Attachment J-06 - PEIP.pdf

H95001-15-R-0001 Attachment J-06

Change History

Document Versions Date Significant/Major Changes

Original March 30, 2016

Rev 1 May 10, 2016 Incentive fee applicability description revised. Small business evaluation definitions revised. Award fee calculation methodology revised.

Page i

Table of Contents

1.0 Objective

1.1 Concept

1.2 References

2.0 Introduction

3.0 Organization

4.0 Roles and Responsibilities

4.1 IRES Functional Services Manager

4.1.1 IRES CPAR Reviewing Official

4.1.2 Performance Review Board Chair

4.1.3 IRES Award Fee Review Board (AFRB) Chair

4.1.4 IRES Award Term Determining Official

4.2. IRES Performance Evaluation Administrator

4.3 IRES Award Fee Determining Official

4.4 IRES Award Fee Review Board

4.5 IRES Performance Review Board

4.6 Procuring Contracting Officer

4.7 Contracting Officer Representatives / Contracting Officer Technical Representatives

4.8 General Counsel

4.9 Contractor Leadership

5.0 Process Overview

6.0 Evaluation Periods

7.0 Quality Assurance Surveillance Plan

7.1 Overview

7.2 Purpose

7.3 Authority

7.4 Organization

7.5 Roles and Responsibilities

7.6 Monthly Surveillance Process

7.6.1 Performance Review Meetings

7.6.2 Acceptance/Certification of Reports

7.7 Surveillance Methods

Page ii

8.0 Service Summary Items

8.1 Overview

8.2 Corrective Plan Responses for Unsatisfactory QPI Ratings

8.3 QPI Corrective Action Reports (CAR)

9.0 Incentive Fee and Quality Performance

9.1 Overview

9.2 Organization

9.3 Roles and Responsibilities

9.4 Evaluation: Quality Performance Index

9.5 Cost Incentive Elements

9.5.1 Fixed Price Incentive Firm Target (FPIF)

9.5.2 Cost Plus Incentive Fee (CPIF)

9.6 Adjustments

9.6.1 Adjustments to the Share Ratios based on Quality Performance Index Score

9.6.2 Adjustments to the Total Potential Fee/Profit based on QPI Score

9.7 Sample Incentive Fee Calculations

9.8 Data for Determining Underrun/Overrun Status for Interim

Evaluations

9.9 Target Fee/Profit Amounts

9.10 Final Task Order Performance Evaluation

9.10.1 Final Quality Performance Index

9.10.2 Data for Determining Final Underrun/Overrun Shares

9.10.3 Final Task Order Payment

10.0 Award Fee Evaluation

10.1 Overview

10.2 Organization

10.3 Roles and Responsibilities

10.4 Expectations Letter

10.5 Award Fee Pool Amounts

10.6 Performance Criteria, Standards and Ratings

10.7 Calculation Methodology

10.8 Unearned Award Fee

11.0 Contractor Performance Assessment Report

Page iii

11.1 Overview

11.2 Organization

11.3 Roles and Responsibilities

11.4 Process

12.0 Award Term Determination

12.1 Overview

12.2 Organization

12.3 Roles and Responsibilities

12.4 Evaluation Factors

12.5 Eligibility Requirements

12.5.1 Award Term 1

12.5.2 Award Term 2

12.5.3 Award Term 3

12.6 Calculation Methodology

13.0 Performance Evaluation Integrity

14.0 Performance Evaluation/Incentive Plan Changes

15.0 Termination

16.0 Attachments

Attachment 1 – Board Memberships

Attachment 2 – Service Summary Item Performance Description, Weight and Surveillance Method

Page iv

List of Exhibits

Exhibit 1. Integration and Alignment of the PE/IP Components

Exhibit 2. IRES Performance Evaluation/Incentive Plan Organization

Exhibit 3. Performance Evaluation Process Overview

Exhibit 4. Performance Evaluation Periods

Exhibit 5. Monthly Surveillance and Adjudication Process

Exhibit 6. Service Summary Items (SSIs) and Weighting Constraints

Exhibit 7. Sample Fixed Price Incentive Firm Calculation

Exhibit 8. Sample Cost Plus Incentive Firm Calculation

Exhibit 9. General Award Fee Performance Definitions

Exhibit 10. Sample Award Fee Calculation

Exhibit 11. IRES CPAR Development and Review Process

Exhibit 12. Award Term Determination Decision Points

Page v

1.0 Objective

The objective of this document is to outline the Integrated Research & Development for Enterprise Solutions (IRES) Performance Evaluation and Incentive Plan (PE/IP). The Plan is designed to align and integrate all facets of contractor performance, surveillance and incentive in an efficient and cohesive process.

This document serves as the Incentive Fee Performance Evaluation Plan, the Award Fee Plan, and the Award Term Plan. Capturing all plans under one document ensures all elements of the plans and the process are aligned, thus streamlining processes and minimizing the potential for contradictory performance assessments.

1.1 Concept

The task order quality assurance surveillance plan (QASP) data will be used to monitor contractor performance and provide documented evidence necessary in evaluating performance against the Service Summary Items (SSIs). The SSIs evaluations serve as the basis of the semi-annual task order performance evaluations and feedback, which, in turn, will feed the annual task order contractor performance assessment report (CPAR). The compilation of task order CPARs will ultimately determine the contractor’s award term eligibility.

How these elements work together to provide effective contractor surveillance as well as adequate and fair rewards for contractor performance, is shown in Exhibit 1.

1.2 References

MDA Award Fee Policy 5010.07, September 8, 2009 MDA CPARS Manual, 5013.28-M October 24, 2013 DoD Guidance for the Contractor Performance Assessment Reporting System, December 2015

2.0 Introduction

The IRES PE/IP has six elements that provide comprehensive surveillance of contractor performance and incentivize the contractor to deliver quality products and services.

