J.07_RFP Quality Assurance Surveillance Plan_04.09.25 Rev1.A0002.docx

U.S. Department of Homeland Security U.S. Customs and Border Protection

QUALITY ASSURANCE SURVEILLANCE PLAN (QASP)

Air and Marine Operations Maritime Patrol Aircraft Program Management Office

MARITIME PATROL AIRCRAFT MAINTENANCE AND LOGISTICAL SERVICES

TABLE OF CONTENTS

Change Log

QUALITY ASSURANCE SURVEILLANCE PLAN (QASP)

1 Introduction This Quality Assurance Surveillance Plan (QASP) is pursuant to the requirements listed in the Performance Work Statement (PWS) entitled Maritime Patrol Aircraft Maintenance and Logistical Services. This plan sets forth the procedures and guidelines the Air and Marine Operations (AMO), Maritime Patrol Aircraft (MPA) Program Management Office (PMO) will use in ensuring the required performance standards or services levels are achieved by the Contractor. The QASP is a “living” document that will be tailored to the Contractor selected and evolve during the life of the contract and will be updated as necessary.

1.1 Purpose

The purpose of the QASP is to describe the systematic methods used to monitor performance and to identify the required documentation and the resources to be employed. The QASP provides a means for evaluating whether the Contractor is meeting the performance standards/quality levels identified in the PWS and the Contractor’s Quality Control Plan (QCP), and to ensure that the government pays only for the level of services received.

This QASP defines the roles and responsibilities of all members of the Integrated Program Team, identifies the performance objectives, defines the methodologies used to monitor and evaluate the Contractor’s performance, describes quality assurance documentation requirements, and describes the analysis of quality assurance monitoring results.

1.2 Performance Management Approach

The PWS structures the acquisition around “what” service or quality level is required, as opposed to “how” the Contractor should perform the work (i.e., results, not compliance). This QASP will define the performance management approach taken by the CO, COR and MPA PMO to monitor and manage the Contractor’s performance to ensure the expected outcomes or performance objectives communicated in the PWS and this QASP are achieved. Performance management rests on developing a capability to review and analyze information generated through performance assessment. The ability to make decisions based on the analysis of performance data is the major focus of performance management; this analysis yields information that indicates whether expected outcomes for the project are being achieved by the Contractor.

Performance management focuses on assessing the extent to which the required outcomes are being achieved. This approach migrates away from scrutiny of compliance with the processes and practices used to achieve the outcome. A performance-based approach enables the Contractor to play a large role in how the work is performed, as long as the proposed processes are within the stated constraints. The only exceptions to process reviews are those required by law (federal, state, and local) and compelling business situations, such as safety and health. A “results” focus provides the Contractor flexibility to continuously improve and innovate over the course of the contract as long as the critical outcomes expected are being achieved and/or the desired performance levels are being met.

1.3 Performance Management Strategy

The Contractor is responsible for the quality of all work performed. The Contractor measures that quality through the Contractor’s own Quality Control (QC) program. QC is work output, not workers, and therefore includes all work performed under this contract regardless of whether the work is performed by Contractor employees or by subcontractors. The Contractor’s QCP will set forth the staffing and procedures for self-inspecting the quality, timeliness, responsiveness, customer satisfaction, and other performance requirements in the PWS and this QASP. The Contractor will develop and implement a performance management system with processes to assess and report its performance to the designated government representative. This QASP enables the government to take advantage of the Contractor’s QC program. The Contractor’s QC program shall be auditable.

The government representative(s) will monitor performance and review performance reports furnished by the Contractor to determine how the Contractor is performing against communicated performance objectives. The Contracting Officer Representative (COR) will make a recommendation to the Contracting Officer regarding incentives earned based on performance measurement metric data. The Contracting Officer (CO) will notify the Contractor of the determination of incentives earned. The Contractor will be responsible for making required changes in processes and practices to ensure performance is managed effectively.

2 Roles and Responsibilities

2.1 The Contracting Officer

The CO is responsible for monitoring contract compliance, contract administration, and cost control and for resolving any differences between the observations documented by the Program Manager, COR, Designated Agency Representative (DAR), and the Contractor. The CO will designate one full-time COR as the government authority for performance management. The number of additional representatives serving as Government representatives depends on the complexity of the services measured, as well as the Contractor’s performance, and must be identified and designated by the CO.

