December 6, 2013 -- By Carden Hedelt, MCSC Corporate Communications
Performance-based logistics is the preferred strategy for providing product support within the Department of Defense, according to Marine Corps Order 4081.2, dating back to January of 2007. Marine Corps Systems Command’s Combat Operations Center, a program under Marine Air-Ground Task Force Command, Control and Communications, has shown what a program can accomplish using PBL.
In the last four years, the program has seen a 21 percent decrease in sustainment costs while maintaining more than 91 percent availability using a tailored PBL agreement. Those results merited the 2013 Secretary of Defense Performance-Based Logistics System Level Award for the COC team.
“Over the years my predecessors have put in for this award,” said Tom Driggers, COC lead logistician. “It’s recognition for our sustained hard work as a team to finally win it this year. It’s a testament to their hard work and dedication to support the warfighter, along with their innovative approach, that allowed us to be recognized.”
The Department of Defense instituted the PBL Awards in 2005 to enhance PBL awareness and encourage PBL excellence. PBL balances Warfighter readiness and product affordability by incentivizing cost-effective solutions from industry to the Department.
In a PBL arrangement, a product support manager identifies certain performance metrics that a product support integrator, or PSI, needs to meet. In the case of the COC, those two metrics were cost, which is measured as sustainment cost per COC per month, and customer satisfaction, which is measured as equipment availability, with an objective of 85 percent and a threshold of 80 percent.
“PBL was the way for us to optimize, but again, it was a way for us to minimize cost across the lifecycle,” Driggers said.
In all, PBL for the Combat Operations Center saved the Marine Corps an estimated $114 million over the course of its life cycle as opposed to other product support strategies.
“It’s in our core to always find out what we can do to best help the warfighter,” Driggers said. In the case of the COC, a well defined and distinct working relationship and the sharing of information between the PMO, the PSI, and the PSP was instrumental. Lonny Haddox, the PSI for the COC who works at Space and Naval Warfare Systems Center – Atlantic in Charleston SC and is the contracting officer’s representative (COR) for the PBL contract, can see the PSP’s actual costs and equipment availability of every single COC.
Haddox shares what he calls an “open kimono” relationship with the COC’s PSP, General Dynamics Information Technolgy: Haddox gets legal access to their extensive maintenance database, barring certain limited sections.
“I’m able to see into the database and into their cost data,” he said. “I can see what they’re charging for parts and employees, and I can see their profits. I can see how long they take to respond to trouble calls and what parts are needed. It’s everything I need to do my data analysis.”
The Firm Fixed Price (FFP) PBL contract is based upon the sustainment cost per COC per month, vice the total cost of the contract. This contracted flexibility permits the monthly invoice payments to change based upon the actual number of COCs supported by the PSP that month. For instance, when COCs are retrograded from OEF and dropped from sustainment, the following month the PSP is only allowed to invoice for the number of COCs still in service under sustainment coverage.
“That’s good customer satisfaction,” Haddox said. “Our focus is making sure we’re as proficient as possible. In the private sector, proficiency is gauged by profit. We gauge it by availability and by efficiency.”