"PBL 2012, Performance-Based Life-Cycle Product Support," held in Washington DC, July 16-18th, provided the usual success stories heard at conferences but there was also discussion of missed successes and what Program Management Offices (PMOs) are doing to avoid pitfalls and adapt to improve operations under Performance Based Logistics (PBL) Firm Fixed Price contracts. Remember that PBL or Product Life-cycle Support strategy is an outcome-based support strategy that's designed to optimize system readiness as well as deliver integrated, affordable, performance solutions. The recent Proof Point study conducted for DoD clearly found that well structured and executed PBL arrangements do deliver performance and price to DoD.
A speaker at the conference said that the current number of PBL contracts in DoD is 86. However, at PBL 2011, we heard that Navy Weapons Systems Support had 176 PBL contracts, so obviously they are out there. Considering PBLs are for work at the component, subcomponent and program level, one would think there would be many more, especially with over $210 billion (2010) spent on supply, Â transportation and maintenance activities.
And PBL 2.0, Enterprise-level PBL, is alive and moving forward. Instead of numerous individual maintenance contracts between each Service and Honeywell, Auxiliary Power Units (APU) will be managed under one PBL contract, this time under the auspices of DLA. Think big cost savings and major supply chain efficiencies, let alone contract efficiencies, for all.
Yes, it's a different way of operating. Each PBL needs to be tailored to the specific program or situation and a trusting and a good relationship developed and maintained between the PMO and contractor(s). Contractors - maybe for the first time - are required to regularly measure and report performance, and meet required performance outcomes. Ask any 3rd Party Logistics Provider (3PL); they've been doing this for more than 10 years. Performance is monitored continuously so that quick action can be taken as needed and continuous improvement efforts result in improved performance, lower costs and/or improved customer satisfaction.
For long term contracts, PBLs are a proven, best practices way for DoD to control and lower costs while gaining improved performance. With tight DoD budgets for the next several years, one would think PBL numbers will be on the rise.
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