DRAFT_Appendix_Q_-_Incentive_Plan.pdf

Solicitation No. FA4890-13-R-0007

APPENDIX Q

MOBILE AIR SURVEILLANCE SYSTEM OPERATIONS, MAINTENANCE AND

TECHNICAL SUPPORT SERVICES CONTRACT INCENTIVE PLAN

DRAFT Appendix Q –1 12 Sep 13

1.0 INTRODUCTION.

1.1 This Plan describes the process that will be used to assess and determine the incentive earned by the contractor. The objective is to motivate the contractor to effectively manage costs and improve performance in the rated areas, which directly impact performance of requirements described in the PWS. 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: performance and cost. Each element will be evaluated and calculated separately on an 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 Mobile Air Surveillance System Operations, Maintenance, and

Technical Support Services contract.

2.0 GENERAL PROCEDURES.

2.1 Evaluation Periods. Evaluations will occur on an annual basis and conincide with the base year and four, one year options. The periods are as follows:

Evaluation

Period

Date

Period 1 1 Oct 14 – 30 Sep 15

Period 2 1 Oct 15 – 30 Sep 16

Period 3 1 Oct 16 – 30 Sep 17

Period 4 1 Oct 17 – 30 Sep 18

Period 5 1 Oct 18 – 30 Sep 19

2.2 Assessment and Payment Overview. The evaluation criteria and calculations as described in paragraph 3.0 for Performance and paragraph 4.0 for Cost will be utilized. The sum of these two areas will determine the incentive earned for the period. Periodic feedback will be provided by the Program Manager (PM) to the contractor. The PM will present all annual evaluation findings and preliminary results to the Functional Director (FD) for validation. The final incentive determination is the unilateral decision of the government. The Contracting Officer

(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 unilaterally modify the contract to incorporate the incentive earned. Invoicing and payment of the incentive will be made annually from the appropriate CLIN.

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 calendar days before the start of the upcoming evaluation period. Changes affecting the current evaluation period will be by bilateral agreement between government and contractor, except as noted in paragraphs 2.4 below.

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

DRAFT Appendix Q –2 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 PERFORMANCE INCENTIVE (PI) PROCEDURES.

3.1 PI Pool: The PI pool is determined by the government and will be approximately 7% of the annual fixed price value of the contract, rounded to the nearest $10,000. The CO will inform the contractor of the pool amount prior to the start of each period.

3.2 Determination of PI earned. The PI will be based on the quality of the contractor’s performance. The assessment will use a Quality Performance Index (QPI) where the contractor can earn up to twelve (12) points per period, one (1) point per month, as defined below.

Performance will be evaluated IAW the PWS and Quality Assurance Surveillance Plan (QASP).

3.2.1 A major nonconformance is defined as: A nonconformance that adversely impacts (or has the potential to) mission, safety of personnel or equipment, environment, performance (quality), schedule (delivery), or cost.

3.2.2 Point Assignment Explanation (12 possible points).

Minus one (-1) point will be assigned for a calendar month during a calendar month when the government issues one or more major nonconformances.

One (1) point will be awarded for each calendar month when the government does not issue a major non-conformance for any requirements of the PWS.

3.2.3 PI Calculation. The overall PI shall be calculated by dividing the Quality points earned by the Quality points available (12) during the PI period and multiplying the result by the available incentive:

3.2.3.1 Formula.

(Points Awarded / Total Points Available) x Available Pool = PI Earned. Results will be rounded down to the next whole dollar.

3.2.3.2 Sample Calculation. Assumption: PI pool = $250K

Contractor earns 10 of 12 available points:

(10/12) x $250K = $208,333

4.0 COST INCENTIVE (CI) PROCEDURES.

4.1 Determination of CI Earned. Cost incentives provide a focus for ensuring costs controlled by the contractor are minimized. The CI will be paid based on savings realized against the contractual target cost (TC). The TC will be based on the average cost to repair the top forty (40) most failed repariable radar parts and the top fourteen (14) most failed repairable communications

DRAFT Appendix Q –3 systems parts as calculated over a historical three-year period. Attachment 1 lists these items along with the projected average cost to repair each item for each year of the contract. For planning purposes, the estimated initial TC is $2,750,000, which is roughly the average annual cost to repair the items based on the three-year historical data, escalated for inflation. The contractor shall track the actual repairs to these items on the monthly financial CDRL A001. The actual cost (AC) will be the sum of the costs to repair these items as reported on the September

CDRL A001 each year. The revised TC will be calculated annually by multiplying the number of repairs for each item by the average cost to repair as established in attachment 1 and summing the amounts for each item. The revised TC will be compared with the AC to determine the amount of

CI earned. The target fee will be zero. The CI share ratio is 50/50 (government/contractor) and will be paid annually.