2.2 The Contracting Officer’s Representative

The COR is designated in writing by the CO to act as his or her authorized representative to assist in administering a contract. COR limitations are contained in the written appointment letter. The COR is responsible for ensuring proper government surveillance of the Contractor’s performance. The COR is not empowered to make any contractual commitments or to authorize any contractual changes on the government’s behalf. Any changes that the Contractor deems may affect contract price, terms, or conditions shall be referred to the CO for action. The COR and DAR will have the responsibility for completing QA monitoring forms used to document the inspection and evaluation of the Contractor’s work performance. Government surveillance may occur under the inspection of services clause for any service relating to the contract.

2.3 Designated Agency Representative

The Designated Agency Representative (DAR) shall carry out surveillance and reporting duties at the sites as directed by the COR. DAR limitations are contained in the written appointment letter. The DAR shall support the COR in administering the contract. The DAR is not authorized to make any contractual commitments or to authorize any contractual changes on the Government’s behalf. The DAR will have the responsibility for completing Quality Assurance monitoring forms used to document the inspection and evaluation of the Contractor’s work performance.

3 Surveillance and Assessment Contract monitoring involves overseeing and ensuring compliance with the terms of the contract through regular review, analysis, and documentation of performance metrics, identifying and addressing potential issues or non-compliance. In addition to overall general contract monitoring, AMO has selected a list of performance requirements of particular importance for quality assurance surveillance. AMO will monitor these performance requirements for quality through specified surveillance methods indicated in the QASP Standards table in section 2.7 Analysis of Surveillance and provide formal reports of results to the CO and formal feedback to the Contractor, including a Discrepancy Reporting Form (DRF) (Attachment 1) if necessary.

3.1 Methods of Surveillance

The method of surveillance is based on the performance criteria of the contract terms and specifications. Each requirement will describe the tasks to be performed and the standard for successful performance. CBP intends to monitor and evaluate the Contractor's performance based on any or all the following surveillance methods:

3.1.1 Periodic Surveillance Inspections:

This method consists of selected surveillance task by the Government that do not require 100 percent inspection or are performed on a random basis. The CO or their designee will evaluate the Contractor’s reports, surveys, etc. on a weekly, biweekly, monthly, or quarterly basis.

3.1.2 Periodic Validation:

The COR will use this type of assessment by selecting samples (tasks) for evaluation on other than 100% inspections or on a statistically random basis.

3.1.3 Random Sampling Surveillance:

The COR will use this method for reoccurring tasks. Random sampling works best when the number of instances of the services being performed is very large and a statistically valid sample can be obtained. Services are sampled to determine if the level of performance is acceptable.

3.1.4 Customer Feedback:

Gathering feedback from end users to assess satisfaction and identify areas for improvement.

3.1.5 Audit:

Engaging CBP AMO employees and/or third-party personnel to perform audits, which will be used to evaluate the Contractor’s performance and compliance.

4 Quality Assurance Forms and Reports

4.1 Surveillance Form:

The QASP Performance Requirements (TABLE 1) Rating column or similar form will be used to document and evaluate the Contractor’s performance. The COR will evaluate each event in accordance with the performance standards and performance requirements stated in the PWS. All tasks that are considered to have unacceptable performance shall be substantiated and documented on the Surveillance Form or similar form and a DRF (Attachment 1) when necessary. The forms will be completed and submitted to the Contractor within five business days. The Contractor shall return the Surveillance Form or similar form along with a Corrective Action Plan (CAP), if required, within time allotted by the COR.

4.2 Inspection of Services Clause:

The CO will include applicable inspection clauses in the contract.

4.3 Analysis of Surveillance

Quarterly Contracting Officer (CO) Report: At the end of each quarter the COR will summarize the overall results of the Contractor’s performance for the previous quarter and send to the CO. If appropriate, the CO may investigate the event (s) further to determine if all the facts and circumstances surrounding the events(s) are accurate. The CO may discuss with the Contractor an event or trend that indicates unacceptable performance.

4.3.1 TABLE 1 Performance Requirements

Staffing and ability to communicate with CO, COR and DAR

PWS C.1.2.20 Staffing and C.1.2.3 Program Communications

Staff to the levels of the staffing plan. Quality of staffing, staffing attendance, and methods of communication are within the requirements of the contract and ensure adequate response to all contract requirements. Changes to the staffing plan must be approved by the CO or designee.

Customer feedback

Startup/Transition Phase

PWS C.1.2.29 Transition-In/Startup

Conduct activities necessary for an orderly and efficient transition, assuming full responsibility for meeting contract requirements with no degradation of performance.

