E-OMS_Award_Fee_-_Term_Plan_3.25.15.pdf

Attachment 6 – Award Fee/Term Plan

1. Introduction

The Award Fee/Term Plan (AF/TP) establishes the process and criteria for determining: a) the amount of award fee earned in an award fee period; and b) whether the Contractor earns an award term.

The AF/TP incentivizes superior contract performance and incentivizes improvements that increase operational efficiencies, streamlines processes, reduces Direct Budget Authority (DBA) expenditures, generates increased Reimbursable Budget Authority (RBA) funding and modernizes capabilities.

The AF/TP applies only to the CLINs designated as Cost Plus Award Fee (CPAF) CLINs.

2. Fee/Term Determining Official

The Fee/Term Determining Official (F/TDO) is the Air Force Program Executive Officer for Combat and Mission Support (AFPEO/CM) or his/her designee. AFPEO/CM, HQ SAF/AQ, HQ AFMC, and HQ AFTC may advise the F/TDO.

Within 45 days after each award fee evaluation period, the F/TDO determines the amount of fee the Contractor receives. Within 45 days after each award term evaluation period, the F/TDO determines if the Contractor earned the award term.

All F/TDO award fee and award term determinations, including the ratings assigned to the Contractor during an evaluation period, are unilateral determinations made solely within the discretion of the Government.

3. Fee/Term Review Board

At the end of each award fee evaluation period, the Fee/Term Review Board (F/TRB) recommends to the F/TDO the amount of fee the Contractor should receive. At the end of each award fee evaluation period, the F/TRB recommends to the F/TDO whether the Contractor should receive an award term.

The F/TRB consists of the following individuals:

96 TW/CC or designee (Chairperson) 96 RN/CL or designee 96 OG/CC or designee 96 TG/CA or designee Contracting Officer (CO) Recorder (non-voting) Legal Advisor, 96 TW/JA (non-voting)

The Contracting Officer Representatives (CORs) and the personnel responsible for evaluating Contractor performance during day to day operations (e.g. Range Systems Engineers, Instrumentation Engineers, Targets Engineers, Safety, Security, Environmental, and Occupational Health, Programming Engineers and Test Engineers) may advise the F/TRB.

4. Award Fee Criteria

There are two award fee criteria: Performance and Improvements.

Performance

The AF/TP incentivizes superior performance of all requirements captured within the CPAF CLINs. The Contractor should not expect to earn full award fee for merely satisfactory performance.

The Performance criterion consists of the following five components: Mission Evaluations, Technical Directive Evaluations, COR Inspections, Financial Inspections and Small Business Participation.

Mission Evaluations

The Test Engineer, Program Engineer, or Central Control Facility (i.e. the mission evaluator) prepares mission evaluations after each mission or related set of missions. The evaluation measures the performance of the Contractor in meeting the test directive. Mission evaluators record their mission evaluations in the Central Scheduling Enterprise management system.

Performance is measured on a scale of “-3” to “+3.” A negative rating indicates that performance did not meet requirements; positive ratings indicate that performance exceeded requirements. A rating of “0” indicates that the Contractor met all requirements. (See Table 1).

Table 1 Performance Ratings

Exceeded Requirements +3 +2 +1

Met Requirements 0

Did Not Meet Requirements -1 -2 -3

The test directive for each mission (or related set of missions) includes a weight consistent with the 96TW Test Priority System. The Contractor’s mission rating is multiplied by the assigned weight to obtain the mission score. All mission scores are evaluated in the aggregate at the end of the award fee period to determine the overall Mission Evaluations score.

Technical Directive Evaluations

The technical directive’s originator, or the originator’s designee, evaluates the Contractor’s technical directive performance and records the evaluation in the Electronic Tasking System.

Each evaluation measures the Contractor’s performance in meeting the technical directive’s requirements.

Performance is measured on a scale of “-3” to “+3.” A negative rating indicates that performance did not meet requirements; positive ratings indicate that performance exceeded requirements. A rating of “0” indicates that the Contractor met all requirements. (See Table 1)

The technical directive’s originator assigns a weight to each technical directive at the time of issuance. The technical directive score equals the technical directive rating multiplied by the assigned weight. All technical directive scores are evaluated in the aggregate at the end of the award fee period to determine the overall Technical Directive Evaluations score.

COR Inspections

CORs inspect the contract and produce surveillance inspection reports that include the CORs’ observations, findings, major findings, and recognitions for exemplary performance. An observation is a minor deviation from, or noncompliance with, an otherwise well-implemented process. A finding identifies noncompliance with PWS requirements or established standards.

A major finding is an inspection discrepancy or lack of responsiveness that significantly degrades or has potential to significantly degrade test, system, or equipment capability, or creates a health, safety, or environmental hazard. Exemplary performance is contract performance that exceeds PWS standards. All surveillance inspection reports are evaluated in the aggregate at the end of the award fee period.

Financial Inspections

Financial inspections determine if the Contractor provided the government with accurate financial estimates in the annual spend plan, reported costs with accuracy and timeliness, did not exceed their semiannual DBA funding spend plan, and met the semiannual spend plan goal.

All financial inspection reports are evaluated in the aggregate at the end of the award fee period.

