Enclosure 3 Metrics Plan 7.29.21 Base Plan for Option DRAFT 2.docx

Enclosure (3)

F/A-18 A-D PMI-1/HFH and F/A-18 Component Material Depot Support DRAFT Metric Plan

SPRPA1-14-D-002U, P00TBD

XX TBD 2023

INTRODUCTION

Subject to the terms and conditions of the contract, this F/A-18 Depot and Component Repair Support Metric Plan will govern the performance of The Boeing Company, hereinafter referred to as “the Contractor”, on Depot Support requirements as defined in the F/A-18 PMI-1/HFH and Component Repair Global/Depot Fleet Readiness Center Statement of Work (SOW) Attachment 32. The Contractor’s performance will be measured by Material Availability (MA) and Depot Fill Rate (DFR) and additional incentives for Backorder (BO) age and MA Over and Above are also included. The metrics shall be monitored by the Government and the Contractor throughout the life of the contract and shall be reviewed during the Performance Review Boards. The purpose of this plan is to define and establish the process by which the MA, DFR, BO and FKD metrics are measured.

MATERIAL AVAILABILITY Performance METRIC The Contractor will provide material availability to fill F/A-18 unique DLA retail, foreign military sales, and global customer requisitions in accordance with the terms and conditions of the contract. Material Availability will be measured against Material Requisition Orders (MRO) filled denoted by Figure 1 below.

MRO (A) are the total qualified MROs released by the retail requisitioning authority. MRO (A) meets the metric when a requisition is filled by DLA or filled by the Contractor within the IPG timeframes defined in Paragraph 2.2.1. MRO (B) are requisitions filled by the DLA while MRO (C) are requisitions filled by the Contractor. The Government Enterprise Business System, EBS, shall be considered the System of Record for monitoring the applicable performance metric. EBS will utilize the data defined in Paragraph 2.2.1 and sent by the Contractor to establish the metric start and metric stop for each F/A-18 PMI-1/HFH and Component material requisition sent to the Contractor. Any errors, interruptions, failures, or defects in EBS may entitle the Contractor to corresponding schedule relief from the applicable metric. In the event the EBS system is unavailable, the Contractor execution system may be recognized as the system of record.

Figure 1. MRO and STO Flow Diagram

In addition to global MA above, the Contractor will be measured on the ability to fill established Retail levels at FRC-SW and FRC-SE as measured through a Depot Fill Rate (DFR). The Contractor will be required to meet a threshold Depot Fill Rate. The Contractor will have the ability to set inventory levels at the local DLA-ISA stocking points for the material identified in the contract. If the Contractor does not meet the threshold, the Global MA performance fee will be decremented in accordance with Figure 13 and 14. The Boeing PBL Supplier Plant designation is “PSGQ.”

OPERATING RULES AND MATERIAL AVAILABILITY

The following paragraphs provide the operating rules and material availability definition.

Requisition Operating Rules Requisitions are defined by the following:

· Requisitions are defined as a request for a single part for any quantity

· Qualified requisitions are requisitions that meet technical requisition requirements as defined below:

· Technical requisition requirements - Systematic checks verify that the message is complete and can be processed (as defined in BCOI Attachment 3 DLA ENTERPRISE PERFORMANCE BASED SUPPORT CONTRACT INTERFACE CONTROL DOCUMENT)

· The Contractor will perform Systematic checks to ensure that no technical requirements have been violated. If the systematic check determines that the technical rules have been violated, the Contractor will respond to DLA utilizing a 945A Warehouse Shipping Advice message with a status of “BD”. “BD” status is defined as: Requisition is delayed due to the need to verify requirements relative to technical data. Orders will remain “out of status” until such time as the technical requisition n requirement has been corrected. The metric clock will not start while requisitions are in “BD” status.

· If the Contractor can demonstrate based upon conditions including but not limited to the following that the requisition was created in error:

· Excess quantities

· Demand signal disconnect (US Army orders an F/A-18 unique National Item Identification Number (NIIN)) Then the Contractor will place those requisitions in “BB” status and notify DLA within one business day of requisition receipt. DLA will respond within one full business day of the Contractor’s notification. Upon notification, DLA and the Contractor will complete the necessary forensics and DLA will make one of the following three decisions:

1) Cancel the requisition in its entirety and remove the requisition from metrics in total, or

2) Request the Contractor fill the order lead-time away, or

3) Fill the requisition because DLA does not agree with the assertion of an error.

