Draft RPA PWS Appendix G.pdf

Solicitation No. FA4890-10-R-0009

Appendix G – RPA Incentive Plan Page 1 of 9

APPENDIX G

REMOTELY PILOTED AIRCRAFT (RPA) INCENTIVE PLAN

1.0 INTRODUCTION.

1.1 This Plan describes the process that will be used to assess and determine the incentives earned by the Contractor. The objective is to motivate the Contractor to effectively manage costs and improve performance in the rated areas over and above the requirements stated in the contract.

This Plan describes the procedures and specific evaluation criteria used to assess the Contractor’s performance and to determine incentive earned. It consists of two elements, cost and performance. Each element will be evaluated and calculated separately on a semi-annual basis.

The results will be used in conjuction with the yearly Contractor Performance Assessment Report

System assessment to provide a complete program assessment of the Contractor’s performance on the RPA contract.

2.0 GENERAL PROCEDURES.

2.1 Evaluation Periods. Evaluations will occur on a semi-annual basis. The periods are as follows:

Evaluation

Period

Date

Period 1 TBD

Period 2 TBD

Period 3 TBD

Period 4 TBD

Period 5 TBD

Period 6 TBD

Period 7 TBD

Period 8 TBD

Period 9 TBD

Period 10 TBD

2.2 Assessment and Payment Overview. The evaluation criteria and calculations will be utilized as described in paragraph 3.0 for Cost and paragraph 4.0 for Performance to assess the incentive earned. Contracting Officer Representative surveillance inputs will be used to calculate

Performance Quality points. Monthly feedback will be provided by the Program Manager (PM) to the Contractor. The PM will present all semi-annual evaluation findings and preliminary results to the Acquisition Management and Integration Center (AMIC) Director (DR) or Deputy

Director (DD) for acceptance. This determination is the utilateral decision of the Government.

The CO will inform the Contractor in writing of the amount of incentive earned within 60 days after the end of the evaluation period. The CO will modify the contract to incorporate the incentive earned. Billing and payment of the incentive will be made semi-annually at the IDIQ contract level.

2.3 Procedures for Changing the Plan. Unilateral changes may be made to the Plan if the

Contractor is provided a modification no later than 15 days before the start of the upcoming

Appendix G – RPA Incentive Plan Page 2 of 9 evaluation period. Changes affecting the current evaluation period will be by mutual agreement between Government and Contractor.

2.4 Contract Termination. If the contract is terminated for the convenience of the

Government after the start of an evaluation period, the Government will use the normal evaluation process for the shortened period. After termination for convenience, the remaining incentive cannot be earned by the Contractor and, therefore, will not be paid.

3.0 COST INCENTIVE PROCEDURES.

3.1 Determination of Cost Incentive Earned. Cost incentives provide a focus for ensuring costs stay within allotted program budgets. Cost incentive will only be earned as a result of real savings against the total target costs. The cost incentive will be based on the contractual target cost (TC), as proposed by the Contractor, for cost reimbursable expenses. The target fee will be zero. The target reduction (TR) will be 10% of the TC. The TR share ratio is 40/60

(Government/Contractor). The cost incentive will be calculated and paid semi-annually and is considered preliminary. The cost incentive calculation will be adjusted when the Contractor determines actual fiscal year indirect rates; the incentive will be finalized when indirect rates are audited and negotiated by DCAA/DCMA.

3.1.1 Calculations. TC and actual cost (AC) data will be provided for each OCONUS location.

TC and AC from each location will be summed to determine the overall TC and AC. The cost incentive will be calculated on a cumulative basis.

