UNITED STATES MARINE CORPS
PERFORMANCE BASED LOGISTICS (PBL)
GUIDEBOOK
Prepared by
United State Marine Corps
PBL Integrated Product Team
TABLE OF CONTENTS
1.0.Introduction
1.1.Objective
1.2.Goals and strategies
1.3.Background
1.4.PBL Transition
1.5.USMC PBL Application Levels and Codes
2.0.THE APPLICATION of PBL
2.1.PBL Program Life Cycle
2.1.1.PBL Methodology
2.1.2. PBL Documentation
2.2.PBL Implementation Steps
2.2.1Perform Management Analysis (MA)
2.2.2.Initiate PBL Development / Stand up Logistics Integrated Product Team (LOG IPT)
2.2.3.Capture MARFOR Performance Objectives
2.2.4.Develop Tailored Product Support Strategy
2.3.5. Develop User PBA
2.3.6.Conduct Business Case Analysis
2.3.7. Develop Product Support Contract / Agreements
2.3.8.Manage Support Contract Through PSI
2.3.9.Reassess Support Requirements and Strategy Periodically
2.4.In-Service Systems
2.2.Roles and Responsibilities
CHAPTER 3: Summary of Program Requirements
APPENDIX A: NAVSUP PBL STRATEGIES
APPENDIX B: NAVSEA PBL STRATEGIES
Figure B - 1. PBL Development Process
B.1. Tailored PBL Strategy
B.1.1 Evaluate PBL Candidates
Figure B - 2. Sample PEO/IWS As-Is Process Template
Figure B - 3. Sample As-Is Process Diagram
Program Constraints
Table B - 1. Sample Program Constraints and Assumptions
B.1.2. Formulate Product Support Alternatives
B.1.3 Descriptive Assessment Method
B.1.4 Concept Nomenclature
B.1.5 ILS Elements
B.1.7. Best-Value Evaluation Criteria
B.1.7 Non-Financial Criteria
B.1.8 Financial Criteria
B.1.9 Criteria Weighting
b.2. Objectives and Metrics
B.3. Lessons Learned
APPENDIX C: Sample Documents
APPENDIX D:RefErences
1.0.Introduction
1.1.Objective
The objective of this document is to assist the Marine Corps Program Managers (PM), Product Groups (PG) and Performance Based Logistics (PBL) stakeholders and customers in implementing PBL Product Support (PS) strategies during life cycle management of weapons and equipment. This guidebook provides the framework for the application of PBL in accordance with Department of Defense (DoD), Department of Navy (DoN), and United State Marine Corps (USMC) policies / guidance. This guidebook provides insight into the general PBL characteristics and process that will be tailored to the specific system, sub-system or component. Marine Corps Order (MCO) XXX.XX, Marine Corps Performance Base Logistic, can be accessed on line via the Marine Corps homepage at An electronic copy of this guidebook maybe accessed via hyperlinks residing on the homepages of the major Marine Corps commands.
1.2.Goals and strategies
The PBL goal is to improve product support for weapon systems by increasing system availability/readiness and reducing Total Ownership Cost (TOC). The policy issued by Deputy Commandant, Installation & Logistics (DC, I&L) states that PBL is the preferred product support strategy within Marine Corps. The policy also directs PMs to conduct a Business Case Analysis (BCA) for determining the ‘best value’ product support strategy to satisfy the Marine Force’s (MARFORs) performance objectives. ‘Best Value’ is define as the expected outcome that in the program’s consideration provides the greatest overall benefit in response to the objectives. The Marine Corps goal of PBL implementation requires the establishment of long term, collaborated relationships between the warfighter, combat developer, PM, Product Support Integrator (PSI) and Product Support Providers (PSP).
1.3.Background
DoD and the Military Services are transitioning from the traditional logistics support processes to a weapons system product support strategy that is performance-based. PBL is defined as the purchase of product support as an integrated, affordable, performance package designed to optimize system readiness and meet performance goals for a weapon system through long-term support arrangements with clear lines of authority and responsibility. Additional PBL related guidance and background documentation are provided in Appendix D.