· Cancelled Requisitions

· Qualified requisitions that are subsequently cancelled within the metric delivery timeframe will be considered an exclusion to the material availability and depot fill rate calculation.

· Qualified requisitions that were identified by the Contractor to be in error that are subsequently cancelled prior to fulfillment will be considered an exclusion to the material availability calculation. Partially filled requisitions that were identified by the Contractor to be in error where the unfilled quantity is subsequently cancelled prior to fulfillment will be considered a quantity change and will be counted under the material availability calculation based on the response time of the partial quantity fulfillment.

· Modified Requisitions

· If a Requisition Modification is requested by the Government and the Contractor accepts this modification, the Contractor will respond indicating its Modification Request Acceptance and restart the metric clock accordingly.

· If a modification is accepted then the Metric Start time for all applicable suffixes on the requisition will be reset using the timestamp sent by the Contractor in the 945A Modification Acceptance Transaction.

Material Availability Definition and Calculation The following paragraphs provide the Material Availability metric definition and exclusions.

MRO (C) Material Availability Timeframe Definition MRO (C) contribution to Material Availability is defined as the Contractor having the ability to successfully fulfill requisitions in the timeframe allocated for its applicable Issue Priority Group (IPG). The Contractor shall adhere to the MA metrics described below. The Government shall be responsible for maintaining accurate MA data in the EBS database. Qualified requisitions will be metric accountable when received on a business day during the following working hours: Monday through Friday from 06:00 Eastern time to 15:00 Eastern time (all times listed utilize a 24-hour clock). Federal holidays are not business days. Requisitions received after 15:00 Eastern time shall be considered received and metric accountable at 06:00 Eastern time on the following business day. Qualified IPG1 requisitions shall be received, processed and prepared for shipping material 24 hours a day/7 days a week.

· The IPG timeframe for requisition fulfillment is defined as follows:

· The IPG timeframe for requisition fulfillment is defined as follows:

· IPG 1 (Requisition Priority 1, 2, and 3) = 1 Business Day

· IPG 2 (Requisition Priority 4, 5, 6, 7, and 8) = 1 Business Day

· IPG 3 (Requisition Priority 9, 10, 11, 12, 13, 14, and 15) = 3 Business Days

· FMS planned CLSSA = Date and Time of receipt of the MILSTRIP Requisition via report # DRU-14849 (defined in the H36 clause) PLUS one business day, PLUS the applicable IPG timeframe referenced above.

Metric Clock Start:

· Qualified requisitions will be metric accountable when received on a business day during the following working hours: Monday through Friday from 06:00 Eastern time to 15:00 Eastern time (all times listed utilize a 24-hour clock). Federal holidays are not business days. Requisitions received after 15:00 Eastern time shall be considered received and metric accountable at 06:00 Eastern time on the following business day.

· Qualified Global IPG 1 requisitions and IPG 1, 2, 3 requisitions supporting the N65888 or N65886 DODAAC shall be received, processed and prepared for shipping material 24 hours day/7 days a week. (in accordance with IPG timeframes above)

· The Metric Clock Start Time will be established, documented and communicated in the Contractor’s response to the Material Requisition detailing that the material on the requisition is available or on backorder.

· Technical Electronic Data Interchange (EDI) Transaction and Data Element Definition:

i. EDI 945A Warehouse Shipping Advice Transaction

ii. Material Status Reported = “BT” or “BB”

1. Loop = 0311 Segment LQ, Data Element LQ01 = 81

a. Data Element LQ02 = Industry Code

i. BT = Requisitioned item is available

ii. BB = Requisitioned item is unavailable and is back ordered

iii. Metric Clock Start

1. G62 Segment, Position 110

a. G6201 (Date Qualifier) = BB

b. Metric Clock Start Date

i. G6202 (Date) = CCYYMMDD

c. G6203 (Time Qualifier) = W

d. Metric Clock Start Time

i. G6204 (Time) = HHMMSS

· Modification Clock Start (Restart):

· If a Requisition Modification is requested by the Government and the Contractor accepts this modification, the Contractor will respond (EDI 945A) indicating its Modification Request Acceptance and restart the metric clock accordingly.

