Logistics & Supply Management

Performance-Based Life-Cycle Product Support

Performance-Based Life-Cycle Product Support (PBL) implementation captures the range of capability solutions that could be employed on a program regarding support/logistics. The approach is incremental, in that each alternative builds on the previous category. In all cases, the system’s sustainment parameters are projected and measured during the design process and then re-assesses once the system is operational so appropriate actions can be taken to achieve the Materiel Availability objective. Within each category, the Program Manager (PM) is responsible for working with the stakeholders to ensure the appropriate actions are taken to meet the user’s needs. The categories do not imply a level of “goodness” but only provide a means to illustrate the wide range of implementation options available to the program. Each category description is described below. [1]

Guide: Performance-Based Logistics: A Program Manager’s Product Support Guide

Category 1: In a life-cycle management environment, all programs should perform to at least this level. This is the traditional support concept where the program buys the various individual support elements. The government develops the requirements, integrates, procures, and balances the logistics elements to achieve the material availability outcome. The contractor metrics are usually cost and schedule. The difference from the traditional approach is what happens once the system is operational. Once operational, the Program Manager (PM) measures the materiel availability and takes appropriate actions with the Stakeholders to meet the user’s needs. However, most of the financial risks are on the government side and the PM works with the logistics element functional offices, government infrastructure/supply chain, and contractors to determine and ensure corrective actions are taken. [1]

Category 2: At level 2 fiscal risks begin to transition, but only in narrow but critical supply chain functional areas. Typical functions falling within this level include providing material, inventory management, transportation, and/or maintenance where the provider is accountable for the responsiveness required to meet customer requirements. This level generally concentrates on providing parts with the government making design decisions. Part availability, mean downtime (MDT) or logistics response time (LRT) is the typical metrics for Level 2 implementations where the time it takes the supplier to deliver the part, commodity or service to the user determines their payment. In using the approach, care must be given to the requirements and contract terms to ensure they drive the supplier’s behavior so the government achieves an affordable material readiness outcome. [1]

The PM is still responsible for taking the appropriate actions with the providers; however, more risks are shared because there are fewer providers with whom to coordinate. The PM still procures many of the individual logistics elements and manages the system’s configuration. The program has to develop performance requirements, integrate, procure, and balance the elements not included in the Performance-Based Agreement (PBA) to achieve an affordable material availability outcome. [1]

Category 3: This level expands the provider’s fiscal risk level by transferring life-cycle support activities to the product support integrator (PSI), making them accountable for sustaining overall system materiel availability. Category 3 typically focuses on maintaining the required availability of key components or assemblies, such as a wing flap or auxiliary power unit, but can include the entire system. In Category 3, there is an additional PSI focus on life-cycle support, training, maintenance, repair and overhaul including logistics planning and execution, in-service engineering, configuration management and transportation. In Category 3, the PSI may also make repair vs. replace decisions. The preferred metric is materiel availability. [1]

At this level, the product support integrator is assigned specific life-cycle responsibility, solely or in partnership, for the breadth of processes affecting materiel availability. This includes aspects of sustainment engineering and configuration control, since reliability and maintenance of equipment and effectiveness of the supply chain influences continually affordable operational availability. [1]

Category 4: This level transfers life-cycle support and design performance responsibilities making the product support integrator responsible for assuring operational availability (Ao) or operational capability. Typically this level applies to systems in the form of operational capability, such as “steaming hours, flying hours or miles per month”; “launches per month”; “power by the hour”; etc. The PSI is assigned responsibility, solely or in partnership, for the breadth of processes that influence Materiel Readiness. This gives the PSI the flexibility to adopt any practices and technology enablers needed to meet required performance levels, including the number of systems deployed and where they are located or staged. [1]

AcqTips:

  • See DAG Figure 5.1.1.3.F1. Performance-Based Life-Cycle Product Support Implementation Framework

AcqLinks and References:

Updated: 3/16/2020

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