Government-private sector partnerships are key to Pentagon efficiency

ARLINGTON, Va., June 4 (UPI) -- One indication of the success of the Globemaster Sustainment Program Performance-Based Logistics is the reduction in Cost per Flight Hour throughout the life of the contract.

Boeing has reduced the Cost per Flight Hour by over 10 percent in the last four years and is expected to further reduce it by 9 percent from fiscal year 2009 to fiscal year 2011 in constant fiscal year 2008 dollars.

The cumulative savings to the government in the first 10 years of the agreement is estimated to have been $807 million on engine management efforts alone -- both reduced expenditures and cost avoidance.

Engine overhaul turnaround time for the Boeing C-17 Globemaster III heavy military air transport, also known as an air-lifter, was reduced from around 100 days in 2001 to less than 70 days in 2008.

At the same time, the average sustained mission capable rate was 85.5 percent during 2001-2007, the highest rate of any strategic air-lifter in Air Mobility Command. In October 2008 the U.S. Air Force signed a new three-year GSP Performance-Based Agreement with Boeing. One objective of the new agreement is a further cost reduction of $200 million with no decrease in performance.

It is national policy to maintain a core government-owned and -operated defense industrial base. This so called organic base is required by law to spend no less than 50 percent of all funds made available for depot-level maintenance with public depots. Public-private partnerships -- also known as PPPs -- offer the possibility of supporting a healthy organic industrial base while also supporting the needs of the warfighter.

One of the keys to the success of Performance-Based Logistics is the relationships that are created between the private sector and the public sector or organic defense industrial base. As part of the effort to institutionalize Performance-Based Logistics across the U.S. Department of Defense's sustainment base, the Pentagon developed the depot maintenance partnership.

This initiative enables the organic depots to develop appropriate partnerships with the commercial sector, while recognizing the legitimate national security need for DoD to retain depot maintenance capability.

Some PBAs involve equal partnerships between public and private entities; in other instances the public facility is a subcontractor to the private company. There are even cases in which the private company has a PBA to provide supply-chain management support for the public facility, which, in turn, is a subcontractor to the same private company for a PBA on a platform or system. These PPPs help to rationalize the mix of capabilities and skills that exist across the defense industrial base.

Public-private partnerships are vital to reducing the life-cycle costs of weapons systems.

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Part 7: Exploring the advantages of the public-private partnership system

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(Daniel Goure is vice president of the Lexington Institute, an independent think tank in Arlington, Va.)

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(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)