Army Programming Process and the Environmental Cost ... · Inconsistent costing approaches – Out-year requirements dropped off significantly Environmental Cost Standardization (ECS)

Lisa J. Smith / DAIM-ISE / (703) 601-1563 / [email protected] 100006MAY2009

Army Programming Process and the Environmental Cost Standardization

Model

Ms. Lisa SmithOACSIM Directorate of Installation Services

Environmental Division

6 May 2009

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4. TITLE AND SUBTITLE Army Programming Process and the Environmental CostStandardization Model

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Agenda

Army PPBES Process Requirements Building Process Environmental Cost Standardization (ECS)

Overview POM Deliberative Process Funds Distribution Process

2 of 24



Army PPBES Process

Army PPBE’s main objective is to establish, justify, and acquire the fiscal and manpower resources needed to accomplish the Army’s assigned missions in executing the Defense Strategy

Planning

Programming and Budgeting

Program Execution

Budget Execution

Size, structure, man equip, train and sustain the Army force

Distribute projected manpower, dollars, and materiel among

competing requirements Convert resource allocation decisions into congressional

requests

Manage and account for funds in approved

programs

Apply resources to achieve approved

program objectives

3 of 24



Army PPBES Cycle

What Installations NeedRequirements

What Installations GetFunding

4 of 24

* Army PPBES Cycle U.S.ARMY

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Lisa J. Smith / DAIM-ISE / (703) 601-1563 / [email protected] 100006MAY20095 of 24

What Installations Need…Requirements Building Process



What Installations Need

6of 23

ECS Requirements +

Non-Recurring Requirements

POM Deliberations

Requirements and Funding Setfor POM Years

Presidents Budget (PB) Set

Army Budget Office

IMCOM, NGB, USAR

Installations, States, RRCs

From POM/BES to PB

POM – Program Objective MemorandumBES – Budget Estimate Submission



Background

Environmental Program Requirements (EPR) turned–off October 2005:– Bottoms up build, labor intensive submittal and process– Inconsistent costing approaches– Out-year requirements dropped off significantly

Environmental Cost Standardization (ECS) model first used for POM FY08-13

ECS revision/update began May 07 to provide greater visibility, auditabilty, reproducibility in recurring activity costs

ECS has migrated from desktop into module of BOS Requirements Module (BRM)



What is ECS?

Generates requirements for Environmental Quality (EQ) program activities

Hybrid Activities Based Costing Methodology designed to use data from existing

authoritative data sources updated as needed Utilized subject matter experts to

– Identify costs – Calculate unit costs specifically designed for this methodology– Determine cost adjustment factors base on installation tier,

size, and location Extensive documentation

– Unit cost factors– Assumptions– Data sources

Flexible enough to incorporate future condition changes and periodic refinements



What does ECS do?

ECS generates costs for recurring requirements for Environmental Quality (EQ) program activities –– Recurring requirements include costs that are either annually

recurring or cyclic in nature

– Generates requirements by installation, by program area, and by activity

Generates sufficient requirement costs to:– Maintain steady state in EQ programs

– Meet current legal and policy-driven requirements

– Assume full and sustained compliance

– Tiered funding levels allows either “Validated” or “Critical”



What Activities are in ECS?

Personnel Compliance

– Clean Air Program – Clean Water Program– Safe Drinking Water Programs– Hazardous Waste – Storage Tanks– Toxic Substances Control

Pollution Prevention– Emergency Planning and Community Right-to-Know Act (EPCRA)– Pollution Prevention Plans

Conservation– Natural Resources– Cultural Resources

Installation Programs and Initiatives



Statistical Analyses

Used to identify appropriate adjustment factors for hybrid-activity based costing

Analyzed differences in environmental expenditures (6 years of data):– Mission (Tier 1, 2, 3)– Size (Small, Medium, Large, etc.)– Location (Alaska, Hawaii, Europe, Pacific Rim**)

Continuing to analyze data for possible links between environmental funding and real property assets– No statistical significance established to date– No linkage between real property and ECS for POM FY10-15– Continue to analyze the appropriate linkage

** Unique factors to account for specific issues



ECS Activity Equation

ECS EQ Requirement

Costs

WaterSolid Waste

Hazardous WasteAir

Storage TanksNatural ResourcesCultural Resources

Installation Programs & Initiatives

= f *Mission

SizeLocationInflation

Environmental Activities Cost Factors

Adjustment Factors

Authoritative Data Sources



ECS Basic Framework

Cost Categories Cost Driver / Unit of Measure

Unit Cost 1Adjust ment

variable 1Adjustment coefficient$/Unit of

Measure Base Year Unit Cost based on

Water

Wastewater

Monitoring and Sampling

Total Cost per wastewater system if wastewater is not privatized;

remote factors applied $1,234 2006Applies to all installations

Hawaii adjustment: applies to all

installations in Hawaii 1.23

Monitoring and Sampling - Lab analyses

Total Cost per wastewater system if wastewater is not privatized $123 2007

Applies to all installations

Permit Applications Total cost per CONUS

installations only $123 2006Medium

installations

Example only numbers not realistic



ECS Documentation

Provides functional definition, cost factors, sources, definition, cost factors, calculations, assumptions, references