The six elements are:

1. Quality Assurance Surveillance Plan (QASP): The QASP identifies the minimum acceptable performance thresholds and the surveillance methodology for task order-specific products and services. Section 7.0 of this document provides details on the structure and surveillance techniques for the QASP.

2. Service Summary Items (SSI): SSIs are high level objective and measurable performance items established at both the contract and task order level. Successful accomplishment of SSIs will result in the contractor earning Quality Performance Indices (QPI) points. The ultimate goal of the contractor is to earn 100 QPI points per evaluation period. Section 8.0 of this document provides details on the SSI components and structure.

Exhibit 1. Integration and Alignment of the PE/IP Components.

3. Predetermined, Formula-Type Incentives (Incentive Fee):

All predetermined, formula-type incentives, as identified in Federal Acquisition Regulation (FAR) 16.402, are referred to as “incentive fee” throughout the remainder of this document.

Incentive fee incorporates objective evaluation criteria for cost and performance (including delivery), motivating the contractor to effectively manage cost and achieve specific performance thresholds as identified by the SSIs. Fee earned is impacted by the successful delivery of the SSIs and the number of QPI points earned. Rather than having a separate pool for the performance incentive, this plan implements a scale whereby the target fee— after adjustments for overruns or underruns in accordance with FAR clause 52.216-10 or 52.216-16—is decremented for delivery of products and services below the specified performance levels. Section 9.0 provides details on the incentive fee structure, evaluation criteria, and calculation method.

4. Award Fee: Award fee incorporates subjective evaluation criteria, rewarding the contractor for performance that exceeds the established thresholds in a manner that provides benefit(s) to the Government. Award fee is earned on a positive fee scale with a zero base fee whereby the available award fee pool for a period must be earned rather than decremented for non-performance. Note: if award fee is used in addition to the incentive fee, the award fee pool will be less than the target fee. Section 10.0 of this document provides details on the award fee structure, evaluation criteria, and calculation method.

5. Contractor Performance Assessment Report (CPAR): The CPAR documents the contractor’s performance for submission to the Department of Defense (DoD) Contractor Performance Assessment Reporting System (CPARS), providing current and accurate data on contractor performance for use in future source selections. Section 11.0 of this document provides an overview of the CPAR assessment methodology.

6. Award Term: The award term incentive affords the contractor an opportunity to earn additional periods of performance based on consistently delivering products and services that meet or exceed the requirements. Successful performance of the contractor in meeting or exceeding the award term criteria is a precursor to a unilateral Government decision to exercise the award term resulting in an extension of the ordering period. Section 12.0 of this document provides the award term eligibility criteria.

3.0 Organization

The IRES PE/IP organization is shown in Exhibit 2; memberships of the boards are provided in Attachment 1.

Exhibit 2. IRES Performance Evaluation/Incentive Plan Organization.

4.0 Roles and Responsibilities

4.1 IRES Functional Services Manager

The IRES Functional Services Manager is the CPAR Reviewing Official, Performance Review Board Chair, the Award Fee Review Board Chair and the Award Term Determining Official.

4.1.1 IRES CPAR Reviewing Official

The Reviewing Official (RO) provides the check-and-balance impartial review when there is disagreement between the Assessing Official (AO) and the contractor. The RO must review and sign the assessment when the contractor indicates non-concurrence with the CPAR.

The RO will:

(1) Provide narrative comment that supplement the Assessing Official’s comments, as necessary

(2) Sign the CPAR (at this point, it is considered final and is posted in the CPARS and is available for source selection official use in the Past Performance Information Retrieval Systems (PPIRS))

4.1.2 Performance Review Board Chair

The Chair presides over the meeting and facilitates discussions to achieve Board consensus of evaluations, ratings and recommendations that are provided to the Functional Services Manager.

The Chair will:

(1) April and October (annually): Convene the Performance Review Board meetings to:

(a) Review task order performance evaluation reports

(b) Recommend task order award fee rating (if applicable)

(2) July (annually): Convene the Performance Review Board meeting to:

(a) Review expectations letter(s)

(b) Appoint IRES Performance Review Board for the next evaluation period

(c) Nominate Award Fee Review Board members for the next evaluation period

(3) October (annually): Convene the Performance Review Board meeting to:

(a) Review applicable CPAR submissions;

(b) Make a recommendation to exercise/not exercise the Award Terms at the end of

Contract Years 2, 3 and 4

(4) As Needed: In consultation with the contracting officer, serve as the decision authority to resolve contractor disagreements with the COTR-scored SSIs

4.1.3 IRES Award Fee Review Board (AFRB) Chair

Applicable to task orders containing an award fee component.

The Chair presides over the meeting and facilitates discussions to achieve Board consensus of award fee ratings and recommendation to be presented to the Fee Determining Official (FDO).

The AFRB Chair will:

(1) April and October (annually): Convene the AFRB meeting

(2) August (annually): Present the expectations letter packages to the FDO for the upcoming award-fee period. Each task order package includes:

(a) 1 page expectations letter

(b) 7 page summary briefing (backup slides permitted)

(3) August (annually): Present revised PE/IP and AFRB appointment letters to the FDO for the upcoming award-fee period

(4) October (annually): Present award fee recommendations to the FDO

(5) Ensure compliance with MDA Award Fee Directive

4.1.4 IRES Award Term Determining Official

The Award Term Determining Official (ATDO) is responsible for assessing and documenting the contractor’s eligibility for the award terms.

The ATDO will:

(1) Make a unilateral determination to exercise/not exercise the Award Terms at the end of

Contract Years 2, 3 and 4

(a) Prepare a memorandum of record documenting the basis of the award term decision

(b) Instruct the procuring contracting officer to exercise the award term

4.2. IRES Performance Evaluation Administrator

Applicable to all task orders.

The IRES Performance Evaluation Administrator, a COR, is responsible for coordinating the actions required to execute this plan.