3.2 Example Calculation.

3.2.1 Cost Incentive Formula.

Final Cost Incentive = (TC – AC) x Contractor Share Percent

3.2.1.1 Sample Calculation (Underrun).

Location 1 Location 2 Location 3 Total

TC $10M $10M $20M $40M

AC $12M $9M $14M $35M

TC = $40M = $10M + $10M + $20M

AC = $35M = $12M + $9M + $14M

Underrun = $5M

Contractor Share = 60%

TR = 10% x TC = $4M

Cost Saved = ($40M - $35M) x 60% = $3.0M

Cost incentive earned = TR x Contractor Share = $4M x 60% = $2.4M

3.2.1.2 Sample Calculation (Overrun).

TO 1 TO 2 TO 3 Total of all TO

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TC $10M $10M $20M $40M

AC $12M $10M $19M $41M

TC = $40M = $10M + $10M + $20M

AC = $41M = $12M + $10M + $19M

Overrun = $1M = Zero incentive earned

4.0 PERFORMANCE INCENTIVE (PI) PROCEDURES.

4.1 PI Pool: The total PI pool is based on size and scope of OCONUS task orders issued and will vary, but will not exceed $3M semi-annually.

4.2 Determination of PI Earned: The PI will be based on four (4) criteria: Quality (35%), Warfighter Servicing/Process Improvements (35%), Small Business (10%), and a Special Interest

Item (SII) (20%). The SII will be determined by the PM. If there is no SII assigned, the uncommitted percentage will be divided equally between Quality and Warfighter

Servicing/Process Improvement.

4.2.1 Quality Criteria (includes Service Summary (SS) items & Quality Management

Sytem (QMS)). The Quality portion of the PI will use a Quality Performance Index (QPI) where the Contractor can earn points for exceeding critical SS standards and for successfully executing the Contractor’s QMS to the benefit of the Government. The Contractor can earn up to four (4) points per month as defined below with two (2) points available for SS and two (2) points for QMS sections of the QPI. The SS and QMS sections will be evaluated IAW the PWS SS and Appendix

H.

4.2.1.1 A major nonconformance is defined as: A nonconformance that adversely impacts (or has the potential to) mission, safety of personnel and/or equipment, environment, performance

(quality), schedule (delivery), and/or cost.

4.2.1.2 SS Point Assignment Explanation.

4.2.1.2.1 Zero (0) points will be awarded for a major non-conformance for any of the following

SS standards:

Aircraft Availability Rate

Total Abort Rate

Repeat/Recur Rate

12-Hour Fix Rate

Ground Control Station Operational Readiness Rate

Tactical Field Terminal Operational Readiness Rate

FSST Operational Readiness Rate

Reachback Circuits Operational Readiness Rates; or

4.2.1.2.2 One (1) point will be awarded for no major non-conformances in any of the SS metrics identified in paragraph 4.2.1.2.1; and

4.2.1.2.3 One (1) additional point will be awarded for meeting or exceeding the following higher

Appendix G – RPA Incentive Plan Page 4 of 9 critical standards at each deployed site:

Standard MQ-1 MQ-9

Aircraft Availability Rate 82% 84%

Total Abort Rate 7% 4%

Repeat/Recur Rate (see exception below) 4% 6%

12-Hour Fix Rate 82% 74%

Exception: MTS-Ball repeats and recurs directly attributable to repair actions by another organization shall not be counted against the higher critical Repeat/Recur rate.

4.2.1.3 QMS Point Assignment Explanation.

4.2.1.3.1 Zero (0) points will be awarded for a calendar month during which the Contractor received a major nonconformance for a technical data violation, or

4.2.1.3.2 One (1) point will be awarded for a calendar month when Contractor is not issued more than three (3) total major non-conformances, and none are a repeat from the previous 90 calendar days, or

4.2.1.3.3 Two (2) points will be awarded for a calendar month when Contractor is not issued any major non-conformances.

4.2.1.4 Quality Criteria Calculation. The overall QPI shall be calculated by dividing the

Quality points earned by the Quality points available during the PI period and multiplying the result by the available incentive for this factor:

4.2.1.4.1 Formula.

(Points Awarded / Total Points Available) x Available Pool = Quality Incentive Earned

4.2.1.4.1.1 Sample Calculation. Assumption: PI pool = $3M

Contractor earns 18 of 24 available points:

Available Pool: $3M x 35% = $1.05M

(18/24) x $1.05M = $787.5K

4.3 Warfighter Servicing/Process Improvement Criteria. The following evaluations will be performed during each period:

4.3.1 Warfighter Servicing. The PM will complete a Warfighter Servicing (WS) Survey at

Attachment 1 and obtain completed surveys from supported Maintenance Group Commanders, Squadron Commanders, and other warfighter customers as deemed appropriate by the PM. The overall score of each survey will be equal to the average value of the point value assigned to each question.