1.4.PBL Transition
The major shift from the traditional approach to PBL product support emphasizes what PMs provide to MARFORs. Instead of buying set levels of spares, repairs, tools, and data, the new focus is on purchasing a predetermined level of system/subsystem availability based on negotiated performance objectives. DoD has issued a template for the application of Total Life Cycle Systems Management (TLCSM) and PBL for the life cycle of weapon systems and equipments. The template is intended to provide PMs and Marine Corps PBL stakeholders in the acquisition process; a tool to assist them in ensuring that effective sustainment is addressed over the system/subsystem life cycle. The template focuses primarily on actions during the acquisition phases, where the greatest opportunities exist to leverage sustainment objectives. PM must integrate acquisition and logistics to ensure a superior product support process by focusing on affordable system operational effectiveness and emphasizing life cycle logistics consideration. Two DoD guidance documents, Designing and Assessing Supportability in DoD Weapons System and Product Support Boundaries,should be review in conjunction with this guidebook. These two DoD documents lay a foundation for PBL by developing supportability during system engineering and establishing boundaries within which PBL should be implemented. Although the transition to PBL does not necessarily mean product support will move from Marine Corps organic providers to industry, we can expect increased management of the supply chain by commercial suppliers. Each PBL strategy is unique. PBL suppliers may take on a number of functions normally performed by various Marine Corps activities. These functions may include providing and maintaining technical manuals and technical data, maintenance planning, depot level maintenance, determining spare parts requirements, physical distribution, warehousing of material, configuration management and some engineering functions. Arrangements may be made with industry partners supporting commercially available equipment or government activities supporting military unique equipment. In addition, industry partners may have government activities functioning as their vendors. Figure 1- 1 illustrates the full spectrum of PBL arrangements.
Figure 1- 1 The Spectrum of PBL
1.5.USMC PBL Application Levels and Codes
The USMC PBL Application Levels and Codes establish a convention for describing and reporting the various types of PBL strategies implemented by PMs. To be effective, PBL strategies, like any other products support strategy, must be tailored to the specific system, subsystem, or component. Additionally, a PBL strategy can encompass a single ILS element, several ILS elements, or all ILS elements. The set of strategies, and associated codes, resulting from different combinations of these two factors is shown in Figure 1-2, USMC PBL Application Levels and Codes. To identify the specific combination selected for an individual PBL strategy, a code has been assigned to each combination. For example, the code “S2” designates a program that has implemented PBL across multiple logistics elements at the system level.
Figure 1- 2. USMC PBL Application Levels and Codes
These codes will be used in PBL reports to DC, I&L.
2.0.THE APPLICATION of PBL
2.1.PBL Program Life Cycle
2.1.1.PBL Methodology
The Marine Corps Order for PBL is MCO XXXX.XX, Marine Corps Performance Based Logistics. The Concept of Operations in the policy forms the requirements for the application of PBL at a Marine Corps enterprise level. This section of the guidebook provides the PMs and key stakeholders with a methodology for implementing PBL through the accomplishment of specific steps. Figure 2-1 identifies the major PBL implementation steps. Application of the methodology is iterative, as the steps should be revisited as more information becomes available throughout the acquisition phases and program life cycle. Changes in the system design, the operating environment, and the market for commercial support each have the potential to impact a PBL strategy. Although PBL can be implemented at any point in a weapon system life cycle, actions taken early during the Pre-Acquisition and Acquisition phases provide the greatest opportunity to leverage sustainment objectives. This iterative approach is necessary because compete information is not always available at the beginning of the acquisition process. The sequencing of the steps may be tailored based on where within the program life cycle the methodology is applied and other unique programmatic realities.
