (or in this case the
guidelines. Given the numerous laws and service) that is responsible for them.
regulations that the Armed Forces follow,
one could argue that every unit has its
Figure 4 “Defense Secretary Donald Rumsfeld
own compliance section, perhaps down to
battalion or even company level. approved this month a measure to overhaul
Managing Across Centers of Excellence It’s important to note that transferring the various operational nerve centers in the
a process to a Center of Excellence does Pentagon…into one, multifunctional
COE COE COE not mean completely eliminating the command center.”13
organization(s) that existed before. Only
those processes that can logically be —Defense Daily, October 23, 2003

Resource Management / 2nd Quarter 2004 23


by someone probably junior to them. 4. McAuliffe, Suzanne. “Refinancing Frenzy—
Working for the greater good of the parent Mortgage Services Answers the Call.” Inside USAA
Figure 6 27 Nov. 2002: 9.
organization sometimes means setting
Process Owners – Roles and 5. McAuliffe, Suzanne.
aside the interests of a single department, a
Responsibilities: 6. Tison, Don. “Creating Better Business Processes;
position which may prove to be unpopular. The Business Initiative Council.” Resource
• Monitor process performance. The support of the Champion ensures that Management 3rd Quarter 2003: 6.
the process owner will have the necessary 7. Gregory, Ernest J. “The BIC as a Tool to Support
• Continuously evaluate end-cus- Resource Stewards.” Resource Management 3rd
support to always act in the best interest of
tomer needs. Quarter 2003: 5.
the organization. 8. “History of the Keyboard.” Pagewise, Inc. (2002):
• Make quick & effective process 2 pp. Online. Internet. Nov. 13, 2003; http://
decisions. Following the Path njnj.essortment.com/keyboardhisto_rdqo.htm.
9. “Centers of Excellence Combine Process
• Evaluate non-value added steps. of Success Engineering, Project and Release Management.”
News @ USAA (Aug 15, 2002): n. pag. Online.
• Measure Improvements. The Department of Defense, with its Intranet. Nov. 7, 2003; http://web.usaa.com/
Business Initiative Council and recognition employee_comm/Story.asp?StoryID=518.
• Policy/Governance.
of Center of Excellence benefits, is on the 10. “Centers of Excellence Combine Process
• Continuous Planning. path of successful change management. In Engineering, Project and Release Management.”
News @ USAA (Aug 15, 2002): n. pag. Online.
instituting and fostering these programs, it is Intranet. Nov. 7, 2003; http://web.usaa.com/
mirroring the successful corporate practices employee_comm/Story.asp?StoryID=518.
of USAA, widely recognized as a leader in 11. “USAA Marketing Groups Organize Centers
managing change, and a continuing symbol of Excellence.” News @ USAA (Sep. 24,
of financial stability in a turbulent business 2002): n. pag. Online. Intranet. Nov. 7, 2003;
http://web.usaa.com/employee_comm/
The story goes on to explain the environment. By maintaining the top-down Story.asp?StoryID=603.
difficulties that DoD confronts in this support of the BIC program, and continuing 12. “Compliance Centers of Excellence Established.”
reorganization, problems that face any to eliminate redundancy through creation News @ USAA (Nov. 14, 2002): n. pag. Online.
of Centers of Excellence, the DoD will truly Intranet. Nov. 7, 2003; http://web.usaa.com/
organization that takes on a restructuring of
be able to lay claim to a goal to which we all employee_comm/Story.asp?StoryID=719.
this magnitude. “Despite strong efforts afoot 13. Butler, Amy. “Rumsfeld Merges Service
in the Pentagon to run the services as a joint aspire, that we are excellent stewards of the Command Centers Into Joint Nerve Center At
force, decades-old processes and cultures public’s resources. Pentagon.” Defense Daily (Oct. 23, 2003): 2 pp.
often slow the pace of change.”15 This This article may contain USAA Online. Internet. Nov. 7, 2003. Early Bird.
proprietary information and may not be 14. Butler, Amy.
problem highlights one of the key tenets of
reproduced in whole or in part in any 15. Butler, Amy.
process engineering: support from the top.
manner without the express written consent
of USAA. The opinions in this article are the
The Champion and the author’s, and do not necessarily reflect the About the Author
Process Owner official positions of USAA or the Department Major Geoffrey Ballou is one of five Functional
of Defense. Area 45 officers participating in the Training
The beginning of the mission statement
With Industry program, in his case with
for the Process Engineering Team at USAA
Endnotes in MLA Format (Modern Language USAA. Major Ballou is a frequent contributor
is to “Enable centers of excellence…to to “Resource Management.”
Association of America):
continuously review and improve business
1. “Housing Section-The Fair Housing Act.” The Fair
activities...” The last part, however, is the
Housing Act (2000) 6 pp. Online. Internet. January
key: “...by ensuring product and process 27, 2004; http://www.usdoj.gov/crt/housing/
owners are accountable through the housing_coverage.htm.
appropriate measures.” (Figure 6) Each 2. “‘Closing Complexities’ Part of the Home
new COE must have a designated leader, Financing Process.” Trends and Information Real
Estate Services (February 24, 2003) 2 pp. Online.
and that leader must have the support of
Internet. January 27, 2004;
the person at the top—the Champion— http://www.cendant.com/media/trends_
whether that is a CEO or a Chief of Staff. information/trends_information.cgi.
The reason for this is clear: the company 3. “Mortgage Interest Rates Hit 40-Plus Year Lows.”
presidents involved in a reorganization Homeboundmortgage™ (2003) 2 pp. Online.
Internet. January 27, 2004; http://www.homebo
have had something stripped away from
undmortgage.com/Mortgage_Info/Mortgage12_
their organization, a process now owned 27_03.

