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Definition
Full-scale formal Business Case Analysis providing a comprehensive examination of expected benefits, costs, and alternatives. This business case analysis is also called a Performance Based Logistics Business Case Analysis (PBL BCA).
General/Information/Narrative
A PBL BCA is an expanded cost/benefit analysis with the intent of determining a best value solution for product support. The BCA assesses each alternative and weighs total cost against total benefits to arrive at the optimum solution. The PBL BCA process goes beyond cost/benefit or traditional economic analyses by documenting how each alternative fulfills the strategic objectives of the program; how it complies with product support performance measures; and the resulting impact on stakeholders. A PBL BCA is a tailored process driven by the dynamics of the pending investment (PBL) decision. The BCA identifies which alternative support options provide optimum mission performance given cost and other constraints, including qualitative or subjective factors.
Depending on the type of PBL contract, the PBL BCA may be used throughout the life cycle of the project. Specifically, the PBL BCA:
- Is used in the initial decision to invest in a project.
- Guides the decision to select among alternative approaches.
- Is used to validate any proposed scope, schedule, or budget changes during the course of the project.
- Should also be used to identify the various budget accounts and amounts affected by the various product support strategies.
- Should be a living document, as project or organization changes occur they should be reflected in updates to the business case.
- Should be used to validate that planned benefits are realized at the completion of the project.
This information should be used in further decisions to sustain or enhance the solution and to refine estimation of benefits and costs for future projects in the organization.
Developing the PBL BCA should determine the following:
- The relative cost vs. benefits of different support strategies.
- The methods and rationale used to quantify benefits and costs.
- The impact and value of Performance/Cost/Schedule/Sustainment tradeoffs.
- Data required to support and justify the PBL strategy.
- Sensitivity of the data to change.
- Analysis and classification of risks.
- A recommendation and summary of the implementation plan for proceeding with the best value alternative.
The minimal PBL BCA should include:
- An introduction that defines what the case is about (the subject) and why (its purpose) it is necessary. The introduction presents the objectives addressed by the subject of the case.
- The methods and assumptions that state the analysis methods and rationale that fixes the boundaries of the case (whose costs and whose benefits examined over what time period). This section outlines the rules for deciding what belongs in the case and what does not, along with the important assumptions.
- The business impacts are the financial and non-financial business impacts expected in one or more scenarios.
- Risk assessment that shows how results depend on important assumptions ('what if'), as well as the likelihood for other results to surface.
- Conclusions and recommendations for specific actions based on business objectives and the results of the analysis.
The PBL BCA becomes an iterative process, conducted and updated as needed throughout the life cycle as program plans evolve and react to changes in the business and mission environment.
Policies, Directives, Regulations, Laws
Army Regulation 70-127 ILS
Acting USD (AT&L) Policy Memo: Performance Based Logistics Business Case Analysis dtd 20 MAR 2004
Acting USD (AT&L) Policy Memo: Performance Based Logistics Business Case Analysis dtd 23 JAN 2004
OSD (AT&L) PBL Memo dtd 13 FEB 02
OSD (AT&L) Product Support Boundaries Memo dtd 23 SEP 04
OSD (AT&L) Total Life Cycle Systems Management and PBL Memo dtd 24 OCT 03
OSD (AT&L) Total Life Cycle Systems Management and PBL Memo dtd 7 MAR 03
Best Practices, Lessons Learned, Stories, Guides, Handbooks, Templates, Example Tools, Communities of Practice, LEC Tools
Performance-Based Logistics Concept – Part of "Maintenance of Military Materiel"
Defense Acquisition Guidebook Chapter 5.3 – Performance-based Logistics Concept
Defense Acquisition Guidebook Chapter 5.5.4 - Business Case Analysis
Introduction to Defense Acquisition Management (7th Edition September 2005)
Product Support for the 21st Century (2004) - A Guide to Buying Performance
Business Case Model for the DoD Logistics Community - A Guide to Business Case Development
OSD (AT&L) Total Life Cycle Systems Management and PBL Template
The Systems Planning and Requirements Software (SYSPARS) tool can be used to create and subsequently update a Business Case Analysis. Through tailored interactive question and answer sections, SYSPARS assists users with the creation of acquisition documents, such as a Business Case Analysis, throughout the life cycle of a program. It can be used to create required plans early in the life cycle with a Systems Engineering Plan and Acquisition Strategy and continue to assist with various required plans through the end of the program. There are numerous documents within the SYSPARS knowledge base that are designed to assist the acquisition community. A conclusive list and SYSPARS program information can be obtained by visiting the SYSPARS website at https://www.logsa.army.mil/lec/syspars.
The Cost Analysis Strategy Assessment (CASA) Life-Cycle Cost Estimating Software uses an engineering cost model to estimate total cost of ownership based on RDT&E, Acquisition/Procurement, O&S, and Disposal activities. In addition to life-cycle cost estimation, CASA can perform trade-offs, production rate, warranty effectiveness, and other economic analyses. CASA is distributed freely to all US personnel. Request from foreign nations for CASA and associated training and technical support are handled through a Foreign Military Sales Case (FMS). CASA can be obtained here: https://www.logsa.army.mil/lec/casa/.
Product Support Boundaries dtd 1 AUG 04
Management Initiative Decision MID 917 -- Performance Based Logistics dtd 18 OCT 04
Total Life Cycle Systems Management (TLCSM) Plan of Action and Milestones
PBL Toolkit
Training Resources
DoD 5000 Tutorial
BCF 106 Fundamentals of Cost Analysis
BCF 107 Applied Cost Analysis
CLL 004 Life Cycle Logistics For The Rest of US
CLL 011 Performance-Based Logistics
CLL 015 Business Case Analysis
CLB 007 Cost Analysis
CLM 016 Cost Estimating
LOG 102 Systems Sustainment Management Fundamentals
LOG 235 Performance-Based Logistics Part A
LOG 236 Performance-Based Logistics Part B
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Definition General Info Policies Guides Communities Training Related