Availability in Performance Based Contracts – Part 2

In an earlier part (Availability Part 1) we described availability as one of the highest priorities of system or service performance in a Performance Based Contract (PBC). We defined is as:

“Availability – providing users with material / services that are in a known state and ready to meet operational preparedness requirements.”

We then described availability performance measures using 4 types; Type 1 Continuous Availability, Type 2 Continuous Unavailability, Type 3 Discrete Availability and Type 4a Interval Availability / Type 4b Interval Unavailability.

While this is a good start we need to look at a some other considerations.

The first consideration is whether the measure represents availability of a number (or fleet) of systems, potentially in multiple geographic locations, or whether the measure only a single system. For example, if I need availability of a tower crane on two different construction sites, when designing the availability measure does the measure represent each site independently or combines both sites? The real question here is whether the measure represents the buyer’s requirement, in this case availability of a tower crane that on both sites to help the construction team. Having a tower crane available on the other construction site when needed on this site does not help. Therefore, care is needed when designing the availability performance measure to accurately reflect whether it represents a single system or fleet, and then how is it averaged (see earlier post on averaging), and potentially then amalgamated with other performance measures (see Weighting Performance Measures).

The second consideration of the measure is defining availability in terms of what sub-systems or components needs to work. For example, consider a complex piece of equipment such as a commercial passenger aircraft such as the Boeing 737. In the case of aircraft there is a minimum criteria of systems that must work for the aircraft to be considered available referred to as the Master Minimum Equipment List (MMEL).  The MMEL describes those sub-systems and equipment that for reasons of safety must be working (e.g. engines, control systems, life vests and rafts, etc.). However, the MMEL doesn’t include optional systems such as the entertainment system. So if the aircraft is safe to fly but the entertainment system isn’t working, is the aircraft available? Now this may be OK for a 1 hour flight, however, if you have ever flown 13 hours from Australia to the US, this is a very different question. Therefore, we need to carefully define what we mean by available in terms of the working order.

Additionally, we need to define any variation between fully functioning vs. partially functioning vs. not functioning. The United States Air Force (USAF) has a term to represent this:

  • Fully Mission Capable (FMC) reflecting the aircraft’s ability to undertake any mission without restriction to the user;
  • Not Mission Capability (NMC) reflecting the aircraft’s inability to undertake any mission regardless of restriction; and
  • Partially Mission Capable (PMC) reflecting the aircraft’s ability to only under a subset of the required missions thereby restricting operations to the user.

While this approach makes sense, the question is how do we score availability for each of these availability states? For example, is the score for FMC equal to PMC? If so, then how do we motivate the seller to deliver FMC rather than PMC every time? Alternatively, if PMC is equal to NMC then is the buyer missing out on availability that could be used? In many cases this situation is addressed by setting FMC to 1 (or 100%), NMC equal to 0 (or 0%) and PMC somewhere between 0.5 to 0.7 (or 50% to 70%) to represent potential benefits to the buyer if the seller offered a PMC aircraft, however, the buyer being clear that the benefits of PMC are not equal to FMC.

Finally, and as required for any performance measure, we need to define who takes the measurement, scores the availability and over what period (e.g. daily, weekly, monthly, quarterly, annually, etc.).

In summary, while availability performance measures represent the goal of many PBC buyers and sellers, care must be taken when designing these measures to ensure that they accurately reflect the need.

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One Response to Availability in Performance Based Contracts – Part 2

  1. Pingback: Supportability Performance Measures | Performance Based Contracting (PBC) Blog

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