The Defense Department recently awarded Boeing [BA] a $2 billion follow-on contract for the C-17 Globemaster III Integrated Sustainment Program (GISP), according to a company statement.
The GISP is a Performance-Based Logistics (PBL) program, which helps provide lower costs through economies of scale from supporting an entire global fleet. The GISP provides support services, such as forecasting, purchasing and material management for the C-17 cargo aircraft and all C-17-unique support. Boeing develops the C-17.
This PBL, which started in 1998 with 42 aircraft, now covers 246 worldwide. This follow-on contract covers fiscal years 2013 through 2017.
Boeing spokeswoman Ellen Buhr said yesterday in an email the company has numerous other PBL contracts, including three awarded in the past month. The Army awarded Boeing Oct. 5 a five-year, $185 million PBL contract for CH-47 Chinook helicopter support. The Navy awarded Bell Boeing a $218 million PBL contract Oct. 4 for V-22 Osprey support, which Buhr said is the first PBL designed to serve the Marine Corps and Air Force variants of the V-22. This contract runs through Dec. 31, 2016. The V-22 is developed by Boeing and Textron [TXT] unit Bell Helicopter. Boeing also develops the CH-47.
Under a PBL arrangement, a customer receives an agreed-to level of system readiness, as opposed to a traditional contract for specific spare parts and support services. This integrated logistics approach, in which Boeing manages United States assets as a designated Inventory Control Point, allows Boeing to apply innovative spares forecasting and modeling tools to maximize aircraft availability while lowering costs. Buhr said these tools allow Boeing to achieve specific outcomes around logistics availability or budgetary limitations to meet the required PBL metrics.
Buhr added Boeing is able to use unique modeling techniques that forecast optimal spares procurement and distribution of spares to base locations that provide the highest spares availability for an entire fleet, including both the Air Force and international customers.
Buhr said Boeing is able to provide readiness levels that exceed those spelled out in PBL arrangements for a number of reasons. One is the company establishes direct sales partnership agreements with Air Force air logistics centers to perform a variety of C-17 airframe and individual component repair actions, which allows Boeing to request a center to perform specific workloads and ensures extremely high readiness rates at the most affordable cost. Buhr said Boeing also performs supply support management for more than 95 percent of the reparable parts on the C-17, adding the company “continually exceeds” contract requirements by achieving a 92 percent delivery rate for these assigned items.