· Technical EDI Transaction and Data Element Definition:

i. EDI 945A Warehouse Shipping Advice Transaction

ii. Material Status Reported = “BK”

1. Loop = 0311 Segment LQ, Data Element LQ01 = 81

a. Data Element LQ02 = Industry Code

i. BK = Sales order has been modified as requested

iii. Metric Clock Start

1. G62 Segment, Position 110

a. G6201 (Date Qualifier) = BB

b. Metric Clock Start Date

i. G6202 (Date) = CCYYMMDD

c. G6203 (Time Qualifier) = W

d. Metric Clock Start Time

i. G6204 (Time) = HHMMSS

· Metric Clock Stop:

· Non-Critical Safety Items (Non-CSI): The Metric Clock Stop Time will be established, documented and communicated in the Contractor’s response to a Material Requisition detailing that the non-CSI material requested has been picked, packed and is ready for shipping instructions from Vendor Shipment Module (VSM). In situations where requisitions require multiple shipments, the clock stops when the final quantity of material is picked, packed and ready for shipping instructions from VSM.

· Non-CSI Technical EDI Transaction and Data Element Definition:

i. EDI 945A Warehouse Shipping Advice Transaction

ii. Material Status Reported = “BT”

1. Loop = 0311 Segment LQ, Data Element LQ01 = 81

a. Data Element LQ02 = Industry Code

i. BT = Requisitioned item is available

2. W0601 (Reporting Code) = NL

3. G6201 (Date Qualifier) Position 110 = BB

4. Metric Stop Date

a. G6202 (Date) = CCYYMMDD

5. Metric Stop Time

a. G6203 (Time Qualifier) = W

b. G6204 (Time) = HHMMSS

· Critical Safety Items (CSI): The Metric Clock Stop Time will be established, documented and communicated in the Contractor’s response to a Material Requisition that indicates the CSI material requested has been picked and is available for Defense Contract Management Agency (DCMA) inspection. In situations where requisitions require multiple shipments, the clock stops when the final quantity of CSI material is picked and ready for DCMA inspection.

· CSI Technical EDI Transaction and Data Element Definition:

ii. EDI 945A Warehouse Shipping Advice Transaction

1. Material Status Reported = “BT”

2. Loop = 0311 Segment LQ, Data Element LQ01 = 81

3. Data Element LQ02 = Industry Code

a. BT = Requisitioned item is available

4. W0601 (Reporting Code) = NL

5. G6201 (Date Qualifier) Position 110 = BB

6. Metric Stop Date

a. G6202 (Date) = CCYYMMDD

7. Metric Stop Time

a. G6203 (Time Qualifier) = W

b. G6204 (Time) = HHMMSS

· Metric Stop Time (Cancellations)

· Partially Filled Requisitions where the remaining quantity is cancelled:

i. EDI 945A Warehouse Shipping Advice Transaction for last filled portion of the requisition:

1. Material Status Reported = “BT”

2. Loop = 0311 Segment LQ, Data Element LQ01 = 81

3. Data Element LQ02 = Industry Code

a. BT = Requisitioned item is available

4. W0601 (Reporting Code) = NL

5. G6201 (Date Qualifier) Position 110 = BB

6. Metric Stop Date

a. G6202 (Date) = CCYYMMDD

7. Metric Stop Time

a. G6203 (Time Qualifier) = W

b. G6204 (Time) = HHMMSS Material Availability Performance METRIC Calculation Material Availability calculation is as shown in Figure 2.

Figure 2. Material Availability Calculation In order to calculate material availability from the daily file, the following steps should be taken:

1) Filter the file to the appropriate NIIN list and document type (TA, ZRET, ZPPD) and the Julian Date Order is within the period of performance

2) Sum the total MRO requests using unique document numbers

3) Count Boeing misses

a. Any 940R MRO request that is still pending and today’s date is greater than the metric need date per the IPG timeframes

b. Any 940R MRO request that has a metric clock stop date greater than the metric need date per the IPG timeframes

4) Calculate (Total MROs – Boeing Misses) / (Total MROs)

