Performance Based Logistics: Examining the Successes and Challenges When Operating in Stressful Environments
University of Maryland, College Park College Park United States
Pagination or Media Count:
Given current and anticipated budgetary constraints, the Department of Defense DoD must heighten its focus on affordability, especially with regard to operation and maintenance costs, which account for almost two thirds of the defense budget. At the same time, new and evolving threats demand superior technology that is highly-reliable. To a large extent, these twin objectivesreduced costs and better performancecan be achieved through the wider implementation of performance-based logistics PBL contracting, a proven strategy to obtain economical and innovative support solutions. Unfortunately, however, PBL contracting is not being aggressively pursued across the DoD. Under traditional sustainment strategies, the government customer purchases spares, repairs, tools, and data in individual transactions. In contrast, PBL transfers inventory management, technical support, and the supply chain function to a provider, typically a private-sector contractor, who guarantees a specified level of performance, often at a fixed price to the government. In effect, this arrangement aligns both parties objectives. The contractor strives to reduce a systems downtime through cost-efficient maintenance and technical improvements.