7-Draft_PWS_App_F_Incentive-Award_Fee_Plan.pdf

Contract Solicitation: FA4890-14-R-0012

APPENDIX F

DRAFT AERIAL TARGETS INCENTIVE/AWARD FEE PLAN

1.0 INTRODUCTION.

1.1 This Plan describes the process that will be used to assess and determine the incentive and award fees earned by the Contractor. The objective is to motivate the Contractor to effectively 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/award fee earned. It consists of three (3) main elements: Performance Incentives (PI), Special Interest Item (SII), and Positive Significant Incidents/Negative Significant Incidents (PSI/NSI). The incentive is evaluated and calculated using a combination of objective and subjective criterion designed to optimize contractor performance and incentivize process and program improvements throughout the life of the contract. The performance, SII, and PSI/NSI elements will be evaluated separately and calculated on a semi-annual basis. The results will be used in conjunction with the yearly Contractor Performance Assessment Reporting System assessment to provide a complete program assessment of the Contractor’s performance on the Aerial Target contract.

2.0 GENERAL PROCEDURES.

2.1 Evaluation Periods. Performance element evaluations will occur on a semi-annual basis.

The periods are as follows:

Performance/SII Element Evaluation Periods

Evaluation Period Date Period 1 1 Oct 15 – 31 Mar 16 Period 2 1 Apr 16 – 30 Sep 16 Period 3 1 Oct 16 – 31 Mar 17 Period 4 1 Apr 17 – 30 Sep 17 Period 5 1 Oct 17 – 31 Mar 18 Period 6 1 Apr 18 – 30 Sep 18 Period 7 1 Oct 18 – 31 Mar 19 Period 8 1 Apr 19 – 30 Sep 19 Period 9 1 Oct 19 – 31 Mar 20

Period 10 1 Apr 20 – 30 Sep 20

2.2 Assessment and Payment Overview. The objective and subjective evaluation criteria and calculations as described in paragraph 3.0 for Performance, SII, and PSI/NSI will be utilized to calculate the recommended fee for presentation to the Fee Determining Official (FDO). Periodic 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 include objective criteria calculations and subjective criteria recommendations, to an Incentive/Award Fee Review Board (I/AFRB) chaired by the Acquisition Management and Integration Center (AMIC) Director (DR) or Deputy Director (DD) for validation (Deputy Director PM/PK will serve as alternate Chairpersons). The I/AFRB Chair shall recommend a total fee amount to the FDO who shall determine the final fee amount. Billing and payment of all earned fee will be

Appendix F Page 1 of 10 made semi-annually against CLIN X009 after the contracting officer (CO) finalizes a contract modification to incorporate the fee earned.

2.3 Procedures for Changing the Plan. Unilateral changes may be made to this plan if the Contractor is provided a modification no later than 15 days before the start of the upcoming evaluation period. Changes affecting the current evaluation period will be by bilateral contract modification between Government and Contractor. Any substantial changes to the plan must be approved by the FDO. Changes each period to the Special Interest Items (reference Paragraph 4.2.3) are not considered substantial.

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 prorate the incentive/award fee pool to reflect months in which work was performed. After termination for convenience, the remaining fee cannot be earned by the Contractor and, therefore, will not be paid.

3.0 PERFORMANCE INCENTIVE AND AWARD FEE PROCEDURES.

3.1 Performance Incentive (PI) Fee. The contractor may earn $25,000 per point for each of the eighteen (18) points available in the Performance Incentive element during each evaluation period for a total of $450,000.

3.1.2 Determination of PI earned. The PI will be based on contractor’s exceeding performance, quality, and customer satisfaction requirements. The assessment will use a Quality Performance Index (QPI) where the contractor can earn up to twelve (12) points per evaluation period, one (1) point per month, as defined below. Performance will be evaluated IAW the PWS, Service Summary Items and Quality Assurance Surveillance Plan (QASP). The contractor may earn up to six (6) additional points for superior service as determined by the results of customer service surveys (Attachment 1).

3.2 Special Interest Item (SII) Fee. The contractor may earn up to $25,000 maximum during each period an SII or multiple SIIs are designated at Attachment 2.

3.2.1 Determination of SII Earned: The PM may assign a Special Interest Item(s) (SII).

When identified, an SII(s) is an area of performance the Government deems critical and/or requires special attention. If an SII is assigned, 10% of the fee earned within PI during each period will be available.