24 Resource Management / 2nd Quarter 2004


Summary of Ethics Rules that
IRS will disregard tax liability for use of
frequent flyer miles earned in official travel,

Apply to DoD Employees


unless they are converted to cash.

Other travel-related benefits. If a Federal


Matt Reres employee is on official travel and is bumped
involuntarily from an overbooked flight, the
compensation for the denied seat belongs to
the government. [JFTR U1200(B)(2); JTR
C1200(B)(2); 59 Comp. Gen. 203 (1980)]
However, if a Federal employee is on official
travel and vacates voluntarily her seat on an
overbooked flight, the compensation belongs
to the employee. [JFTR U1200(B)(1); JTR
C1200(B)(1)]

Gifts from outside sources. Employees


are prohibited from soliciting gifts from
DoD contractors or other non-Federal
organizations (e.g., a local business) in their
official capacity. [5 CFR 2635.202(a)(1); 5
CFR 2635.202(c)(2)] Employees generally
are prohibited from accepting gifts
offered because of their official position
or gifts from a “prohibited source” (e.g.,
a DoD contractor). [5 CFR 2635.202(a)]
Nevertheless, there are certain items that

E
employees may accept, such as:
ach of us has the responsibility to http://www.hqda.army.mil/ogc/
understand the Fourteen Principles
EthicsForArmyLeaders.htm
• Modest items of food and drink that are
of Ethical Conduct for Government exclusive of a meal (e.g., coffee & donuts).
Officers and Employees and to Please Note. The rules in the CFR (Code of
Federal Regulations) apply to all Executive
• Gifts of $20 or less in value per occasion
apply these principles to our activities as (never cash), as long as the total value
Department of Defense (DoD) employees. Branch employees. The rules in the JER (Joint of the gifts you receive from one source
These Principles are the foundation of Ethics Regulation) apply to all DoD employees. (e.g., one company) is less than $50 in a
the Standards of Ethical Conduct for the Moreover, all the rules apply to military calendar year.
Executive Branch and the Joint Ethics
Regulation. Moreover, these Principles
officers, enlisted personnel, and civilian
employees (except where otherwise stated).
• Free attendance for you and spouse/
guest at a “widely attended gathering”
establish the minimum standards if an ethics counselor determines your
demanded of each of us who serves the Frequent flyer miles. Prior to 28 December attendance will further DoD programs or
United States. Although the particular 2001, frequent flyer miles earned in official operations. [5 CFR 2635.204(g)]
ethics rules emanating from the Fourteen travel belonged to the government. On
Principles are many, it is your individual 28 December 2001, the President signed the • A gift of personal property from a
Foreign Government if the value (in
responsibility to be aware of each of them. FY 2002 DoD Authorization Act (Public
the United States) is $285 or less. Gifts
Your ethics counselor stands ready to assist Law 107-107). Section 1116 of the Act
with value exceeding $285 belong to the
you in advance of any decision you may provides that frequent flyer miles earned
United States.
make that involves these rules. To assist you in official travel may be kept for personal
in the correct ethical performance of your use. Frequent flyer miles earned in official • A travel payment (e.g., a plane ticket)
official duties, you should visit the website travel are now the employee’s personal from a non-Federal source, if you will
provided below to inform yourself of those property, whether they were earned before, attend a meeting or similar function,
ethics subjects and the specific rules that on, or after 28 December 2001. [JFTR away from your duty station, in your
apply to you. U1200 (A)(1); JTR U1200(A)(1)] IRS official capacity, and your travel-
Announcement 2002-18 provides that the approving authority and ethics counselor

