Performance Based Specifications: An Investigation of Risk Management Options

The use of Performance Based Specifications (PBS) is a major tenet of Acquisition Reform in the Department of Defense (DOD). Technical Data Packages (TDPs) of old are no longer affordable, thus requiring innovation in Defense procurements. From implementation in 1994, the use of PBS is mandatory for...

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Bibliographic Details
Main Author: Maxwell, J. Allen
Format: Report
Language:English
Subjects:
ACCOUNTING
COST EFFECTIVENESS
DEFENSE INDUSTRY
LOGISTICS MANAGEMENT
Logistics, Military Facilities and Supplies
MILITARY PROCUREMENT
MILITARY REQUIREMENTS
PLANNING PROGRAMMING BUDGETING
RISK ANALYSIS
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Summary:The use of Performance Based Specifications (PBS) is a major tenet of Acquisition Reform in the Department of Defense (DOD). Technical Data Packages (TDPs) of old are no longer affordable, thus requiring innovation in Defense procurements. From implementation in 1994, the use of PBS is mandatory for new procurements, including block and product improvements of legacy systems. There is concern on the part of materiel developers (Program Managers and TRADOC System Managers) who feel a loss of control and a lessening of their ability to influence the acquisition process. While adapting to this new and still changing environment, materiel developers need tools now that can assist with this process. This paper investigates two risk management options, consistent with the Army implementation plan blueprint for change: toward a national production base, that provide insight to the materiel developer, meet the users requirements and yet do not impede the defense industry. The first technique discussed is the use of systems architecting tools to manage complex systems. The second technique combines activity based costing with systems architecting to produce a technique called activity based risk management.