AMIR REZA KASHANI POUR1,2, PETER SANDBORN1,2, QINGBIN CUI3
1 Department of Mechanical Engineering, University of Maryland, College Park, College Park, Maryland
2 CALCE, Center for Advanced Life Cycle Engineering, Department of Mechanical Engineering, University of Maryland, College Park, Maryland 20740, USA
3 Department of Civil and Environmental Engineering, University of Maryland, College Park, College Park, Maryland
Abstract:
Understanding the total life-cycle cost is an essential part of all sustainment contracts. Sustainment
constitutes 70% or more of the total life-cycle cost of safety-, mission-, and infrastructure-critical
systems. For many types of systems, availability is the most critical factor in determining the total
life-cycle cost of the system. To address this, availability-based contracts have been introduced in the
governmental and non-governmental acquisitions space (e.g., energy, defense, transportation, and
healthcare). As a result, in the new service-oriented environment, formulating contracts in cost effective
ways (for both the customer and the contractor) is of great importance for pricing, negotiations,
and transparency. Meanwhile, the development, implementation, and impact of contract and availability
requirements within contracts is not well understood. This article reviews quantitative studies
that address the critical elements for designing availability-based contracts. Assessments of current
methodologies ranging from optimization- to simulation-based methods in domains of practice that
utilize availability-based contracts are included, and research gaps are identified.
This article is available through the publisher or to CALCE Consortium Members for personal review.