Resource Management / 2nd Quarter 2004 25


approve in advance. Payments of more (3) Personal hospitality provided at written approval for off-duty employment
than $250 per event must be reported to a residence, of the type and value the (including self-employment and employment
an ethics counselor using the SF 326. [31 employee normally provides to personal during terminal leave).
USC 1353; 41 CFR Part 304-1] friends (e.g., inviting the neighbors over
Contractor advisory boards. DoD
• If your commander or supervisor for dinner); OR
employees may never serve, in their official
approves your attendance at a ceremony capacity, on an advisory board or advisory
(4) An item the employee gives when
to mark the completion of a milestone committee for a defense contractor.
receiving personal hospitality from the
in tank manufacturing, helicopter Employees who are considering serving as
superior, of the value normally given on
completion, or similar vehicle success, an advisor to a defense contractor in their
such occasions (e.g., when the superior
you may accept (1) free attendance personal capacity should follow the guidance
invites you to dinner).
at a dinner, lunch and/or reception on this subject in the DoD General Counsel
incident to the ceremony, and (2) gifts Special occasion gifts. These are gifts memo dated 7 May 99.
or mementos in connection with the for the termination of a superior-
ceremony, if their aggregate retail value subordinate relationship (retirement, General/Flag Officers. General/Flag
is less than $100 per family, their cost separation, resignation, PCS, transfer) or Officers are prohibited from receiving
is paid for by other than the Federal for an infrequently occurring occasion compensation for serving as an officer
Government, and you are an official of personal significance (marriage, or member of the board of any non-
participant in the ceremony. [JER 2-300c] illness, birth, or adoption of a child). Federal entity (other than professional
associations and closely-held family
• An employee who speaks at an event [5 CFR 2635.304(b)] If the gift is from
an individual subordinate, it must be entities). Compensated service in the
in an official capacity may accept free
“appropriate to the occasion” (there are management of closely-held family
attendance at the event (including a
no dollar limits). [5 CFR 2635.304(b)] entities or professional associations must
meal) on the day of the speech. [5 CFR
Further, if the gift is from a group with one be approved by the applicable Service
2635.204(g)(1)] If the event is more than
or more subordinates, the gift generally Secretary. [DepSecDef Ltr, 23 Jul 96.]
one day long, you may be able to accept
free attendance at the entire event under should be less than $300 in value; no
employee may be asked to contribute more Non-Federal Entities.
the “widely attended gathering” rule. [5
CFR 2635.204(g)(2)] than $10 for the gift, but employees may Participating in an official capacity.
choose to contribute more than $10 for the Employees should never participate in an
Gifts to superiors. Employees generally gift. [JER 2-203] official capacity in the management (e.g.,
are prohibited from giving gifts to their as an officer, director or trustee) of a non-
Soliciting. Employees may never solicit
superiors. A superior may advise his/her Federal entity without approval by the
contributions from other government
immediate subordinates that NO GIFTS DoD General Counsel (DoD/GC). [JER
employees for an “occasional gift.” [5 CFR
should be given by the subordinates to him/ 3-202] DoD/GC has stated that, to prevent
2635.304(c)(Ex. 2)] But they may solicit
her, thus removing all of the attendant ethics conflicts of interest, the GC will disapprove
contributions for food and/or refreshments
issues arising from gift-giving to a superior. service in a management position in a
that will be shared in the office among
Should, however, the superior elect to receive non-Federal entity in an official capacity
several employees. [5 CFR 2635.304(c)(2)]
gifts from subordinates in compliance with (except where such service is authorized
They may also solicit contributions
the ethics standards, please note the specific by law). [10 USC 1033 & 1589] An
for a “special occasion gift.” [5 CFR
exceptions provided below for “occasional employee may serve in an official capacity
2635.304(c)(1)] However solicitation from
gifts” and “special occasion gifts.” [5 CFR as a DoD Liaison to a non-Federal entity
contractors and their employees
2635.304] if appointed by the commander. [JER 3-
is prohibited.
201a] In some instances, General Officers
Occasional gifts. 5 CFR 2635.304(a)
may appoint themselves as a DoD Liaison
provides that employees may give to their Off-duty employment/outside activities.
to a non-Federal entity.
superiors, on an occasional basis, a
Off-duty employment. DoD employees are
required to obtain prior written approval of Participating in a personal capacity.
(1) An item or items with a value of $10 or
off-duty employment if (1) they are required Employees generally may participate in a
less (other than cash);
to file a financial disclosure report (i.e., SF non-Federal entity in a personal capacity.
(2) Food & refreshments that are shared in 278 or OGE Form 450) and (2) they will be [JER 3-300a] One exception is that an
the office among several employees; working for a “prohibited source” (such as a employee is prohibited from serving, in a
DoD contractor). [JER 2-206a] The general personal capacity, as an officer, member
rule is that personnel must obtain prior of the Board of Directors, or in any other