5) Adjust for exceptions as appropriate

Depot Fill Rate Calculation The Depot Fill Rate is limited to FRC retail requisitions and is calculated as shown in Figure 3. For the purposes of this calculation, maintenance requisitions are limited to parts included in the Boeing Market Basket as defined by the F/A-18 PMI-1/HFH Depot SOW F/A-18 PMI-1/HFH and Component Repair Global/Depot Fleet Readiness Center Statement of Work (SOW) Attachment 32. The “FRC Plant” referenced in the formula below is the material stored in both the DLA IA and Local DLA DD. The equation below will be used to calculate separately the Depot Fill Rate for FRCSW (N65888) and FRCSE (N65886)

Figure 3. Depot Fill Rate Calculate To calculate depot fill rate from the daily file, the following steps should be taken:

1) Filter the file to the appropriate NIIN list and document type (TA, ZRET, ZPPD)

2) Filter MRO requests to those starting with FRC DODAAC and sum total MRO requests using unique document numbers

3) If the requisition is in SS or BA and the supplying plant is from the same FRC DODAAC then it is a fill If the requisition is in BB or the supply plant is PSGQ (Boeing), then it is a miss If the requisition is in any other status, including but not limited to BQ, CD, BF, CJ, CM, CA, CG, CK, CB, BM and BD, then it is excluded from the calculation

4) Calculate (Fill) / (Fill + Miss)

5) Adjust for exceptions as appropriate Exclusions Requisitions in the following categories will be excluded from the MA and DFR metric calculations. However, if the Contractor fulfills an excluded requisition within the MA timeline, it will be included in the MA metric calculation.

1. If Boeing demonstrates excessive demand for NIINs affected by, for example: the results from Service/Inspection Bulletins, Analytical Condition Inspections (ACI)/High Flyer Program, Aircraft Structural Integrity Program (ASIP), Technical Directives, and Service/Fatigue Life Extension Programs in effect after 28 April 2016 for a timeframe required to support the demand. Metric relief will be determined bi-laterally and documented via PCO correspondence. For the purposes of this clause, excessive is defined as: “going beyond the usual, necessary, or proper limit or degree”.

2. Exclusions due to excusable delays clause (H10)

3. Requisitions impacted when DLA inventory position (per Enclosure 2 to Attachment XX F/A-18 PMI-1/HFH and Component Repair Global/Depot Fleet Readiness Center Statement of Work (SOW)) has been depleted without a corresponding requisition to support the attrition per Attachment XX. F/A-18 PMI-1/HFH and Component Repair Global/Depot Fleet Readiness Center Statement of Work (SOW) paragraph 2.2, (Government Inventory)

4. If the Government invokes its inspection rights, and government resources are unavailable (i.e. people, systems), and Boeing demonstrates it causes a delay, affected requisitions will be excluded.

5. Requisitions for obsolete/diminishing manufacturing sources (DMS) items for any requisitions received beyond existing on-hand and due-in shelf stock.

6. Requisitions exceeding MA timeframes due to Government direction to first satisfy lower priority or newer requisitions for the same material.

7. Qualified requisitions identified by the Contractor to be in error that are subsequently cancelled prior to fulfillment.

8. Requisitions received after contract award during the transition period.

9. FMS unplanned Coordinating Logistics Supply Support Agreement (CLSSA), non-CLSSA, Initial Support, and FMS Direct Requisitioning Procedures (DRP) requisitions which will be filled no later than lead time away. FMS CLSSA requisitions that may impact ability to support United States Government (USG) requisitions (above anticipated quantity) will also apply.

10. If a requisition is not satisfied within the IPG timeframes due to a government contract for non-Boeing material that is delinquent to the due in dates defined on Enclosure 2 to the SOW by more than zero days that transaction will be excluded from the MA, DFR and BO metric calculation. In the event the delinquent contract quantity is less than the requisition quantity, the exclusion will only apply to the delinquent contract quantity. The delta is expected to be satisfied by the contractor.

11. For Depot Fill Rate, requisitions not filled or requisitions filled from locations other than ISA due to the Contractor’s stocking plan not being executed.

12. For Depot Fill Rate, requisitions filled from other than the DD or IA when an industrial level exists and stock is available at the Contractor Wholesale but a STO was not requested within required delivery timeframe

13. The contractor will receive metric relief for any NIINs that DLA sets the industrial protection level below the Contractor submitted levels.

Separate from any relief available to the Contractor pursuant to metric exclusions above, exclusions from the requisition metric count may also be granted at the discretion of the Government Procurement Contracting Officer (PCO) for good cause provided that substantiation and documentation is submitted by the Contractor demonstrating performance or schedule impacts outside of the Contractor’s direct supply chain control.

