Aerial_Targets_PWS_App_F_(Incentive-Awd_Fee_Plan)_2_Sept_14_(Final).pdf

Contract Solicitation: FA4890-14-R-0012

APPENDIX F

AERIAL TARGETS INCENTIVE/AWARD FEE PLAN

02 Sep 14 Appendix F Page 1 of 11

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 Targets contract. An I/AFRB will not be convened when the contractor’s overall cost, schedule, and technical performance in the aggregate is below satisfactory.

2.0 GENERAL PROCEDURES.

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

The periods are as follows:

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

Period 11 1 Oct 20 – 31 Mar 21

Period 12 1 Apr 21 - 30 Sep 21

Period 13 1 Oct 21 – 31 Mar 22

Period 14 1 Apr 22 – 30 Sep 22

*Period 15 1 Oct 22 – 31 Mar 23

(*Period 15 applicable if 6-month extension is exercised)

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

02 Sep 14 Appendix F Page 2 of 11 feedback will be provided by the Program Manager (PM) to the Contractor. The PM will present all semi-annual evaluation findings, 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 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. If less than 15 days, then changes will be by a bilateral contract modification between Government and Contractor. Changes affecting the current evaluation period will also be by bilateral contract modification between Government and Contractor. Any substantial changes to the plan must be approved by the AMIC/DD. Changes each period to the Special

Interest Items (reference Paragraph 5.0) 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.

If contract is terminated for default, the I/AFRB will not be convened.

2.5 Contractor Presentation. The Contractor will be provided the opportunity to make an optional presentation to the I/AFRB prior to the PM’s presentation to the board. The presentation shall be in MS PowerPoint version 2.3 or higher format, limited to thirty minutes, and focus on specific accomplishments over and above contract requirements that improves processes/quality, saves money, or increases customer satisfaction.

3.0 PERFORMANCE INCENTIVE AND AWARD FEE PROCEDURES.

3.1 Performance Incentive (PI) Fee. The contractor may earn $20,000 per point for each of the eighteen (18) points available in the PI element during each evaluation period for a total of

$360,000.

3.1.2 Determination of PI earned. The PI will be based on the contractor exceeding performance thresholds under Service Summary, Quality Management System (QMS), and

Customer Satisfaction requirements as follows. The assessment will use a Quality Performance

Index (QPI) where the contractor can earn up to twelve (12) points during each evaluation period within Service Summary and QMS. Performance will be evaluated IAW the PWS, Service

Summary Items and Quality Assurance Surveillance Plan (QASP). Additionally, the contractor may earn up to six (6) additional points for superior service as determined by the results of customer service surveys (Attachment 1).

02 Sep 14 Appendix F Page 3 of 11

3.2 Special Interest Item (SII) Fee. The contractor may earn up to 20% maximum of the earned PI during each period an SII or multiple SIIs are designated at Attachment 2. It’s important to note earned PI is the fee earned after all three areas under PI have been calculated for a period.

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. The actual dollar amount available will be dependent on the amount earned within PI each period an SII is identified. If zero PI is earned in a period, then zero funds will be available under SII fee.

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 earned at the discretion of the Government.

3.3.1 Determination of PSI/NSI Earned: PSI/NSIs may be submitted by the Government or

PSIs by the Contractor NLT the fifth (5 th

) calendar day following the end of a performance period using the format at Attachment 3. The PM will assign a Government representative to evaluate the PSI/NSI. The PM will brief the results of this evaluation to the I/AFRB and the I/ARFB will provide a recommendation to the FDO. 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 maximum fee available for an approved PSI is up to $100K. An NSI may warrant zero incentive/award fee to be approved by the FDO and result in no I/AFRB to be convened.

3.4 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, and then communicated to the contractor in one of two forms:

3.4.1 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.

3.4.2 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.

02 Sep 14 Appendix F Page 4 of 11

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 (6 points total)

One (1) point per month available for QMS (6 points total)

Six (6) points 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 (6 possible points).

4.1.1 Negative one-half (-1/2) point will be earned for a calendar month when the Government issues a CAR for failing any of the following SS performance standards (PWS Table 1.6). Two or more CARs issued in a month will earn an additional negative one-half (-1/2) point for a total of a negative one (1) point.

Quality Management System

FSAT Mission Success Rate

SSAT Mission Success Rate

Tellabs Switch Operational Availability

Data and Communications Circuit Connectivity

GRDCS Mission Availability

RCS/BC3 and AccessNet or Orion Comm Network Mission Availability

TPS-75 Radar Mission Availability

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

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%

02 Sep 14 Appendix F Page 5 of 11

4.2. QMS Point Assignment (6 possible points).

4.2.1 A negative one-half (-1/2) point will be earned when more than one (1) CAR is issued in a calendar month, OR a repeat CAR is issued from the previous 180 calendar days. A total of negative one (-1) point will be earned when three (3) or more CARs are issued in a calendar month.