The Performance Evaluation Administrator will:

(1) Monthly: Review/finalize COTR-developed surveillance reports

(2) March: Prepare for mid-period performance evaluations

(a) Issue evaluation report forms to COTRs

(b) Schedule Performance Review Board ‘Mid-period’ Meeting

(c) Conduct customer satisfaction surveys

(3) April: Administer the mid-period Performance Review Board Meeting

(a) Compile and distribute read-ahead

(b) Chair meeting in absence of the Functional Services Manager

(c) Finalize documentation for distribution to the contractor

(4) July: Administer the Performance Review Board ‘Expectations Letter’ Meeting

(a) Schedule meeting

(b) Compile and distribute read-ahead

(c) Chair meeting in absence of the Functional Services Manager

(d) Finalize documentation for expectations letter package

(5) September: Prepare for end-period performance evaluations

(a) Issue evaluation report forms to COTRs

(b) Schedule Performance Review Board ‘End-period’ Meeting

(c) Conduct customer satisfaction surveys

(6) October: Administer the end-period Performance Review Board Meeting

(a) Compile and distribute read-ahead

(b) Chair meeting in absence of the Functional Services Manager

(c) Finalize documentation for distribution to the contractor or Award Fee process (if applicable)

(7) November: Administer the Performance Review Board ‘CPAR’ Meeting

(a) Compile and distribute read-ahead

(b) Chair meeting in absence of the Functional Services Manager

(c) Finalize documentation for the PCO’s (serving as the Assessing Official) release to the contractor

(8) Accomplish Award Fee related activities:

(a) Arrange briefings for expectations letters, AFRBs, and fee determination presentations

(b) Provide a complete staff summary package in support of Award Fee briefings (to include: Expectations Letter, FDO Briefing, AFRB briefing, and Draft FDO Determination letter, CPARS input, and Task Order Performance Assessment Reports)

(c) Draft the summary AFRB and FDO briefings

(9) Accomplishing other actions required to ensure the smooth operation of the performance evaluation process

(10) Serve as the Contractor Performance Assessment Reports (CPAR) Assessing Official

Representative (AOR)

(a) Take the CPARS Overview (two hours) and Quality and Narrative Writing training

(b) Register task orders in the CPARS database

(c) Draft, coordinate and load task order CPARs into the CPAR system in accordance with the MDA CPAR manual

(d) Submit properly justified CPAR to the PCO (serving as the CPAR AO)

4.3 IRES Award Fee Determining Official

Applicable to task orders containing an award fee component.

The FDO for this contract is MDA/DA unless delegated. The FDO ensures the amount and percentage of Award Fee earned accurately reflects the contractor's performance.

The FDO will:

(1) September (annually): Approve expectations letter package(s), to include:

(a) Signing the task order expectations letter(s)

(b) Signing/approving the appointment of AFRB members for the next period

(c) Approving the components of the award fee plan incorporated in this document

(2) October (annually): Provide the contractor a written award fee decision that discusses contractor performance, specifies the amount of fee earned on each task order, and reiterates the areas of emphasis included in the expectations letter

(a) Ensure the award fee decision process is thorough and fair

(b) Determine the amount of fee earned

(c) Direct the Contracting Officer to make changes to the award fee plan as necessary

4.4 IRES Award Fee Review Board

Applicable to task orders containing an award fee component.

The Award Fee Review Board (AFRB) will review the Contractor’s performance reports and the IRES Performance Review Board recommendations prior to making an award fee recommendation to the FDO. The AFRB will be provided a summary briefing of the task orders that have an award fee component; incentive fee/profit ratings will be included in the briefing.

The AFRB will:

(1) April (annually): Review the task order performance reports and IRES Performance

Review Board recommendations; recommend an award fee rating

(2) October (annually): Review the task order performance reports and IRES Performance Review Board recommendations; recommend an award fee rating/amount for presentation to the Fee Determining Official

4.5 IRES Performance Review Board

Applicable to all task orders.

The IRES Performance Review Board is a twelve (12) person panel that consists of the chair, the IRES Performance Evaluation Administrator (vice chair) and a cross section of IRES Procuring Contracting Officer (PCOs), Contracting Officer Representatives (CORs), Contracting Officer Technical Representatives (COTRs), and two contractor representatives*, and others as appointed by the IRES Performance Review Board Chair. Board members will be appointed by the Performance Review Board Chair for each 12-month evaluation period. A minimum of eight

(8) government members, one (1) of which must be the chair or vice chair, are required to conduct business.

*Note: The contractor representatives are non-voting members of the Performance Review Board.

The IRES Performance Review Board will assemble four times annually to review performance evaluation reports, expectations letters and CPAR documentation. The board will ensure evaluations are consistent with the surveillance plans.

The IRES Performance Review Board will:

(1) April (annually): Assemble to review mid-period performance evaluation reports. This is approximately a 6 hour meeting that may be conducted over two sessions provided that the same board members attend.

(a) Determine the rating/Quality Performance Index (QPI) points for the contract-level Service Summary Items (SSIs)

(b) Ensure that the Quality Performance Index (QPI) points awarded by the COTR are in accordance with the SSIs defined in the task orders and this plan

(c) Serve as the first order adjudicator to resolve contractor disputes of the COTR-scored SSIs and resulting incentive fee earned

(2) July (annually): Assemble to review task order expectations letter packages. This is approximately a 2 hour meeting.

(a) Review task order expectations letter and briefing

(b) Review and update the IRES Performance Evaluation Plan

(c) Nominate Performance Review Board members for the next evaluation period

(3) October (annually): Assemble to review end-period evaluation reports. This is approximately a 6 hour meeting that may be conducted over two sessions provided that the same board members attend.

(a) Determine the rating/Quality Performance Index (QPI) points for the contract-level Service Summary Items (SSIs)

(b) Ensure that the Quality Performance Index (QPI) points awarded by the COTR are in accordance with the SSIs defined in the task orders and this plan

(c) Serve as the first order adjudicator to resolve contractor disputes of the COTR-scored SSIs and resulting incentive fee earned

(d) Determine, via voting, the recommended task order award fee ratings (if applicable)

(4) November (annually): Assemble to review applicable CPAR submissions. This is approximately a 2 hour meeting.