Provide a schedule w/milestone for the transition of personnel and training.

Conduct analysis of current inventory Establish vendor relationship Develop SOP and Technical Library

Periodic Validation (through the transition period)

Files and Records

PWS C.1.3.14 Aircraft Logs and Record Keeping

Aircraft Logbook Inspection: Review all aircraft records, history cards, Aircraft Maintenance Management System entries, and engine/propellor logs for accuracy.

Aircraft Discrepancy Books (ADB): Review all maintenance discrepancy entries that provide maintenance/ aircrew personnel with a comprehensive chronology of flight and maintenance activities performed on specified aircraft by bureau number for at least 10 consecutive flights, and corrective action entries, blank form availability, entry signoffs, and weight & balance forms.

Verify contractor and sub-contractor are in compliance.

Periodic Surveillance Inspections

Audit

Program Management and Relationship Management

PWS C.1.2 Program Management

Maintain a highly skilled staff that meet all personnel training and certification requirements

Low turnover of key personnel

All contractor personnel shall have the proper experience level to perform the positions.

Improve the integration of cost and schedule reporting consistent with good, disciplined program management.

Ability to meet the changing demands of the program as it evolves.

Periodic Surveillance Inspections

Customer Feedback

Quality Control / Quality Management System

PWS C.1.2.7 Quality Control The Contractor’s compliance with the QCP.

The Contractor’s compliance with AS9100/9110 certification requirements.

Adherence to Quality Control Plan. (QCP)

The QCP shall describe the Contractor’s overall approach, methods, roles and responsibilities relating to Quality Control of all major services areas. It shall describe procedures for correcting problems, data gathering, improving efficiencies, and addressing quality assurance findings.

Demonstrates continuous improvement of corrective actions.

Maintain all records and data related to QC.

The Contractor shall update and review the QCP annually.

Outline processes and activities that will be implemented and include a schedule that covers reporting requirements.

Contractor QCP shall provide objective trend data on all high and moderate risk systems, processes and characteristics.

Adherence to AS9100 or AS9110 Certification Plan

All work locations/sites are AS9100 or AS9110 certified and maintain certifications via surveillance audits.

Periodic Validation

Random sampling Surveillance

Aircraft Maintenance Management Systems and Information Systems

PWS C.1.2.16 Aircraft Maintenance Management Systems and Information Systems

Financial allocations, commitments, obligations, expenditures, forecasting, reporting, inspections and inventory throughout the life of the contract are maintained in the Aircraft Maintenance Management System Periodic Validation

Random Sampling Surveillance

Cost Control

PWS C.1.2.4 Financial Management and CDRL A007-Contract Funding Status Report

Assess the Contractor’s effectiveness in forecasting, managing, and controlling contract cost.

Updating and forecasting contract funds requirements Planning or making decision on funding changes Develop funds requirements or estimates Determine funds in excess or cost overruns Provide burn-rate and cost variance analysis Notification of cost incurred exceeding 75% Invoices are received on time, correct and complete 100% of the time.

Periodic Validation

Audit

Reports

PWS Appendix 1.7.5 Contract Data Requirements List

All reports must be complete, thorough, accurate and submitted on time as required by the Contract.

Corrections and re-submittal to CBP within five business days of rejected deliverables.

Periodic Surveillance Inspections

Maintenance/Operational Schedule

PWS C.1.3 Site Maintenance (O-Level) Contractor shall meet or exceed scheduled maintenance tasks

Contractor shall provide full mission capable aircraft to meet operational flight schedules Contractor must perform maintenance tasks in accordance with the inspection schedule and in accordance with CBP maintenance instructions, manufacturer’s recommended standards or any other procedure provided to the Contractor.

Contractor must meet the Operational Performance Metric (OPM) 87%

All waivers and extensions must be maintained and monitored within the applicable directive’s timeframe and recorded in the Aircraft Maintenance Management System.

Provide daily aircraft status report.

Periodic Validation

Risk Management

PWS C.1.2.5 Risk Management and C.1.2.26 Environmental, Safety and Health

Contractors shall incorporate controls for managing issues, risk events and assign appropriate resources and personnel to initiate corrective actions.

Report any significant program or contract issue discovered and/or risk within 24 hours.

Develop and record risk in a risk register.

Develop and record issues in an issue register.

