Defense management
Subtitle: DOD needs to demonstrate that performance-based logistics contracts are achieving expected benefits : report to the Subcommittee on Readiness and Management Support, Committee on Armed Services, U.S. Senate
Contributors: United States. Congress. Senate. Committee on Armed Services. Subcommittee on Readiness and Management Support
Publisher: U.S. Government Accountability Office
Published: 2005
Place of publication: Washington, D.C.]
Language: eng
Number of pages: 18
Subjects: Rules and practice; Evaluation; Performance contracts; Government policy; Defense contracts; Cost effectiveness; Weapons systems; Maintenance and repair; United States. Department of Defense; United States
Other titles: Defense management, Department of Defense needs to demonstrate that performance based logistics contracts are achieving expected benefits; DOD needs to demonstrate that performance-based logistics contracts are achieving expected benefits; Performance-based logistics
Description: DOD program offices could not demonstrate that they have achieved cost savings or performance improvements through the use of performance-based logistics arrangements. Although DOD guidance on implementing these arrangements states program offices should update their business case analysis based on actual cost and performance data, only 1 of the 15 program offices included in GAO's review had performed such an update consistent with DOD guidance. In the single case where the program office had updated its business case analysis, it determined that the performance based logistics contract did not result in expected cost savings and the weapon system did not meet established performance requirements. In general, program offices had not updated their business case analysis after entering into a performance-based logistics contract because they assumed that the costs for weapon system maintenance incurred under a fixed-price performance-based logistics contract would always be lower than costs under a more traditional contracting approach and because they lacked reliable cost and performance data needed to validate assumptions used. Furthermore, the Office of the Secretary of Defense has not established procedures to monitor program offices to ensure they follow guidance and update the business case analysis. Additionally, program officials said because of limitations in their own information systems, they typically relied on cost and performance data generated by the contractors' information systems to monitor performance-based logistics contracts. The program offices, however, had not determined whether contractor-provided data were sufficiently reliable to update their business case analysis.
Notes: Cover title.

"September 2005."

"GAO-05-966."

Includes bibliographical references.