A 4-Step Process Evaluation Model to Assess the Success of Performance Based Logistics Contracts

Performance-Based Logistics (PBL) is DoD' s preferred product support approach in order to satisfy vitally-important war fighter needs. The elasticity of these needs makes it impossible to build a one-fits-all template PBL contract with the contractors. Thus, both economic metrics such as Cost per Unit Usage and non-economic metrics such as Availability, Reliability, Logistics Foot Print and Logistics Response Time can be defined and tailored according to each individual program. However, evaluation of the success of a PBL contract gets harder proportional to the increased number of different types of metrics. This research suggests an integrated model approach for combining multiple criteria when assessing the success of a PBL contract. This approach may be used in operational-level decisions such as reward and penalty decisions within a contract, or strategic-level decisions such as extending the contract with the same contractor, terminating the contract and negotiating with other contractors.