ANNUAL MATERIAL AVAILABILITY REPORTING PERIODS

The reporting schedule for the performance is annual and shown in calendar days within Figure 4. DLA is responsible for sending the Annual Performance Report to the Contractor within 60 calendar days of the end of the reporting period for reconciliation. The Annual Performance Review Board, jointly attended by DLA and the Contractor, will be held within 30 calendar days of the Contractor receiving the Annual Performance Report. All MRO requisitions are metric accountable at time of contract award, in accordance with Paragraph 7.2 of BCOI F/A-18 PMI-1/HFH and Component Repair SOW, unless noted differently on the Parts list.

Items that have moved from non-metric accountable (1B) to metric accountable (1A) will be fully metric accountable for all performance and incentive fees 143 days after contract award and will be noted on the Parts list as having transitioned from (1B) to (1A).

Metric accountable 120 days after contract award in accordance with Paragraph 7.2 of the F/A-18 PMI-1/HFH and Component Repair Global/Depot Fleet Readiness Center Statement of Work.

Figure 4. Performance Periods F/A-18 A-D PMI-1/HFH and F/A-18 Component Repair

MATERIAL AVAILABILITY Performance METRIC RECONCILIATION On a monthly basis, DLA will provide the raw data used in calculating the material availability to the Contractor by the 21st of each month. Upon receipt of the data, the Contractor will perform a reconciliation of the data set to the Contractor’s system of record 10 days from receipt. Any disputed data will be validated and corrected by DLA within 10 business days of receipt of the dispute from the Contractor.

MATERIAL AVAILABILITY PERFORMANCE METRIC REQUIREMENTS for PMI-1/HFH and Component Repair A Material Availability baseline will be established using DLA historical performance of the material listed in Enclosure 2 of the SOW. The Contractor’s performance fee per contract performance period is shown in Figure 5 for Depot 1: PMI-1/HFH and Figure 6 for Depot 2: Component Repair. Negotiated Contract Performance Fee for the Period of Performance will be distributed between the various metric categories in accordance with the Fee Distribution percentages outlined in Figures 5 and 6. Depot Fill Rate Performance Fee will be based on the weighted percentage of requisitions received from the two Depots covered under this contract (N65886 and N65888).

PMI-1/HFH

Depot Fill Rate Performance Fee

PMI-1/HFH

Backorder Age Reduction Performance Fee PMI-1 /HFH

Figure 5. Contract Performance Incentive Fees (Depot 1) PMI-1/HFH

Fee Component Repair Depot Fill Rate Performance Fee Component Repair

Total

Figure 6. Contract Performance Incentive Fees (Depot 2) Component Repair

The Contractor will be required to incrementally increase MA to 92% and provide a specified level of support to the ISA’s (N65888 or N65886) as measured by the Depot Fill Rate identified bellow. The Contractor will lose performance fee when MA and Depot Fill Rate performance fails to meet stipulated thresholds. Performance fee decrements are calculated as follows:

To compute the MA performance metric, the four charts below (MA Performance Requirements Global (Figure-7) Depot Fill Rate FRCSW (Figure -8), Depot Fill Rate FRCSE (Figure -9) work in concert. Complete the following steps:

1. Determine Yr 1 global MA performance. MA is calculated per paragraph 2.2.3.

2. Determine and apply a weighted average of requisitions processed to compute the MA incentive. The Weighted Average example is identified in Figure 10 and explained in paragraph 2.5.

3. Determine the Yr 1 Depot Fill Rate at each site. DFR is calculated per the formula in paragraph

PMI-1/HFH (Depot 1) & Component Repair (Depot 2) MA Performance Requirement

Figure 7. Global Material Availability Performance Requirements PMI-1/HFH & Component Repair

The Contractor will be required to maintain Depot Fill Rate (DFR) at 90%. The Contractor will lose performance fee when DFR performance fails to meet stipulated thresholds. Performance fee decrements are calculated as follows:

PMI-1/HFH (Depot 1) & Component Repair (Depot 2) DFR Performance Requirement

(FRCSW & FRCSE)