3.3 Positive Significant Incidents/Negative Significant Incidents (PSI/NSI). A PSI or NSI identified during the period may increase (PSI) or decrease (NSI) the incentive/award fee at the discretion of the Government. The maximum fee increase available for an approved PSI is $50K.

3.3.1 Determination of PSI/NSI Earned: In the event of any significant positive or negative incident that, in the opinion of the Government, was within the contractor’s control, the FDO may unilaterally modify up or down the amount of the total fee earned for the period without regard to Contractor performance in the areas scored. An NSI may warrant zero incentive/award fee to be approved by the FDO and result in no I/AFRB to be convened.

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3.3.2 Nonconformance. Failure to fulfill any contract requirement is a nonconformance. The Contractor shall take immediate corrective action for any nonconformance. Nonconformances are evaluated for risk, then communicated to the contractor in one of two forms:

3.2.1 Major Nonconformance. A nonconformance that negatively impacts, or has potential to impact, safety of personnel and/or equipment, performance (quality), schedule (delivery), or cost.

The risk associated with this nonconformance is evaluated as Moderate or High. The CO will communicate a major nonconformance on a Corrective Action Request (CAR) form with a suspense date for the Contractor’s corrective action plan.

3.2.2 Minor Nonconformance. A nonconformance, which by itself does not adversely impact mission, safety of personnel and/or equipment, performance (quality), schedule (delivery), or cost.

The risk associated with this nonconformance is evaluated as Low and is communicated by the COR through a First and/or Second Notice. First notices are issued for any identified minor nonconformance; second notices are issued for a repeat nonconformance or failing to correct a nonconformance within a reasonable amount of time. As a minimum, the Contractor’s corrective action plan shall address action taken to fix the immediate problem.

4.0 Performance Incentive (PI) Criteria includes Service Summary (SS) items, Quality Management System (QMS, and Customer Satisfaction Surveys. The PI portion of the Incentive/Award Fee will use a Quality Performance Index (QPI) where the Contractor can earn points for exceeding critical SS standards, successfully executing the Contractor’s QMS, and exceeding customer satisfaction to the benefit of the Government. The Contractor can earn up to eighteen (18) points per period:

• One (1) point per month available for SS

• One (1) point per month available for QMS section of QPI

• One (1) point for “Outstanding” ratings on Customer satisfaction Surveys

• (Equates to 18 points available per incentive/award period)

The zero point value is assigned to minimum contract standards; failing to meet minimum standards will result in negative points. The SS and QMS sections will be evaluated IAW the PWS SS Table 1.6 and Appendix G.

4.1 SS Point Assignment Explanation (6 possible points).

4.1.1 A negative one-half (-1/2) point will be earned for a calendar month when the Government issues a CAR for any of the following SS performance standards (PWS Table 1.6):

• FSAT Mission Success Rate

• SSAT Mission Success Rate

• Tellabs Switch Operational Availability

• GRDCS Mission Availability

• RCS/BC3 and AccessNet or Orion Comm Network Mission Availability

• TPS-75 Radar Mission Availability

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4.1.2 One-quarter (1/4) of a point will be earned monthly for each critical standard for up to a total of one (1) point when:

• The Government does not issue a CAR for failure to meet any of the SS standards identified above, AND

• A critical standard below is met or exceeded.

Critical Standards FSAT Mission Success Rate ≥ 98% SSAT Mission Success Rate ≥ 98% Tellabs Switch Operational Availability ≥ 98% GRDCS Mission Availability ≥ 98%

Exception: VDOPS scoring system mission failures directly attributable to repair actions by another organization shall not be counted against the higher FSAT/SSAT mission success rates.

4.2. QMS Point Assignment (6 possible points).

4.2.1 A negative one-half (-1/2) point will be earned for a calendar month if any of the following situations occur:

• Government issues a CAR for a technical data violation (TDV), OR

• More than two (2) non-TDV CARs are issued, OR

• A repeat CAR from the previous 180 calendar days is issued

4.2.2 Zero (0) points will be earned for a calendar month when the Government does not issue a CAR for a TDV, does not issue more than two (2) non-TDV CARs, and CAR is not a repeat from the previous 180 calendar days, OR

4.2.3 One (1) point will be earned for a calendar month when the Government does not issue any CARs.

4.2.4 Performance Incentive Criteria Calculation. The PI for SS and QMS shall be calculated by taking the sum of points awarded multiplied by the $25K fee for each point:

