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Resourcing to Win: Strategies for Optimizing Special Operations Budgets

Tony Arvanitakis, Christopher Kelley, and Jeremiah Monk of Veritas Rei Group

"If you don't like change, you will like irrelevance even less."

- General Eric Shinseki


INTRODUCTION


Section 1004 of the National Defense Authorization Act for Fiscal Year 2022 directed the formation of a Legislative Commission to conduct a comprehensive examination of the Defense Department’s Planning, Programming, Budgeting, and Execution (PPBE) process. This Commission’s charter was to examine the effectiveness of the PPBE process, consider potential alternatives, and provide recommendations to improve the process. In their final report released in March 2024, the Commission highlighted an urgent need for significant reform to the Department of Defense’s (DoD) resourcing process.[i] Such a reform is particularly crucial for the DoD in the current defense environment, where efficient resource allocation and budget optimization are essential to maintain Joint Force readiness and strategic advantage.


Simultaneously, subordinate Combatant Commands such as U.S. Special Operations Command (USSOCOM) find themselves in a period of sustained fiscal constraint. USSOCOM is further challenged by calls to transform its increasingly outdated Enterprise force structure and budget programs, with signals now emanating from Congressional Appropriators.  As budgets tighten and the Department looks to make its resourcing process more efficient and strategy-oriented, the message to USSOCOM is clear: evolve or perish.


THE PPBE REFORM COMMISSION REPORT: KEY RECOMMENDATIONS


The PPBE Reform Commission's report offers several actionable recommendations, such as restructuring the budget, consolidating budget line items, increasing reprogramming thresholds, and improving access to budget documents. These changes aim to enhance the DoD's ability to respond swiftly to emerging threats and technological advancements.  The report emphasizes five critical areas for improvement:


  • Improving Alignment of Budgets to Strategy: Ensuring that financial resources are directly tied to strategic objectives.

  • Fostering Innovation and Adaptability: Promoting a culture of innovation to adapt to evolving threats and operational demands.

  • Strengthening Relationships Between DoD and Congress: Enhancing communication and collaboration with Congress to secure necessary support and funding.

  • Modernizing Business Systems and Data Analytics: Leveraging modern information technologies to improve efficiency and the decision-making processes.

  • Strengthening the Capability of the Resourcing Workforce: Building a more skilled workforce to manage and optimize resources more effectively.


IMPACT OF PPBE REFORM ON USSOCOM


The recommendations of the PPBE Commission propose the most dramatic renovation of the DoD’s budget process since its implementation in the early days of the Vietnam War.  If fully realized, the proposed reforms aim to align defense budgets with national interests, ensure resource decisions are based on balanced alternatives, and use multi-year assessments to compare costs and benefits. They also emphasize fostering innovation and agility among leaders, utilizing modern business systems for better decision-making and communication, and providing skilled support staff. Additionally, the reforms seek to signal technological priorities to the industrial base, meet budget timelines with stakeholder input, and enhance transparency for Congress, the OMB, and the public.


This should be welcome news to a Combatant Command such as USSOCOM, to which the Commission’s proposal offers several advantages:


  • Enhanced Strategic Alignment: By refining the PPBE process, USSOCOM could achieve better alignment with broader defense strategies. This would ensure that special operations forces are adequately resourced to meet evolving security challenges, thereby enhancing their strategic capabilities.

  • Improved Resource Allocation: Streamlining the budgeting process could lead to more efficient allocation of resources. This would enable USSOCOM to prioritize critical missions and invest in advanced technologies and training programs, ultimately boosting operational readiness.

  • Increased Flexibility: A reformed PPBE process might offer greater flexibility in responding to emergent threats. This would allow USSOCOM to rapidly adapt to changing environments and maintain a high level of preparedness.


Of course, there will be downsides.  If implemented, commands like USSOCOM should prepare for a period of transition, which may feature such hurdles as:


  • Bureaucratic Challenges: Implementing new processes could introduce bureaucratic hurdles, potentially slowing down decision-making and resource distribution. This might hinder USSOCOM’s ability to swiftly execute missions.

  • Funding Uncertainties: Changes in the budgeting process could lead to uncertainties in funding, affecting long-term planning and stability. This could impact the development and sustainment of special operations capabilities.

  • Operational Disruptions: The transition to a new PPBE framework might cause temporary disruptions in operations. Adjusting to new procedures and systems could divert attention and resources from critical missions.


CURRENT BUDGETARY CONTEXT FOR USSOCOM


The catch, of course, will be the ability of DoD (or Congress) to implement these recommendations.  As General Shinseki noted, there is a real danger in failing to adapt to change.  But one thing is certain: future budgets will not look as they did in the past, and increasing constraints will demand Commands be more efficient in their application of available resources.


When adjusted for inflation, commands with relatively flat budgets like USSOCOM will realize a decline in relative purchasing power. Since 2021, USSOCOM has realized only a minimal increase in nominal dollars. Accounting for recent inflationary figures (2022-2023 average of 6.2%), this flat budget effectively equates to a 6.2% decrease in relative purchasing power. Furthermore, with the Fiscal Responsibility Act of 2023 capping FY24 Defense spending to $886 billion (a nominal increase of approximately 3% from FY23), USSOCOM can at best expect the command’s relative available budget to effectively shrink by 1-2% year-over-year moving forward.


While USSOCOM has realigned nearly $2.8 billion over recent budget planning cycles, the majority of the straightforward reprogramming options have since been exhausted. This financial context makes the efficient application of allocated resources that much more of an imperative for USSOCOM.

