DRAFT_Concept_PI_Clause.docx

INCENTIVE PROFIT AND QUALITY PERFORMANCE INDICATOR

a. This is a Firm Fixed Price (FFP) contract with a Performance Incentive. The government shall calculate the adjusted performance incentive in accordance with this supplemental clause.

b. This incentivization process is based on the simple concept whereby the government establishes contract requirements and performance outcomes. The government then evaluates the contractor as they perform. Any performance outcome that the contractor fails to successfully achieve will result in the contractor’s performance incentive being decremented. Therefore, all incentive earned under this clause is subject to the Quality Performance Indicator (QPI) points described in paragraph (d).

c. In this FFP contract, 4% of the contractor’s Total Evaluated Price (TEP) of FFP Contract Line Items (CLIN) will be held “at risk” for satisfactory performance. Each FFP CLIN will be reduced by 4%. These amounts will be held in a Performance Incentive pool, CLIN XXXX, and may be earned quarterly through satisfactory performance. The contractor will be paid the performance incentive based on the percentage of QPI points earned during the respective quarter that performance takes place The following is an example of how the government will calculate the Performance Incentive pool to be held “at risk” for satisfactory performance.

EXAMPLE*:

* Amounts are notional **FFP CLINs will be reduced 4% to sum $580,000

d. Quality Performance Indicators (QPI). Notwithstanding any other contract clause or any other language in or attached to this contract, the performance incentive earned under this clause is subject to QPI points earned. A percentage of earned QPI points shall be the final determination of the amount of performance incentive the government pays the contractor on a quarterly basis. The QPI is designed to ensure that performance expectations are achieved and maintained. The QPI reflects the contractor’s success in achieving acceptable levels of customer satisfaction and maintaining acceptable measures in metrics and other contract requirements.

QPI points will be allocated on a quarterly basis based on the contractor’s performance during the respective quarter where performance occurred. The QPIs consist of 100 points available per month, 300 per quarter, a total of 1200 points available per year. QPI points will be allocated monthly, with the earned Performance Incentive calculated and available quarterly. Once the quarterly QPI are allocated, in accordance with this clause, the earned Performance Incentive shall be calculated by the government. The QPI points earned per quarter are then calculated to a percentage earned. The QPI percentage earned is then multiplied by the available Performance Incentive available for the quarter of performance. The result of this calculation constitutes the amount of Performance Incentive earned. The example below illustrates the earned Performance Incentive calculation.

EXAMPLE:

Assume the following:

* Amounts are notional **FFP CLINs will be reduced 4% to sum $580,000

Earned Performance Incentive:

1st Quarter Performance: The contractor earned 200 QPI of the 300 QPI available for the quarter.

1st Quarter Performance Incentive earned: 200/300 = 66.67% x $580,000 = $386,686

2nd Quarter Performance: The contractor earned 243 QPI of the 300 QPI available for the quarter.

2nd Quarter Performance Incentive earned: 243/300 = 81% x $580,000 = $469,800

3rd Quarter Performance: The contractor earned 265 QPI of the 300 QPI available for the quarter.

3rd Quarter Performance Incentive earned: 265/300 = 88.33% x $580,000 = $512,314

4th Quarter Performance: The contractor earned 300 QPI of the 300 QPI available for the quarter.

4th Quarter Performance Incentive earned: 300/300 = 100% x $580,000 = $580,000

Total QPI earned for the Base Year: 1008 of 1200 possible (84%) Total Performance Incentive earned for the Base Year: $1,948,800 of $2,320,000 (84%) Government retained Unearned Performance Incentive: $2,320,000 - $1,948,800 = $371,200 (16%)

The Performance Incentive QPI points available monthly are allocated as follows: Customer Satisfaction, 10 points; Incentivized Performance Metrics, 70 points (45 Tier One, 25 Tier Two); Compliance Metrics, 20 points. Upon recommendation from the Program Manager and approval by the Functional Commander, the Administrative Contracting Officer (ACO) may unilaterally change the QPIs available to be earned by providing written notice to the contractor. Changes to the QPIs shall be effective as of the first full day of the first full month following fifteen days after the date of the ACO’s written notification to the contractor. Changes to the QPIs shall be limited to not more than 45 points during any consecutive three-month period.

As indicated above. The QPIs measure the following three categories: Customer Satisfaction, Incentivized Performance Metrics, and Compliance Metrics. This measurement is described for each of the components below:

e. Customer Satisfaction (CS). The contractor will provide a CS measurement system that meets the criteria of this plan. There is a maximum of 10 QPI points available monthly to be earned by the contractor for the category of CS and 30 points per quarter. There is one method of measuring CS: Point of Service (POS) feedbacks. The POS will be collected by the Contracting Officer’s Representatives (CORs) to calculate and report the results to the Performance Management Office (PMO) throughout each month. In situations where the contractor feels that a customer complaint is unfair, they have the right to go to the Government Program Manager (GPM) and ask for an invalidation. If the GPM decides in favor of the contractor, the customer complaint will be rendered invalid. If the contractor is not satisfied with the GPM’s decision, it may be taken to the ACO for a final determination. During the contract period of performance, the Air Force may unilaterally modify or change the customer satisfaction measurement system as the mission and priorities of Maxwell-Gunter Air Force Base AFB evolve. Such changes will be limited to no more than 5% changes in Service Area Groups (SAGs) weighting, a 0.05 change in POS threshold score to be achieved, or a 4 point change for POS QPI points over any 6 month period. All changes are subject to the approval of the Functional Commander. **NOTE: Data for computing POS customer satisfaction will not include BOS contractor or subcontractor personnel feedback.

