As part of the contract, Boeing aims to support individual contracts based on operational performance requirements. The first phase includes the supply and supply chain management of Honeywell`s own parts, which are exclusively licensed to Boeing and are valued at $39 million. The 16 October CSIS report indicates that there are barriers to the optimal performance of performance-based logistics contracts (EDPs), which are due to confusion over the use of working capital and maintenance and working capital. “Boeing`s supply chain management and distribution functions will help ensure that parts are accessible anytime, anywhere based on their use, while reducing storage and logistics cycle costs,” said John Guasto, Boeing`s Director of Global Integrated Services Assistance. CORRECTION: In an earlier version of this article, the use of merit-based logistics contracts by DLA was misguided. DLA awards performance-based logistics contracts, however, the study found that it missed about $1 billion in savings. Federal News Radio regrets this mistake. Note: An important difference between PBAs and other types of agreements is that PBAs contain agreed performance and/or sustainability metrics corresponding to the funding share. Not the others. These contracts focus on delivery rather than goods. If a product breaks down or needs to be serviced in a traditional contract, DoD buys the parts needed by a company and repairs the product.
Contracting for merit-based logistics is a multi-step process that can be applied to new modified or older systems. The process is described as a proven method as part of the web-based performance agreement. A new study from the Center for Strategic and International Studies (CSIS) is pushing the DLA to develop a coordinated approach with the military and the Department of Defense to better use performance-based logistics to preserve weapons systems. Performance-based logistics contracts outline the results of program results and then encourage these goals to be achieved, sometimes throughout the lifecycle. Very complex programs can take advantage of the benefits of PBLs because DoD is at a disadvantage in recruiting and maintaining the skills needed to maintain the desired costs and performance, according to the study. This is particularly important in the areas of information technology and software development. “PBL contracts provide a strong incentive for suppliers to provide the exact results of well-executed competition: reduced costs and improved performance,” the study says. A performance-based agreement (ADP) documents the negotiated and agreed amount of the corresponding assistance and funding needed to meet performance requirements. A PBA with the user identifies the objectives that form the basis of performance-based product support to meet operational requirements. They define the basis of the negotiated benefit and the assistance needed to achieve the service, whether provided by commercial or organic support providers. The Program Manager (MP) is primarily responsible for the implementation and management of assistance agreements.
The Defence Logistics Agency could save approximately $1 billion through defined-benefit logistics, due to the emergence of financial and contractual barriers to working with military services. Sustainability indicators should be the objectives that form the basis of APBs.