(a) Ensure the task order CPAR submissions are consistent with the performance evaluations

(b) Make a recommendation to exercise/not exercise the Award Terms at the end of

Contract Years 2, 3 and 4; approximately 2 hours

4.6 Procuring Contracting Officer

Applicable to all task orders.

The Procuring Contracting Officer (PCO) is the binding authority between the contractor and Government. The PCOs will modify the contract/task orders to reflect the decisions of the Performance Review Board, Award Fee Determining Official and Award Term Determining Official.

The PCO will:

(1) Serve as the CPAR Assessing Official (AO)

(a) Take the CPARS Overview (two hours) and quality and narrative writing training

(b) Ensure overall contract execution, review, sign, and process the CPAR

(c) Ensure performance input from program management, technical, functional, quality assurance, contracting and other end users of the product or service is included in the evaluation

(d) Ensure CPARs are of the highest quality; all ratings are clearly supported with comprehensive comments and examples

(e) Release CPAR to the Contractor

(2) Execute incentive fee contract actions to authorize payment of interim/final incentive fee earned within five (5) business days after receipt of Performance Review Board Chair’s decision memorandum

(3) Execute award fee contract actions to authorize payment of award fee earned within five

(5) business days after receipt of the FDO decision memorandum

(4) Execute award term contract actions to exercise the award terms within five (5) business days after receipt of the Award Term Determining Official decision memorandum

4.7 Contracting Officer Representatives / Contracting Officer Technical Representatives

Applicable to all task orders.

Contracting Officer Representatives (CORs) and Contracting Officer Technical Representatives (COTRs) serve as the primary performance monitors, providing the day-to-day surveillance of the contractor’s performance. The CORs focus primarily on the business systems, and the COTRs focus primarily on the technical products. The combination of COR / COTR expertise provides a comprehensive surveillance team to develop the artifacts detailed below. Surveillance is the foundation of the performance evaluation process.

CORs / COTRs will:

(1) Monthly: Conduct surveillance in accordance with the task order QASP and maintain written records of the contractor’s performance that provide specific examples where performance is below or exceeds contract requirements. Participate in monthly feedback meetings with the contractor.

(2) April (annually): Submit the mid-period performance evaluation report that documents the contractor’s overall performance, significant accomplishments, areas for improvement, and goals.

(a) Recommend and defend, with data, the QPI score(s)

(b) Provide substantiating comments that demonstrate that the contractor exceeded performance thresholds in a manner that may result in earning award fee (if applicable)

(c) Brief the task order performance evaluation report to the IRES Performance Review Board and support the boards’ discussion resulting in scoring recommendation(s)

(3) July (annually): Submit the task order expectations letter and briefing identifying expectations and special focus areas. The COR/COTR may seek contractor’s participation in drafting of the letter.

(4) October (annually): Submit the end-period performance evaluation report that documents the contractor’s overall performance, significant accomplishments, areas for improvement, and goals.

(a) Recommend and defend, with data (if necessary), the QPI score(s)

(b) Provide substantiating comments that demonstrate that the contractor exceeded performance thresholds in a manner that may result in earning award fee (if applicable)

(c) Brief the task order performance evaluation report to the IRES Performance Review Board and support the boards’ discussion resulting in scoring recommendation(s)

(5) November (annually): Coordinate on the annual task order CPAR input within five (5) business days of tasking

(6) Take annual performance evaluation refresher training.

4.8 General Counsel

Applicable to all task orders.

MDA/GC will:

(1) Advise the Performance Review Board and AFRB on legal issues relating to board recommendations

(2) Advise the Functional Services Manager on the legal sufficiency of incentive fee, award fee, and Award Term determinations

(3) Review contract clauses for legal sufficiency and advise MDA/DAC accordingly

4.9 Contractor Leadership

Applicable to all task orders.

Contractor leadership will be non-voting members of the IRES Performance Review and the Award Fee Review Boards.

5.0 Process Overview

To minimize the administrative burden of executing the performance evaluation process, an integrated process has been developed, as shown in Exhibit 3.

Exhibit 3. Performance Evaluation Process Overview

6.0 Evaluation Periods

All performance assessments will be conducted semi-annually in accordance with the schedule presented in Exhibit 4.

Contract Year

Evaluation period Start Date* End Date* Notes

1 Period # 1a – Mid-Period 1 Feb 2017 31 Jul 2017 IPMR first report through Jun data Base Period # 1b – End-Period 1 Aug 2017 31 Jan 2018 IPMR month ending Jul through Dec data

CPAR Assessment 1 1 Feb 2017 31 Jan 2018 Results of Evaluation Periods 1a and 1b 2 Period # 2a – Mid-Period 1 Feb 2018 31 Jul 2018 IPMR month ending Jan through Jun data

Base Period # 2b – End-Period 1 Aug 2018 31 Jan 2019 IPMR month ending Jul through Dec data CPAR Assessment 2 1 Feb 2018 31 Jan 2019 Results of Evaluation Periods 2a and 2b

Award Term 1 Assessment [Period 6 eligibility] 1 Aug 2017 31 Jul 2019 Results of CPAR Evaluations 1 and 2 3 Period # 3a – Mid-Period 1 Feb 2019 31 Jul 2019 IPMR month ending Jan through Jun data

Base Period # 3b – End-Period 1 Aug 2019 31 Jan 2020 IPMR month ending Jul through Dec data CPAR Assessment 3 1 Feb 2019 31 Jan 2020 Results of Evaluation Periods 3a and 3b

Award Term 2 Assessment [Period 7 eligibility] 1 Oct 2019 31 Aug 2020 Results of CPAR Evaluation Period 3 4 Period # 4a – Mid-Period 1 Feb 2020 31 Jul 2020 IPMR month ending Jan through Jun data

