The Current State of Performance Based Logistics and Public-Private Partnerships for Depot-Level Maintenance - Operating Models Outcomes and Issues Report - DTD Oct 10

According to its executive summary, “this Report provides an in-depth look at the current state of performance-based logistics (PBL) as relates to the U.S. Department of Defense’s weapons system maintenance depots (the term ‘performance-based logistics’ (PBL) is used to describe the purchase of support as an “integrated and affordable performance package designed to optimize system readiness and meet performance goals.”). The Report also reviews the public-private partnerships (PPPs) that execute these PBL contracts from the vantage point of success/outcomes, challenges, lessons learned and emergence of best practices in managing these often-complex public private relationships. The Report is divided into seven sections:  Part I provides a brief overview of the pressures and challenges currently facing DoD with regard to weapons systems sustainment. Part II assesses the state of depot-level weapons system maintenance today. It discusses PBL and PPPs—what they are and how they’re used in the context of depot level maintenance. This section also reviews the performance of PBL arrangements and PPPs since their introduction 10 years ago, and looks at how PPPs are used successfully in other countries. Part III discusses PPP management structures—i.e., which party serves as overall managing lead in the partnership arrangement. Insights on the efficacy of the various management structure options are included. Part IV offers an in-depth case study and performance analysis of the PPP to maintain F/A-18 auxiliary power units at the Fleet Readiness Center-East (FRC-East), Cherry Point, NC. The case study includes the most current performance data on fleet availability, cost savings, logistics response time, inventory savings and other metrics. The results of this PPP are impressive: $35 million in total cost savings and cost avoidance, $8.5 million in annual inventory savings, and supply material availability average, of the four programs, supported at the depot increased from 65 percent to 95 percent. Part V reviews potential opportunities for improvement in PBL and PPPs, and quantifies what these improvements could mean for DoD with regard to budgetary savings. Part VI summarizes key challenges facing PBL and PPPs today. These challenges include shifting political policy, obstacles to cultural change, the trend toward federal government in-sourcing, and revisions in acquisitions policy and practice within DoD and the federal government. The section discusses the impact of each of these trends. Part VII provides the authors’ specific recommendations as to how the practice of PBL and PPPs could be improved going forward. These recommendations address defense budgetary issues as well as methodologies for improving the consistency and performance of PBL and PPPs for depot-level maintenance. Part VIII concludes the report with overall observations about the way forward.” This research was conducted by The University of Maryland Center for Public Policy and Private Enterprise, and was sponsored by the Lockheed-Martin Corporation. The University of Maryland Center for Public Policy and Private Enterprise “provides the strategic linkage between the public and private sector to develop and improve solutions to increasingly complex problems associated with the delivery of public services—a responsibility increasingly shared by both sectors. Operating at the nexus of public and private interests, the Center researches, develops, and promotes best practices;  develops policy recommendations; and strives to influence (through its research) senior decision-makers toward improved government and industry results.” This report is posted with permission of the report sponsor on this U.S. government website as a public service and does not constitute or imply endorsement of the report or its recommendations by the U.S. Government, the Department of Defense or the Defense Acquisition University.