Impact of Diffusion and Variability on Vendor Performance Evaluation

Abstract

Performance-Based Logistics (PBL) is an initiative that the Department of Defense (DoD) has targeted for aggressive implementation in FY 2006-2009 (Wolfowitz, 2004). It is an initiative intended to improve weapon-system logistics outcomes, and to reduce weapon system life-cycle costs. Provider evaluation in PBL is intended to center on clearly specified outcome metrics, and mutually-agreed upon goals on those metrics (DUSD-LMR, 2001) with the idea that the DoD knows best what it wants in terms of logistic services, but the vendor may know best how to provide those services. PBL can be seen as an extension of the principle of commander's intent in which leadership presents goals, but subordinates are encouraged to choose methods and processes (Apgar & Keane, 2004).