While the C-17 program has long been a leader in performance-based logistics (PBL), for many defense contractors PBL still represents a “paradigm shift” that they have yet to understand, let alone implement. For the C-17, PBL dates from 1998, when the U.S. Air Force first signed up for what is now known as the Globemaster III Integrated Sustainment Program (GISP). All seven international customers for the C-17 have since joined the innovative scheme. “We have provided tailored support solutions, maintaining the highest level of aircraft readiness,” said Gus Urzua, Boeing’s vice president and general manager, C-17 GISP. “There’s no other weapon system in the U.S. inventory that has reduced the flight-hour cost as we have–and while improving performance,” he claimed. The C-17 fleet has enjoyed an 86-percent mission-capable rate in recent years, while flight hours costs dropped by 29 percent from fiscal year 2004 to 2011. “We measure monthly against 11 performance metrics. Boeing has exceeded every one by huge amounts,” said Lt. Col. Jeff Hayden, C-17 chief of program integration for the U.S. Air Force.
In the GISP, Boeing provides guaranteed availability to the USAF and is paid by the flight hour. Most of the contract is firm fixed-price, although there is some target-cost-incentive fee pricing. There is an annual renegotiation.