Base Period # 4b – End-Period 1 Aug 2020 31 Jan 2021 IPMR month ending Jul through Dec data CPAR Assessment 4 1 Feb 2020 31 Jan 2021 Results of Evaluation Periods 4a and 4b

Award Term 3 Assessment [Period 8 eligibility] 1 Oct 2020 31 Aug 2021 Results of CPAR Evaluation Period 4 5 Period # 5a – Mid-Period 1 Feb 2021 31 Jul 2021 IPMR month ending Jan through Jun data

Base Period # 5b – End-Period 1 Aug 2021 31 Jan 2022 IPMR month ending Jul through Dec data CPAR Assessment 5 1 Feb 2021 31 Jan 2022 Results of Evaluation Periods 5a and 5b 6 Period # 6a – Mid-Period 1 Feb 2022 31 Jul 2022 IPMR month ending Jan through Jun data

AT Period # 6b – End-Period 1 Aug 2022 31 Jan 2023 IPMR month ending Jul through Dec data CPAR Assessment 6 1 Feb 2022 31 Jan 2023 Results of Evaluation Periods 6a and 6b 7 Period # 7a – Mid-Period 1 Feb 2023 31 Jul 2023 IPMR month ending Jan through Jun data

AT Period # 7b – End-Period 1 Aug 2023 31 Jan 2024 IPMR month ending Jul through Dec data CPAR Assessment 7 1 Feb 2023 31 Jan 2024 Results of Evaluation Periods 6a and 6b 8 Period # 8a – Mid-Period 1 Feb 2024 31 Jul 2024 IPMR month ending Jan through Jun data

AT Period # 8b – End-Period 1 Aug 2024 31 Jan 2025 IPMR month ending Jul through last report CPAR Assessment 8 [Final Assessment] 1 Feb 2024 31 Jan 2025 Results of Evaluation Periods 8

* Start/end dates to be updated before award

Exhibit 4. Performance Evaluation Periods

Task orders may cross several performance evaluation periods. Incentive fee will be apportioned, and award fee will be allocated, to the period that the work is expected to be performed in. If the planned work schedule changes, the procuring contract officer will:

• Re-align the award fee to the appropriate period.

• Re-apportion the incentive fee to the appropriate period for interim disbursements (note:

incentive fee will be apportioned for interim payout only; final cost data will be used to reconcile incentive fee earned).

Note: Fee associated with task orders that start less than 60 days prior to the start of an evaluation period will automatically be allocated into the next evaluation period.

7.0 Quality Assurance Surveillance Plan

7.1 Overview

The objective of establishing task order Quality Assurance Surveillance Plan (QASP) is to ensure that quality products and services are delivered in accordance with the task order requirements.

The QASP is an internal Government document used to determine if the contractor’s performance meets the performance standards contained in the task orders. The QASP provides the detailed process for a continuous oversight process:

• What will be monitored

• How monitoring will take place

• Who will conduct the monitoring

• How monitoring efforts and results will be documented

The QASP is based on the premise of prevention, rather than detection of issues, by:

• Providing the contractor with timely, objective performance feedback on how well the

Contractor is performing; and

• Identifying areas where improvements are needed.

7.2 Purpose

The contractor is responsible for implementing processes and delivering performance that meets the standards specified in the task order PWS. It is the Government’s responsibility to be objective, fair and consistent in evaluating contractor performance.

The task order QASP is a living document; providing flexibility in the QASP is required to allow for an increase or decrease in the level of surveillance necessary based on contractor performance.

Bottom line, the QASP should facilitate early identification and resolution of performance issues to minimize impact on mission performance.

7.3 Authority

Authority for issuance/use of a QASP is provided under Part 46 of the Federal Acquisition Regulation, Inspection of Services clauses, which provides for inspection, acceptance and documentation of the service(s) called for in the contract or order. This acceptance is to be executed by the procuring contracting officer or a duly authorized representative.

7.4 Organization

The Contracting Officer Technical Representative (COTR) has primary responsibility for providing task order surveillance. The Procuring Contracting Officer, IRES Performance Evaluation Administrator and the IRES Performance Review Board provide oversight to ensure reviews are consistent with the plan.

7.5 Roles and Responsibilities

Reference Section 4.0 for Government roles and responsibilities.

Contractor Role and Responsibilities. The contractor shall develop and maintain a quality program to ensure services are performed in accordance with commonly accepted commercial practices for this task. The contractor shall develop and implement procedures to identify and prevent defective services from recurring.

7.6 Monthly Surveillance Process

The monthly surveillance and adjudication process is shown in Exhibit 5.

Exhibit 5. Monthly Surveillance and Adjudication Process

7.6.1 Performance Review Meetings

If necessary or desired by the COTR or Contractor team, monthly meetings will be conducted to discuss QASP results, metrics, and the relevance/potential impact to performance. These meetings may also be used to review and adjust the QASP.

7.6.2 Acceptance/Certification of Reports

The Contractor has three (3) business days to identify and document concerns, issues or discrepancies to the IRES Performance Evaluation Administrator. If the concerns, issues or discrepancies cannot be resolved, the IRES Performance Evaluation Administrator will elevate the report to the Chair. The Chair is the final adjudication official. If the Contractor has no issues, the report is considered accurate and final as provided to the Contractor.

7.7 Surveillance Methods

Various methods exist to monitor performance. The COTR shall use the surveillance methods listed below in the administration of the task order QASP.

a. Direct Observation. Can be performed periodically or through 100% surveillance.

b. Management Information System (MIS). Evaluates outputs through the use of management information reports. Best used for general surveillance and may need to be supplemented by periodic inspections.

c. Periodic Inspection. Uses a comprehensive evaluation of selected outputs. Inspections may be scheduled [Daily, Weekly, Monthly, Quarterly, or annually] or unscheduled, as required.

d. User Survey. Combines elements of validated user complaints and random sampling.