Periodic Validation

Repairs

PWS C.1.3.2 Aircraft Maintenance and Servicing

Government Furnished Equipment (GFE), Property (GFP), and Information (GFI)

PWS C1.2.16 Aircraft Maintenance Management Systems and Information Systems

PWS C.1.2.8 GFE/GFP/GFI

The Contractor shall ensure all GFE and GFP are maintained in accordance with OEM or CBP recommended and provided schedule when applicable.

The Contractor shall ensure all GFE, GFP are inspected, calibrated and available to the maintainers on a not to interfere bases.

The Contractor shall follow CBP and FAR policy regarding disposal procedures.

Periodic Validation

Contractor Furnished Property/Information/Equipment

PWS C1.2.9 Contractor Furnished Property/Information/Equipment

All hand tools used under this PWS shall comply with the Contractor’s policy for proper identification Periodic Validation

Safety

PWS 1.2.26 Environmental, Safety, and Health

CBPMPA-M-018

Aircraft and Flight Line Safety Adherence to Safety Management System Program and Plan. Adherence to SOP CBPMPA-M-018.

The Contractor shall prevent injury to personnel and damage to equipment by eliminating or controlling hazards.

Periodic Surveillance Inspections

Periodic Validation

Corrosion Control

PWS 1.3.5 Corrosion Control Program CBPMPA-M-013 Rev 3 SOP Corrosion Control and Prevention Program

CBP01-75P3-6 Change 8 Periodic Maintenance Information Cards Adherence to SOP CBPMPA-M-013 Rev 3

Entry into the Miscellaneous /History (OPNAV 4790/25A form) within 24 hours of exposure

Conduct inventory and proper disposal of materials, equipment and tools to support the Corrosion Control Program

Ensure corrosion control inspections are performed per applicable directives

Random Sampling Surveillance

Hazmat Programs

PWS 1.2.26 Environmental, Safety, and Health

Contractor’s HAZMAT program must conform to strict Contractor, local, state, and federal quality standards Random Sampling Surveillance

Fuel and POL Program

PWS 1.3.3 Aviation Fuel and Pol Management Program

Monitor the Contractor’s tracking for compliance with local, state, DOD, federal and AMO regulations (where applicable governing the use of and maintenance of CBP owned fuel storage equipment, fuel trucks, fuel sampling and shelf life.

Random Sampling Surveillance

Foreign Object Debris (FOD) and Things Falling off Aircraft (TFOA)

PWS C.1.3.10 Foreign Object Debris

Monitor Contractors FOD awareness program for compliance with CBP and Contractor FOD prevention procedures. Ensure all training requirements have been achieved. IAW SOP.

Random Sampling Surveillance

Tool Control Awareness PWS C.1.3.10 Foreign Object Debris

Monitor Contractors Tool Control program for compliance with CBP and Contractor Operations Tool Control procedures. Conduct random toolbox inventories and check work areas. Ensure all tools brought on the site have been inventoried and recorded on the Tool Control Inventory Record (CBPAVP-P3-044). Ensure the minimum tool list for employees have been met.

Tool Calibration and Special Tools Program

PWS C.1.4.8 Calibration Program

Monitor the Contractor’s reports for tool calibration, special tools and tool control program. Ensure compliance with inspection requirements and proper tracking requirements.

Random Sampling Surveillance

Annual and Special Inventories

PWS C.1.4.9 Annual Inventory and PWS C.1.4.11 Special Inventories

Provide active oversight of Contractor’s annual inventory and any special inventories required by the Government. Ensure accuracy of inventory and reporting.

Random Sampling Surveillance

Configuration Management/ Engineering

PWS C.1.2.15 Configuration Management

PWS C.1.2.12 Engineering Services

Contractor shall maintain accountability of the aircraft configuration.

Once notified of authorizations of change, take action to include.

a. Send item to appropriate location for modification.

b. Change record in Inventory Accounting System.

c. Determine changes required for D143/D043 input.

d. Document and track modification from inception to completion by aircraft.

e. Ensure engineering services are provided (as required) in support of repairs, analysis, and/or modifications.

Random Sampling Surveillance

Training

PWS C.1.2.23 Training and Certification Requirements

PWS Appendix 1.7.3 Regulations, Training, Certifications

Contractor must provide and maintain personnel training certification status.

Contractor shall establish and maintain a training and certification program.

Periodic Validation

Material Management

PWS C.1.4 Material Management/ Inventory Control Point

Provide responsive program-wide logistics support.

Operate, maintain and improve In-House Repair capabilities.

Manage supply chain risk

Establish a continuous improvement process for receiving inspections on material.

