Attachment J8-Incentive and Monitoring Framework.docx

USAID CHEGAR Incentive and Monitoring Framework

I. Performance Incentive Plan

Under USAID CHEGAR, offerors will provide a detailed cost and a minimum fee that does not exceed 2% of the target cost. Once awarded, the contractor will be reimbursed for all reasonable, allowable and allocable costs, in accordance with the Limitations of Funds Clause—FAR 52-232-22. An incentive payment, up to 8% of the target cost will be calculated based on the measure below and be paid on a quarterly basis.

USAID intends to provide performance incentives (PI) based on the performance against two key performance indicators. These performance incentive payments will be based on the value of deliveries that are approved for reimbursement on a semi-annual basis (for a total of 6 payments over the lifespan of the three-year contract). Contractors should propose a reasonable base fee not exceeding 2% in accordance with the quantity and risks. The maximum fee for this procurement will be 8% of the target cost. Indicators are defined so that they are within the manageable control of the contractor. The contractor is invited to suggest additional industry-specific indicators that will improve performance monitoring and maximizing efficiency. Performance will be tracked on a monthly basis; however, the incentive calculations will be made on a quarterly basis.

On time delivery

This key performance metric measures the timeliness to which health facilities receive medical commodities in accordance with the pre-established distribution plan agreed with the contractor.

91-100%

81-90%

71-80% Tier 3 (91-100%): 4%

Tier 2 (81-90%): 3%

Tier 1 (71-80%): 1%

Applied to the expected target cost for the quarter

In full delivery

This key performance metric measures the completeness of deliveries in accordance with the pre-established distribution plan agreed with the contractor.

Tier 2 (90-95%): 3%

Tier 1 (85-89%): 1%

Applied to the expected target cost for the quarter

II. Illustrative Performance Monitoring Plan

USAID intends to track performance on a monthly basis; however, the incentive calculations will be made on a quarterly basis.

On time delivery

Data collection method: Submitted & approved in CHEGAR reporting to be reviewed by LMSC

Data Source: Agreed upon plan signed by DPS and signed proof of delivery (POD)

Frequency: Monthly Data Quality Assessment: DQA performed quarterly for a randomly selected province, and on an as needed basis when performance problems or complaints are raised

Potential Limitations: Districts may not have distribution plans Mitigation Plan: Make clear the distribution plan requirement before starting distributions in each geographic area.

Reported monthly with quarterly and semi-annual and annual review of trends by USAID IHO, LMSC, and CMAM serve as the basis for the semi-annual incentive payment

In full delivery

Data collection method: Submitted in CHEGAR reporting

Data Source: Delivery notes

Frequency: Monthly Data Quality Assessment: DQA performed quarterly for a randomly selected province, and on an as needed basis when performance problems or complaints are raised Potential Limitations: Delivery notes without signature and/or date Mitigation Plan: Training at the start of implementation on how to fill out delivery notes and conduct quality assurance during data review meetings Reported monthly with quarterly and semi-annual and annual review of trends by USAID IHO, LMSC, and CMAM serve as the basis for the quarterly incentive payment

Performance Monitoring Roles:

USAID Integrated Health Office (IHO), and third parties will monitor the performance of the CHEGAR contractor. A critical 3rd party monitor role will be the Last Mile Supply Chain (LMSC) project that will help monitor, track and validate the data reported for the incentive indicators. Other third parties include: host government officials at the national and sub-national level, health facilities and PEPFAR and other service delivery partners that support health facilities. Over the lifespan of the contract, CMAM and LMSC will play a prominent role in monitoring performance before the contract is due to end and responsibilities for last mile distribution should begin to transition to CMAM. The monitoring roles for the three main institutions validating CHEGARS performance, are detailed in the table below:

(starting in year 3)

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