SAGs. The government requires visibility into the POS Feedback process. To provide this visibility, the contractor will report the POS Feedback data to the PMO broken down into Airfield Support (AS), Base-Wide Support (BWS), Civil Engineering (CE), Information Technology (IT), and Logistics Support (LS). In order to earn the full QPI for this area, the contractor must secure at least 225 POS Feedbacks across all SAGs each month with no less than 15 feedbacks for any single SAG. Failure to achieve 225 feedbacks will forfeit all 10 QPIs. Failure to achieve 15 feedbacks in any single SAG will forfeit the QPIs for that SAG. Customer Satisfaction QPIs will be broken out as follows:

POS Methodology. Data for computing the POS SAG rating will be collected from POS feedback forms. Each POS form will be scored by totaling each question’s numeric rating, on a 5 point scale, and calculating an overall average for the form. Questions without a numeric rating will not be used in the computation. Each POS form will be assigned to only one SAG. The scores for all POS forms within a SAG will be totaled to calculate an overall average score which will be used as the POS SAG score. The POS SAG scores will be compared to the POS QPI point scoring model below to determine the number of POS customer satisfaction QPIs that are earned for each SAG. No QPIs shall be earned for an average score less than 4.5. No extrapolations are permitted.

· SAG POS score > 4.5 on a 5 point scale will earn 100% of SAG Customer satisfaction POS QPI points available. A SAG POS score less than 4.5 earns zero POS QPI points.

Total CS QPI Points. All CS QPI Points will be totaled by adding the individual SAG QPI points together.

Customer Satisfaction QPI points Calculation Example:

POS Calculation: Monthly QPI Points Possible: 10

7.5

Total CS QPI for the month = 7.5 (out of 10 possible)

f. Incentivized Performance Metrics. The contractor’s performance each month will be evaluated to determine if it meets the established standards for Tier One and Tier Two metrics. The number of incentivized performance metrics meeting or exceeding the Service Delivery Summary (SDS) standards will be totaled and used to determine the number of achieved QPI points. For example, if the contractor met the standard on 72 of 80 designated Tier One metrics, the percentage for successful performance metric effectiveness would be 90%. These percentages would then be applied to the total number QPI points. For example, since there are 45 Tier One QPI points available, the contractor would earn 40.5 Metric Tier One QPI Points in the example above.

The GPM may, at his/her discretion, elect to discard, suppress, suspend, or modify performance metrics from the monthly calculation/reporting should the GPM determine that unanticipated factors influenced the contractor’s performance, government validation, data, or data-capture for the metric(s). The GPM shall document the decision and submit the documentation to the ACO for review and placed in the contract file.

During the contract period of performance, the government may unilaterally modify, change, or replace the incentivized performance metrics as the mission and priorities of MAFB evolve. Such changes will be coordinated by the PM with the applicable Squadron Commanders and Contracting Officer Representatives (CORs) and will be limited to no more than 10% of the total number of incentivized metrics over any 3 month period. This does not apply to metrics that are deleted, added, or modified as a result of contract modifications to descope, add or change requirements. The ACO will notify the contractor, in writing, of changes to the incentivized performance metrics and shall be effective as of the first full day of the first full month following 15 days after the date of the ACO’s written notification to the contractor.

g. Compliance Metrics. The purpose of these metrics is to determine the contractor’s success at complying with directive publications listed in Appendix “A” of the PWS. These are monthly metrics that are calculated based on pass rates of compliance inspections performed by the CORs throughout each month. There are 20 QPI points available that will be divided into four SAGs: BWS, CE, IT and LG. In order to be valid, each compliance metric must have 50 documented inspection results of completed compliance inspections. (The Performance Plan Metric Worksheets document the rules, standards, and calculations for each SAG compliance inspection.) The QPI apportionment will be determined by dividing the number of valid metrics into the 20 QPIs. For example, if there are only three valid compliance metrics for a particular month each metric would be worth 6.67 QPIs. (20/3=6.67). Points are calculated as in the example in paragraph “g” above.

h. Total QPI Calculation.

Monthly Total Performance Incentive QPI Points = Customer Satisfaction + Performance Metrics + Compliance Metrics = 10 + 70 + 20 = 100

Quarterly Total Performance Incentive QPI Points = Customer Satisfaction + Performance Metrics + Compliance Metrics = 30 + 210 + 60 = 300

i. Minimum Performance Limit.

Should performance decrease below 60% of QPI points earned, in either CS, Performance Metrics (Tier One or Tier Two), Compliance Metrics, OR the cumulative sum of all QPI points, the entire performance incentive shall be forfeited for that incentive period. The minimum performance QPI limits, based on quarterly incentive, are as follows:

OR

-Total QPI earned: 180

j. Earned Performance Incentive Invoicing:

At the conclusion of each quarter of the fiscal year (31 December, 31 March, 30 June, and 30 September), the government will notify the contractor of QPI points earned for the quarter and the calculated earned Performance Incentive. The government will make this notification not later than 45 calendar days after the end of the quarter. The contractor shall invoice the calculated amount of earned Performance Incentive against CLIN XXXX. The contractor may elect to invoice separately for the earned Performance Incentive, or include the earned Performance Incentive CLIN to the monthly invoice for that particular month of service.

Posted 21 Aug 13. Responses due by CST 1200, 30 Aug 13.