Incorporate Integrated Product Support (IPS) elements:

Establish a Stock Efficiency Rate (SER)

Contractor must meet the Supply Response Time (SRT) 87% for each Force Activity Designator (FAD)

Contractor must use the proper object class code when purchasing and invoicing.

Submittal of weekly component repair report.

Periodic Surveillance Inspections.

4.3.2 TABLE 2 Performance Ratings

Performance Rating Definition

4.4 Quality Assurance Documentation

4.4.1 Performance Management Feedback

Performance Management Feedback begins with the communication of expected outcomes. Performance standards are expressed in the PWS and are assessed using the performance monitoring requirements.

The COR will retain a copy of all completed QA surveillance forms and DRFs.

4.5 Analysis of Quality Assurance Assessment

4.5.1 Determining Performance

The Government shall use the monitoring methods cited to determine whether the performance standards/service levels/ have been met. If the Contractor has not met the minimum requirements, it will be asked to develop a Corrective Action Plan (CAP) to show how and by what date it intends to bring performance up to the required levels.

4.5.2 Reviews and Resolution

The COR may require the Contractor’s program manager, or a designated alternate, to meet with the CO, COR and other government Program Management Office (PMO) personnel as deemed necessary to discuss performance evaluation. The PM or COR will define a frequency of in-depth reviews with the Contractor, including appropriate self-assessments by the Contractor; however, if the need arises, the Contractor will meet with CO, PM and COR as often as required or per the Contractor’s request. The agenda of the reviews may include:

0. Monthly performance assessment data and trend analysis

0. Issues and concerns of both parties

0. Projected outlook for upcoming months and progress against expected trends, including a corrective action plan analysis

0. Recommendations for improved efficiency and/or effectiveness

0. Issues arising from the performance monitoring processes The COR must coordinate and communicate with the Contractor to resolve issues and concerns regarding marginal or unacceptable performance.

The PM, COR and Contractor should jointly formulate tactical and long-term courses of action. Decisions regarding changes to metrics, thresholds, or service levels should be clearly documented. Changes to service levels, procedures, and metrics will be incorporated as a contract modification.

5 Operational and Supply Response Performance Incentives Calculations

5.1 Operational Performance Measure (OPM)

The Contractor shall support the Operational Flight Schedule (OFS) issued by the Government. The number of events/sorties/flights/missions will be determined by Operations and published in the OFS. Operations coordinates with the DAR to ensure all maintenance is managed to support the OFS.

The Contractor’s OPM will be determined by its ability to support the OFS. For the Performance Incentive Fee, OPM will be calculated and reported monthly and applied to fee as a quarterly average.

The OPM is based two variables: Launch Rate (LR) and Mission Completion Rate (MCR).

OPM= LR x MCR

Monthly launch rate is calculated by dividing the number of Missions launched by the number of launches set out in the final CBP launch schedule.

Final CBP launch schedule is calculated by the original number of CBP scheduled launches, minus the number of launches cancelled by CBP.

A launch is defined as a successful aircraft take off (transition from a state of full stop to in air flight) in support of a scheduled mission.

A missed launch is defined as an unsuccessful aircraft take off in support of a scheduled mission that results in an unintended mission cancellation.

Flight schedule events that are cancelled as a result of Operations, Projects, Range, weather, or other non-maintenance related reasons – as determined by the government – shall not count as scheduled events.

Mission Completion Rate is calculated by dividing the Missions Completed by Missions Launched.

A completed mission is defined as all systems under the control of the Contractor must have functioned properly and not contributed to the inabilities of the crew to complete its assigned mission.

A mission is defined as a flight, or series of flights conducted to completion.

Failure to complete the mission will only be assessed against the Contractor if the systems under the control of the Contractor have not functioned properly and contributed to the inability of the crew to complete its assigned mission.

5.2 Supply Response Time (SRT)

Supply Response Time (SRT) - Measures the efficiency and responsiveness of the Contractor’s supply system. As per the PWS, SRT is measured by priority code (PRI 02, PRI 05, and PRI 12) with time thresholds (T) and objectives (O) for the time required for the Contractor to (I) forward a request to the Inventory Control Point (ICP), (II) subsequent placement of that request on a fully executed Purchase Order (PO), and (III) actual Delivery Date (DD) Purchase order. For the purposes of incentive fee calculations, the Government will consider (II), Supply Response Time – Purchase Order. However, sustained failure to meet the threshold time frame for submitting an order to the ICP or the threshold time frame for delivery dates, may result in the issuance of a DRF at a level commensurate with impact on the program which could therefore negatively impact fee.