Random survey is conducted to solicit user satisfaction. Appropriate for high quantity activities that have historically been satisfactory. May also generate periodic and 100% inspections.

e. Validated User/Customer Complaints. Relies on the user of the service to identify deficiencies. Complaints are then investigated and validated. Highly applicable to services provided in quantity and where quality is highly subjective.

f. 100% Inspection. Evaluates all outputs. Most applicable to small quantity, but highly important services. May be used where there are written deliverables and stringent requirements such as tasks required by law, safety, or security.

g. Periodic Sampling. Variation of random sampling. However, sample is only taken when a deficiency is suspected. Good follow-up to MIS analysis. Sample results are applicable only for the specific work inspected. Since sample is not entirely random, it cannot be applied to total activity performance.

h. Random Sampling. Designed to evaluate the outputs of the award requirement by randomly selecting and inspecting a statistically significant sample. Highly recommended for large quantity repetitive activities with objective and measurable quality attributes.

8.0 Service Summary Items

8.1 Overview

Although the contract allows for the flexibility of any contract type and incentive structure at the task order level, with appropriate approval, cost plus incentive fee (CPIF) and fixed price incentive firm (FPIF) are the anticipated predominant contract types. Task orders with an award fee component will also include an incentive fee component. Service Summary Items (SSIs) capture the performance elements of the contract and task order that will impact the fee earned.

Exhibit 6 provides the service summary items and minimum weighting constraints applicable to all incentive task orders issued under the IRES contract; SSI descriptions, performance thresholds and surveillance methods are provided in Attachment 2.

SSIs 1 through 4 are common and required on all task orders and will be assessed at the contract level (i.e., all task orders will receive the same rating for these SSIs). The Performance Review Board is responsible for assigning the ratings for SSIs 1 through 4.

SSI 5 (through n) [Technical Performance] will capture the specific task order Service Summary Items deemed essential to successful (satisfactory) execution of the task order. COTRs for the specific task orders are responsible for defining and assigning ratings for SSI 5 through n.

Service Summary Items will be incorporated into Section 4 of every incentive task order.

SSI # Title Descriptions Weight

SSI 1 Integration Task order activities / requirements are coordinated / deconflicted with other task orders to meet negotiated schedules. Contract / Task order schedules provides a realistic performance baseline that allows for early identification and mitigation of risk.

10%

SSI 2 Small Business Utilization

On track to meet or exceed all goals established in the Small Business Participation and Commitment Plan.

5%

SSI 3 Customer Satisfaction

‘Customer’ is defined as any service provider or user of the products and services delivered under the task order.

5%

SSI 4 CDRL / Proposal Timeliness

CDRLs, proposals and milestones are delivered / accomplished in accordance with the agreed to timeline and specifications.

5%

SSI 5 Technical Performance

To be developed / defined using the performance measures proposed by the contractor.

No greater than 75%

Exhibit 6. Service Summary Items (SSIs) and Weighting Constraints

8.2 Corrective Plan Responses for Unsatisfactory QPI Ratings

In the event the contractor receives of a QPI rating in the unacceptable range in any SSI, the Contractor shall, no later than ten (10) calendar days subsequent to notification thereof, submit a formal plan of action for remedy of the deficiencies, omissions, or non-compliances noted to the PCO, with a copy to the Government Functional Services Manager and Task Order Lead.

8.3 QPI Corrective Action Reports (CAR)

In the event a task order receives a cumulative QPI rating less than 50, a CAR will be issued. In the event two (2) or more task orders receive unsatisfactory QPI rating less than 50 within an evaluation period (reference exhibit 4), all task order QPI ratings will be reduced by 5 percentage points.

9.0 Incentive Fee and Quality Performance

9.1 Overview

The goal of using incentive fee is to reward the contractor for efficiently delivering quality products and services. Efficiency is measured by providing the products and services for less than the target cost; quality is measured by providing the products and services at the specified performance level. Rather than having a separate pool for the performance incentive, this plan implements a scale whereby the target fee—after adjustment for overruns or underruns—is decremented for delivery of products and services below the specified performance levels.

9.2 Organization

The organization that provides oversight of performance on incentive fee task orders includes:

IRES Performance Evaluation Administrator, Contracting Officer Technical Representatives, and the IRES Performance Board.

9.3 Roles and Responsibilities

Reference Section 4.0 for Government roles and responsibilities.

Contractor Role and Responsibilities. The contractor may identify two members to serve on the board; contractor representatives are non-voting members to the IRES Performance Review Board, and is encouraged to participate in all Performance Review Board meetings.

9.4 Evaluation: Quality Performance Index

The target fee—after adjustment for overruns or underruns—will be adjusted to reflect the Quality Performance Index (QPI) score. The QPI system allocates 100 points to the SSIs according to the relative importance of the specific tasks in the Task Order Performance Work Statements (PWS).

At the end of each performance evaluation period, the Performance Review Board will score the contract-level SSIs and the Contracting Officer Technical Representative will score the task order technical SSIs. The Performance Review Board will scrutinize the scoring to ensure compliance with the evaluation plan and task order QASP. SSI weights are subject to the constraints described in Exhibit 6.

9.5 Cost Incentive Elements

9.5.1 Fixed Price Incentive Firm Target (FPIF)

The primary negotiated elements of FPIF task orders and task order line items are as follows:

• Target Cost: The negotiated estimated cost. Note: the target cost will be the sum of the Services/Solutions and Expensed Contractor Acquired Property (CAP) contract line item numbers (CLINs) (e.g., task order [TO] CLINs x001 + x002 + x003 + x004).

• Target Profit: The amount of profit the contractor will earn if the contractor delivers required products and/or services at the target cost.

• Target Price: The sum of target cost and target profit.

• Ceiling Price: The maximum that may be paid to the contract, except for any adjustment under other contract clauses.