PBL Implementation Steps
- Perform Management Analysis (MA)
- Initiate PBL Development / Stand up Logistics Integrated Product Team (LOG IPT)
- Capture MARFOR Performance Objectives
- Develop Tailored Product Support Strategy
- Develop Users Performance Based Agreement (PBA)
- Conduct Business Case Analysis
- Develop Product Support Contract (s)/Agreement(s)
- Manage Product Support Contract (s)/Agreement(s) through Product Support Integrator
- Reassess Support Requirements and Strategy Periodically
Figure 2-1. PBL Implementation Steps
2.1.2. PBL Documentation
PBL documentation will be generated during the program’s life cycle. USMC PBL policy requires the MA and BCA documentation be maintained by the PM along with the other program documents. It is recommended, as a minimum, the following PBL documentation also be maintained within the PM Office.
- Descriptive program information, including, as applicable:
– User, PSI and PSP PBAs
– Performance-based metrics
– Performance-based incentives
– Partnering relationships
– PBL assessment strategy
–PBL exit strategy
– Other as applicable
2.2.PBL Implementation Steps
2.2.1Perform Management Analysis (MA)
The first step, regardless of where the program lies within the life cycle, is to determine whether a PBL strategy should be pursued for an individual system/subsystem. PM will conduct a MA for each new start program and ACAT I/II fielded programs. The MA should weigh the potential benefits and risks of PBL, in terms of affordability and readiness improvements, against the overall program plan documented in the Marine Corps Single Acquisition Plan (MC-SAMP). It should also analyze the potential benefits received by an individual program against the systematic impacts on supportability and affordability across other Product Groups or Programs. Appendix B provides the MA template and the following criteria for the PMto determine if a PBL strategy is appropriate for the program:
- Life Cycle Stage: Impact of a PBL strategy will depend on the current life cycle status of the system/sub-system under review. The earlier in the system life cycle that a PBL strategy is implemented, the greater the potential benefits.
- Acquisition Program Strategy: Any PBL strategy must be incorporated within the overall program acquisition strategy.
- Organic Impact: Product groups, programs and weapon systems align both horizontally by commodities, subsystems, and component levels and USMC logistics vertically. Accordingly, an optimal vertically driven PBL strategy at the program level may lead to sub-optimizing for horizontal driven commodities and visa versa.
- Commercial Base: Analyze long-term prospects for continued competition and sources of logistics products/services given the current organic and industrial base.
- Design Considerations: Analyze the system/subsystem design in terms of potential PBL risks and benefits.
- Technology Considerations: Analyze the technology base for your system/subsystem in terms of potential risks and benefits.
The MA results will provide PM with a tool to determine whether or not the program is a viable PBL candidate along with a discussion of pros and cons, risks, benefits and other relevant aspects of the PBL recommendation. The data necessary to conduct a MA is normally gathered during the Concept Refinement Phase (Pre-Milestone A) and Technology Development Phase (ACQLOG Core Process: Requirements Analyses). For new start programs, the MA should be made at the beginning of the Technology Development Phase. Since the data gathering effort is expected to evolve with the acquisition program, therefore detailed information may not be available at the time of the MA. If the MA shows that the PBL is not an appropriate strategy, the program should develop an alternative support strategy and the decision to use a PBL strategy should be re-evaluated later, System Development and Demonstration Phase (ACLOG Core Process: Design for PEI Supportability), in the program as the system design and product support strategy matures. The results of the MA will be documented in the Marine Corps-Single Acquisition Master Plan (MC-SAMP), Chapter 7, to include any justification for not implementing a PBL approach. The process flow of the MA is shown in Figure 2-2.
Figure 2- 2. Management Analysis Process Flow Chart
2.2.2.Initiate PBL Development / Stand up Logistics Integrated Product Team (LOG IPT)
Once the PM has made the decision to pursue a PBL product support strategy, the next step is to establish a team to apply the implementation guidelines. The PM should establish a LOG IPT, regardless of the product support strategy. For PBL programs, the purpose of the LOG IPT is to develop and manage the execution of PBL principals. For new PBL programs, the LOG IPT should generally be established at the beginning of the Technology Development phase. For new programs, even if the MA supports a traditional organic approach at the system level, the LOG IPT will initiate BCA development during System Design and Demonstration Phases to determine if PBL is a viable option at the sub-system/component level. For a tradition organic programs that are fully fielded, it is recommended the PM should re-evaluate the product support strategy every three to five years by conducting a BCA utilizing established tools and concepts such as Reliability Centered Maintenance (RCM).