5.2.1 Request to Inventory Control Point:

This is the total number of requests initiated by the Contractor forwarded for generation of a PO.

5.2.2 Supply Response Time – Order (SRT PO):

Each request is treated as an individual instance measured on whether it made threshold (T) or objective (O) requirements or failed to do so. At the end of the contract quarter, a tally is made, for each priority code, of the total number requests issued to the ICPof issuance of a request requests initiated, the total number of request placed on PO within Threshold (T) but not within Objective (O), and the total number of request placed on PO within Objective (O) time. The Contractor shall then add the total Threshold (T) and Objective (O) request successfully placed on PO. Subsequently, the Contractor shall divide the total number of request (T and O) placed on PO by the total number of request issuednitiated to calculate the SRT PO which shall be expressed as a percentage.

This figure shall be used to calculate the SRT fee, as explained and calculated in section 6.2.52.13 SRT PO Fee Calculation, and which is enhanced by an incentive fee for orders placed on PO within PWS Objective (O) time standards. To support the calculation of the SRT PO incentive fee, the Contractor divides the total number of requests processed successfully to PO within Objective (O) standards by the total number of request initiatedissued.

5.2.3 Supply Response Time Delivery Date (DD):

DD is represented by threshold and objective timeframes for delivery of items to the requesting site. DD does not include normal long-lead time parts and repairs. The Government considers long lead time to be 12-months or more.

6 Incentives

6.1 Incentive Fee Pool Calculations

The annual fee pool will be established as the annual target cost multiplied by the target fee percentage. 85% of the total annual incentive fee pool will be set aside for performance incentives, the remaining 15% of the total annual incentive fee pool will be set aside for the cost incentive.

This contract includes incentive fees that emphasize Operational Performance Measure (OPM), Supply Response Time (SRT) and Cost performance. Because the Government considers OPM and SRT more important than Cost performance, the target incentive fee will be divided as follows: 40% OPM, 40% SRT PO (Purchase Order), 5% SRT Objective and 15% Cost Performance. To promote consistent contract performance, while at the same time incentivizing performance, the concept of a SRT objective incentive fee is being used on this contract. It allows for the contractor to be rewarded for placing purchase orders within the objective (O) timeframe.

The Offeror is expected to propose a Target Cost, as well as percentages for Minimum Fee, Target Fee, and Maximum Fee.

The following is an example of how the Annual Incentive Fee Pool would be calculated for the Contract with the following parameters:

Target Cost = $100,000,000

Target Fee 6% = $100,000,000 * .06 = $6,000,000 Fee Ratio: 80%/5%/15% (Performance/Objective/Cost)

Operational Performance Fee

$100,000,000 * .06 = $6,000,000 * 85% = $5,100,000 per year $5,100,000 / 4 = $1,275,000 per quarter $1,275,000 * 40% = $510,000 (OPM quarterly fee) $1,275,000 * 40% = $510,000 (SRT PO quarterly fee) $1,275,000 * 5% = $63,750 (SRT Objective fee)

6.2 Performance Incentives

Performance incentives will be measured on a quarterly basis. 80% of the total annual incentive pool will be set aside for OPM and SRT PO performance incentives and 5% will be set aside for SRT objective incentive.

6.2.1 TABLE 3 Performance Incentives

90% - 94.99%

87% - 89.99%

OPM below 87% is considered unsatisfactory and no fee will be awarded.

100% of the available OPM Fee for the quarter

60% of the available OPM Fee for the quarter

30% of the available OPM Fee for the quarter

90% - 94.99%

87% - 89.99%

SRT below 87% is considered unsatisfactory and no fee will be awarded.

100% of the available SRT Fee for the quarter

60% of the available SRT Fee for the quarter

30% of the available SRT Fee for the quarter

25% to 49.99%

10% to 24.99%

SRT Objective below 10% will result in no incentive fee.

100% of the available Fee for the quarter

60% of the available Fee for the quarter

30% of the available Fee for the quarter

6.2.2 Calculating OPM Fees

OPM is calculated monthly but assessed quarterly. The table above identifies the incentive fee earned based on the OPM measured for the quarter. OPM shall be calculated to two decimal places and shall not be rounded up.

Each month the OPM data will be collected into a scorecard. in accordance with the OPM calculations in section 2.11. At the end of each quarter all the monthly OPM data will place into a quarterly scorecard.

