Draft Service Level Methodology_Performance Metrics September 4_2020.docx

Attachment 14 - Service Level Methodology

General The Service Level Agreement (“SLA” or “Service Levels”) Metrics and their targets that are described in the attachments to this Attachment 14 have been specifically designed to support Federal Student Aid’s (“FSA” or “Government”) service level agreement(s).

The methodology set out in this Attachment 14 shall support the Service Level management cycle of agreeing on, monitoring, reporting, and improving upon the delivery of the Services to FSA’s Governments, Business Units and Partners.

As of the Commencement Date (or as otherwise specified in this Attachment 14 and the attachments to this Attachment 14), Contractor shall perform the Services to which Service Levels apply so that in each month of the Contract Period of Performance, its performance meets or exceeds the Expected Service Level Targets.

Terms used in this Attachment 14 with initial capitalized letters but not defined in this Attachment 14 shall have the respective meanings set forth in Schedule 1 (Definitions), the other Schedules to the Agreement, or the Exhibits to this Contract. The following terms have the meanings set forth below:

“At-Risk Pool Amount” means the At-Risk Percent multiplied by the At-Risk Fees.

“At-Risk Fees” means the Monthly Invoice Amount for the Measurement Period in which a Service Level Default occurred for this Contract.

“At-Risk Percent” means five percent (5%).

“Critical Deliverables” means one-time or milestone-based projects or key activities that the Contractor is responsible to deliver.

“Expected Service Level Target” means the contracted level of performance for a Service Level, as initially set forth in Attachment 14-1 (Service Levels and Performance Disincentives) and as the same may be changed in accordance with Attachment 14 (Service Level Methodology).

“Key Performance Indicators” means those measurements that are not SLA for which no Service Level Disincentive is payable, but which are meaningful to Government’s Business, and are described in Attachment 14-1 (Service Levels and Performance Disincentives).

“Measurement Period” means monthly or an alternative period of time as expressly stated in an individual Service Level in Attachment 14-1 (Service Levels and Performance Disincentives).

“SLA Pool Percentage Weight” means the percentage of At-Risk Pool Amount applied to a specific SLA as set forth in Attachment 14-1 (Service Levels and Performance Disincentives).

“Service Level Default” means in respect of each SLA that:

“Service Level Effective Date” means the date on which the Performance Disincentives for a Service Level begin to apply and is the Effective date of this Contract.

“Significant Service Level Default” means the second consecutive failure to meet the Expected Service Level Target for the same individual Service Level.

ATTACHMENTS

The following attachment to this Attachment 14 is incorporated herein by reference:

Attachment 14-1 – Service Levels and Performance Disincentives: Attachment 14-1 sets forth the Expected Service Level Targets associated with the SLA and Key Performance Indicators, and the quantitative measurements associated with Critical Deliverables. It also sets forth the descriptions, definitions, and formula used to calculate compliance with the SLA, Key Performance Indicators and Critical Deliverables.

SERVICE LEVEL FRAMEWORK

1. Service Level Performance shall commence being measured and reported by Contractor on the effective date of the Contract.

Performance Disincentives shall apply beginning on the Contract Effective Date.

The Measurement Methodologies set forth in Attachment 14-1 shall be used by Contractor to measure compliance with the Service Levels.

Service Level Performance shall be measured monthly by Government unless otherwise specified in Attachment 14-1.

A failure by Contractor to meet an Expected Service Level Target as set forth in Attachment 14-1 shall be deemed a Service Level Default (“Service Level Default”) and subject to Performance Disincentives.

A failure by Contractor to measure Service Level Performance in accordance with the Measurement Methodology, shall be deemed a Service Level Default and continue to be a Service Level Default each month until Contractor measures the Service Level Performance in accordance with the Measurement Methodology, unless Contractor can otherwise prove that a Service Level Default did not occur (i.e., validating that the received Service met the Expected Service Level Target) and Government approves such Contractor explanation. The Performance Disincentive associated with a failure to measure Service Level Performance will be equal to the At-Risk Pool Amount for the measurement period.

Detailed performance information used to calculate each Service Level will be maintained by Contractor and retained for no less than three (3) years.

Upon Government’s request, Contractor shall provide, or provide access to, such performance information to allow Government to verify the accuracy of reported Service Level measurements.

1. reporting

1. Contractor shall provide to Government, using data that Contractor extracts from their systems, as part of Contractor’s monthly performance reports, a set of reports to verify Contractor's performance and compliance with the Service Levels and Critical Deliverables.

Contractor shall provide detailed supporting information for each Service Level Performance report to Government.

The data and detailed supporting information shall be Government’s Confidential Information.

Government may access such information online and in real-time, where technically feasible, at any time during the Contract Term.

Contractor shall complete Service Level Posting on or before the tenth (10th) business day of the month following the completion of any Measurement Period.

No post-reporting adjustment shall be made to any Service Level Performance data or supporting information without Government’s approval.

service level DEfault In the event of a Service Level Default, Contractor shall provide to Government Performance Disincentives as defined below:

1. Subject to paragraph 7 of this Section 5 and Sections 6 (Exceptions) of this Attachment 14 and upon the occurrence of a Service Level Default, a Performance Disincentive – which is calculated as defined in this Section 5 of Attachment 14 – shall be due from Contractor.

