Performance-based logistics

Performance-based Logistics (PBL), also known as performance based life-cycle product support, is a strategy for weapons system support. Instead of contracting for goods and services, the product support manager identifies product support integrator(s) (PSI) to deliver performance outcomes as defined by performance metric(s) for a system or product. The integrator often commits to this performance level at a lower cost, or increased performance at costs similar to those previously achieved under a non-PBL or transactional portfolio of product support arrangements for goods and services.

Performance based logistics is the United States Department of Defense's (DoD) preferred support strategy for weapons systems. It seeks to deliver product support as an integrated, affordable performance package designed to optimize system readiness. PBL meets performance goals for a weapon system through a support structure based on long-term performance agreements with clear lines of authority and responsibility. ^[1]

DoD program managers are required to develop and implement performance-based life-cycle (PBL) support strategies for weapons systems. These strategies should optimize total system availability while minimizing cost and logistics footprint. Trade-off decisions involve cost, useful service, and effectiveness. The selection of the specific performance metrics should be carefully considered and supported by an operationally-oriented analysis, taking into account technology maturity, fiscal constraints, and the timeframe the capability is required. In implementing performance-based life-cycle product support strategies, the metrics should be appropriate to the scope of product support integrators and providers responsibilities and should be revisited as necessary to ensure they are motivating the desired behaviors across the enterprise. ^{[2] [3]}

It is important to note that PBL strategies do not direct that work be contracted to commercial contractors. Building on the best features of the public and private sectors is a key component of the support strategy. Instead of a pre-ordained course of action, Product Managers are directed to implement “sustainment strategies that include the best use of public and private sector capabilities through government/industry partnering initiatives, in accordance with statutory requirements.” ^[4]

Many times the results in employing a PBL strategy have resulted in either increased system performance issues and cost or sometimes both. Examples include the C17 PBL, FIRST, and PBtH. Ideally, the provider has more control over constituent elements that are used to generate the performance results.

History

By the early 1990s, increases in the costs to support fielded systems, decreases in the reliability in general, and an overall decrease in readiness of those systems were being recognized as issues that could continue if unabated. As a result, PBL was advocated by the U.S. DoD in its annual Quadrennial Defense Review in 2001. Since then, not only the U.S. DoD, but other countries as well have adopted this system sustainment strategy as many programs that have employed it have yielded increased system availability, shorter maintenance cycles, and/or reduced costs.

Since inception of the PBL concept, there have been numerous examples of DoD systems that have yielded the anticipated results, and many that have exceeded – some extremely so – the performance expectations. Annual PBL awards highlight three notable achievements; one for component-level PBL arrangements; one for sub-systems; and one for system-level or platform-level PBLs.

Partially in response to some who believed that PBL concepts were still not adequate, and to assess the current state of DoD systems sustainment, DoD’s Office of the Assistant Deputy Secretary of Defense for Materiel Readiness (OADUSD(MR) initiated a Weapon System Acquisition Reform Product Support Assessment in 2009. Its final report was signed by Ashton B. Carter, Under Secretary of Defense for Acquisition, Technology and Logistics. The report affirms the essence of the PBL concept by stating, “there remains a strong consensus that an outcome-based, performance-oriented product support strategy is a worthy objective…” It further identified eight areas that would make product support even more effective, if developed and improved:

1. Product Support Business Model
2. Industrial Integration Strategy
3. Supply Chain Operational Strategy
4. Governance
5. Metrics
6. Operating and Support Costs
7. Analytical Tools
8. Human Capital

See also

• Cost-plus contract
• Fixed price contract
• Military surplus

References

External links

• Performance Based Logistics
• Performance Based Logistics What it Takes
• Defense Acquisition Guidebook, Section 5.1.1.2

• Defense Acquisition Guidebook, Section 5.1.1.3
• DoD Directive 5000.01, The Defense Acquisition System, Enclosure 1, Section E1.1.17 - Performance Based Logistics
• Defense Acquisition Guidebook

• Life Cycle Logistics Community of Practice PBL Topic Area
• PBL Toolkit
• Going Organic