The LOG IPT may consist of government and private-sector subject matter experts (SME); however, it is important that they are able to work across organizational boundaries. The composition of the LOG IPT in a PBL program has the additional focus of PBL implementation. Figure 2-3 provides a graphic illustration of the recommended types of SMEs that should participate in a PBL LOG IPT.
2.2.3.Capture MARFOR Performance Objectives
One of the distinguishing characteristics of a PBL strategy is the identification of MARFORs’ performance objectives and the development of a Users PBA between the PM and MARFORs. Understanding of the performance objectives is a life cycle management process for the PM. When beginning the process of capturing MARFORs performance objectives, the PM should emphasize that it is striving to provide a best value solution with PBL potential benefits of:
- Developing relationships that are based on performance outcomes.
- Utilizing integrated supply chains across Government and industry.
- Creating a support environment that maintains long-term competitive pressure on Government and industry support providers.
- Implementing integrated information systems the enable full asset visibility so support is transparent to the end user.
- Exploiting continuous improvement of weapon system supportability and reduction in operating costs through incentivizing support providers to make investments in infrastructure and in system reliability.
During the acquisition phases, MCCDC will represent the MARFORs by identifying and negotiating acceptable cost / performance objectives and associated metrics. PMs have the responsibility to work with MCCDC in determining what are reasonable and attainable performance objectives based on life cycle cost estimates. Joint Capabilities Integration and Development documentation (ICD, CCD, CPD) and the Acquisition Program Baseline provide a foundation for determining and capturing the objectives. The PM will continuously monitor the development and demonstration of systems/subsystems with MCCDC to ensure alignment with the performance objectives. Any proposed changes to the performance objectives may result in possible changes to the User PBA and its associated metrics. The proposed changes will be reviewed by PM – MCCDC for possible agreement modification.
Once a system or subsystem has been deployed, MARFORs, not MCCDC, will have the responsibility of identifying changes to the performance objectives. If performance objectives do change, then the following actions should initiate:
- PM - MARFORs should annually review the Users PBA, and associated metrics for possible Agreement modification and ensure financial resources are available to implement changes. Review of the financial resources should also take into account additional PSI PBA funding requirements.
- PM – PSI should annually review the current PSI PBA and associated metrics for possible Agreement modification.
- PM – MCCDC (MARFORs) will review the Users PBA for impact, if major changes occur to MARFORs’ mission or operational needs.
For fielded systems that are being evaluated for possible PBL product support or where planned major modifications impacting operational capabilities, there may not be up to date program documentation (Operation Requirements Document and Mission Need Statement) which currently identifies MARFORs’ requirements and needs. Therefore, the PM should work with MCCDC to identify and define the high-level support requirements that are most relevant. The performance metrics should be documented in the PBA.
2.2.4.Develop Tailored Product Support Strategy
After the PM has captured MARFORs performance objectives, the LOGIPT should begin to develop an initial PBL support strategy. In developing a PBL strategy it should be tailored to the life cycle of the system, complexity of the system and at a level appropriate to the programs acquisition category. To develop an effective strategy, the PM/LOG IPT needs to identify the differences between the existing and desired performance objectives. The methodology used in developing a tailored PBL product support strategy involved:
- Selecting PBL Candidate(s)
- Assessing the Product Support Environment
- Performing a Market Analysis
- Determining Preferred Support Alternatives
- Establishment of Preliminary Cost and Performance Assessment Baseline
- Obtaining PM Approval/Documenting PBL Strategy
For programs not utilizing a PBL product support strategy, the preceding methodology is performed iteratively since a PBL strategy could evolve with the acquisition process. Therefore, it may be necessary for the PM to revisit each of these processes as the initial support strategy matures through the system‘s life cycle.