Performance-Based Logistics

Description and Purpose

F18

Performance-Based Logistics (PBL) contracting is the Department of Defense's preferred method to acquire support, whether this support is organic, contractor-provided, or a partnership of both. Boeing delivers optimized, bundled capability to the warfighter, not just spares or services. Approached from a system level, logistics support for airplanes and weapons is addressed as a total integration task. PBLs use industry as systems integrators for all support elements. Because the military pays for readiness -- not parts or services -- industry's incentive is to ensure system availability. This top-down look at systems requirements ensures industry keeps looking for ways to improve system readiness and reliability. And it results in lower life-cycle cost. Two Boeing examples are frequently cited as PBL successes:

C-17 Globemaster Sustainment Partnership (GSP)

  • Sustained Mission Capability rate of 83.2% in FY0
  • Delivered annual improvements in Mission Capability rates
  • Partnered with U.S. Air Force logistics centers
  • Delivered sustained aircraft availability 8% to 10% above airlift fleet average for past five years
  • Operational cost avoidance $8.5 million in FY04 and $12.4 million in FY05

F/A-18E/F Integrated Readiness Support Teaming (FIRST)

  • Increased Mission Capable rates with 15% cost savings in the initial 5 years
  • Improved logistics center performance through industry partnership, reducing repair turn-around-time by 33%

The real benefit of PBL is that it more directly relates the objectives of the warfighter customer (operational availability, improved reliability, reduced cycle times and costs) to the requirements and incentives of the provider. The total system PBL can integrate the supply chain to have better visibility, thereby improving cycle times and eliminating redundant inventory by improved forecasting.