26 Resource Management / 2nd Quarter 2004


similar position in a non-Federal entity decision-making or exercise of significant they disregard the rule of law and replace
that is offered to the employee because judgment in contracting or procurement. it with their own judgment of what is right
of his or her DoD assignment or official [JER 7-300] The 450 must be filed within and proper. In the United States, none of us
position. [JER 3-301] 30 days after entering such a position and is allowed to pick and choose what laws we
each year by 30 November [JER 7-303] will follow during our public service. Unless
Endorsement. Employees are prohibited
we execute our official duties in absolute
from officially endorsing non-Federal Political activities. Civilian DoD
compliance with the rule of law and the
entities (NFEs), or their products, employees are prohibited from election
Fourteen Ethics Principles, we have failed to
services, events or enterprises (including and political activities that could associate
perform our official responsibilities in the
conferences and golf tournaments). [5 the department with any partisan
manner expected of someone who serves
CFR 2635.702(c); JER 3-209] However, candidate or issue. These prohibitions
the United States. As every Member of the
employees may use official channels include using official authority to
Armed Forces and DoD civilian employee
(e.g., letter, flier or fax) to notify other influence or affect an election; soliciting
must be acutely aware, each of us is obligated
employees of events of common interest or discouraging the political activity of
to uphold the rule of law now matter how
sponsored by an NFE. [JER 3-208] any person who has business with DoD;
difficult or unpopular. For that reason, we
Notifications must avoid words of praise engaging in political activity while on duty
should remind ourselves on a frequent basis
for the organization or the event. [DoD/ (to include wearing political buttons) or
of the oath of office that each of us swore to
GC Ltr, 28 May 96]. while in the Federal workplace; engaging
uphold when we raised our right hand and
in political activity while wearing an
Events. An NFE may be allowed to use said: “I will well and faithfully discharge the
official uniform or displaying official
personnel, facilities and equipment for a duties of the office on which I am about to
insignia identifying the office or position
non-fundraising event (JER 3-211a), or enter.” Without question, our compliance
of the DoD employee; soliciting political
facilities and equipment for a fundraiser with the Fourteen Ethics Principles is
contributions from the general public; and
(JER 3-211b). required if we intend to discharge faithfully
being a candidate for public office in a
the duties of our office. As President George
partisan election (JER 6-203). Presidential
Conflict of interest. It is a crime for an W. Bush counseled us as federal employees:
appointees confirmed by the Senate and
employee to participate (e.g., make a decision, “We must always maintain the highest ethical
non-career SES members have additional
give advice, make a recommendation) in any standards. In addition to asking, “What is
limitations and prohibitions on activity
matter if any of the following individuals legal,” we must also ask, “What is right.””
that could be interpreted as associating
has a financial interest in the matter: the the department with any political cause
employee, the employee’s spouse, the or issue (DepSecDef Memo, 7 February About the Author:
employee’s minor child, the employee’s 2000). In addition to the above, among Mr. Matt Reres is the Deputy General Counsel
general partner, or an organization or other restrictions, Members of the Armed (Ethics &Fiscal) in the Army’s Office of the
company in which the employee is serving as Forces on active duty are also prohibited General Counsel. Mr. Reres is a frequent con-
an officer, director, trustee, general partner, or from public speaking (to include tributor to “Resource Management.”
employee. [18 USC 208(a); JER 5-301] Also, broadcasting on television or radio) which
military officers and civilians (including advocates a partisan political party or
while on terminal or annual leave) generally candidate; marching or riding in a partisan
are prohibited from representing anyone political parade; and selling tickets for,
(other than the United States) before any or otherwise actively promote, political
Federal agency. [18 USC 203 & 205; JER dinners and similar fundraising efforts
5-401 & 5-403] (DoDD 1344.10, E3.3).
Financial Forms. General Officers, SES
and SES-equivalents must file Public Conclusion: What should now be apparent
Financial Disclosure Report (SF 278) to each of us is the breadth and complexity
within 30 days after becoming a G.O., SES of the ethics rules that apply as we perform
or SES-equivalent; each year no later than our official duties. Moreover, we should
15 May and within 30 days after leaving the be aware that the performance of our
government. [JER 7-203] Late SF 278 filers official duties is linked inextricably to the
must pay a $200 penalty. [JER 7-203g] The performance of our ethics responsibilities.
Confidential Financial Disclosure Report Although most will speak of values when
(OGE Form 450) must be filed by Colonels, standing before public forums, there are a
GS-15s and below whose position involves few whose high words betray them when