Small Business Participation

The Contractor is incentivized to exceed the total small business participation goal. The total small business participation goal is 25% of all costs incurred during the award fee period. Of the 25% small business goal, the Contractor is required to meet the following goals for participation of small businesses in the socioeconomic categories:

HUBZone (3% of all costs incurred during the award fee period) SDVOSB (3% of all costs incurred during the award fee period) WOSB (5% of all costs incurred during the award fee period) SDB (5% of all costs incurred during the award fee period)

Improvements

Contractor-driven, Government-approved innovation is critical to increasing both the relevancy and the long term sustainability of the ETTC and the NRTF. Without continuous improvement and modernization of the ETTC and the NRTF, the 96 TW will be unable to fully achieve its mission in the foreseeable future.

The Contractor is incentivized to develop and execute improvements to achieve DBA cost reductions, improved mission capability, and operational efficiencies. Improvements may include process changes, cross-utilization of employees, implementing unique business strategies, leveraging technological upgrades and modifying existing government assets.

Improvements should be achievable within existing budgets, and comply with governing statutes, regulations and policies.

The Contractor is responsible for presenting each of its improvements in writing to the Contracting Officer prior to the end of the award fee period. If the Contracting Officer determines that an improvement requires Government-approval to implement and the Contracting Officer will either approve or disapprove the solution.

The Contractor’s execution of improvements is evaluated in the aggregate at the end of the award fee period. If the Contractor fails to present any innovative solutions in writing to the Contracting Officer prior to the end of the award fee period, the Contractor will receive a zero score for Improvements for that award fee period.

5. Award Fee Score

The F/TDO will evaluate the contractor’s performance against the award fee criteria and improvement execution to ascertain the Award Fee Score (AFS).

The AFS is a numerical score between 0 and 100 points. The Rating Categories assigned to the point ranges in Table 2 are for stratification purposes only. The F/TDO letter to the Contractor states both the AFS and the Rating Category.

Table 2

Award Fee Score Rating Category 80-100 Excellent 65-79 Good 50-64 Satisfactory 35-49 Marginal 0-35 Poor

For the current award fee period, it is likely the Performance accounts for up to 80 points of the AFS and Improvement accounts for 0-20 points of the AFS.

The Performance score is comprised of the Mission Evaluations score (0-25 points), the Technical Directive Evaluations score (0-20 points), the COR Inspections score (0-20 points), the Financial Inspections score (0-10 points), and the Small Business Participation score (0-5 points).

The F/TDO retains the right to adjust the AFS downwardly or upwardly based upon significantly poor performance, performance failures, or for events outside of the Contractor’s control that impact the Contractor’s ability to successfully perform contract requirements. Examples include:

a) Contractor actions creating safety, health, environmental, mission, or security impacts; b) Contractor actions resulting in damage to Government property or injury to persons; c) Events such as hurricanes, wildfires and government shutdowns.

6. Award Fee Amount

The F/TDO derives the award fee amount by dividing the award fee score by 100 and then multiplying that quotient by the award fee pool amount established in Section B of the Schedule.

For example, if the Contractor receives an award fee score of 75 and the award fee pool is $2M, then the Contractor would receive an award fee amount of $1.5M.

The F/TDO may use significant swings, positive or negative, in the rating from one period to another if performance changes. There is neither a requirement nor a presumption that the rating for a given period will become a baseline for the rating applicable to future periods. The F/TDO may determine that the Contractor has earned $0 in award fee for any given period.

7. Contractor’s Self-Evaluation

Within 7 days after each evaluation period, the Contractor shall provide the Contracting Officer with a written self-evaluation. The self-evaluation shall include the Contractor’s assessment of its performance under the Performance criterion and Improvements.

8. Award Terms

The Contractor may receive up to two 2-year award terms. If the Contractor receives an award term, then the Contracting Officer exercises the award term periods through unilateral contract modifications subject to: a) the Availability of Funds (See Section I, FAR Clause 52.232-18); and

b) the award of the term period satisfying the conditions of FAR 17.207(c). Each award term period has an associated one-year award term evaluation period.

The award term periods will commence at the start of years six and eight from the start of the full performance date. The relationship between evaluation periods and award term years is as follows:

Table 3 Evaluation Period Award Term Period

1 April 2018 – 31 March 2019 1 April 2022 – 31 March 2024 1 April 2020 – 31 March 2021 1 April 2024 – 31 March 2026

At the conclusion of an award term evaluation period, the AFSs for each award fee evaluation period occurring within the award term evaluation period are averaged to produce an award term score (ATS).

First Award Term Criteria

The Contractor shall receive the first award term if the Contractor receives an ATS of at least 70 points. If the Contractor receives an ATS of less than 70 points, the F/TDO may award a first award term.

Second Award Term Criteria

The Contractor shall receive the second award term if the Contractor receives an ATS of at least 75 points. If the Contractor receives an ATS of less than 75 points, the F/TDO may award a second award term.

9. Contract Termination

If the Government terminates the contract for convenience after the start of an award fee period, the F/TDO will determine the award fee for that period consistent with this award fee plan. The remaining dollars for all subsequent periods will not be considered available or earned and shall not be paid. If the contract is terminated for default, the Contractor shall not earn any fee for the period in which the default termination occurred.

10. Award Fee/Term Plan Changes

The Contracting Officer may unilaterally change the AF/TP provided the Contracting Officer notifies the Contractor of the change in writing 30 days before the start of the upcoming award fee evaluation period. Changes to this AF/TP that are applicable to a current evaluation period may be incorporated by mutual agreement of the parties at any time.

The F/TRB is responsible for recommending significant AF/TP changes to the F/TDO.

Examples of significant changes include changing evaluation criteria, adjusting weights to redirect the Contractor’s emphasis, and revising the distribution of award fee dollars. The F/TDO approves significant changes to the AF/TP.