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Performance Based Service Acquisition: A Quantitative
Evaluation of Implementation Goals and Performance in the
United States Air Force
Abstract
Presenter: Lt Col Curtis G. Tenney, USAF
Capt Dylan D. Pope, USAF
Lt Col Bryan J. Hudgens, USAF
Lt Col David R. King, USAF
Over the last 12 years, the percentage of the Department of Defense (DoD) budget
spent on the procurement of services has risen constantly (Gansler, 2001). In an attempt to
maximize cost savings in the rapidly growing services sector, the DoD established a
Performance Based Service Acquisition (PBSA) strategy that focuses on evaluating contractor
performance based on their ability to meet desired outcomes rather than the means to which the
outcomes are obtained. In April 2000, Dr. Gansler, then Under Secretary of Defense for
Acquisition, Technology and Logistics, issued a memorandum mandating that 50 percent of all
eligible service acquisitions be awarded using PBSA methods by Fiscal Year (FY) 2005. While
some studies (Ausnik, Camm, & Cannon, 2001; Ausnik, Baldwin, Hunter, & Shirley, 2002) have
attempted to measure the potential increases in quality and cost savings, very little research has
been focused on USAF implementation of PBSA and the progress and attainment of the PBSA
goals.
Using multiple years of comprehensive data obtained from the Air Force Contract
Reporting System, also known as the J001, this thesis extends on previous PBSA research
(Lacey, 2004) and seeks to evaluate and analyze the current and expected future states of
PBSA implementation in the USAF, including an assessment of current performance against
PBSA goals, the development of forecasts of future performance against PBSA goals, and the
evaluation of PBSA contract characteristics. A combination of descriptive statistics, forecasting,
contingency tables, and regression were used to analyze the data, draw conclusions, and make
recommendations for PBSA implementation improvements. The results conclude that the USAF
is not meeting interim PBSA goals and will most likely fall short of the FY 2005 PBSA goal.
These results suggest that the goals may not have been reasonable and that the USAF has hit
a natural plateau in PBSA use.
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