Análisis por Factor

Literature research with respect to PBL results / findings shows different interpretations and/or conclusions.

On request of the DoD, the US Government Accountability Office (GAO) performed a review with respect to DoD‟s implementation of performance-based logistics arrangements. The objective was to determine whether DoD could demonstrate cost savings or improved responsiveness through the use of performance-based logistics arrangements. The results are published in the Report to the Subcommittee on Readiness and Management Support,

Committee on Armed Services, U.S. Senate [Defense Management DoD, 2005]

GAO analyzed the implementation of performance based logistics arrangements for 16 weapon system programs.

Military service Weapon system or component

Program office

Air Force C-17 Air Force Materiel Command

Air Force F-117 Air Force Materiel Command

Air Force JSTARS Warner Robins Air Logistics Center

Air Force C-130J Air Force Materiel Command

Navy ALR-67 (V3) Naval Supply Systems Command

Navy Auxiliary Power Units Naval Supply Systems Command and Naval Air Systems Command

Navy F-18 E/F FIRST Naval Supply Systems Command and Naval Air Systems Command

Navy F-404 Naval Supply Systems Command and

Naval Air Systems Command

Navy T-45 engines Naval Supply Systems Command and Naval Air Systems Command

Navy V-22 engines Naval Air Systems Command

Navy/Marine Corps

KC-130J Naval Supply Systems Command and Naval Air Systems Command

Army HIMARS Aviation and Missile Command

Army Javelin CLU Aviation and Missile Command

Army TOW-ITAS Aviation and Missile Command

Army TUAV Shadow Aviation and Missile Command

Table 2.2.1.1 Performance-Based Logistics Programs reviewed [Defense Management DoD, 2005]

The following was concluded;

DoD program offices cannot demonstrate that they have achieved cost savings or performance improvements through the use of performance based logistics arrangements. Although DOD guidance on implementing these arrangements states that program offices should update their business case analysis based on actual cost and performance data, only 1 of the 15 program offices included in the review have performed such an update consistent with DoD guidance. In the single case where the program office has updated its business case

analysis, it determines that the performance based logistics contract does not result in expected cost savings and the weapon system does not meet

established performance requirements. In general, program offices have not updated their business case analysis after entering into a performance-based logistics contract because they assume that the costs for weapon system maintenance incur under a fixed price, performance-based logistics contract will always be lower than costs under a more traditional contracting approach and because they lack reliable cost and performance data needed to validate assumptions used. Furthermore, the Office of the Secretary of Defense has not established procedures to monitor program offices to ensure they follow

guidance and update the business case analysis. Additionally, program officials say that, because of limitations in their own information systems, they typically rely on cost and performance data generated by the contractors‟ information systems to monitor performance-based logistics contracts. The program

offices, however, have not determined whether the contractor provided data are sufficiently reliable to update their business case analysis. Although the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA) are most commonly used to monitor higher risk

contracts, such as cost plus contracts, they are potential resources available to assist program offices in monitoring fixed price performance-based contracts.

In doing so, these DoD agencies have the capability to verify the reliability of contractors‟ information systems and collect cost and performance data needed to update the business case analysis. Until program offices follow DoD‟s guidance and update their business case analysis based on reliable cost and performance data, DoD cannot evaluate the extent to which performance-based logistics arrangements are achieving expected benefits and being effectively implemented within DoD.

With respect to these findings the GAO recommends to take the following two actions:

Reaffirm DoD guidance that program offices update their business case analyses following implementation of a performance-based logistics

arrangement and develop procedures, in conjunction with the military services, to track whether program offices that enter into these arrangements validate their business case decisions consistent with DoD guidance.

Direct program offices to improve their monitoring of performance based logistics arrangements by verifying the reliability of contractor cost and

performance data. The program offices may wish to increase the role of DCMA and DCAA in overseeing performance-based logistics contracts.

However, a White Paper called Performance-Based Logistics - The Changing Landscape in Support Contracting [PBL, 2006] shows that in spite of

unprecedented success in improving operational readiness and stemming rampant weapon system support costs, PBL continues to face resistance. In a recent General Accountability Office (GAO) report on PBL, 16 programs utilizing PBL support strategies were examined. GAO findings showed that 10 of the 16 exceeded the performance requirements specified in their PBL agreements, and the remaining 5 programs met all performance requirements A 100% success rate in terms of meeting the objective of „buying performance

outcomes‟. No previous DoD support strategy has approached that level of success, yet GAO still found room to question whether the success “could be attributed directly to their use of performance-based logistics arrangements.”

Clearly, there are still challenges ahead. DoD financial processes, particularly those that dictate the use of various „colors‟ (appropriations) of money are problematic. While most weapon system support costs are funded with

„Operations and Support (O&S)‟ funds, full scope sustainment also requires Procurement and Research, Development, Test, and Evaluation (RDT&E) funding for modifications to counteract obsolescence and improve support processes. PBL transfers many of the „make or buy‟ decisions to the prime support contractor, yet DoD financial rules still require government managers to include separate appropriation funding requirements in contracts .

In other words forcing them to „estimate‟ what kind of support decisions the support contractor will make, and in doing so setting arbitrary boundaries that constrain contractor flexibility to make best value decisions.

Industry has done a great job in joining with DoD in utilizing PBL to deliver real results on today‟s battlefields. Systems such as the Stryker, F/A-18 Super Hornet, C-17, and Joint STARS have all historically demonstrated high mission availability rates in both Operations Iraqi Freedom and Enduring Freedom. Still, PBL has yet to be implemented on very complex „system of systems‟ platforms, such as Navy Carriers, or the developmental Army Future Combat System and Joint Strike Fighter programs.

PBL‟s concept of buying customer (war fighter) performance outcomes will be challenged with these user, variant, and in some cases multi-national systems. In spite of the doubters, there are PBL champions as well.

On September 21, 2005, Ken Krieg, the new USD/AT&L spoke to the National Defense Industry Association (NDIA), and said, “Obviously, there are a number of tools, but one answer is Based Logistics. When Performance-Based Logistics, or PBL, is done right, it focuses energy on the necessary outputs and can provide both effectiveness and efficiency.” PBL has produced too many „wins‟ to warrant slowing its progress. DoD desperately needs

consistent operational readiness and more reliable, easily deployable systems in today‟s global engagement threat environment, and PBL has shown

consistently that it can achieve those results. DoD should press ahead with

vigor, and work towards alleviating any remaining financial, statutory, or policy barriers that limit the full potential of PBL. DoD has made a commitment, through continued downsizing of the base and Depot infrastructure, to rely on public-private partnerships for weapon system support. There is indeed best value in utilizing the immense capabilities, flexibility, and entrepreneurial

approach of the private sector. PBL is the best available strategy that takes full advantage of those benefits, and should receive commensurate continued support and implementation emphasis