Resource Management / 2nd Quarter 2004 27


Case Study

Walter Reed Army WRAMC EUL Case Study— The Agreement


The WRAMC EUL agreement is
Medical Center Building 40 structured to protect the interests of
Results the government while minimizing both
Alan D. King, Deputy to the Garrison In February 2004, WRAMC completed government control and liability. The federal
Commander, WRAMC a EUL agreement that will result in the government will not provide a guarantee of
renovation of an unused historical building, financing or assume any of the risk of the
“Let me assure you that expanded Building 40. The private developer will plan, private developer. Nor will the Army be an
leasing opportunities, available finance, and renovate Building 40 converting it “equity partnership” or participate in the
from our Enhance Use Leasing into a modern office complex. The developer day-to-day management of the facility. The
will then operate, maintain and manage the developers will operate Building 40 exactly
authority, is a key element of the
complex for 50 years. At the end of the lease, as if it were located on private property.
Department’s efficient facilities the property reverts to the Army. The private WRAMC will have the right of first refusal
initiative.” developer will provide $62 million in capital to lease and occupy renovated space in
Raymond F. DuBois, Jr. for the renovation. WRAMC will receive over Building 40, at fair market value, but with no
Deputy Under Secretary of Defense $20 million as in-kind services and have a cost guarantee of government occupancy for any
(Installations and Environment) avoidance of $75 million over the lease term. of the space.
May 2002 The Process Future WRAMC EUL Projects
Building 40 at WRAMC has been vacant On 13 January 2004, WRAMC received
since 1998. As WRAMC leadership reviewed approval on a second EUL proposal from the
Background (GAO Report 02- options to demolish, move, or renovate this House Armed Forces Services Committee for
475 Defense Infrastructure) historic building, Congress passed legislation private sector development of approximately 8
DoD faces the challenge of dealing with allowing installations to enter into EUL acres of land located on the WRAMC campus.
a large backlog of facilities maintenance and agreements creating a win/win option for The proposed EUL will result in additional
repair and insufficient funding devoted to WRAMC. Apart from getting a historic administrative and laboratory space creating
sustainment, restoration and modernization. building renovated at no cost to the Army, a collaborative opportunities with other health
To address this issue, DoD is pursuing a multi- market analysis validated that the renovated care related entities, developing additional
pronged strategy to reduce infrastructure costs building could provide much needed secure parking to ease the current severe shortage,
and to reshape military installations to meet laboratory and administrative space for federal and generating in-kind rent for the leased
the demands of the 21st century. agencies within the National Capital Region. property. Further project details can be
While the base realignment and closure WRAMC prepared its EUL package in obtained at http://eul.ey.com.
(BRAC) process receives the lions’ share early 2002, and the House Armed Services Conclusion
of the publicity on how DoD is shaping Committee approved it in June 2002. In The Enhanced Use Lease program is
installations for the 21st century, there are December, the Army approved publication benefiting WRAMC by unleashing and
other options DoD leaders can leverage of WRAMC’s Notice of Availability to Lease leveraging the untapped value of non-excess
to make services and installations more (NOL), which is the document used to real property assets and putting them to
effective and efficient. One of these options competitively select a developer. WRAMC productive use. Not only will Building 40 be
is the Enhanced Leasing Program (EUL), held its Industry Forum in February 2003 and renovated at no cost to WRAMC, but the
authorized by Congress in 2001. released its final NOL in March 2003. In May lease will also result in substantial in-kind
The Walter Reed Army Medical Center 2003, the Source Selection Evaluation Board payment and significant cost avoidance
(WRAMC) installation leadership has been selected Keenan Development Ventures, LLC over the life of the lease. The private sector
at the forefront of DoD in capitalizing on (KDV) as the developer. Representatives from resources leveraged through WRAMC’s EUL
the tremendous potential of EUL. WRAMC WRAMC and KDV conducted a partnering efforts will ensure the vitality of the post and
has successfully used EUL to leverage the session in June 2003 in conjunction with the provide much needed resources for other
conversion of unused, non-excess real start of the development of the business and WRAMC mission needs and priorities.
property from a resource drain to a vital asset lease plan. WRAMC submitted the resulting
and revenue generator. business and lease plan to the Department of
Army in December 2003 and the Department About the Author:
approved the plan in January 2004. This process
Mr. Alan D. King is currently employed at the
moved with lightening speed compared to
Walter Reed Army Medical Center, where he
other possible options to renovate the building. serves as Deputy to the Garrison Commander.