Furthermore, Congress is already signaling the imperative to optimize the U.S. SOF Enterprise.  In their markup of the 2025 National Defense Authorization Act (NDAA), the U.S. Senate Armed Services Committee added verbiage that “directs DOD to address the size, structure, and posture priorities for special operations forces in the annual Defense Planning Guidance.”  This is a clear indication that if USSOCOM doesn’t unilaterally address its function and form, the DoD will soon be legislated to do it for them – a clear shot across the bow to USSOCOM that should inspire the command to put into place a means to optimize and defend the command’s budget plans.[ii]


INTRODUCING PROGRAM OPTIMIZATION


One promising approach to achieving these goals is the introduction of program optimization reviews: analysis efforts that can help commands identify inefficiencies, potential savings, and realignment opportunities.  Optimization reviews seek to assess not only the efficiency and effectiveness of budgetary programs, but also the sufficiency and proficiency of those programs to meet strategic objectives.  These reviews can significantly enhance not only the spending power of a command’s annual budget request, but can also make that request more defensible in the face of scrutiny. By investing in this approach, commands can help ensure financial resources align with strategic objectives, foster innovation, and enhance decision-making through advanced data analytics – and free up additional resources for more efficient employment.


Please note the objectives of program optimization are shared with those of the PPBE Reform Commission. It is no secret the existing PPBE Process is unsuitable for the modern age, so one can reasonably expect DoD (or Congress) will adopt some if not all of the report’s recommendations.  Thus, if USSOCOM is able to preemptively align its budgetary process objectives with those of the Commission’s report, it would find itself ahead of the DoD in not only the competition for scarce resources.  The command would also be able to more proactively participate in the forthcoming Congressionally-directed force structure review.


While program optimization could be conducted internally, there are significant benefits to leveraging a neutral third party.  External reviews offer an unbiased perspective, essential for objective evaluation and continuous improvement. Engaging third-party experts offers several benefits:


  1. Objective Assessment: Unbiased reviewers can identify program drifts or misalignments free from internal politics.

  2. Fresh Eyes: External experts removed from internal dynamics can spot inefficiencies and redundancies that internal teams may miss, such as redundant processes or misaligned resource allocations.

  3. A Dedicated Team: Often the largest constraints on a programming division are time and people.  This forces in-house reviews to be executed as additional duties, and thus become constrained in both quality and quality. A dedicated external team would be able to focus solely on delivering a more thorough report in a shorter amount of time, in turn allowing more programs to be reviewed in a given annual budget development cycle.

  4. Expert Recommendations: With extensive experience, third-party reviewers provide informed recommendations for strategic realignments, process optimizations, and innovative solutions.

  5. Enhanced Credibility: Independent reviews add credibility, building trust and support from stakeholders, including Congressional committees.  This credibility is further enhanced if the reviewing entity can offer respected credentials, such as via a research university.

  6. Baseline for Continuous Improvement: Regular reviews establish a baseline for continuous improvement, allowing progress tracking and necessary adjustments.

  7. Resource Optimization: Identifying waste and cost-saving opportunities, independent reviews help reallocate resources more effectively, leading to significant cost savings.


Optimization goes beyond just realizing cost savings. An optimization assessment should also evaluate the capability delivered for the cost incurred to ensure that resources are being utilized effectively and strategically. This thorough accounting is crucial for reassessing the actual lifecycle costs and capabilities delivered, which can often diverge from initial projections due to unforeseen challenges and evolving operational requirements. A comprehensive optimization review can help programmers identify inefficiencies, validate the return on investment, and ensure that the most advanced and necessary capabilities are being fielded to support mission success. This process not only enhances transparency and accountability but also drives informed discussions and decisions among senior leaders, enabling them to make strategic adjustments that align with national defense priorities. Ultimately, optimization reviews help foster a culture of continuous improvement and strategic agility, ensuring that USSOCOM remains at the forefront of addressing complex global threats.


CONCLUSION


The recommendations of the PPBE Reform Commission aim to make the DoD budget process more strategically aligned, integrated, and flexible, which in theory will enable the DoD to respond more effectively to emerging threats and technological advancements.  Whether or not DoD is able to implement the reforms is beside the larger point: resources are scarce and efficiencies must be realized to ensure U.S. National Security in an increasingly global and fluid operating environment.


U.S. Special Operations Command has a long history of being on the cutting edge of revolutionary transformation. In this fiscal context, USSOCOM has the opportunity to continue that legacy. The critical need for budget optimization in U.S. Special Operations cannot be overstated, and through the implementation of program optimization strategies, USSOCOM can improve its ability to meet future operational demands, maintain transparency and accountability in resource allocation, and better prepare for evolving strategic and operational environments. This proactive approach will ensure that USSOCOM remains a robust and responsive force capable of sustaining its critical role in ensuring the national security of the United States.

The alternative is irrelevance.

 

Tony Arvanitakis, Christopher Kelley, and Jeremiah Monk are the founders of Veritas Rei Group LLC, an SBA-certified SDVOSB that provides expert independent program assessments for federal government clients. For information on how Veritas Rei can help optimize your agency’s budgetary programs, please contact tony.arvanitakis@veritasrei.net.


NOTES

 [i] Commission on Planning, Programming, Budgeting, and Execution Reform, “Commission on PPBE Reform: Defense Resourcing for the Future.” March 2024. https://ppbereform.senate.gov/finalreport/ (accessed June 18, 2024).

[ii] US Senate Committee on Armed Services, “FY24 National Defense Authorization Act [Markup] Executive Summary.” June 2024, 17.  https://www.armed-services.senate.gov/imo/media/doc/fy25_ndaa_executive_summary.pdf (accessed 19 June 2024).

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