Performance Based Service Acquisition (PBSA) is a quickly growing concept that takes standard service level agreements with supply chain and logistics service providers to the next level by focusing almost exclusively on the results of the service being offered, and less on how that result is achieved. It’s “pay for performance” at a whole new level.

The approach has been aggressively adopted by the US Department of Defense over the past few years, for example (See Raytheon has to Deliver in Spare Parts Delivery Contract for the Navy).

As evidence of the growing interest in PBSA, it was recently announced that the University of Tennessee, in conjunction with the Defense Acquisition University, has been chartered to identify commercial best practices in Performance-based Service Acquisition. The researchers are seeking companies who have experience or emerging best practices for procuring services through a performance-based approach to participate in the study.  

The goal of the research is to improve the adoption of PBSA techniques for services within the U.S. Department of Defense and to teach DOD personnel how to be better customers in order to achieve maximum benefit and leverage from available commercial suppliers of services.

The research is fully funded by the U.S. Department of Defense and there is no cost to companies that participate outside of a one-day time commitment to host a UT or DAU research faculty member to interview key individuals within the company who are associated with the company’s performance-based service acquisitions.   In return for participating, UT will provide a summary report that shares all of the best practices.  Tools, techniques, and databases used within individual companies will be kept strictly confidential, as well as individual company names/findings.

Companies interested in potentially participating should contact research team member Dr. Karl Manrodt, Associate Professor of Logistics at Georgia Southern University, at kmanrodt@georgiasouthern.edu