Appendix_I_-_AFEC_PMEL_Incentive_Plan.pdf

Solicitation No. FA4890-13-R-0111

APPENDIX I

AF ENTERPRISE CONTRACTED PRECISION MEASUREMENT EQUIPMENT

LABORATORY (AFEC PMEL) SERVICES INCENTIVE PLAN

Appendix I – AFEC PMEL Incentive Plan Page 1 of 7

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 stated in the contract that directly impact performance of requirements described in the PWS and applicable to incentive plan categories and criteria. This

Plan describes the procedures and specific evaluation criteria used to assess the Contractor’s performance and to determine incentive earned. It consists of three elements; performance, schedule and cost. Each element will be evaluated and calculated separately on an annual basis.

This total will then be multiplied by a customer satisfaction percentage to obtain the final results.

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

System assessment to provide a complete program assessment of the Contractor’s performance on the AF Enterprise Contracted PMEL Services contract.

2.0 GENERAL PROCEDURES.

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

Evaluation

Period

Date

Period 1 TBD

Period 2 TBD

Period 3 TBD

Period 4 TBD

Period 5 TBD

2.2 Assessment and Payment Overview. The evaluation criteria and calculations as described in paragraph 3.0 for Performance, paragraph 4.0 for Schedule, and paragraph 5.0 for Cost will be utilized. The sum of these three areas will then be multiplied by a customer satisfaction percentage to calculate 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 for validation. The final incentive fee determination is the unilateral 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 unilaterally modify the contract to incorporate the incentive earned. Invoicing and payment of the incentive will be made annually at the delivery order 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 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.

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

Appendix I – AFEC PMEL Incentive Plan Page 2 of 7 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 total PI pool is determined by the Government and will be a percentage of the value of delivery orders issued. The PI pool will not exceed 2% of the annual fixed price value of the delivery order.

3.2 Determination of PI Earned: The PI will be based on Quality of the contractor’s performance. The overall PI determination will be calculated at the delivery order level.

3.2.1 Quality Criteria (includes Service Summary (SS) items except for Turn Around Time which is covered under the schedule incentive). The Quality portion of the PI will use a

Quality Performance Index (QPI) where the Contractor can earn points for exceeding critical SS minimum required thresholds to the benefit of the Government. The Contractor can earn up to twenty four (24) points per period per base under the Quality Criteria: two (2) points per month per base as defined below. The SS sections will be evaluated IAW the PWS SS and Quality

Assurance Surveillance Program (QASP).

3.2.1.1 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.

3.2.1.2 A minor nonconformance is defined as: A nonconformance that does not necessarily adversely impact mission, safety of personnel and/or equipment, environment, performance

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

3.2.1.2 QMS (SS1) Point Assignment Explanation (12 possible points).

Minus one (-1) points will be awarded for a calendar month during a calendar month when the

Government issues a major nonconformance OR

Zero (0) points will be awarded for a calendar month during a calendar month when the

Government issues a minor nonconformance OR

One (1) point will be awarded for a calendar month when the Government does not issue any non-conformances.

3.2.1.3 Calibration and Maintenance Process (SS2) Point Assignment Explanation (12 possible points).

Minus one (-1) points will be awarded for a calendar month during a calendar month when the

Government issues a major nonconformance OR

Appendix I – AFEC PMEL Incentive Plan Page 3 of 7

Zero (0) points will be awarded for a calendar month during a calendar month when the

Government issues a minor nonconformance OR

One (1) point will be awarded for a calendar month when the Government does not issue any non-conformances.

3.2.1.4 AFMETCAL Certification (SS4) Assignment Explanation (12 possible points).

Minus two (-2) points will be awarded during a calendar month when a PMEL has either a withheld or pending certification for areas within the contractor’s control before the Government has accepted the contractor’s corrective action plan OR

Minus one (-1) points will be awarded during a calendar month when a PMEL has either a withheld or pending certification for areas within the contractor’s control after the Government has accepted the contractor’s corrective action plan but before the reevaluation OR

Zero (0) point will be awarded for a calendar month when the PMEL is AFMETCAL certified.

3.2.1.5 Quality Criteria Calculation. The overall PI shall be calculated by dividing the

Quality points earned by the Quality points available (24) during the PI period and multiplying the result by the available incentive for this factor:

3.2.1.5.1 Formula.

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

3.2.1.5.1.1 Sample Calculation. Assumption: PI pool = $100K

Contractor earns 16 of 24 available points:

Available Pool: $100K

(16/24) x $100K = $66.7K

4.0 SCHEDULE INCENTIVE (SI) PROCEDURES.

4.1 SI Pool: The total SI pool is determined by the Government and will be a percentage of the delivery orders issued. The SI pool will not exceed 1% of annual fixed price value of the delivery order.

4.2 Determination of SI Earned: The SI will be based on the contractor’s performance in

Turn Around and Throughput Time. The overall SI determination will be calculated at the delivery order level.

4.2.1 Schedule Criteria, (includes Service Summary (SS) item Turn Around Time). The

Schedule portion will use a Schedule Performance Index (SPI) where the Contractor can earn points for exceeding critical SS minimum required thresholds to the benefit of the Government.