• Profit Adjustment Formula / Share Ratios: The formula that is used to adjust profit based on the variance of the final negotiated cost from the target cost.

9.5.2 Cost Plus Incentive Fee (CPIF)

The primary elements of CPIF task orders and task order line items are as follows:

• Target Cost: The negotiated estimated cost. Note: the target cost will be the sum of the Services/Solutions and Expensed CAP CLINs (e.g., TO CLINs x001 + x002 + x003 + x004).

• Target Fee: The amount of fee the contractor will earn if the contractor delivers required products and/or services at the target cost.

• Total Target Cost + Fee: The sum of target cost and target fee.

• Minimum Fee: The minimum fee that will be earned regardless of actual cost incurred.

• Maximum Fee: The maximum fee that will be earned regardless of actual cost incurred.

• Fee Adjustment Formula / Share Ratios: The formula that is used to adjust fee based on the variance of the final total allowable cost from the target cost.

Note: Expensed CAP CLINs X002, X003, and/or X004) were created as an accounting mechanism designed to provide MDA better visibility and linkage of budget, obligation and expenditure data on contractor acquired property (hardware, software, and facilities-relate equipment). Given the Agency’s need for this level of visibility/linkage, as well as the need to include these costs as an integral component of the cost and performance incentive, the target costs associated with these line items (CLINs X002, X003, and X004) will be added to the target cost of the Services/Solutions line item (CLIN X001) for the purpose of administering the incentive. The target profit/fee associated with these line items (CLINs X002, X003, and X004) will be included in the target profit/fee of the Services/Solutions line item (CLIN X001) for the purpose of administering the incentive.

9.6 Adjustments

9.6.1 Adjustments to the Share Ratios based on Quality Performance Index Score To incentivize the contractor to efficiently deliver quality products and services, the share ratio will be increased in the contractor’s favor by 5% if the contractor receives a QPI score of 90 or greater (e.g., negotiated share ratio is 50% government/50% contractor for both underruns and overruns; in the event of a QPI score of 91, the underrun share ratio will be = 45% government/55% contractor and the overrun share ratio will be 55% government/45% contractor).

If the QPI score is less than 50, the share ratio will be increased in the government’s favor by 5% (e.g., negotiated share ratio is 50% government/50% contractor for both underruns and overruns;

in the event of a QPI score less than 50, the underrun share ratio is 55% government/45% contractor and the overrun share ration is 45% government/55% contractor).

Share ratio adjustments will be determined upon calculation of the Final Quality Performance Index (paragraph 9.10.1).

9.6.2 Adjustments to the Total Potential Fee/Profit based on QPI Score The total potential fee/profit will be adjusted by multiplying the negotiated target fee/profit plus or minus underrun/overrun share amount by the quality performance index (QPI); a QPI score of 100 means no adjustment is necessary, the contractor earns target fee plus/minus underrun/ overrun shares.

9.7 Sample Incentive Fee Calculations

Exhibit 7 provides sample calculations for fixed price incentive firm (FPIF) task orders and Exhibit 8 provides sample calculations for cost plus incentive fee (CPIF) task orders, illustrating how the QPI score impacts the fee earned.

Exhibit 7. Sample Fixed Price Incentive Firm Calculation

Conditions / Assumptions Target Cost 1,000,000$ Ceiling Price 1,200,000$ Target Profit 100,000$ Under Target Share Ratio (Government / Contractor) 50 / 50

Over Target Share Ratio (Government / Contractor) 50 / 50

QPI Score = 100% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 55.0% Overrun Share Ratio, Contractor 45.0%

Underrun Cost Share 55,000$ Overrun Cost Share (45,000)$ Target Profit 100,000$ 100,000$ 100,000$ Total Potential Profit 155,000$ 100,000$ 55,000$ QPI Score Adjustment Applied to Total Potential Profit 155,000$ 100,000$ 55,000$

Ceiling Price Adjustment Not Applicable Not Applicable Not Applicable Total Final Price 1,055,000$ 1,100,000$ 1,155,000$ Final Contract Profit 17.2% 10.0% 5.0%

QPI Score = 80% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 50.0% Overrun Share Ratio, Contractor 50.0%

Underrun Cost Share 50,000$ Overrun Cost Share (50,000)$ Target Profit 100,000$ 100,000$ 100,000$ Total Potential Profit 150,000$ 100,000$ 50,000$ QPI Score Adjustment Applied to Total Potential Profit 120,000$ 80,000$ 40,000$

Ceiling Price Adjustment Not Applicable Not Applicable Not Applicable Total Final Price 1,020,000$ 1,080,000$ 1,140,000$ Final Contract Profit 13.3% 8.0% 3.6%

QPI Score = 45% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 45.0% Overrun Share Ratio, Contractor 55.0%

Underrun Cost Share 45,000$ Overrun Cost Share (55,000)$ Target Profit 100,000$ 100,000$ 100,000$ Total Potential Profit 145,000$ 100,000$ 45,000$ QPI Score Adjustment Applied to Total Potential Profit 65,250$ 45,000$ 20,250$

Ceiling Price Adjustment Not Applicable Not Applicable Not Applicable Total Final Price 965,250$ 1,045,000$ 1,120,250$ Final Contract Profit 7.3% 4.5% 1.8%

Exhibit 8. Sample Cost Plus Incentive Firm Calculation

Conditions / Assumptions Target Cost 1,000,000$ Target Fee 100,000$ Minimum Fee 50,000$ Maximum Fee 200,000$ Under Target Share Ratio (Government / Contractor) 50 / 50 Over Target Share Ratio (Government / Contractor) 50 / 50

QPI Score = 100% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 55.0% Overrun Share Ratio, Contractor 45.0%

Underrun Cost Share 55,000$ Overrun Cost Share (45,000)$ Target Fee 100,000$ 100,000$ 100,000$ Total Potential Fee 155,000$ 100,000$ 55,000$ QPI Score Adjustment Applied to Total Potential Fee 155,000$ 100,000$ 55,000$

