Future Contracting for Availability

Abstract

The United States faces unprecedented national security threats in an environment of continued federal budget limitations. The U.S. military must modernize its force to deter near-peer competitors and unstable states, while maintaining high readiness to deter and defeat extreme violent organizations. These factors put significant pressure on research, development, and procurement accounts to field critically needed capabilities in a time of overwhelming demands on resources. These challenges are not unique to the United States. Many of our allies, faced with these same defense modernization and readiness issues, created new public private partnerships through the implementation of Outcomes Based Service Contracting (OBSC). Under the outcomes based model, a customer (Defense) contracts and pays for business results delivered by a service provider (industry), rather than for defined activities, tasks, or assets. These types of contracts focus on the outcomes rather than piece parts or the manner in which the service is provided. This paper explores the fundamental business decisions needed to identify opportunities that will allow the DoD to concentrate on its core competencies of deterrence and national defense. By buying outcomes versus equipment and services, the greater utilization of Outcomes Based Service Contracting will ensure readiness and modernization.