Better PBL Contracts - An Analytical Approach

Successful Performance Based Logistics (PBL) can reduce total ownership costs for government while maintaining or increasing capability. The chance of success depends heavily on the terms in the PBL contract. In this paper, some key success factors and a step wise approach for setting the terms of a PBL contract are presented. This paper offers a step wise analytical approach to PBL contract development, where Monte Carlo simulation is used to design an effective incentive model, to set the performance levels and suitable measurement intervals; all based on proper decision support, mission understanding and consequence analyses. This report is posted with permission of the author. Additional information on the tools cited in this report (SIMLOX and OPUS10) is available in the Product Support Analytical Tools database. Please note the information contained in this research paper is provided for informational purposes only, and does not constitute an endorsement of either the results or the tools used by either the Defense Acquisition University (DAU) or the Department of Defense (DoD).