Measurement issues in performance-based logistics
| Published date | 01 March 2005 |
| Date | 01 March 2005 |
| DOI | https://doi.org/10.1108/JOPP-05-02-2005-B002 |
| Pages | 164-186 |
| Author | Kenneth Doerr,Ira Lewis,Donald R. Eaton |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 5, ISSUE 2, 164-186 2005
MEASUREMENT ISSUES IN
PERFORMANCE-BASED LOGISTICS
Kenneth Doerr, Ira Lewis and Donald R. Eaton*
ABSTRACT. Performance Based Logistics (PBL) is an acquisition reform that
is intended to improve weapon systems logistics by reducing cost, improving
reliability, and reducing footprint. PBL is an extension of a broad process of
rationalizing and, in many cases, outsourcing government services. As with
other examples of governmental service outsourcing, measurement issues arise
in the gap between governmental objectives and service measurement, and in the
contrast between clear profit-centered vendor metrics, a nd more comple x
mission-oriented governmental metrics. Beyond this, however, PBL presents
new challenges to the relationship between governmental agencies and their
service vendors. In many cases, weapons systems logistical support involves
levels of operational risk that are more difficult to measure and more difficult to
value than other government services. We discuss the implications of
operational risk and other measurement issues on PBL implementation.
INTRODUCTION
Attributes of the New Public Management (NPM) reforms include
disaggregation and decentralization of public services, as well as an
emphasis on the adoption of private sector management practices within
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* Kenn eth Doerr, Ph.D., and Ira Lewis, Ph.D., are Associate Professors, and
Donald R. Eaton, Rear Admiral (Retired), U.S. Navy, is a Senior Lecturer and
Arthur Chair of Logistics, Naval Postgraduate School. Dr. Doerr’s research
interests include work design, decision making, and integrated risk
management. Dr. Lewis’s research interests include transportation, public
policy, and the impact of information technology on logistics. RADM Eaton’s
research interests include enabling the Future Logistics Enterprise and the
increased effectiveness of reliability management in the acquisition logistics
process.
Copyright © 2005 by PrAcademics Press
MEASUREMENT ISSUES IN PERFORMANCE-BASED LOGISTICS 165
the public sector (Osborne & McLaughlin, 2002). Accordingly, the
NPM literature often addresses the establishment of alternative forms of
service delivery, including outsourcing or privatization of government
functions (Borins, 2002). It has been argued that where changes in
institutional arrangements for service delivery are designed to give
organizations specific mandates to focus on providing greater benefits to
specific groups of users, responsiveness and the quality of service should
improve (Aucoin, 1998). In addition, it has been asserted that reductions
in information costs have led to an increase in the effectiveness of
process-oriented structures, such as independent organizations with
focused service delivery responsibilities, relative to functional structures
with a wide scope of responsibilities such as large government
departments (Jones & Thompson, 1999, p. 29).
Advocates of NPM also have leveraged the concept of the minimalist
state, where government arranges for specific services but does not
necessarily provide them (Jones & Thompson, 1999, p. 18; Savas, 2000,
p. 65; Pollitt, 2002). In contrast to traditional public administration,
NPM also is concerned with implementation rather than solely with
policy prescriptions (Kelman, 2003). The focus is therefore more on the
operation of management systems and techniques, and associated
outcomes. Often these approaches cannot be decided upon or
implemented unilaterally, but require some type of cooperative
relationship between stakeholders (Jones, 2003). Such relationships fall
within the scope of public procurement, whose nature and scope reflects
the policy making and management functions of government (Thai,
2001). In particular, the management of relationships between
government and suppliers during contract implementation has been
suggested as a fruitful area for research, given the shift from a
“transactional” to a “relational” philosophy (Wang & Bunn, 2004).
Performance Based Service Acquisition is a U.S. Department of
Defense (DoD) acquisition reform that is intended to reduce the cost of
non-core government services (Office of the Deputy Under Secretary of
Defense – Defense Acquisition Reform [OSD-DAR], 2000). The
guiding principle in Performance Based Service Acquisition is that when
an outside vendor exists that can perform a service more effectively than
a government user could organically (i.e., in-house), the government
client should specify measurable outcomes to a service vendor, and allow
the vendor to best determine the appropriate processes (the “how”) of
delivering the service. In adopting this reform, DoD has been
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