Performance-based logistics: An answer to the readiness conundrum.

• Author: Captain, Tom
• Position: Viewpoint

The military sustainment mission is vital to strengthening the U.S. competitive global military advantage, but the nation must recognize the sober reality of its challenges, how private industry can help resolve some of the U.S. military's readiness challenges, and what changes in government contracting might be helpful.

Certain service chiefs, the administration and some in the media have stated that U.S. military mission capability and readiness could increasingly be considered a national security problem. Not enough ships and fighters, helicopters, refueling and transport aircraft, and too many of the ones the military has are often down for maintenance and repair.

U.S. Naval Institute Proceedings articles over the past year have stated that virtually all of the naval services' helicopters, the F/A-18 and Harriers are at or below 50 percent readiness levels. Moreover, the number of ready based aircraft do not meet established platform readiness targets. The other two services face similar sustainment challenges on some of their weapon systems platforms.

This does not seem like an acceptable situation at a time when global threats may be more acute and danger could spring at the most inopportune time with no notice. The United States should have existing and very sophisticated military weapon system platforms ready to go when needed to help ensure global stability and safety, and when necessary, fight.

What is the problem and what is getting in the way? There are many causes, even some finger-pointing and some self-inflicted wounds that are to blame. How can the nation solve this problem?

First, military sustainment is shared between private companies and U.S. military depots, as well as the government's intermediate and operational level maintainers. Title 10, USC 2466, is the defining statute that mandates that 50 percent of depot maintenance touch labor must be performed by a government employee, the so-called 50/50 law. Compliance is measured at the military department or defense agency level during each fiscal year. Congress has also mandated for almost three decades that the government must maintain an organic readiness and sustainment capability for core sustainment activities.

Commercial airlines conduct sustainment, employing practices that result in better than 98 percent dispatch reliability. Many of them employ a "power by the hour" performance-based contracting mechanism, to ensure maximum aircraft readiness at a low and competitive cost per flight hour. Simply put, airlines care more about aircraft uptime, than owning and maintaining the aircraft or engines.

A few years ago, the deputy assistant secretary of defense for materiel readiness analyzed weapon systems, subsystems and components sustained using outcome or performance-based strategies, similar to what we see in commercial airline operations. The study found that weapon systems sustained through performance-based logistics delivered savings from 5 percent to 25 percent when compared to legacy sustainment approaches, and improved readiness up to 50 percent or more.

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The United Kingdom's Ministry of Defence is employing such a contract on its...