Performance Disincentives do not apply to Key Performance Indicators.

If Contractor fails to meet an Expected Service Level Target for an SLA, Contractor shall provide Government with a written Corrective Action Plan (“CAP”) for improving Contractor’s performance within fifteen (15) calendar days of the failure to meet the Expected Service Level Target.

The plan shall be subject to Government’s consent. Contractor shall promptly implement such plan when it has received consent from Government.

Attachment 14-1 (Service Levels and Performance Disincentives) sets forth the information required to calculate the Performance Disincentive in the event of a Service Level Default. For the purposes of calculating Performance Disincentives, the At-Risk Percent will be applied to the At-Risk Fee to arrive at an At-Risk Pool Amount. For each Service Level Default, the SLA Pool Percentage Weight will be multiplied by the At-Risk Pool Amount to arrive at the Performance Disincentive. In no event shall the amount of Performance Disincentives Disincentiveed to Government with respect to all Service Level Defaults occurring in a single month exceed, in total, the At-Risk Pool Amount. Such Performance Disincentives shall be computed in accordance with the following formula:

Performance Disincentive (E = C x D) Where:

A = The At-Risk Fees.

B = The At-Risk Percent.

C = The At-Risk Pool Amount (A x B) D = SLA Pool Percentage Weight as shown in Attachment 14-1 E = The Performance Disincentive (C x D).

For example, assume that Contractor fails to meet the Expected Service Level Target for an SLA. Assume Contractor’s At-Risk Fees for the month in which the Service Level Default occurred was $1,000,000 and that the At-Risk Percent was five percent (5%). Additionally, assume that the SLA Pool Percentage Weight is ten percent (10%). The Performance Disincentive due to Government for such Service Level Default would be computed as follows:

C = The At-Risk Pool Amount = $50,000 ($1,000,000 *5%) Multiplied by D = The SLA Pool Percentage Weight (10%) as shown in Attachment 14-1 E = Five thousand dollars ($5,000) (the amount of the Performance Disincentive).

Subject to paragraph 6 of this Section 5, if more than one Service Level Default has occurred in a single month, the sum of the corresponding Performance Disincentives shall be Disincentiveed to Government.

In no event shall the amount of Performance Disincentives Disincentiveed to Government with respect to all Service Level Defaults occurring in a single month exceed, in total, the At-Risk Amount, except as provided in this Section 5.

The total amount of Performance Disincentives – which Contractor shall be obliged to Disincentive to Government, with respect to Service Level Defaults occurring each month – shall be reflected on the invoice that contains charges for the month during which the Service Level Default(s) giving rise to such Disincentive(s) occurred. For example, the amount of Performance Disincentives for Service Level Defaults occurring in August shall appear as a Disincentive on Contractor’s invoice in September for the August monthly charges.

If Contractor fails to provide a Performance Disincentive that is due, Government may set off an amount equal to the Performance Disincentive from payments owed to Contractor in accordance with Disputed Fees; Right to Offset of the Agreement.

If an individual Service Level experiences a Significant Service Level Default, then:

The amount of the applicable Performance Disincentive payable to Government for the individual Service Level Default shall be increased by fifty percent (50%) upon each such Significant Service Level Default (calculated as 1.50 multiplied by the individual Service Level Default Performance Disincentive that would have been payable had it not been for the multiple consecutive SLA defaults), and shall be further increased by an additional fifty percent (50%) for any subsequent, consecutive failure to meet the Minimum Service Level Target of the same individual Service Level;

The amount of any Performance Disincentive for the Significant Service Level Default shall be limited by the At-Risk Amount as described in this Section 5;

The At-Risk Amount shall still apply to the cumulative amount of any Performance Disincentives due for any Service Level Defaults that occur in the same Measurement Period Contractor acknowledges and agrees that the Performance Disincentives shall not be deemed or construed to be liquidated damages or a sole and exclusive remedy or in derogation of any other rights and remedies Government has hereunder or under the Agreement.

Exceptions

1. If any events or periods that are measured as part of a Service Level are not successfully achieved in accordance with the relevant performance standard specified for the Service Level, and Contractor demonstrates that such failure is directly caused by any of the following, then such events or periods shall be disregarded for the purpose of calculating the relevant Service Level (and for Service Levels calculated as a percentage, shall be excluded from both the numerator and the denominator for the purposes of calculating whether the Service Level has been achieved):

Government’s (or a Government Agent’s) breach of the Contract;

Willful misconduct or violations of law by Government or a Government Agent; and Prioritization of work mandated by Government in writing that may impact the timeliness SLA. This exception shall not be applicable to quality related service levels. Contractor shall inform Government in writing of potential failure on timeliness service level as a result of prioritization of work by Government.

SERVICE LEVEL TERMINATION EVENT

Government may terminate, by written notice to Contractor, if Contractor does not meet the Expected Service Level Target for (i) the same Service Level Target for four (4) consecutive months or (ii) greater than 25% of the total Service Level Targets for any Fiscal Quarter. Percentages will be rounded up to the highest whole numbers when determining whether one of these termination events has occurred. The terminations described in this paragraph will be effective as of the date specified in the written notices.