28 Resource Management / 2nd Quarter 2004


Perspectives
Leveraging can be used to obtain or enhance mission
facilities, such as test tracks and hangars that
approved organizations and the Army

Army Resources
will receive a percent of “rent” from
can be used jointly by the military and the
the lease.
private sector.
The use of leverage to obtain private • Fort Bliss. Fort Bliss just released an
Leverage is “the power and capital for DoD/Army purposes achieves two announcement through FedBizOpps
important outcomes. Directly, cash or in- seeking a private contractor to develop
influence for attaining an kind services resulting from an EUL project the under-utilized William Beaumont
end.” Leverage can help get can be used to fund mission priorities. General Hospital Historic District
comprised of 92.75 acres and 39 historic
results quicker, more effi- Indirectly, commanders can use EUL to
structures located outside the installation.
leverage other benefits such as improving
ciently, and at a lower cost. utilization of property and fostering See details at https://www.asaie.army.mil/
Public/Partnerships/OHP/ohp.htm.
It can free up appropriations relationships between the military services,

for other military purposes.


the community, and the private sector. • Fort Monmouth. Fort Monmouth
To capitalize on both the direct and is competitively leasing three vacant
indirect benefits, some Army installations buildings in the main post area for
The Department of Defense (DoD) are already aggressively leveraging EUL. adaptive use, as well as 80 acres of
has the authority to use leverage to obtain For example: land and an 85,000 square foot facility
private sector financing to improve needed for development of a Research and
facilities and infrastructure. Leverage has • Walter Reed Army Medical Center
Development campus for mission-
(WRAMC) has a successful 50-year
been successfully used to obtain private related functions. See details at http:
EUL project for the renovation of a
sector capital to finance construction, //www.fmnj.biz.
historic building. The contractor will
modernization, restoration, and operations
finance, renovate, operate, maintain, and EUL is a powerful leveraging tool that
and maintenance of family housing units
manage the renovated building over the can help Army installations get improved
through the Residential Communities
50-year period of the EUL. At the end facilities quicker and more efficiently. Given
Initiative and Utilities Privatization Program.
of the lease, the property will revert to current budget constraints, EUL allows the
Leveraging private sector capital is important
government ownership. For this EUL, the Army to obtain private sector financing to
because it frees up Military Construction,
contractor will provide $62M in capital construct, improve, and maintain facilities,
and Operations and Maintenance funding for
for the renovation. WRAMC will receive thereby freeing up the funds that would
other military purposes.
over $20M as in-kind services and have have been used for these purposes for other
A powerful DoD leveraging tool was
an estimated cost avoidance of $75M military requirements.
expanded in 10 USC 2667 of the 2001
over the course of the lease. Based on We believe there are many EUL
National Defense Authorization Act. This
the success of this EUL, WRAMC is in opportunities and we challenge installations
tool, known as Enhanced Use Leasing (EUL),
the preliminary stages of a second EUL to seek them out. Please visit the Army’s EUL
allows the DoD to outlease non-excess DoD
project. See details at http://eul.ey.com. website at www.asafm.army.mil/rabp/info/
real property (land and facilities) to the
private sector in return for remuneration – • Fort Leonard Wood leased 62 acres to sop.asp
cash or in-kind services. Leases of unused or the University of Missouri for 33 years
underutilized real estate can be used to fund for development as a technology park.
The installation receives a percent of net About the Author:
a wide range of projects such as maintenance,
protection, repair and improvement of revenues from the lease agreements. Ms. Sharon Weinhold is the Acting Deputy
Assistant Secretary of the Army for Resource
existing government facilities, construction • Fort Sam Houston has three EUL
Analysis and Business Practices.
or acquisition of new facilities, and projects underway to renovate historic
Ms. Weinhold is a frequent contributor to
restoration of property or facilities to include property that will result in over 240,000 “Resource Management.”
environmental restoration. Using EUL can square feet of office and special purpose
result in projects such as new or renovated space. The private sector invested over
offices, warehouses, and lodging facilities. It $50M. This space will be rented by

Resource Management / 2nd Quarter 2004 29



Senior Army responsibilities are transferred to the Competency-Based System. Will
civilian workforce, permitting soldiers to enable the Army to shape the civilian

