With President Trump releasing his budget plan for the next fiscal year today, the Pentagon is slated to get a healthy boost. As a result, the Pentagon will need to continue to find ways to be more efficient.
Considering that more than 70 percent of the life cycle costs of a weapons system are experienced during sustainment, performance based logistics (PBL) arrangements have been on the rise between suppliers and the Pentagon. Unlike traditional fee-for-service or time-and-materials contracts, PBL works by specifying outcomes, not activities.
Questions for both buyers and suppliers:
- Do PBL arrangements actually work?
- Do suppliers prefer a PBL arrangement?
- How do buyers drive further focus on outcomes?
- What other means of procurement are effective at reducing total life cycle costs?
Seville Government Consulting