4.3.2 Process Improvements.

Appendix G – RPA Incentive Plan Page 5 of 9

4.3.3.2.1 Contractor Process Improvement Inputs (CPII). The Contractor shall provide process improvement inputs as they occur within 20 calendar days of the event occurrence but not later than five (5) days after the end of the PI period (via email distribution) to the PM. The PM will assign an office of primary responsibility (OPR) for evaluation of the inputs as required, and set a suspense for completion of the evaluation. The OPR is responsible for providing a coordinated validation of the input to include a validation of the claims made by the Contractor

(e.g., monetary savings, man-hours avoided etc.). OPRs will evaluate individual CPIIs, and assign a numerical value using the rating scale in Attachment 2. The Government’s evaluation of the Contractor’s inputs will be provided to the Contractor to promote timely feedback.

4.3.2.2 Government Process Improvement Inputs (GPII). The Government will provide inputs as they occur (via email distribution) to the PM. The PM will assign an OPR as required for evaluation of the inputs, and set a suspense for completion of evaluation. The OPR is responsible for providing a coordinated validation of the input. All inputs shall be submitted as they occur within 20 calendar days of the event occurrence, but not later than the fifth (5th) calendar day following the end of a PI period.

4.3.2.3 Process Improvement Input Evaluations. The PM shall evaluate all CPIIs and GPIIs, and then assign an Overall Process Improvement Score (OPIS) using the rating scale in

Attachment 2. The PM shall draft a memo justifying the OPIS and forward it for review and acceptance by AMIC/DR or AMIC/DD.

4.3.3 Warfighter Servicing/Process Improvement Calculation. The overall score will be computed by adding all Warfighter Survey Scores (WSS) and the OPIS and dividing the result by the total number of inputs. The resulting percentage will be multiplied by the available incentive pool for this factor.

4.3.3.1 Formula.

Available Incentive Pool*[(Sum of WSS + OPIS) / (Count of WSS + 1)]/Highest Scale Rating =

Incentive Earned

4.3.3.1.1 Sample Calculation. Assumption: PI pool = $3M

Question 1 Question 2 Question 3 Question 4 WSS Count

Survey 1 Scores 3 4 3 3 3.25 1

Survey 2 Scores -1 2 3 0 1.00 1

Survey 3 Scores 4 4 3 4 3.75 1

OPIS 4.00 1

(Sum of WSS + OPIS) / (Count of WSS +1) 12.00 / 4 = 3

Available Pool: $3M x 35% = $1.05M

Highest Scale Rating: 4

$1.05M x 3 / 4 = $ 787.5K

4.4 Small Business Criteria. The Contractor can earn one (1) point for every 1% it exceeds the

Appendix G – RPA Incentive Plan Page 6 of 9

15% contractual small business subcontract requirement . No fractional points will be awarded.

The ceiling is five (5) points.

Potential Earnings:

Small Business

Participation

Points Awarded Incentive Earned

16% 1 20% of $300K ($60K)

17% 2 40% of $300K ($120K)

18% 3 60% of $300K ($180K)

19% 4 80% of $300K ($240K)

20% 5 100% of $300K

4.4.1 Sample Calculation. Assumption: PI pool = $3M

Contractor earns 3 out of 5 points by achieving 18%

($3M x 10%) x (3/5) = $180,000 incentive earned

4.5 SII Criteria. The PM may assign a SII for up to 20% of the total PI pool prior to the beginning of period. When identified, the SII is an area of performance that the Government deems critical and requires special attention. The PM shall obtain approval from

AMIC/PM-Deputy Directoror AMIC/DD prior to furnishing an SII to the CO. The SII will be defined in Attachment 3 to this appendix.