Figure 8. Depot Industrial Activities Depot Fill Rate Requirements PMI-1/HFH & Component Repair (FRCSW & FRCSE) Depot Fill Rate for PMI-1/HFH and Component Repair Incentive Pools will be adjusted based on the weighted average of demands to each of the perspective Depots (FRCSW and FRCSE) per the following:

Figure 9. Weighted Average Example PMI-1/HFH & Component Repair for Depot Fill Rate Incentive

The above weighted average example (Figure -9) works by first applying the Global MA decrement (if any). In the example above the full incentive for MA would be $1000 if no decrement for performance was applied. Assuming the Global MA fill rate is 88%, which translates to a 10% decrement, the starting incentive in the above weighted average model is $900. Therefore, the MA Incentive is computed as follows:

1. Depot Fill Rate for FRCSW in year 1 is 86% which translates to a 10% decrement

2. Depot Fill Rate for FRCSE in year 1 is 85% which translates to a 10% decrement The weighted average incentive decrement for each site is computed as follows:

1. FRCSW received 74% of the total requisitions, therefore, the weighted average $ decrement for FRCSW is computed as $900 x .74 (74% of requisitions) x (0.10) (10 % site decrement) = $66.60.

2. FRCSE received 26% of the total requisitions, therefore, the weighted average $ decrement for FRCSE is computed as $900 x .26 (26% of requisitions) x (0.10) (10% site decrement) = $23.40 Therefore, the total incentive fee for this period is computed as $1000 (Total Global MA incentive fee) - $100 (Global MA decrement) = $900 - $90 (Total weighted average site decrement) = $810 (Net Incentive Fee).

Additional notes:

· The notional DLA MA baseline at start of the contract is 84%.

· The notional DLA Depot Fill Rate baseline at start of the contractor is 81%.

· 100% of MA fee is provided to the contractor each month, and an adjustment is made at the end of the performance period if the contractor does not perform at the 0.0% decrement level for both MA Global and Depot Fill Rate at each site.

INCENTIVE METRICS

An incentive metric is utilized to motivate the Contractor to improve specific performance areas. Potential incentive rewards are outlined herein that the Contractor can earn by achieving specific goals. DLA and the Contractor have established a performance baseline using valid historical data from the past 3 years. The Contractor will use best efforts to apply their resources to the specified goals.

BACKORDER INcentive The Back Order (BO) incentive is incentivized over and above the Fixed Price Incentive (FPI) metric geometry of Material Availability (MA) and cost performance and is calculated separately. The BO incentive is not priced in the Boeing F/A-18 PMI-1/HFH contract. The BO metric only applies to on-contract NIINs (Enclsosure 1A and 1D of the SOW).

Backorder Age Definition For the purposes of this plan, a backorder is an MRO assigned a status of “BV” with a SGQ RIC beyond the MA response timeframes specified in paragraph 2.2.1 or a status of “BB” in the Daily Report (DRU-14849) for on-contract NIINs. BO age is measured in calendar days from the Original Requistion date to the date the report is created. In order to calculate backorder incentive from the daily file, the following steps should be taken:

1) Use the daily file from the last reporting day of the month

2) Filter the file to the appropriate NIIN list and documents type (TA, ZRET, ZPPD)

3) Count any MROs sent to Boeing via EDI that have exceeded their IPG Metric Timeframe and are still open

4) Calculate Age of each document number (Date of daily file – original requisition date)

5) Adjust for exceptions as appropriate

6) Add new month’s data to appropriate charts as identified below

3.1.2 Backorder Incentive Reporting

The Contractor will create charts showing a Box and Whisker plot for open backorders in total and by IPG specified in the Daily Report (DRU-14849) for the last business day of the month.

Each month’s Box and Whisker plot will be based on a snapshot of open backorders as of the date of the Daily Report. Charts will reflect Box and Whisker plots for each of the prior 24 months. Each chart will also indicate the total number of open backordered requisitions as of each month’s end. Backordered requisitions that are subsequently cancelled (those items assigned a “BQ” Status Code) are to remain in previously reported backorder metrics. The Contractor will report the collected data and Box and Whisker charts to the Government during the Performance Review Board. An example illustrating the intended Box and Whisker chart format for all open backorders is shown in Figure 10.

In addition, the Contractor shall calculate a 12-month average at the end of the annual performance period for the 75th quartile, median, and 25th quartile backorder ages based on the open backorder aging data as of each individual month’s end. The Contractor shall report the calculated performance results and the data on which it was based to the Government at the same time as MA reconciliation.

