As your mother probably told you (many times), bigger isn’t necessarily better. And yet that’s too often the approach the military uses to determine whether it’s succeeding in its mission.
When members of the American defense establishment try to answer former New York City Mayor Ed Koch’s famous question, “How am I doing?” they traditionally begin by measuring raw industrial output. How many weapons and platforms have been repaired? How many tons of matériel have been moved? How many hours of services were provided? How many replacement parts were acquired? And so forth.
Of course, this method for measuring success means military leaders too often focus on getting a few big projects done, when it may be more important to dot the i’s and cross the t’s. After all, you don’t need an F-15 if you’re only going across town. And while many military missions do require complex weapons systems, many if not most rely on smaller groupings manned by skilled personnel.
Luckily, there’s a better way for our military to measure success, an approach that would also save us money.
“Performance-based logistics” is a complex term for a rather simple approach that measures outcomes in terms of how well the system does what we want it to do. Specifically, that means identifying what our warfighters need, whether the system delivered the needed matériel to the warfighters, and whether delivery of goods and services to warfighters was timely and useful.
Performance-based logistics is managed through a system of contracts called performance-based agreements. Program managers begin by conducting a business-case analysis that reveals that a new support arrangement either can deliver the same level of performance to the warfighter at less cost than the existing arrangement or can increase the level of performance at the same cost as the existing arrangement.
Providers are required to meet performance goals, but enjoy some flexibility about how exactly to do so.
Organizationally, the performance-based logistics system works best when government-controlled depots and logistical centers partner with private contractors (usually the contractors that produced the weapons or equipment to be sustained and supported). These public–private arrangements are called outcome-based partnerships.
Current law requires that no more than half the money spent for depot-level maintenance may go to private contractors. That’s a mistaken limit. Public–private partnerships established under performance-based logistics allow contractors to have a greater role in public supply depots. That often means more private investment in infrastructure upgrades in these facilities, giving our troops better equipment without driving up costs for the government.
Most important, the public–private partnerships focus on achieving the best performance outcome for the warfighter. Lawmakers could improve efficiency and save money by increasing the use of public-private partnerships. The result wouldn’t necessarily be bigger systems, but would definitely be better ones.