4.2.4.1 Formula. Points Awarded x $25K = Performance Incentive Earned

4.2.4.2 Sample Calculation. Each point is worth $25K

Contractor earns 12 of 12 available points:

12 x $25K = $300K earned

4.3 Customer Satisfaction Point Assignment (6 possible points).

4.3.1 The 53 WEG leaders (4) and AMIC PM shall each complete a customer service survey

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(Attachment 1) for a total of five (5) surveys each period. The AMIC PM survey will count double to provide additional weight to the contractor’s performance program-wide. The score for each survey will be determined by averaging the evaluated points for each question on the survey.

Maximum score per survey is one (1) point. The score for all surveys will be summed to arrive at the total score for customer satisfaction (maximum of six (6) points.

4.3.1.1 Customer Satisfaction Calculation. The overall PI will be calculated by multiplying the total points earned during the evaluation period by $25K, the value assigned for each point.

4.3.1.2 Formula. Points Awarded x $25K = Customer Satisfaction Incentive Earned.

4.3.1.3 Sample Calculation. Each point is worth $25K

Contractor earns 6 of 6 available points:

6 x $25K = $150K earned

5.0 Special Interest Item (SII). SIIs shall be identified/assigned when the Government deems an area of performance critical and/or an area requires special attention.

5.1 SII Assignment. SII No later than 30 calendar days prior to the end of an incentive fee period, 53 WEG or AMIC CORs may submit a proposed SII to the AMIC PM for consideration.

The Functional Director will review and approve SIIs. After the start of an evaluation period, a SII can only be implemented by a bilateral modification between the contractor and Government.

The QAM will be notified within 10 calendar days of SII approval to ensure it is included in the surveillance plan. Attachment 2 contains the SII(s) that may apply to an evaluation period. The PM shall suspense a lead functional evaluator as necessary to evaluate the SII. The lead functional evaluator is responsible for providing a coordinated evaluation and recommended rating to the PM for each SII using the rating definitions specific to each SII. For the first evaluation period, Transition will be the SII. Available SII amount will be 10% of the fee earned within PI.

5.1.1 Formula. (PI x 10%) x SII rating

(SII ratings: Outstanding=100%; Good=50%; Sat= 0%; Unsat=110%)

5.1.2 Sample Calculation.

The earned fee within PI is $350K and Contractor receives a “Good” SII rating:

$350K x 10% = $35,000 fee available for SII $35,000 x 50% = $17,500 fee earned

6.0 Significant Incidents. In the event of any Positive Significant Incident (PSI) or Negative Significant Incident (NSI) that, in the opinion of the Government, was within the contractor’s control, the FDO may unilaterally modify up or down the amount of the total fee earned for the period without regard to Contractor performance in the areas scored. The fee will not be modified as a result of events that are outside the control of the Contractor.

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6.1 Positive Significant Incidents:

Examples include but are not limited to:

• Significant support benefiting the Aerial Targets Program

• Major innovations that significantly improved weapon system capabilities or provide savings to the government.

6.2 Negative Significant Incidents:

Examples include but are not limited to:

• Serious damage/destruction to Government property as a result of the contractor’s actions.

• Serious, significant, and/or chronic management problems or performance problems that can be reasonably attributed to a general lack of Contractor management oversight in areas not necessarily delineated in the Incentive/Award Fee evaluation criteria.

6.2.1 Formula. PSI/NSI

• PSI: Total PI and SII amount + PSI amount determined up to a maximum of $50K

• NSI: Total PI and SII amount - NSI amount determined

6.2.2 Sample Calculation.

PI fee earned is $300K + SII fee earned is $17,500 $300,000 + $17,500 = $317,500 PSI award determined/approved by FDO is $30,000 $317,500 + $30,000 = $347,500 total fee earned

6.3. If the cause of a NSI (i.e., aircraft mishap, etc.) is determined to be a Contractor responsibility after the period in which the event occurred, then the Government can consider the finding in the period during which the responsibility determination was made or if no formal determination is or will be made, when the investigation is closed. The Incentive/Award Fee Review Board should consider if any action was already taken in regard to the NSI. The Government shall make the Contractor aware of NSI(s) submitted to the I/AFRB for review.

