R&D Budgeting - Its Harder than Rocket Science Or Long Range Budgeting in a Short Term Town OrBudgeting: Democracy Trumps Efficiency 1
Our system is perfectly and purposely designed to not be efficientAs a result, finding and holding on to acredible budget is tougher than Rocket Science What’s the Bottom Line? 2
Managing Expectations and Influencing the Arrow/Circle Touchpoints “White House” NASA Office of Contractors Legislative Affairs Office of Management & International Partners Congressional Members Budget Congressional Staffers Media Congressional Budget Outside Science Office Community Congressional Research Service Office of Science General Accountability Space Advocacy and Technology Office Groups Policy NASA Centers NASA Headquarters General PublicWhat is the bottom line? Our system is perfectly designed to not be efficient. To 3protect Freedom and liberty is it’s purpose. No one player holds the key to power.
The Facts Of Budget LifeAll major issues revolve around money. In theFederal government, the budget drives the debateTiming is everything. Stakeholders at all levelshave different products and expectations relatingto different phases of the budget cycleChange happens…constantlyIt’s not “your” budget. How you see the budgetdepends on where you sit and what stage you arelooking at…one person’s requirement is seen bythe next level as only the request…It is never complete
The Facts Of Budget LifeOne does not go and get capital. One buildscredit so capital seeks youBudget process gets longer and morecomplicated every year. Federal governmentrequires nearly two years to settle on a set of one-year estimates…and even then it is rarelyapproved by Congress before the year in questionbegins...usually takes months. Plan accordinglyYour every move will be second guessed…by amyriad of people looking over your shoulderIt is political! You never know when lightning willstrike…facts can have little relevance if you arecaught in the middle of a big political battle
A perspective on Efficiency vs Democracy…I have always worked with public funds…from dictatorshipto democracy, … from war and defense departments to thecivilian space agency. …no top research manager today canignore the economic, political, and even the social interface ofhuge national programs. He can’t hold himself aloof frompolitics and say he doesnt care for it. It matters. And itmatters most in a free country. In a democracy, the amount ofpolitics is in direct proportion to the amount of the budget –and theres a lot of money in space. Democracy, with itssystem of checks and balances, is not the fastest reacting formof government... but…the public, once informed and arousedcan be trusted to make the right decision. It is essential thatthe team members understand the system of governmentunder which it works – Excerpt from 1962 speech of Wernher Von Braun 6
Budget Advocacy – Depends Where You Sit Task manager to Branch Chief Project to Ctr Directorate Project to Program (and Center) Program to HQ Mission Directorate Theme Manager to AA HQ Mission Directorate to Administrator NASA to OMB Executive vs. Legislative House vs. Senate Authorizations vs. Appropriations Republicans vs. Democrats Member vs. Member Coalition vs. CoalitionWhere does your sense of where the us vs them mentality start? 7 An OMB Story….
By 2020, “Boots on the moon”…We will have had 3-4 Presidents 8 elections for House of Representatives 3 Senate elections 15 budgets So much for stability. However there are three things that will probably outlast us all… 8
…the Basis of Our Budget Authority “We the people of the United States, in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."It all starts with the Constitution but where does fundingNASA fit in?The Space Act refers to our role in support of the“general welfare” 10
The President’s Budget - Broad National Priorities • Sets priority on war against terrorism • Promotes strong economy; includes other high-priority domestic initiatives • Restrains spending throughout the rest of government • Maintains focus on results instead of dollars 11
Where’s the Money? 2007 Outlays $2,770 Billion Discretionary 37% Net Interest DoD Discretionary Homeland *Other Mandatory Security 9% 9% Discretionary 18% 12% 1% 7% 7%Medicaid 18% NDNH Discretionary 14% 21% 21% 18% Medicare Mandatory 63% Social Security* Includes -- Means Tested Income Support, Federal Employee Retirement, and other. NASA is in here .7% of discretionary spending 12
On What Basis are Decisions Made? Budget Priority FactorsStrategic Relevance/Criticality – Critical to achieve level 0 requirements as defined by Exploration vision – Critical to achieve level 0 as expanded to cover NASA goals – Directly critical to either of the above – Tangentially relevant to the above – Not relevant to the aboveAgency Credibility (President’s Vision, Strategic plan,External commitment)State of Development (Implementation, formulation,feasibility, early technology)Cost impact of delay (significant or limited cost impact)Process for Resolving issues (general order: project,program, theme, directorate, agency, overguide (hopefulthinking) 13