The Contractor can earn up to twenty-four (24) points per period per base under the Schedule

Appendix I – AFEC PMEL Incentive Plan Page 4 of 7

Criteria: two (2) points per month per base as defined below. The SS sections will be evaluated

IAW the PWS SS and QASP.

4.2.1.2 TAT (SS3) Point Assignment Explanation (12 possible points).

Minus one (-1) points will be awarded for a calendar month when the Government issues a nonconformance OR

Zero (0) points will be awarded for a calendar month when average monthly TAT greater than or equal to 90% of requirement (i.e. 12.6 days or greater on 14 day requirement) OR

One half (.5) points will be awarded for a calendar month when average monthly TAT between

60% and 89.99% of requirement (i.e. between 8.4 days and 12.5 days on 14 day requirement) OR

One (1) point will be awarded for a calendar month when average monthly TAT less than 60% of requirement (i.e. less than 8.4 days on a 14 day requirement)

(TAT fractional days fractional days are determined as part of the whole number, not in terms of hours)

4.2.1.3 Throughput Point Assignment Explanation (12 possible points).

Zero (0) points will be awarded for a calendar month when average monthly Throughput is greater than TAT requirement (i.e. 14 days or greater on 14 day requirement) OR

One half (.5) points will be awarded for a calendar month when average monthly Throughput is between 60% and 100% of TAT requirement (i.e. 8.4 calendar days or greater on 14 calendar day requirement) OR

One (1) point will be awarded for a calendar month when average monthly Throughput is less than

60% of TAT requirement (i.e. less than 8.4 calendar days on a 14 calendar day requirement)

(Throughput fractional days are determined as part of the whole number, not in terms of hours)

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: SI pool = $50K

Contractor earns 16 of 24 available points:

Available Pool: $50K

(16/24) x $50K = $33.3K

5.0 COST INCENTIVE (CI) PROCEDURES.

Appendix I – AFEC PMEL Incentive Plan Page 5 of 7

5.1 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 actual 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 cost incentive share ratio is 60/40 (Government/Contractor). The cost incentive will be calculated using cost data from the Financial Report (CDRL 2) and paid annually.

5.1.1 Calculations. TC and actual cost (AC) data will be provided for each task order to determine the overall TC and AC. The cost incentive will be calculated on a cumulative basis.

5.2 Example Calculation.

5.2.1 Cost Incentive Formula.

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

5.2.1.1 Sample Calculation (Under run).

TO 1

TC $30K

AC $25K

TC = $30K

AC = $25K

Contractor Share = 40%

Cost Saved = ($30K - $25K) = $5K

Cost incentive earned = Cost saved x Contractor Share = $5K x 40% = $2K

5.2.1.2 Sample Calculation (Overrun).

TO 1

TC $30K

AC $35K

TC = $30K

AC = $35K

Overrun = $5K = Zero cost incentive earned

6.0 CUSTOMER SATISFACTION SURVEY FACTOR. The customer satisfaction survey calculation is based on the average score of surveys submitted rather than total points. The

PM/QAM will complete a Customer Satisfaction (CS) Survey using the format at Attachment 1 and obtain completed surveys from supported Maintenance Group Commanders and other supported customers as deemed appropriate by the PM/QAM. The government will strive to receive survey results from at least 20% of the customers supported. The overall score of the customer survey will be equal to the average value of the point value assigned to each question.

Appendix I – AFEC PMEL Incentive Plan Page 6 of 7

These will then be summed and a percentage developed by dividing the earned average/total available (5). The percentage earned, down to a 70% satisfaction, based on the bands below will then be multiplied by the sum of the PI, SI, and CI. This will result in the total incentive earned for the period. Below 70% satisfaction will result in zero fee earned.

6.1 Survey Bands.

Bottom % Top % Earned %

95 100 100

90 94.99 95

85 89.99 90

80 84.99 85

75 79.99 80

70 74.99 75

6.2 Example Calculation.

6.2.1 Formula.

(PI+SI+CI) x Customer Satisfaction Survey Percentage = Incentive Earned

6.2.1.1 Sample Calculation. Assumption: Customer Satisfaction Rating 83.7%

(66.7K + 33.3K + 2K) x 85% = $86.7K

7.0 INCENTIVE PLAN 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 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.

Appendix I – AFEC PMEL Incentive Plan Page 7 of 7

Attachment 1

Customer Satisfaction Survey

Facility Appearance Excellent Good OK Poor Awful N/A

Employee/Staff Attitude Excellent Good OK Poor Awful N/A

Timeliness of Service Excellent Good OK Poor Awful N/A

Hours of Service Excellent Good OK Poor Awful N/A

Did the product or service meet your needs? Yes No N/A

Please rate PMELs ability to answer any questions, problems or concerns you may have

Excellent Good OK Poor Awful

N/A

When PMEL places a limited calibration label on your TMDE how well does it continue to meet your mission requirements?

Excellent Good OK Poor Awful

N/A

PMEL’s response to priority calibrations (i.e. Emergency and

Mission Essential)

Excellent Good OK Poor Awful

N/A

Overall, how well does the PMEL's support enable you to meet your mission?

Excellent Good OK Poor Awful N/A

Were you satisfied with your experience at this office / facility? Yes No N/A