4.2 Example Calculation.

4.2.1 CI Formula.

CI = (TC – AC) x Contractor Share Percent

4.2.1.1 Sample Calculation (Underrun).

TC $2.75M

AC $2.55M

TC = $2.75M

AC = $2.55M

Contractor Share = 50%

Cost Saved = ($2.75M - $2.55M) = $0.2M

CI earned = Cost saved x Contractor Share = $0.2M x 50% = $0.1M

4.2.1.2 Sample Calculation (Overrun).

TC $2.75M

AC $2.85M

TC = $2.75M

AC = $2.85M

Overrun = $0.1M = Zero CI earned

5.0 TOTAL INCENTIVE EARNED. The total incentive earned is the sum of the PI and the

CI. Using the example calculations above, assuming a cost underrun on the CI, the total incentive earned for the period would be $208,333 + $100,000 = $308,333.

6.0 INCENTIVE RESULTS. The PM will present the proposed incentive results each period to the FD to ensure consistency and integrity in application of the Incentive Plan. The FD will validate the PM’s inputs, recommendations, and calculations. Incentive results each period are

DRAFT Appendix Q –4 not closed until final coordination with the FD. The final determination is the unilateral decision of the government and will be communicated to the contractor by the CO within 60 days after the end of the evaluation period.

MOBILE AIR SURVEILLANCE SYSTEM OPERATIONS, MAINTENANCE AND TECHNICAL SUPPORT SERVICES

CONTRACT INCENTIVE PLAN

DRAFT Appendix Q –5

Attachment 1

Average Item Depot Repair Costs

Part# Description

Baseline Avg. Repair cost

(FY10-12) 2015 2016 2017 2018 2019

365D019G01 Pulse Forming Network $15,000.00 $15,920.45 $16,159.26 $16,401.65 $16,647.67 $16,897.39

1D20464G01 Inverted Power Modulator $15,000.00 15,920.45 16,159.26 16,401.65 16,647.67 16,897.39

1A23446H01 UPX-27 Interrogator Set $4,500.00 4,776.14 4,847.78 4,920.49 4,994.30 5,069.22

1D17798G02 Inverted Control Regulator $5,500.00 5,837.50 5,925.06 6,013.94 6,104.15 6,195.71

3D55778G01 Trigger Amplifier $5,500.00 5,837.50 5,925.06 6,013.94 6,104.15 6,195.71

3D59354G01 Diode Stk $4,200.00 4,457.73 4,524.59 4,592.46 4,661.35 4,731.27

1D17934G02 FCPS $4,000.00 4,245.45 4,309.14 4,373.77 4,439.38 4,505.97

1D18517G02 Fil Inter Relay $3,800.00 4,033.18 4,093.68 4,155.08 4,217.41 4,280.67

1D17712G01 Radio Frequency Driver $48,000.00 50,945.45 51,709.63 52,485.28 53,272.56 54,071.64

1D27738G01 Def Power Control $3,500.00 3,714.77 3,770.49 3,827.05 3,884.46 3,942.72

645A589A07 Low Noise Amplifier $8,500.00 9,021.59 9,156.91 9,294.27 9,433.68 9,575.19

1D27107G01 Processor Timing Generator $3,200.00 3,396.36 3,447.31 3,499.02 3,551.50 3,604.78

335D501G01 Twystron $68,000.00 72,172.72 73,255.31 74,354.14 75,469.45 76,601.50

146C795A01 Pulse Transformer $8,000.00 8,490.91 8,618.27 8,747.55 8,878.76 9,011.94

353D582G01 Rotary Joint $90,000.00 95,522.72 96,955.56 98,409.89 99,886.04 101,384.33

12K3-6 Heat Exchanger Pump $1,700.00 1,804.32 1,831.38 1,858.85 1,886.74 1,915.04

1D17627G01 / 3D59810G03 Frequency Generator $15,000.00 15,920.45 16,159.26 16,401.65 16,647.67 16,897.39

365D140G01 Capacitor Filter Bank $4,200.00 4,457.73 4,524.59 4,592.46 4,661.35 4,731.27

645A570A01 Radio Frequency Receiver $6,500.00 6,898.86 7,002.35 7,107.38 7,213.99 7,322.20

DRAFT Appendix Q –6

Part# Description

Baseline Avg. Repair cost

(FY10-12) 2015 2016 2017 2018 2019

1D27308G01

Intermediate Frequency Receiver Circuit Card Assembly $3,000.00 3,184.09 3,231.85 3,280.33 3,329.53 3,379.48