Example of a monthly scorecard:

6.2.3 TABLE 4 Monthly OPM Scorecard

To Calculate monthly OPM:

(A) Each Site will enter the original OFS

(B) Enter the number of flights cancelled by CBP

(C) Subtract A from B to get the final CBP OFS for the month

(D) Enter the number of Missed Launches (see section 2.11 (A)5.1 for the definition)

(E) Subtract the number of Missed Launches (D) from the Final CBP OFS for the Month (C)

(F) Divide Missions Launched (E) by the Final CBP OFS for the Month (C) to get the Launch Rate

(G) Enter the number of Mission aborted during the month

(H) Subtract the number of Mission aborted during the month (G) by Missions Launched (E)

(I) Divided the Missions Completed (H) by Missions Launched (E) to get the Mission Completion Rate

(J) Multiply Launch Rate (F) by Mission Completion Rate (I) to get the OPM for the month.

Example of a quarterly scorecard:

6.2.4 TABLE 5 Quarterly Combined Site OPM Scorecard

At the end of each quarter the OPM fee is calculated and compared to the Performance Fee Incentive (Table 7) to determine the amount to be awarded.

To calculate the OPM for the quarter:

Uses the monthly OPM data collected for the sites to fill in the quarterly data:

(A) Enter the Final CBP OFS for each month ((C) from the monthly scorecard).

(B) Enter the Mission Launched for each month ((E) from the monthly scorecard)

(C) Divide the total Missions Launched (B) numbers with the total Final CBP OFS (A) to get the quarterly launch rate.

(D) Enter the Mission Completed ((D) from the monthly scorecard),

(E) Divide the Missions Completed (D) by the quarterly launch rate (C) to get the Mission Completion Rate

(F) Multiply the quarterly launch rate (C) by the quarterly Mission Completion Rate (E) to get quarterly OPM

6.2.5 Calculating SRT PO Fees

SRT PO Fee is calculated and assessed quarterly against SRT PO (T) and (O) percentages. SRT PO (T) performance establishes the SRT PO Fee while SRT PO (O) performance establishes the foundation for calculation of a SRT PO (O) bonus Incentive Fee. In addition, SRT PO is broken down to and assessed by Priority Code (02, 05, and 12). The intent of this fee structure is to incentivize both SRT PO (T) and (O) performance.

Each quarter the SRT data will be collected into a datasheet.

Quarterly SRT PO Fee is derived from the accumulated SRT PO data collected. as per section 2.11 above. An example SRT PO Fee Calculation data sheet is provided below for ease of reference for the following instructions. SRT shall be calculated to two decimal places and shall not be rounded up.

If a PO is cancelled or modified at the direction of the government, the PO will not count against this metric. The Contractor shall report these instances to the government in their quarterly submissions for this metric.

TABLE 6 SRT PO Fee Incentive

To calculate the SRT PO Fee:

A. Enter the total number of Requests Issued for the quarter for each Priority Code (A).

B. Enter the total number of Requests Issued and Processed to PO within Threshold (B) C. Enter the total number of Requests Issued and Processed to PO within the objective (C).

D. Add (B) and (C) together for the quarter to get the total number of Requests Issued and Processed to PO (D).

E. Divide the total number of Requests Issued and processed to PO (D) with the total number of requested issued (A) to get the quarterly rate for each Priority Code within the threshold timeframe.

F. Divide the total number of Requests Issued and processed to PO (C) with the total number of requested issued (A) to get the quarterly rate for each Priority Code within the objective timeframe.

To calculate SRT PO Fee, apply the total percentage calculated for the quarter as per Table 6 column E (SRT (D/A) against the associated SRT PO Fee specified in Table 3 at section 6.2.1 2.12.2 above. In this example a 99.08% SRT earns 100% of the available SRT fee for the quarter.

To calculate the SRT Objective, associate the results in Column F Table 6 ((O) Percentage (C/A)) with the SRT Objective Fee specified in 6.2.1 Table 3 at section 2.1 In the example a 34.56% SRT PO (O) provided, the contractor earns earns 60% of the SRT Objective fee available for the quarter.

The results from the OPM and SRT quarterly scorecards will be used to calculate combined quarterly operational incentive fee.

6.3 Performance Fee Impacts

6.3.1 Deficiency Reports

The Contractor shall minimize Deficiency Reports, to achieve a standard of zero.

The Deficiency Report Forms (DRFs) provide identification, description, analysis, notification, and acknowledgment of a contract performance discrepancy requiring root cause analysis and corrective actions to prevent recurring deficiencies.