7.0 Incentive/Award Fee Review Board Process. The AFRB will consist of 3 to 5 voting members identified in Attachment 3 to validate the proposed Incentive/Award Fee results. The PM shall present the proposed results each period to the I/AFRB to ensure consistency and integrity in application of this plan. The I/AFRB will validate the PM’s inputs, recommendations, and calculations, and consider PSI/NSI inputs prior to reaching a final consensus on a recommended fee amount. The Contractor shall not be present during I/AFRB deliberations. The I/AFRB Chair will forward recommended fee amount, rationale, and supporting documentation to the FDO for final approval.

7.1 FDO Determination. The FDO considers the I/AFRB recommendation, but is solely responsible for the final fee determination. If the FDO decision differs from the recommendation of the I/AFRB, the FDO shall document their decision rationale for the contract file. The final

Appendix F Page 6 of 10 results for each period will not be closed until the FDO approves the final fee amount. The final determination is the unilateral decision of the Government. The FDO will provide the CO a written incentive/award fee decision and, barring unforeseen circumstances, the CO shall notify the Contractor of the final decision within 90 calendar days after the end of the period.

7.1.1 AFPEO/CM shall normally serve as the FDO, unless delegated to HQ ACC O-6 or higher (i.e. A5/8/9, A4/8/9-2, A8T, etc.). AFPEO/CM has delegated FDO responsibilities to HQ

ACC/A5/8/9.

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Attachment 1

AERIAL TARGETS O&M Service Survey

Please answer the following questions using the ratings provided:

Communication

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:__________________________

Responsiveness

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?

RATING:__________________________

Quality of Maintenance and Mission Effectiveness

3. How well has the Contractor performed organizational-level maintenance services? Has the Contractor met your organization’s mission and flying program requirements?

RATING:__________________________

Rating Description Point Value*

Outstanding Contractor consistently exceeds mission requirements 1 Good Contractor occasionally exceeds mission requirements .5

Satisfactory Contractor meets mission requirements 0 Unsatisfactory Contractor fails to meet mission requirements -1

*Point Value will be removed prior to sending surveys to the 53 WEG

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Attachment 2

Special Interest Item

Description: This SII will evaluate the Contractor’s efforts in transitioning from the current Aerial Target contract to the follow-on contract IAW the PWS and Contractor’s Transition Plan. Evaluation will include: determine whether all major milestones were properly identified and met on schedule, the Contractor’s success in dealing with the outgoing incumbent Contractor and government management team, and the Contractor’s capability of meeting full Aerial Targets capability at full performance start. This SII will evaluate the Contractor’s ability to successfully assume requirements at performance start. The fee amount available for this SII shall be 10% of the fee earned within PI.

The SII will be rated as follows:

Outstanding. Exceeded all transition plan objectives and milestones. Fully capable to commence Aerial Targets requirements at contract performance start. The Contractor will earn 100% of the available SII fee for achieving an Outstanding rating.

Good. Fully met all transition plan objectives and milestones, and exceeded some. Fully capable to commence Aerial Targets requirements at contract performance start. The Contractor will earn 50% of the available SII fee for achieving a Good rating.

Satisfactory. Fully met all transition plan objectives and milestones. Fully capable to commence Aerial Targets requirements at contract performance start. The Contractor will earn 0% of the available SII fee for achieving a Satisfactory rating.

Unsatisfactory. Failed to meet transition plan objectives and milestones. Not fully capable to commence Aerial Targets requirements at contract performance start. The Contractor’s fee earned within PI will be reduced by -10% for achieving an Unsatisfactory rating.

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Attachment 3

AFRB Members

Incentive Fee Review Board Voting Members

HQ ACC AMIC/DR or DD (Chairperson) (Alternates AMIC PM/PK) 53 WEG/CC, CD, CDM or HQ ACC/A8T

HQ ACC AMIC/PM

HQ ACC AMIC/PK

HQ ACC AMIC/PMA

HQ ACC AMIC/PKC

Note: AMIC/PM or AMIC/PK will serve as chairperson in the absence of AMIC/DR or DD.

Non-Voting Members / Advisors

HQ ACC/JA

ACC AMIC/PMAU

ACC AMIC/PSU

ACC AMIC/DRQ

ACC AMIC/PSC

ACC AMIC/PLG

ACC AMIC/DRF

ACC AMIC/PCE

ACC AMIC/OL

ACC AMIC/PKCA

Fee Determining Official

AFPEO/CM or ACC/A5/8/9 as delegated by AFPEO/CM

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