A Product Support Arrangement provides a description of the products or services that are required, the metrics that will be used to determine if expectations are being met, the incentives that are available if the expectations are exceeded, and the penalties that may be imposed if minimum requirements are not met.

A Product Support Arrangement provides a description of the products or services that are required, the metrics that will be used to determine if expectations are being met, the incentives that are available if the expectations are exceeded, and the penalties that may be imposed if minimum requirements are not met.

• A. False
• B. Not specified
• C. True
• D. Only for contractors

Answer: (C)

In performance-based logistics, the agreement that governs how support is delivered focuses on outcomes and how success will be measured. A Product Support Arrangement specifically lays out what products or services are required, the metrics that will determine whether performance meets expectations, the incentives available if targets are exceeded, and the penalties if minimum requirements are not met. This structure is what makes the arrangement effective: it ties payment and reward directly to demonstrated performance, drives accountability, and aligns the supplier’s efforts with the government's readiness goals. The description described is exactly what a PSA includes, so the statement is true.

In performance-based logistics, the agreement that governs how support is delivered focuses on outcomes and how success will be measured. A Product Support Arrangement specifically lays out what products or services are required, the metrics that will determine whether performance meets expectations, the incentives available if targets are exceeded, and the penalties if minimum requirements are not met. This structure is what makes the arrangement effective: it ties payment and reward directly to demonstrated performance, drives accountability, and aligns the supplier’s efforts with the government's readiness goals. The description described is exactly what a PSA includes, so the statement is true.