A decision-support tool for military aerospace performance-based contracting

Pozzetti, A 2015, A decision-support tool for military aerospace performance-based contracting, Doctor of Philosophy (PhD), Aerospace, Mechanical and Manufacturing Engineering, RMIT University.

Document type: Thesis
Collection: Theses

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Title A decision-support tool for military aerospace performance-based contracting
Author(s) Pozzetti, A
Year 2015
Abstract Previously being within what was a traditionally product driven environment, the last decade has seen many businesses change their approach to managing major acquisitions. This has been very apparent in the field of military aviation, where contracts are large and extend for many decades often covering the full life cycle of the product.

There are some inefficiencies with the previous traditional approach, which separated the activities of identifying and acquiring a product, and then finding a contractor to manage or operate that product. One inefficiency inherent during long-term operations is the need to repeatedly tender for the maintenance and operation of the product, with all the uncertainties that entails. Another arises when the user or operator, other than the manufacturer, does not have the requisite skill or knowledge of the product. Attempts to overcome this by “back-contracting” the manufacturer to maintain the product, can lead to an undesirable monopoly situation and inevitable cost increases.

As a result there is increasing interest in acquiring an overall capability, in other words the tenderer must supply and maintain the product to a specified level of availability that is targeted at a capability.

Research Questions
The research questions answered in this thesis are divided into two parts and are as follows:

In relation to the tender/acquisition phase of a Performance-Based Contract; how to predict the effects of the performance guarantees that are set out for a Performance-Based Contract, together with existing or predicted aircraft system performance.
In relation to the support life cycle phase of a Performance-Based Contract; how to provide visibility of any number of Performance-Based Contracts’ contract performance across multiple aircraft platforms.

It is important to note that there are two main actors involved with a Performance-Based Contract, which is referred to throughout this thesis; Actor 1 being a purchaser and Actor 2 being a supplier. There are many labels used interchangeably through the thesis, which are applied to both Actor 1 and Actor 2.

Actor 1, the purchaser, can also be referred to as the “customer” or the “client” and they are the entity whom are purchasing or acquiring the aircraft systems during the tender/acquisition phase of a contract, or have purchased or acquired and consequently operating the aircraft systems during the support life cycle phase of the contract. Actor 2, the supplier, can also be referred to as the “tenderer”, “manufacturer” “prime contractor”, “service provider”, “product supplier”, “provider” and “contractor” during both the tender/acquisition and the support life cycle phase of the contract. This research takes the Actor 2 point of view as a military aviation supplier providing performance-based services.

There are several problems in making the transition from product-driven to performance-based contract, and these problems can be experienced by both the purchaser and the supplier; the first is ensuring that the supplier has effective foresight of system requirements and performance together with the impact of the specific guarantees defined within the contract. This aspect forms the basis for the first research question. The second problem arises where multiple products, such as aircraft platforms, need to be managed under one or more performance-based contracts. This also forms the basis for the second research question.

The effect of these changes is that the product supplier is now increasingly motivated to consider the serviceability of the product from design, manufacturing and operations, through to the end-of-life. The significance of this change means that contractual capability and/or serviceability guarantees can become very costly if they are not met. (1) The terms used to describe this shift in contractual mechanism are often referred to as Performance-Based Contracting (PBC), Performance-Based Logistics (PBL), Contracting for Availability or Outcomes Based Contracting. (2-4)

The acquisition and through-life operation of military aircraft can be one of the most expensive acquisitions for many nations, and to answer the research questions outlined above this thesis (a) examines the existing tools available for PBC, (b) considers the potential for improved modelling, and (c) develops a model – a Decision-Support System (DSS) – which will allow for more effective management of PBCs.

To answer the questions proposed, a novel model of a Decision-Support System is developed for use with PBCs in this research work. The model incorporates a Data Warehouse, two Discrete Event Simulation (DES) systems and a Fuzzy Logic model comprising of three Fuzzy Inference Systems (FIS). The Fuzzy Logic model developed uses an existing PBC framework as a case study for the FISs, a computational intelligence and artificial intelligence technique, which has a benefit of automation for the calculation process and decisions within the PBC framework. The DES system is used to simulate the PBC framework over the lifecycle of the contract for a given fleet of aircraft. Finally a data warehouse is used for the collection, storage and reporting of data in relation to the PBC.

Expereminentation on this system performed in this research demonstrates clearly the ability to predict the cause and effect of the varying performance a fleet of aircraft systems, supporting maintenance and logistics network has throughout the lifecycle of a PBC including assessment of the contracted performance guarantees. Additionally the model is designed to allow for multiple aircraft platforms enabling the user to compare an existing contract performance against the predicted performance of another contract.
Degree Doctor of Philosophy (PhD)
Institution RMIT University
School, Department or Centre Aerospace, Mechanical and Manufacturing Engineering
Subjects Decision Support and Group Support Systems
Operations Research
Neural, Evolutionary and Fuzzy Computation
Simulation and Modelling
Aerospace Engineering not elsewhere classified
Keyword(s) Performance-based contracting
Aeronautic systems
Decision-support system
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Created: Fri, 24 Feb 2017, 09:03:16 EST by Adam Rivett
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