Workforce (SAW)
be assigned to the operational force. SAW workforce based on projected needs
Program Management will be aligned versus the status quo, and provide
under the Human Resources Command a holistic view of an individual’s
capabilities and potential. This system
“Army Civilian Leaders of and will centrally manage assignments and
selections similar to the Officer Personnel will be designed to assess, develop and
Today and Tomorrow” Management Directorate. This centralization assign SAW members based on an
At no other time has there been such will enhance the ability of the Army to individual’s demonstration of prescribed
great opportunity for change with regard provide the right person to the right job competencies within a broadly defined
to human resource management of Army when needed, removing the organization’s career track.
civilians. Requirements validated through requirement to “find” the right person. The
Coupled with the legislative changes and
the workforce analyses conducted as part four key components of the SAW foundation
the management flexibilities identified in the
of the Civilian Personnel Management are Central Management, Training and
National Security Personnel System (NSPS),
System (CPMS) XXI study and the Army Development, Multifunctional Career Tracks
the Senior Army Workforce concept will be
Training and Leader Development Panel and a Competency-Based System.
a force multiplier, and will enable the Army
(Civilian) clearly demonstrate that the Army
must continue to acquire, develop and • Central Management (Promotions/ leadership to focus on training, readiness
Assignments/Selection). Will enable and fighting the Global War on Terrorism.
sustain highly skilled civilian leaders. Due to strategic allocation of resources to The SAW uses drivers from CPMS XXI, the
downsizing of the current workforce and the ensure fair and equitable development ATLDP-C study and single variants that all
projected retirements at all grade levels and of Army civilian leaders (ATLDP point to certain common trends that must be
occupations; this need must be addressed recommendation). Provides for HQDA, addressed now – the aging civilian workforce,
now. Investment in the development of G1, to centrally promote, and assign the lack of focused development for civilian
civilian leaders is critical to Army readiness civilian leaders to all supervisory leaders and limited human capital planning
and mission success. As a result, major efforts positions through a formally established tied to budgeting and mission requirements.
are underway to overhaul the way the Army competitive selection process. SAW is the answer to a senior leadership
manages its senior level civilians in the
innovation called the SAW. • Training and Development. Long-term focus area in the form of centrally-managed
and developed Army civilian leaders. The
training, developmental assignments,
and service schools will be administered Army must plan to the future and invest in
What is the SAW? through a training and development the development of the “Civilian Bench.” On
The Senior Army Workforce (SAW), as account, similar to the current military January 28, 2004 the ASA (M&RA) approved
it is proposed, is an innovative strategy to Transients, Trainees, Holdees, and the SAW concept. Briefings to the Army’s
assure that the Army grows and sustains its Students (TTHS). This component senior leadership, strategic communication
civilian leaders. The SAW will be staffed with formalizes civilian leader core curriculum and workforce education plans will follow as
leaders operating within a work environment and will be developed in partnership this concept continues development.
where they are responsible for cultivating with Career Program Functional Chief
opportunities for crosstraining to increase Representatives (FCRs) and the G-3
About the Author:
technical proficiencies, where they pursue through the creation of Career Maps
personal and professional development similar to those in DA Pam 600-3 Ms. Nancy Spurlin is a Program Manager
through continuous learning and where (Commissioned Officer Development in the Senior Army Workforce Management
good performance is rewarded. This cadre of and Career Management). Training and Office, Office of the Assistant G-1 for Civilian
Personnel Policy.
multi-functional leaders will facilitate Army’s professional development decisions will
military to civilian non-core task conversion, be made with an Army-wide view.
enabling Army to plan, project and meet
requirements rather than respond reactively.
• Multifunctional Career Tracks. Will
broaden civilian leader skills through
The key tenet of the SAW is the Central experience, education, and training and
Selection and Management of civilian provide multi-skilled leaders who will
leaders, supervisors, and managers in have the ability to manage a number
grades GS-12 to15 (or their equivalents) of broad-based functional and mission
Army-wide. Initially, the SAW will areas as a result of planned training and
include over 17,000 civilians, a number development.
which will increase as more functional