Figure 10. Example Box and Whisker Chart

0. BACKORDER INCENTIVE OPPORTUNITIES

The Contractor can earn additional incentive fee by reducing BOs. BO Baseline Improvement is the percent (%) reduction from the established BO baseline. Incentive fee is first obtained when total BOs are reduced and again when any of the three performance indicators are improved. Available incentive fee per contract performance period is shown in Figure 11. BO baselines and reduction thresholds for earning BO incentives are shown in Figure 12.

Using the baseline total BO count to determine the required total BO count reduction is contingent on the number of requisitions received during a contract performance period. If total requisitions received by the Contractor fall outside ± 5% of total requisitions received during the period used to determine the baseline BO quantity, the BO baseline will increase by the equivalent percentage of requisitions received.

For example, assuming the Contractor receives 2000 requisitions and 200 BOs in contract performance period 1 and the baseline was based on 1000 requisitions and 100 BOs, this would equate to a 100% increase in requisitions received. Since this falls outside the allowable 5% range, it necessitates an increase to BOs by an equivalent 100%.

PMI-1/HFH

Available Incentive Fee for Component Repair

Figure 11. Backorder Incentive Available Fee

Total BO Count

TBD

Annual Reqs TBD Avg Monthly BOs

Notes

· All annual reductions based on corresponding, specified initial baseline values.

· No quartile fee will be awarded unless the annual total BO reduction percentage is first met.

· Using the specified initial baseline BO Count to determine required reductions is valid only if the number of requisitions received by the Contractor during a contract performance period is within ± 5% of the initial baseline total requisition count.

Figure 12. Backorder Incentive Measurement F/A-18A-D PMI-1/HFH

Total BO Count

TBD

Annual Reqs TBD Avg Monthly BOs

Notes

· All annual reductions based on corresponding, specified initial baseline values.

· No quartile fee will be awarded unless the annual total BO reduction percentage is first met.

· Using the specified initial baseline BO Count to determine required reductions is valid only if the number of requisitions received by the Contractor during a contract performance period is within ± 5% of the initial baseline total requisition count.

Figure 12A. Backorder Incentive Measurement F/A-18 Component Repair

Examples for Backorder Incentive Metric:

Example 1.

· Incentive fee for the period equals $1,000

· Baseline BOs at the start of year 1 is 1,500

· At the end of the period the contractor obtains the following results:

· Age of the 75th quartile is reduced by 11%

· Age of the Median quartile is reduced by 12%

· Age of the 25th quartile is reduced by 5%

· Total BOs reduced by 2% NO fee is awarded because the contractor did not reduce overall BOs by 5%

Example 2.

· Incentive fee for the period equals $1,000

· Baseline BOs at the start of year 1 is 1,500

· At the end of the period the contractor obtains the following results:

· Age of the 75th quartile is reduced by 7%

· Age of the Median quartile is reduced by 14%

· Age of the 25th quartile is reduced by 15%

· Total BOs reduced by 14% The contractor would receive the following fee: 0% for the 75th quartile, 25% for the Median quartile, 25% for the 25th quartile, and 25% for reducing total BOs Fee Computation = 0 + 25% + 25% + 25% = 75% and 75% x $1,000 = $750.00

3.3 MATERIAL AVAILABILITY PERFORMANCE “OVER AND ABOVE” INCENTIVE

Through Contract Performance Periods 3 through 5, the Contractor can earn additional incentive fee by exceeding the F/A-18 Global Material Availability Performance PMI-1/HFH. Available MA incentive fee per contract performance period for PMI-HFH is shown in Figure 13.

Figure 13. MA Incentive Available Fee – PMI-1/HFH

PMI-1/HFH & Component Repair MA Incentive Opportunity Requirements

Figure 14: MA “Over and Above” Incentive Fee – PMI-1/HFH

When overall MA exceeds the minimum baseline goal for the market basket, 90% for Years 3 through 5, the incentives for “Over and Above” performance in this section will be applied. Performance will be rounded to the nearest 0.1% in accordance with the standard rounding procedures of 0.05 or above rounded up.

MA Performance “Over and Above” Incentive Fee will not be paid monthly in advance and will be paid at the conclusion of the Contract Performance Period when all metric reconciliations have been completed.

GLOSSARY

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