Performance-Based Logistics Contracts: A Basic Overview

Performance-Based Logistics (PBL) contracts provide services or sup-port where the provider is held to customer-oriented performance requirements. These contracts are not necessarily designed to save money, but rather to maintain or improve current system or platform performance in a cost constrained world. The Navy began using PBL contracts in 1999, and since then, contract managers have reported improved availability and reduced customer wait time. The Chief of Naval Operations, Director of Assessments, Deputy for Readiness (N-814) asked CNA to look at the Department of Navy's use of PBL contracts and determine whether they were pro-viding the advertised results. This study is expands on an earlier study in which CNA was asked to examine the success of PBL contracts for three programs. The objective of that study was to analyze and assess Navy PBL contracts in order to compare expected versus achieved cost savings and identify traits that characterize PBL contracts that deliver the highest return on investment [1].