* ECS Documentation U.S.ARMY

A e;n '1/a~er Act

CATEGORY Water Seciin enl basins v;ill Je used 1o control discharQes of sediment-ACTIVITY CWA: Non-Point Gou rce {~) laden :,torn wntcr r .mofffron mnltetr_.c,r orca~. Coot wa3 b l•c"' REGULA TORY OR CWA trom an t l-'.ll. stud'/ ror nstaraua1 and mamtenance 01 seatment POLICY OrtiVEfl Stntutc : 33 USC 1251 c : 3 CQ. basins f« di~t-.ubed land

l"<eautallo n: 40 CI"K 1:l:l.:l1 OEFif>JITIOI~ n ,b a ctivity i3 intc'ld cd to OO\'Cr coot3 to comply wi!h Section

Tlte cala 90-ur :e b r ttte ru-nbe-r oi install-at:on maneu•1er r\ fe·a 31!:1 ot me CWA ana retated state. beat or ·oreta-~ c,overnrnQ ~.;r~::s i:s dal i:! tt:lpCJi l::l.l i11 HQ~IS CAT: ODE~ 177 · 0 ami 17720. etandardc t hot r~gula!e non p o. int e o.urce dicchargee. Training

areas are ; sed ·or cornt•at anl naneuver uaintng a 1d can te :>,GOO t.3 ot ~ed'im::nt b.:. .sin will l:e needed ;)¢r ea" e of dis:U'l:e·j charact:orizec 3$ con1imously di~tlJ'be.d 3reas. The'te disturbed area. ttl ::c:.:s c:.1~ •..1ft~11 suiJj~t.:t 1o 11101~ tlXlensiv~ 6MP::; ro1 in:s l~:~11c:. liuu

S'lnrl m::\n~!JP.mP.nt nf f!rn::.ion :::nri ~P.rl imP.."lt t o ntrols; ~.~ rP.qu irP.r. C.Jst ;o Install sectmem c.asrn rs $0.22/ltl. by their St·:~rm Ylealer N FOCS Pemits ancJ/cr 5WPPP~. Ther.e

activties include o ·eventino sed im ent ation. beach. or stream Th~ ~llt 1 ui:ll U lo:till lt: I IC:.J I\:~ .,;o:sl u l t1 t.~J i·•,=nt t;a::;ir• i:s tl4U;.11 lu bon I( c~ion if not ottributc.blc to moncu·tcr d amage; t ,Jn k troil n o;. nf thP. r.nM tr. insts;.ll :'l ~P.r,inP.nt h;:;~in

m~intP.n::\nr.P. rr.::\rl m-.intP.nAnr.~ firP.lYP. llk~ nr nihP.r A"n~ion nnt re.!oultina from the bc;k of ma intena nce to real prcoertv

Seciin enl basins have a 1-year efective l ffe and ml.sl t:·e re-ENGIIJEERED S1.19 (SfVOO) im tnlc :t (or the cq1..ivolcn(• every yccr. ACTIVITY COSl

UNIT OF MEASURo Per acre OCO\IU$ 1nstal a:ion~ haw analog:~us CWA requir~nents CALCULATION IMCOM - CONUS ouUiucd ; , .,;o un!JV·.$UC\: iri.,; FGS.

<.:-ost = t nomeeJet:r cost cet n;aneuveJ area acre "'Numoer or REFERENCES CWA , '33 USC 125' e.t ~eq., 4•) CFR 122.21 m:.meu~'er a rea ':lcrec

F P A ?flO) nP.w:lf1(:n:P..?t r:n-:L•mP.m {.")r Pm{¥0$P.rl FffitJP.nt IMCOM OCOH US Guicl::li:u:s and 3Uinc:'o,"ds for 1h e G:msfrucfiM end Devetoomenf C-ost = EngmeeJet:r cosr cet n;aneuveJ area acre • Numoer or C:~tecorr·. June. Costs 111 d ocument are Q.i'ven in $=v co m an.e.u![er ar~a acres

IJ!i.AR H •:!! ISCAT.:OOE.s ·rrr· oano 1772.

Not tJpp/ic;,bfe U:;t'cJ pu; (e::;::;iof ~ t:-J!.Ptlf i::nt;t: ~n.,; bt:t>l e:nyint:t:Jiuy julfym~ut

de.r ived l:y ass-i stin~ "a,ious DoD in;:t~l a :ic,n;: n V;ate· program Arm'j ~'otionol C uord

~\: livi.it: ::s. Cost = EnoineeJed cost oet n;aneuveJ area acre • Number of muncu~'crarco ':lcrc3 C·:ln3ul:otion wi1h HQ0.6.. and ~thcr Army 3Ul:jccl nc.ttcr c xpcrt3

BASIS FOR Enoineere~ oos: per maneuver are a acre is based on 1he and techmcar worK ·:HOJ!Q_S. ENCitJEEnED m ointcr.a ncc coo~ 033ociotcd v.it h cro3bn ond ::ccimcnt ACI IYI I Y t.:US I connors.

