Performance Based Contract (PBC) implementation within the Government of Malaysia (GOM) started in 2011 with the introduction of PBC (First Generation PBC) maintenance contract for Russian made Mi-17 and Agusta aircraft fleet for Fire and Rescue Department of Malaysia (Jabatan Bomba & Penyelamat Malaysia – JBPM), followed by Malaysian Maritime Enforcement Agency (Agensi Penguatkuasa Maritim Malaysia – APMM) on their maintenance contract (Third Generation PBC) for Canadian CL-415 aircraft fleet in 2015.

PBC was initiated by the Ministry of Finance (MOF) based on a study about the “Enhancement of the Royal Malaysian Air Force (RMAF) Contractorisation Program” in August 2011. The Australian Department of Defence (DOD) PBC model has been recommended to be used within the RMAF Capability Sustainment contracting to improve the RMAF readiness. For decades, PBC – which is known as Performance Based Logistics (PBL) in the United States, and Contracting for Availability in the United Kingdom, has been the best practice for defense and non-defense sectors in many nations for maintenance outsourcing from traditional to performance approach in contracting.

The Malaysian Aerospace Industry Blueprint 2030, endorsed by the Malaysian Aerospace Council, recognized the usage of PBC as one of its key initiatives involving the acquisition of maintenance, repair and overhaul (MRO) services for Government aircrafts (Page 51).

Technology Depository Agency (TDA), established in 2015 as the Malaysia Industrial Collaboration Program authority was given three (3) mandates that are (1) ICP Policy operationalization; (2) ICP Management Unit services; and (3) Contractization and business development.  Under the third mandate, TDA undertakes and spearheads all PBC activities within the public sector in Malaysia.  This includes  contractisation strategies and best practices in through-life support mechanism, and PBC Center of Reference (PBC CoR).  The MOF will be issuing PBC Policy and Guidelines by the end of 2018 in order to further enhance the application of PBC in Government Procurement Systems and Capability Sustainment contracts to all Government Agencies and Government-Link Companies (GLCs).