Minimum / Maximum Fee Adjustment Not Applicable Not Applicable Not Applicable Total Final Price 1,055,000$ 1,100,000$ 1,155,000$ Final Contract Fee Percent Earned 17.2% 10.0% 5.0%

QPI Score = 80% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 50.0% Overrun Share Ratio, Contractor 50.0%

Underrun Cost Share 50,000$ Overrun Cost Share (50,000)$ Target Fee 100,000$ 100,000$ 100,000$ Total Potential Fee 150,000$ 100,000$ 50,000$ QPI Score Adjustment Applied to Total Potential Fee 120,000$ 80,000$ 40,000$

Minimum / Maximum Fee Adjustment Not Applicable Not Applicable 10,000$ Total Final Price 1,020,000$ 1,080,000$ 1,150,000$ Final Contract Fee Percent Earned 13.3% 8.0% 4.5%

QPI Score = 45% Under-run On Cost Over-run Actual Contractor Cost 900,000$ 1,000,000$ 1,100,000$

Cost Underrun 100,000$ Cost Overrun 100,000$

Adjustments to Shared Fee based on QPI Score Underrun Share Ratio, Contractor 45.0% Overrun Share Ratio, Contractor 55.0%

Underrun Cost Share 45,000$ Overrun Cost Share (55,000)$ Target Fee 100,000$ 100,000$ 100,000$ Total Potential Fee 145,000$ 100,000$ 45,000$ QPI Score Adjustment Applied to Total Potential Fee 65,250$ 45,000$ 20,250$

Minimum / Maximum Fee Adjustment Not Applicable 5,000$ 29,750$ Total Final Price 965,250$ 1,045,000$ 1,150,000$ Final Contract Fee Percent Earned 7.3% 5.0% 4.5%

9.8 Data for Determining Underrun/Overrun Status for Interim Evaluations The most recent contractor’s cost performance report (IPMR) data posted as of the close of the evaluation period will be used to determine the cumulative cost performance index (CPI) and schedule performance index (SPI). The average of the six-month cumulative CPI and SPI will be used to determine the contractor’s underrun/overrun status for an evaluation period. The sum of the Services/Solutions and Expensed CAP CLINs x001 + x002 + x003 will be used in the six-month cumulative SPI/CPI calculation.

Calculation:

𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 =

𝐶𝐶𝐶𝐶𝐶𝐶6 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚ℎ 𝑐𝑐𝑐𝑐𝑚𝑚 + 𝑆𝑆𝐶𝐶𝐶𝐶6 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚ℎ 𝑐𝑐𝑐𝑐𝑚𝑚

A 6 month cumulative CPI/SPI average of 0.95 to 1.05 will be considered to be on cost.

9.9 Target Fee/Profit Amounts

In order to accomplish interim fee/profit pay-outs, target cost and target fee/profit will be allocated to the evaluation periods defined in Exhibit 4 of this document.

Interim fee/profit pay-outs will be adjusted in accordance with paragraph 9.6.2 and 9.8 of this document. For example, assuming a CPI/SPI average of 0.95 to 1.05:

• QPI assessment 1 score = 100; interim fee/profit = target fee/profit invoiced until the next performance assessment

• QPI assessment 2 score = 90; interim fee/profit = 90% of target fee/profit invoiced until the next performance assessment

• QPI assessment 3 score = 80; interim fee/profit = 80% target fee/profit invoiced until the next performance assessment

9.10 Final Task Order Performance Evaluation

9.10.1 Final Quality Performance Index

The final task order performance evaluation will be the average of all QPI ratings assessed on task order; all ratings and all evaluation periods are equally weighted.

Calculation:

𝑇𝑇𝑇𝑇 𝐹𝐹𝐹𝐹𝐹𝐹𝑆𝑆𝐹𝐹 𝑄𝑄𝐶𝐶𝐶𝐶 𝑅𝑅𝑆𝑆𝑆𝑆𝐹𝐹𝐹𝐹𝑅𝑅 =

𝑄𝑄𝐶𝐶𝐶𝐶 𝑅𝑅𝑆𝑆𝑆𝑆𝐹𝐹𝐹𝐹𝑅𝑅 1 + 𝑄𝑄𝐶𝐶𝐶𝐶 𝑅𝑅𝑆𝑆𝑆𝑆𝐹𝐹𝐹𝐹𝑅𝑅 2 + 𝑄𝑄𝐶𝐶𝐶𝐶 𝑅𝑅𝑆𝑆𝑆𝑆𝐹𝐹𝐹𝐹𝑅𝑅 𝐹𝐹

𝐹𝐹

9.10.2 Data for Determining Final Underrun/Overrun Shares

The final QPI rating will be determined upon contractor submission and Government acceptance of the final Wide Area Workflow (WAWF) receiving report (or equivalent). The final underrun/overrun status will be based on actual allowable cost of work performed; the final underrun/overrun share calculation will be consistent with calculation methodology applied for interim determinations, Section 9.5.

9.10.3 Final Task Order Payment

The total final price on all FPIF task orders is subject to adjustments in accordance with FAR 52.216.16, Incentive Price Revision—Firm Target, and performance assessments conducted in accordance with the IRES Performance Evaluation and Incentive Plan. The fee payable under all CPIF task orders is subject to adjustments in accordance with FAR 52.216.10, Incentive Fee, and performance assessments conducted in accordance with the IRES Performance Evaluation and Incentive Plan.

10.0 Award Fee Evaluation

10.1 Overview

The award fee evaluation works with/complements the incentive fee component. AF will only be used with other contract types (e.g., CPIF/AF, FPIF/AF, and FFP/AF) and will not be the predominant contract (or CLIN) type. The AF pool will not exceed 50% of the combined incentive fee/profit. The objective measures of the incentive fee ensure the Government is delivered acceptable or better products and services; but not all task order requirements can be objectively incentivized.