DLA moves toward a new era in contracting

The Defense Logistics Agency is expanding its performance based contracts by using metrics goals to incentivize companies to make better products and lower the cost of program sustainment.

Performance based logistics (PBL) contracts pay for outcomes rather than for an object or service.

“Instead of the traditional contract that we’re familiar with in DLA in terms of buying parts, we’re actually buying a performance outcome that the vendor can meet, and through those outcomes we are measuring the performance through metrics that are agreed upon in the contract,” said Carlo Montemayor, DLA’s program manager for the enterprise PBL effort. “There are also incentives and disincentives depending on how well they perform to those metrics.”

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