Budget Stages – Where are we? We are hereCalendar yr 04 05 06 07 08 09 FY Budget 08 Budget to Congress The “baseline” for FY09 formulation (POP 07) 09 09 08 Submit to OMB 08 (08 accountability report) 08 Appropriation bill signed or CR 07 (07 accountability report) 07 06 (06 accountability report) 06 14 Formulation Advocacy Execution Audit/Evaluation
From Project submit to Appropriation takes at minimum 20 Months - Change Happens! M A M J J A S O N D J F M A M J/J A S O 20 MONTHSGuidelines POP or PPBE 06 08 Appropriation • Final budget PRESIDENT approval • Budget message to Congress CONGRESS • Budget Resolution • Authorization Acts OMB • Appropriation Acts • Review and integrate agency recommendations - Markup and OMB reclama process • Midyear update / • Secure final sequester report determinations by • Apportionment of President appropriated funds AGENCIES • Operating Plans • Internal determination of requirements • Obligations and authorities AGENCIES • Costs - Formation of budget recommendations We are here • Outlays 15
What’s a Project Manager to Do?Requirements need to be credible, responsible, and focused onresults with clearly defined milestones and a baseline against whichprogress can be measured.Credibility counts. A successful track record makes the job ofconvincing people of the need for resources much easier. – Tell reviewers about the project’s accomplishments and the milestones it has met to date. – Show evidence of program control techniques and produce earned value reports that lend credibility to projections, accompanied by plans to resolve any problems. – Let the stakeholders understand relationship of resources to outcomesBe ready to trace the requirements from the project to the agencygoals and objectives. This will enable the stakeholders to know whythis project matters and how it contributes to the larger policy goals.It answers the “so what” factor and enables the reviewers up theline to translate an issue to their own bosses.Be responsive to any questions that come back; deadlines arelooming and lack of responsiveness could lead to the wronginformation going forward.Awareness of operating plan, commitments, obligation, and costingrates. Don’t give anyone an excuse to take those funds away socareful and realistic planning is important. 16
Budget Dynamics for ExplorationFour months into the year and we are facing afull year CR.Implications for budget we just submitted toCongressGo as you can afford to pay – schedule is thevariableDynamics of preliminary estimates becomingthe gospel early in formulationProtecting the roll through to compensate for flatfunding curve 17
Program/Budget Framework: Enabling ExplorationAdvanced Capabilities Theme Constellation Theme Constellation Lunar Precursor Human Technology Program (JSC) Robotic Program Program Program (MSFC) (JSC) (LaRC) Orion • Global Map of the • Human spaceflight • Thermal medical standards Protection System Ares I Moon, Mars Moon for landing Destination: site determination for CEV • Countermeasure Ares V Products • Identification of testing and • Cabin air potential Lunar validation monitor for ISS and Orion Ground resources • Research to Operations • Assessment of accurately estimate • Non toxic RCS radiation hazard in and reduce space and orbital Mission low Lunar orbit radiation risks maneuvering Operations engines • Technology risk • Physiological and reduction for human medical studies on • Nuclear surface EVA lunar landers human/space suit power technology interaction requirements Destination: Commercial Crew/ ISS Cargo Program (JSC) Office of the Chief Requirements Health and Medical Officer 18
Protecting the roll through is essential for success…but very hard in a town that that has a short term focus - Basis for FY07 Budget Submit 8000.0 AR LUN E R UR FO CT 7000.0 GE ITE EVA ED RCH W A 6000.0 ECANS 5000.0 Lande r Taxe s 4000.0 SE&I He avy Lift LV 3000.0 Cre w Launch Ve hicle IP/ ISS 2000.0 Cre w Exploration Ve hicle 1000.0 Launch & M is s ion Sys te m s 0.0 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY06 FY07 FY08 FY09 FY10 FY11 FY12FY05 Carry In 192Available Budget 1734 3058 3068 3613 4084 7698 8344Requirement 1361 2564 2877 4047 4619 5614 7306Total Available 565 494 191 434 535 2084 1038Cum Delta 565 1059 1250 816 281 2365 193403
The thing about democracy, beloveds, is that it is not neat, orderly, or quiet. It requires a certain relish for confusion - Molly Ivans, columnist 20
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