Deficiency reporting is a CBP contract administrative process utilizing a Deficiency Report Form (DRF) to identify, document, and correct inefficient, defective, and/or unsafe actions by the Contractor. Deficiencies can be but are not limited to designs, drawings, specification, work orders, contract administration action, purchasing, supply/material, manufacturing, and workmanship that result in a product not fulfilling its fit, form, and/or function by the Contractor or subcontractor.

Deficiency Reports are graded on three levels and are applied to all areas of the contract to include Program Management.

· Level 1 - DEFECT, CRITICAL - A critical defect that could cause death, injury, severe occupational illness, loss or major damage to an aircraft, aircraft sub-systems, government equipment, facility, loss of availability or work stoppage. A critical defect also includes Contractor lack of contract administration, resulting in Contractor default, loss of funding, and/or significant delay or failure of a modification, upgrade and/or removal of components.

· Level 2 - DEFECT, MAJOR - A defect, that could result in failure or materially reduce the usability of a unit or part or facility for its intended purpose. A major defect also includes administrative non-compliance with policy, procedures, defective or incorrect engineering products or analysis, or contractual requirements or internal controls going unchecked that can lead to misalignment or misreporting of data/information. Major defects may also be the result of an accumulation or repetition of otherwise minor defects that are not corrected, especially, but not exclusively, those minor Level – 3 Defects recorded in previous deficiency reports.

· Level 3 - DEFECT, MINOR - A defect that does not materially reduce the usability of the unit or part for its intended purpose or is a departure from standards which has no significant bearing on the effective use or operation of the unit or part or service. The defect is less than desirable to the Government but does not adversely affect maintenance or logistic operations. Minor defects also include incidents of administrative error or non-compliance resulting from failure to follow policy, procedure, or inattention to detail. Accumulation, repetition, or failure to correct documented Level III defects may result in escalation of such defects to Level II defects.

Each DR level will be assessed on a point scale. Each Level I DR issued will result in 1 point. Each Level II DR issued will result in .5 point (1/2 point). Each Level III DR issued will result in zero (0) points or no impact on the performance incentive fee earned. At the end of each quarter the Government will add up all issued DRs to determine the fee impact.

6.3.2 Table 7 Deficiency Report Fee Impact

6.4 Combined Quarterly Fee

The results from the OPM and SRT quarterly scorecards will be used to calculate combined quarterly operational incentive fee.

6.4.1 TABLE 8 Example Aggregate Fee Calculation

· DRF Impact is a shared decrement between the OPM and SRT fee earned.

· The SRT PO incentive fee is added to the final combined fee earned to equal the net fee.

6.4.2 Cost Incentive

The amount of Cost Incentive Fee earned is based on a formula that relates total allowable costs incurred to the Target Cost. This formula provides, within limits, for increases in fee above the Target Fee when total allowable costs incurred are less than the Target Cost. Likewise, the formula provides for a decrease in fee when total allowable costs incurred exceed the Target Cost. Specifically, the fee payable shall be the Target Fee increased by a certain number of cents for every dollar that the total allowable cost is less than the Target Cost or decreased by a certain number of cents for every dollar that the total allowable costs exceed the Target Cost. The target, maximum, and minimum fees available in this category are a percentage of the Target Cost. Only 15% of total fee is available as a cost incentive.

Following is an example of how the Cost Incentive Fee would be structured for a contract with the following: a Target Cost of $100,000,000, a minimum fee of 1%, Target Fee of 6%, a maximum fee of 7%, and a 50% Government/50% Contractor share ratio:

Should the Contractor’s total allowable costs for the period of performance come in below the Target Cost at $93,000,000, the Cost Incentive Fee earned would be calculated as follows:

This calculation shows $4,400,000 of cost incentive earned, however the maximum cost incentive fee available and payable is $1.050,000. The calculation of maximum cost fee available is as follows:

Likewise, should the Contractor’s total allowable costs for the same period of performance come in over the Target Cost at $102,000,000, the Cost Incentive Fee earned would be calculated as follows:

This calculation shows -$100,000 of cost incentive earned, however the minimum cost incentive fee available and payable is $150,000. The calculation of minimum cost fee available is as follows:

Total Operational and Cost Performance Fee Earned for the 12-month period of performance under the following two scenarios:

Scenario 1 (Total Allowable Costs = $93,000,000)

Scenario 2 (Total Allowable Costs = $102,000,000)

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