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Life Cycle Logistics

Hot Topics (Part 10): Performance Based Logistics

By Bill Kobren/February 23, 2022

Hot Topics (Part 10): Performance Based Logistics

Bill Kobren

Welcome to the tenth and final installment of our multi-part series of DAU LOG Blog posts highlighting a range of resources, references and related learning opportunities covering a range of critically important multi-disciplinary topics of interest to the defense acquisition workforce. So far, we have examined:

Today we will examine a topic we have visited before, namely an interdisciplinary product support and sustainment strategy topic that has been a foundational part of the DoD policy process for nearly 25 years, namely that of Performance Based Logistics (PBL), also known as Performance Based Life Cycle Product Support:

Definition

  • Synonymous with performance-based product support, where outcomes are acquired through performance-based arrangements that deliver Warfighter requirements and incentivize product support providers to reduce costs through innovation. These arrangements are contracts with industry or inter-governmental agreements. Sources of support may be organic, commercial, or a combination, with a primary focus of optimizing customer support, increasing weapon system availability, and reducing ownership costs. (Source: DAU Glossary)

Statute

DoD Policy

  • DoD Directive 5000.01 The Defense Acquisition System shall:

    • Para 1.2.k. Employ Performance Based-Acquisition Strategies. To maximize competition, innovation, and interoperability, acquisition managers will consider and employ performance-based strategies for acquiring and sustaining products and services. “Performance-based strategy” means a strategy that supports an acquisition approach structured around the results to be achieved as opposed to the manner by which the work is to be performed. This approach will be applied to all new procurements and upgrades, as well as re-procurements of systems, subsystems, and spares that are procured beyond the initial production contract award.

    • Para 1.2.l. Plan for Product Support. Product support strategies (PSSs) will be informed by a business case analysis conducted pursuant to Section 2337 of Title 10, U.S.C. The PSS is designed to facilitate enduring and affordable sustainment consistent with warfighter requirements. Support metrics will be established, tracked, and adjusted where needed to ensure product support objectives are achieved and sustained over the system life cycle. PSSs include the best use of public and private sector capabilities through government and industry partnering initiatives, in accordance with statutory requirements.

    • Para 1.2.m. Implement Effective Life-Cycle Management. The PM is accountable for achieving program life-cycle management objectives throughout the program life cycle. Planning for operations and support will begin at program inception, and supportability requirements will be balanced with other requirements that impact program cost, schedule, and performance. Performance based life-cycle product support implements life-cycle system management.

  • DoDI 5000.91 Product Support Management for the Adaptive Acquisition Framework

    • Para 4.7.a. “The program manager, with the support of the PSM, will develop and implement an effective performance-based life cycle product support (synonymous with performance-based logistics strategy) (emphasis added) that will deliver an integrated and affordable product support solution designed to optimize system readiness for the warfighter.

    • Para 4.7.a. “The performance-based life cycle product support strategy will be the basis for all product support efforts (emphasis added) and lead to a product support package to sustain warfighter requirements.”

    • Para 4.7.b. “At the program level, all product support solutions will be performance based (emphasis added). Product support solutions will include an appropriate mix of product and process metrics with threshold values to monitor performance that may be adjusted as needed to satisfy warfighter requirements. The PSM will employ effective planning, development, implementation, and management in developing a system’s product support arrangements in support of the product support solution.”

    • Para 4.7.c. While performance-based product support arrangements may be a key component of a program’s performance-based lifecycle product support solution, this does not mean that all arrangements with industry will be performance-based logistics contracts. Performance-based logistics contracts are utilized when analysis indicates they can effectively reduce cost and improve performance. Performance-based logistics contracts will be structured to specific program needs and may evolve throughout the life cycle.

    • Para 4.7.d. The PSM will maximize the best use of public and private sector capabilities through Government and industry partnership initiatives (emphasis added) when developing the PSS.

DoD Guidance

DAU Training

ACQuipedia Articles

DoD PBL Proof Point Study

Additional Resources

Non-DAU Training (Note: The information below is provided for informational purposes only; no official DoD or DAU endorsement is intended)

Note: Some material above was taken from an earlier DAU LOG Blog post entitled “One-Stop Shop for PBL Resources, References, Training”.