Incorporation of Outcome-Based Contract Requirements in a Real Options Approach for Maintenance Planning

Report Number: SYM-AM-16-022

Series: Acquisition Management

Category: Real Options Theory

Report Series: Symposium Proceedings

Authors: Xin Lei, Navid Goudarzi, Amir Reza Kashani Pour, Peter Sandborn

Title: Incorporation of Outcome-Based Contract Requirements in a Real Options Approach for Maintenance Planning

Published: 2016-05-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: Other Research Faculty

Full Text URL: http://www.acquisitionresearch.net/files/FY2016/SYM-AM-16-022.pdf

Keywords: Performance-based logistics, outcome-based contract

Abstract:

Performance-based logistics (PBL) is growing in popularity for both governmental and non-governmental acquisitions of critical systems. These contracts allow the customer to buy the performance of the system rather than purchase the system and/or to buy the availability of the system rather than pay for maintenance. Outcome-based contracts, which include PBL, are highly quantified