Joe Soules’ Post

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute complex sustainment programs to deliver against services’ mission capability rates. Click through for a breakout of what sustainment and MRO demand could look like in the future, as well as how AlixPartners can help prepare your organization to optimize the delivery of performance-based contracting.

The release of the FY25 US defense budget has highlighted significant opportunities available to contractors via the operations and maintenance spend, a budget category expected to grow 9% through FY29. While sustainment has historically been viewed by some as an afterthought, the rapidly growing costs of F-35 sustainment and the resurgence of performance-based logistics have highlighted the significant opportunity available to contractors – but only if they can execute.

Last week, the DoD released their Regional Sustainment Framework (RSF) with the vision to “Establish a globally connected, resilient, defense ecosystem through collaborative regional sustainment strategies that leverage the strengths of our allies, partners, and the Defense Industrial Base…” The message couldn’t be more clear that the DoD, and it’s allies, are looking to OEMs and their suppliers to take a more active role in end-to-end sustainment. Establishing a Performance Based Logistics (PBL) agreement can support sustainment targets for the DoD and incentivize suppliers, which is directly aligned with the RSF’s goals. My colleagues Ben Brooks, Rodion Kaplounov, Olivia A. White, and I recently published a point-of-view on the future of defense sustainment and how contractors can capture a greater share of the market through successful execution of PBL contracts. Please reach out if you have any questions or are interested in learning more about this topic, end-to-end Sustainment, or other Defense-related topic. #sustainment #PBL #defense https://lnkd.in/e43pZWqu

Recently, the U.S. Air Force announced it will divest one B-2 Spirit stealth bomber that was damaged in a ground accident instead of trying to repair it. Many people know the B-2 as a “$1B+ cost per copy airplane,” but don’t consider the Sustainment costs to support the aircraft. From a Sustainment standpoint, the Air Force expects to save “$32.7 million in operations and maintenance (O&M) funding in 2025 and $176.3 million over the next five years by retiring the single aircraft.” While retiring one B-2 saves some O&M funding, O&M funding as a whole is forecast to increase by 6% in the FY25 budget request and 9% from FY25 to the projected FY29 levels (including supplementals). My colleagues Brian Jones, Rodion Kaplounov, Olivia A. White, and I recently published a point-of-view on O&M funding and how defense contractors can capture a greater share of the defense MRO market through successful execution of Performance Based Logistics (PBL) contracts. If you’re interested in learning more, or having a discussion on PBLs, Sustainment, or any other Defense-related topic, please reach out. https://lnkd.in/eYK8e93e #defense #sustainment #aftermarket

The U.S. Department of Defenses' accelerating demand for Operations and Maintenance components signals a growing opportunity for companies performing sustainment activities in the defense industrial base. While the U.S. Department of Defense's budget is only projected to increase by 2%, the Operations and Maintenance (O&M) budget looks to increase by ~10% during the same period. To seize this opportunity, defense contractors must proactively invest in supply chain and logistics operations to ensure availability of the right workforce, systems, supporting tools, and parts. My colleagues Brian Jones, Olivia A. White, & Rodion Kaplounov outlined how defense contractors should secure these key elements to maximize the most of the coming windfall: