Attachment_8__KAFB_Incentive_Option_Periods_v2.0.pdf

Performance Incentive

Plan

This Performance Incentive Plan (PIP) is comprised of one distinct incentive tool, Incentive

Option Periods (IOP). This plan details the IOP process and explains how this incentive is applied. The objective of this incentive approach is to motivate the Service Provider (SP) to consistently perform at least “very good” in areas of key importance.

1.0 Definitions

1.1 “Incentive Option Period (IOP),” refers to a period of performance established under this competitively awarded contract in which the awardee may be awarded an option in the future based on a contingency. In this case, the contingency is defined as the awardee receiving exclusively “Very Good” or “Exceptional” Contractor Performance Assessment Reporting

System (CPARS) documented ratings in all evaluated areas of contract performance considered at the effective Determination Point.

1.2 “Determination Point (DP),” refers to the scheduled point in time when the CO makes a unilateral decision as to whether the SP has become eligible or ineligible for an opportunity to perform a future IOP. An affirmative determination does not automatically entitle the SP to perform during a particular IOP, but rather affords the SP an opportunity to perform during a particular IOP contingent upon the CO determining the requirements of FAR Part 17.202 – Use of Options are met and exercising the IOP IAW FAR 52.217-9, Option to Extend the Term of the

Contract.

1.3 “Eligible,” refers to the CO’s affirmative decision that the SP has met the required criteria, (i.e., received exclusively “Very Good” or “Exceptional” CPARS ratings) which in turn, supports the CO’s decision to exercise either Option 5 (IOP1) or Option 6 (IOP2).

2.0 Introduction

2.1 This plan describes the process that will be applied by the CO to determine whether the SP is eligible or ineligible for the IOPs. The figure in Section 4.0 depicts the DPs when the CO may determine the SP is eligible or ineligible to be awarded either future IOP.

2.2 The objective of this incentive approach is to motivate consistent, “Very Good” or

“Exceptional” performance in all CPARS rated areas from the outset of SP performance. For this reason, the DP for IOP1 eligibility relates directly to initial performance quality (the base period of performance). Subsequent IOP DPs consider performance occurring after the base period.

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Attachment 8

3.0 IOP Parameters

3.1 As previously mentioned in Section 1.0, the SP becomes eligible or ineligible for IOPs based on CPARS performance ratings. One or more CPARS rating(s) below “Very Good” in any rated area (i.e. Quality, Schedule, Cost Control, Management, Small Business Utilization, and

Regulatory Compliance) may result in the loss of eligibility for the IOPs. Only “Very Good” or

“Exceptional” CPARS ratings in all rated areas will guarantee continued IOP eligibility.

3.2 All IOPs will be executed in accordance with FAR 52.217-9, Option to Extend the Term of the Contract, as the unilateral right of the Government. As such, it should be understood that becoming “eligible” for IOPs does not guarantee future performance of 5th or 6th Option Periods.

In addition to maintaining eligibility through “Very Good” or “Exceptional” CPARS ratings, the

IOPs remain contingent upon the requirements of FAR Part 17.207 – Exercise of Options criteria being met.

3.3 Within approximately 45 days of CPARS finalization, at the applicable DP described in

Section 4.0 below, the CO will determine whether the SP is eligible or ineligible for a particular

IOP. The CO will notify the SP as soon as practicable upon making the determination.

4.0 IOP Implementation

This section illustrates the DPs and IOP eligibility process. There are up to three possible DPs

(DP #1, DP #1A and DP #2) and each is described below. Each DP makes reference to “IOP1”, and/or “IOP2”. IOP1 refers to the 5th Option Period, and IOP2 refers to the 6th Option Period.

To merit an opportunity to become eligible for IOP2, the SP must be eligible for IOP1 first. The below figure is a visual chart depicting the IOP DPs and IOP eligibility process:

Recent CPARS remain relevant for follow-on & other contract opportunities!

1 Apr

30 Sep

30 Sep

30 Sep

30 Sep

30 Sep

30 Sep

30 Sep

Base

Period 1st Option

Period

2nd Option

Period

3rd Option

Period 4th Option

Period

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***Note: The contract durations (5-yr, 6-yr and 7-yr) depicted in this chart indicates maximum periods of performance if ALL options are exercised IAW FAR 52.217-9.

4.1 DP #1

4.1.1 Eligible. The SP has achieved CPARS ratings of “Very Good” or “Exceptional” in all evaluated performance areas during the base and Option 1 periods. The SP becomes eligible for

IOP1, therefore, the possible contract duration becomes six years. Although eligible for IOP1, this option may or may not be exercised by the CO in accordance with FAR 52.217-9. If the SP becomes eligible for IOP1 at this determination point, the SP establishes an opportunity to become eligible for IOP2 at DP #2.

4.1.2 Ineligible. The SP did not achieve annual CPARS ratings of “Very Good” or “Exceptional” in all evaluated performance areas during the base period of performance. Since the SP must be eligible for IOP1 to merit an opportunity to become eligible for IOP2, the SP becomes ineligible for IOP2. However, the SP will be afforded an opportunity to become eligible for IOP1 at DP

#1A.

4.2 DP #1A

4.2.1 Eligible. DP #1A is applicable only when the SP did not become eligible for IOP1 at DP

#1. The SP has achieved CPARS rating of “Very Good” or “Exceptional” in all evaluated performance areas during the Option 1 period. The SP becomes eligible for IOP1, therefore, the possible contract duration becomes six years. Although eligible for IOP1, this option may or may not be exercised by the CO in accordance with FAR 52.217-9.

4.2.2 Ineligible. The SP did not achieve annual CPARS ratings of “Very Good” or “Exceptional” in all evaluated performance areas during the Option 1 period. The SP becomes ineligible for both IOPs, therefore, the possible contract duration becomes five years.

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4.3 DP #2

4.3.1 Eligible. DP #2 is applicable only when the SP became eligible for IOP1 at DP #1. The SP achieved annual CPARS ratings of “Very Good” or “Exceptional” in all evaluated performance areas during the Option 1 and Option 2 periods. The SP becomes eligible for IOP2, therefore, the possible contract duration becomes seven years. Although eligible for IOP2, this option may or may not be exercised by the CO in accordance with FAR 52.217-9.

4.3.2 Ineligible. The SP did not achieve annual CPARS ratings of “Very Good” or “Exceptional” in all evaluated performance areas during the Option 1 and Option 2 periods. The SP becomes ineligible for IOP2, therefore, the possible contract duration remains six years.

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