4.5.1 Sample Calculation. Assumption: PI pool = $3M

Contractor achieves all SII requirements

($3M x 20%) = $600,000 incentive earned

Appendix G – RPA Incentive Plan Page 7 of 9

Attachment 1

Warfighter Servicing Survey

Please answer the following questions using the ratings provided:

1. How well has the Contractor’s management team openly communicated, participated in problem-solving, and worked to enhance positive working relationships with the Government’s management team, Group/Squadron CCs/leaders, other key personnel?

RATING:__________________________

2. How well has the Contractor’s management team aggressively pursued and provided timely response to Government issues to enhance organizational-level maintenance support and mission effectiveness?

3. How well has the Contractor met the needs of your organizational-level maintenance requirements, mission and flying program?

4. How well has the Contractor performed maintenance services?

Rating Description Point

Value*

Outstanding Contractor significantly exceeds nearly all mission requirements

Excellent Contractor significantly exceeds most mission requirements 3

Very Good Contractor appreciably exceeds many mission requirements 2

Commendable Contractor exceeds some mission requirements 1

Satisfactory Contractor meets mission requirements 0

Unsatisfactory Contractor fails to meet many minor mission requirements -1

*Point Value will be removed prior to sending surveys to the Warfighting Customers

Appendix G – RPA Incentive Plan Page 8 of 9

Attachment 2

Process Improvement Ratings

The following point definitions shall be applied to individual Process Improvement evaluations and to the overall score in that category.

Outstanding: (4 Points). Nearly all process improvements provide exceptional benefit to the

Government through exceptional dollar savings/or cost avoidance, program wide effects or very large impacts over an extended period of time.

Excellent: (3 Points). Most process improvements provide significant benefit to the

Government through dollar savings/cost avoidance, program wide effects, or large impacts over an extended period of time.

Very Good: (2 Points). Some process improvements provide appreciable benefit to the

Government through dollar savings/cost avoidance, program wide effects, or large impacts over an extended period of time.

Good: (1 Point). A few process improvements provide benefit to the Government through dollar savings/cost avoidance, program wide effects, or large impacts over an extended period of time.

Satisfactory: (0 Points). Nearly all process improvements meet existing contractual requirements or provide little benefit to the Government.

Appendix G – RPA Incentive Plan Page 9 of 9

Attachment 3

Special Interest Item

Description: This SII will evaluate the Contractor’s efforts in transitioning from the current

MQ-1 and MQ-9 organizational level maintenance operations IAW the Contractor’s approved

Transition Plan. Evaluation will include, but not be limited to whether all major milestones were properly identified and met on schedule, and the Contractor’s success in dealing with the outgoing incumbent Contractor and warfighter customers. This SII will evaluate the Contractor’s ability to successfully assume requirements at contract start.

The SII will be rated as follows:

Outstanding. Exceeded most objectives of the transition plan and met most milestones ahead of schedule in a beneficial manner to the customer. Met 100% of all objectives and milestones on schedule. Exceeded all staffing requirements. Met 100% of CONUS and OCONUS mission requirements on Day 1 of contract performance. The Contractor will earn 100% of the available

SII incentive pool for achieving an Outstanding rating.

Excellent. Fully met 100% of all objectives of transition plan on schedule and exceeded some.

Met all milestones on schedule and fully met all staffing requirements. The Contractor will earn

85% of the available SII incentive pool for achieving an Excellent rating.

Good. Fully met all objectives of transition plan. Fully met all staffing requirements and assumption of risks. The Contractor will earn 50% of the available SII incentive pool for achieving a Good rating.

Satisfactory. Met objectives of transition plan for a smooth transition. Provided most of required staffing and assumed most tasks in an acceptable manner The Contractor will earn 0% of the available SII incentive pool for achieving a Satisfactory rating.

Unsatisfactory. Failed to meet the objectives for transition plan to allow a smooth transition with the incumbent, provide required staffing, required Operating Instructions, MIS and an orderly assumption of tasks IAW Section D of the PWS. The Contractor will earn 0% of the available SII incentive pool for achieving a Satisfactory rating.