30 Resource Management / 2nd Quarter 2004


The Importance of Career Fairs As a student this can be a nerve-racking
experience. First you walk into a room with
a couple hundred employers and then you
Rebecca Goering have to talk to as many as possible. You
hope to make a good impression. Students
recognize it is important to ask the right
questions and act professionally. Career
fairs are often the only chance a student gets
to meet prospective employers. It is also
an opportunity for students to learn about
career options they may not have considered.
The career fair at the University of Illinois
was the same as hundreds of fairs held
around the country every year. It provided
an excellent opportunity to inform young
adults about the benefits of working for
the Army as a civilian. Many students do
not know that there are civilian positions
within the Army and the military as a whole.
Recruiting individuals fresh out of college
will be important to sustaining the civilian
workforce and developing great civilian
leaders of the future. I recommend that the
Army participate in more career fairs across
the country to expose more students to the
opportunity to become civilian employees.
The Army is always looking for good civilian employees.
An excellent starting point is college campuses. Every year About the Author:
universities and colleges hold one or more career fairs. Ms. Rebecca Goering is a Financial
Hundreds of employers from both the private and public Management Specialist Intern in the
Comptroller Proponency Office, Office of the
sector attend the career fairs looking for the best candidates. Assistant Secretary of the Army for Financial
Students also come hoping to find jobs. The next important Management and Comptroller.

step is matching the two groups.

I
participated, as an employer, last fall at is like. Career Fairs are an opportunity
the University of Illinois Career Fair. for employers to collect resumes and get a
The Army was looking for students who general feeling about a student’s interest in
would be interested in the Financial the job.
Management Intern Program or working Many career fairs offer an interview
for the Army Audit Agency (AAA). We set day the day after the career fair. This is a
up a booth and prepared for students to time when an employer can, if they chose,
ask questions about the programs we were have a one-on-one session with a student.
advertising. Many questions were asked This interview session can lead to future
about working for the government and what interviews and possibly a job. We did not
the intern program was like. I explained participate in the interview day, however we
what an intern does during their time as an received around 100 resumes from students
intern and the benefits of being an intern. who were interested in working for the Army.
Other members of the team explained the Career fairs can be a great opportunity for
hiring process and what working for AAA students to make contacts with employers.

Resource Management / 2nd Quarter 2004 31


CP11 Training these assignments are expected to continue
in DA or other Department of Defense

With Industry
(DoD) service for a period equal to three
times the length of the assignment. The

(TWI)
careerist subsequently returns to the previous
assignment within DA or DoD upon
assignment completion.

Background Corporations/Locations
The Comptroller Proponency Office The CP 11 Comptroller Proponency
released a special announcement for the Army Office has negotiated terms with the
Comptroller Civilian Career Program (CP 11) following industry partners for five to six
Training With Industry (TWI) Pilot Program positions:
in November 2003. The CP 11 TWI Program
is a one-year work-experience training
• Boeing Military Aircraft and
Missile Group
program. It is designed to take selected St. Louis, MO
careerists out of the government environment
and expose them to the latest private sector • General Electric Aircraft Engines
Cincinnati, OH
business practices, organizational structures
and cultures. A primary advantage is to foster • KPMG Limited Liability Partnership
a more cohesive working knowledge between Mid-Atlantic Region
industry and the Army. (Washington, DC; Pittsburgh, PA;
The TWI Program has successfully Philadelphia, PA; Baltimore, MD;
operated for military Functional Area (FA Richmond, VA)
45) for the past two years. The CP 11 TWI
provides opportunities for Army civilian
• Motorola Communications Sector
Libertyville, IL
personnel to engage in corporate procedures
and practices, and share Army business
• USAA Office of Corporate CFO
San Antonio, TX
practices with industry. This training
enables the individuals to obtain knowledge,
experience and a perspective in management Application for Positions
and operational techniques. The key objective The application process is found on
of the CP 11 TWI Program is to provide the Civilian Personnel home page,
private sector partners with seasoned http://www.cpol.army.mil. The on-line
professionals with diverse experience and and hard documents required for the TWI
perspectives to apply to industry client professional development are found in the
engagements. At the same time, the careerist ACTEDS Training Catalog. Application
will bring better business practices back from packages are submitted through the career
industry leaders for Army use. program manager and command channels to
arrive at the Comptroller Proponency Office,
Qualifications OASA (FM&C) by a stated suspense date.
The CP 11 TWI Program is open to
Department of the Army (DA)_CP 11
About the Author:
civilians at the GS-12, GS-13 and GS-14
grade levels. The careerist must have career Ms. Esther Williams is an Auditor with the
status and currently serving in permanent United States Army Audit Agency currently
serving in a Developmental assignment in the
competitive appointments without time
Comptroller Proponency Office.
limitation. The careerist must also have
a minimum of three years of consecutive
DA service under one or more permanent
appointments. CP 11 careerists selected for

32 Resource Management / 2nd Quarter 2004


Comptroller Proponency Office
Office of the Assistant Secretary of the Army
(Financial Management and Comptroller)
Resource Management
Professional development bulletin
ISSN 0893–1828

ATTN: SAFM–PO, 109 Army Pentagon,


Washington, DC 20310–0109.