DOD Looks to Performance-Based Logistics to Cut Costs

By Juliet Van Wagenen | October 17, 2014
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The Pentagon, headquarters of the United States Department of Defense
The Pentagon, headquarters of the United States Department of Defense. Photo: Wikipedia

[Avionics Today 10-17-2014] At the Bookings Institution in Washington, D.C., earlier this week, national security experts and industry leaders met to discuss cutting Department of Defense (DOD) costs in the face of a declining military budget.

One proposal, detailed in a statement on Pratt & Whitney’s website, includes a broader adoption of Performance-Based Logistics (PBL) — a contract model designed to incentivize the contractor to reduce total maintenance costs by improving reliability. The service-based contracting model has been used for sustainment of Pratt & Whitney’s F117 engine on the C-17 aircraft, which Jay DeFrank, vice president for communications and government relations at Pratt & Whitney, claims has improved engine time while saving $3 billion over the life of the 15-year contract.

Other companies also report savings with the PBL contract. Sikorsky reported some $60 million in savings with a sustainment contract with the U.S. Navy for the Seahawk helicopter, and a BAE Systems contract also reports a similar savings outcome.

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