Engmeered cos: per manewer area ocre = ((Secflmem Das/Jl cub;e ieet/Oc te of dir:Wrbect' a1e3 * Cott t::> ;nsfr~l/Jr;edin:en! bos~n

~..:uiJ;c f et::l) • 0 . ~5 <J tiiiUbl Jti<JiillctltJiu.:e ~,;w;(.'tJt:tlf.:.;J/ ilt:t.ul/ <;1..::>1 " (SP.rlim~nf hs;.~;, r.:uh i-: fP.P. f.'~r:rP. o i ,"fis:.furll~d WP.A • !.o<5:1 JO

insta{f/~ediment ba~ir. cubk. ket}) ASS I IMPTIOIIS All A rm'} iMt:~I IMions: w il"' mAnP.uvr_r S'lrP.I\~ will rAr[llf P. SIP.•1imP.nt

and erosion (.Ontrol m etl$UrC$ a nd :hat t ho.:.e Ol CII$Ure$ will re· u 're a n 1ual naintenance.



What Installations Need

15 of 23

ECS Requirements +


Presidents Budget (PB)

POM Deliberations


Army Budget Office

IMCOM, NGB, USAR


From POM/BES to PB




POM Deliberative Process

16 of 23

Current Year 10

Budget Year 11

POM 12-17



What Installations Get…Funding Distribution Process



What Installations Get

18 of 23

ECS Requirements +


Presidents Budget (PB)

POM Deliberations


Army Budget Office

IMCOM, NGB, USAR


From POM/BES to PB




What Installations Get…

19 of 28

IMCOM

Recurring: Common Levels of Support (CLS)

Non-Recurring: STEP

NGBRecurring: Status Toolof the Environmental

Program (STEP)Non-Recurring: STEP

USARC

Recurring: CLS(yet to be implemented)

Non-Recurring

Commands distribute funds using different mechanisms



ECS, CLS, ISR, STEP Linkage

Under Construction No direct link

BOS Requirements Model (BRM)

Common Level of Support (CLS)

Installations Execute

CLS helps IMCOM determine funds

distribution based onfunding levels available

Green, Amber, Red

$$$

Real Property InventoryPopulation Data

Environmental Database

Installations report service

metrics

Installation StatusReport - Services

(ISR)Execution

Data

ECS

Metrics adjust funding levels

POM Development

$$$STEP

BRM/ECS develops recurring requirements

by Installation



ECS, ISR, and STEP Linkage


STEP Database

Installations Execute

Installations input environmental

projects

NGB, USARC determine funds distribution

based onapproved projects

$$$

Real Property InventoryPopulation Data

Environmental Database

Installations report service

metrics

Installation StatusReport - Services

(ISR)Execution

Data

ECS

Metrics adjust funding levels

POM Development

$$$

Under Construction No direct link, informs model



Installation Status Report (ISR)[“How Well” --- Level of Service:

Green C1, Amber C2, Red C3, & Black C4]

ISR-Cost (previously SBC)

[“How Much” ---Dollars & Quantities]

Standard ServiceCosting (SSC)

[“Should Cost”]II PEG MDEP

Managers & POCs

Requirements Build

PROBE & and More HQDA Approved

Adjustments (PBD’s, PDM’s, Senior Leader

Changes)

The Standard Service Costing (SSC) methodology that forms the basic cost algorithms within BRM are developed, certified

and validated by the Deputy Assistant Secretary of the Army for Cost and Economics (DASA-CE).

BRM requirements build requires BOTH ISR –S and ISR–Cost (SBC) data, plus the cost estimating relationships generated by the Standard Service Costing (SSC)

methodology to generate the baseline BOS requirements portfolio for the Army.

•Performance•Quantity

•Cost


http://brm.army.mil

Adjustments re-allocated at Installation Level by Appn, MDEP,

PE and Service

Baseline Requirements

at Installation Level by Appn,

MDEP, PE and Service POMRequirementAC/AR/NG

Adjustments allocated at CMD, Appn, MDEP and

PE Level

II PEG Requirements

Review

RVT ValidationISR-Cost



Questions???

23 of 23

ECS Documentation on AKO:

BRM website: http://brm.army.mil

https://www.us.army.mil/suite/collaboration/GetDocument.do?doid=10798482

Ms. Lisa SmithHQDA

OACSIM Installation Services Directorate

Environmental Division703-601-1563

[email protected]


http://brm.army.mil/

mailto:[email protected]

Documents

Army Programming Process and the Environmental Cost ... · Inconsistent costing approaches – Out-year requirements dropped off significantly Environmental Cost Standardization (ECS)