3D56825G01 8086 Processor $3,000.00 3,184.09 3,231.85 3,280.33 3,329.53 3,379.48

1D23436G01 280V Power Supply $3,800.00 4,033.18 4,093.68 4,155.08 4,217.41 4,280.67

1D17710G01 Output Diode Assembly $18,000.00 19,104.54 19,391.11 19,681.98 19,977.21 20,276.87

1A20454H01 Compressor-Dehydrator $5,500.00 5,837.50 5,925.06 6,013.94 6,104.15 6,195.71

645A625H01 Fan, Tube Axial $2,300.00 2,441.14 2,477.75 2,514.92 2,552.64 2,590.93

602B883H01 Filament Transformer $7,800.00 8,278.64 8,402.82 8,528.86 8,656.79 8,786.64

1D27626G01 Control Board $1,800.00 1,910.45 1,939.11 1,968.20 1,997.72 2,027.69

1D21949G01 Serial Communications Interface $2,200.00 2,335.00 2,370.02 2,405.58 2,441.66 2,478.28

1D17935G01 VPPS $2,200.00 2,335.00 2,370.02 2,405.58 2,441.66 2,478.28

1D18652G01 Fault Memory Board $1,800.00 1,910.45 1,939.11 1,968.20 1,997.72 2,027.69

150C317G01 FPA Meter Shunt $1,200.00 1,273.64 1,292.74 1,312.13 1,331.81 1,351.79

128C497H01 Power Transformer $1,800.00 1,910.45 1,939.11 1,968.20 1,997.72 2,027.69

335D502G01 Focus Coil $17,000.00 18,043.18 18,313.83 18,588.54 18,867.36 19,150.37

1D27749G02 Formatter Interface $5,500.00 5,837.50 5,925.06 6,013.94 6,104.15 6,195.71

645A506G01 Power Supply 5V $3,200.00 3,396.36 3,447.31 3,499.02 3,551.50 3,604.78

1D18183G01 256k Memory $1,800.00 1,910.45 1,939.11 1,968.20 1,997.72 2,027.69

342D902G01 Motor, Antenna Drive $4,500.00 4,776.14 4,847.78 4,920.49 4,994.30 5,069.22

1D24318G01 8086 Processor $3,200.00 3,396.36 3,447.31 3,499.02 3,551.50 3,604.78

344D996G01 Electronic Switch Assembly $5,500.00 5,837.50 5,925.06 6,013.94 6,104.15 6,195.71

1D18291G02 DHRO Interface $4,200.00 4,457.73 4,524.59 4,592.46 4,661.35 4,731.27

Table Q-1-1 Top 40 Radar Failure Items

DRAFT Appendix Q –7

Part# Description

Baseline Avg.

Repair cost

(FY10-12) 2015 2016 2017 2018 2019

RFT-500-20 RFT $2,995.00 $3,178.78 $3,226.47 $3,274.86 $3,323.99 $3,373.85

SDM-300A Modem $800.00 $849.09 $861.83 $874.75 $887.88 $901.19

RSU-503 Switch Unit $800.00 $849.09 $861.83 $874.75 $887.88 $901.19

SMS-301 1:1 Switch $800.00 $849.09 $861.83 $874.75 $887.88 $901.19

LRC4545-XX Low Noise Amplifier $1,900.00 $2,016.59 $2,046.84 $2,077.54 $2,108.71 $2,140.34

VIC2-2E/M Cisco 2 Port E&M Card $400.00 $424.55 $430.91 $437.38 $443.94 $450.60

WIC-2T Cisco Interface Card $350.00 $371.48 $377.05 $382.71 $388.45 $394.27

VIC-4FXS/DID Cisco 4 Port FXS Card $350.00 $371.48 $377.05 $382.71 $388.45 $394.27

RF-2601 High Frequency Antenna Coupler $4,500.00 $4,776.14 $4,847.78 $4,920.49 $4,994.30 $5,069.22

URC-200 Radio $3,800.00 $4,033.18 $4,093.68 $4,155.08 $4,217.41 $4,280.67

100-008350 SIU 2100 Interface Unit $3,200.00 $3,396.36 $3,447.31 $3,499.02 $3,551.50 $3,604.78

AN-USQ-111(V) MX-512 Data Terminal Set $5,500.00 $5,837.50 $5,925.06 $6,013.94 $6,104.15 $6,195.71

NM-HDV2

Cisco IP communications voice/fax network module $350.00 $371.48 $377.05 $382.71 $388.45 $394.27

CISCO2811/S28NSPSK9

Integrated Service Router( Cisco

2811/S28NSPSK9) $1,000.00 $1,061.36 $1,077.28 $1,093.44 $1,109.84 $1,126.49

Table Q-1-2 Top 14 Communications System Failure Items