4.2.2 Zero (0) points will be earned for a calendar month when the Government does not issue more than one (1) CAR and CAR is not a repeat from the previous 180 calendar days.

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

CARs.

4.3. Customer Satisfaction Point Assignment (6 possible points).

4.3.1 53 WEG leaders (4) and AMIC PM (2) shall each complete a customer service survey

(Attachment 1) for a total of six (6) surveys each performance period. 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 available).

4.4 Performance Incentive Criteria Calculation. The PI fee earned for SS, QMS, and

Customer Service Survey shall be calculated by taking the sum of points awarded multiplied by the

$20K fee for each point.

4.4.1 Service Summary, QMS and Customer Satisfaction Point Assignment (18 possible points)

4.4.1.1 Formula. Points Awarded x $20K = PI fee earned

4.4.1.2 Sample Calculation. Each point is worth $20K

Contractor earns 10 of 18 available points:

10 x $20K = $200K PI fee earned

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

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

Functional Director will review and approve SIIs. The QAM will be notified within 10 calendar days of SII approval to ensure it is included in the surveillance plan. 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.

02 Sep 14 Appendix F Page 6 of 11

5.1.1 Formula. PI fee earned x 20%

SII evaluation: Pass = 100% SII fee available; Fail = zero% SII fee available

5.1.2 Sample Calculation.

If the earned fee within PI is $200K and Contractor receives a “Pass” SII evaluation result:

$200K x 20% = $40,000 fee awarded for SII (Note: PI awarded is now $160,000)

6.0 Significant Incidents. Positive Significant Incidents (PSI) or Negative Significant

Incidents (NSI), within the contractor’s control, may result in an increase or decrease of the total fee earned for a performance period. If any PSI/NSIs are submitted, the I/AFRB will provide a recommendation to the FDO for consideration. 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.

6.1 Positive Significant Incidents:

Examples include but are not limited to:

Significant support benefiting the Aerial Targets Program

Process improvements/innovations that significantly improve mission/logistics support, aircraft availability, or provide cost savings/avoidance 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 In the event Contractor’s overall cost, schedule, and performance in the aggregate is deemed to be below satisfactory, no incentive/award shall be earned.

6.2.2 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.

6.3 Formula/Calculation. PSI/NSI

PSI: PSI amount approved by FDO (up to a maximum of $100K)

NSI: NSI will reduce incentive/award fee amount as approved by FDO

02 Sep 14 Appendix F Page 7 of 11

7.0 Total Incentive/Award Fee Formula.

PI + SII + PSI or – NSI = Total fee earned

7.1 Total Incentive/Award Fee Sample Calculation

If PI fee earned is $200,000K and SII percent assigned is 20% and SII is rated as “Pass”, then

PI ($160,000) + SII (40,000) = $200,000

PI & SII ($200,000) + PSI ($50,000) = $250,000 total fee earned

8.0 Incentive/Award Fee Review Board Process. The I/AFRB will consist of 3 to 5 voting members identified in Attachment 4 to validate the proposed incentive/award fee results. The

Contractor may provide an optional presentation to the I/AFRB in accordance with paragraph 2.5 above. 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.

8.1 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 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.

8.1.1 AFPEO/CM shall normally serve as the FDO, unless delegated to HQ ACC O-6 or higher

(i.e. A5/8/9, A5/8/9-2, A5T, etc.). AFPEO/CM has delegated FDO responsibilities to HQ ACC

A5T.

02 Sep 14 Appendix F Page 8 of 11

ATTACHMENT 1

AERIAL TARGETS O&M SERVICES 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?

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 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

02 Sep 14 Appendix F Page 9 of 11

ATTACHMENT 2

SPECIAL INTEREST ITEM (SII)

Description: The SII for the first period of performance will be contract transition. 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 20% of the

PI fee earned during the contract’s first period of performance.

The SII will be rated “pass” or “fail” as follows:

Pass. Met or exceeded all transition plan objectives and milestones. The Contractor will earn 100% of the available SII fee.

Example: If PI earned = $200,000

SII (20% of earned PI) = $40,000 (PI now $160,000)

SII fee earned = $40,000

Fail. Failed to meet transition plan objectives and milestones. The Contractor will earn zero percent of the available SII fee.

Example: If PI earned = $200,000

SII (20%) = $40,000 (PI now $160,000)

SII fee earned = $zero

02 Sep 14 Appendix F Page 10 of 11

ATTACHMENT 3

POSITIVE OR NEGATIVE SIGNIFICANT INCIDENT FORMAT

CRITERIA AND SUBCRITERIA HEADING: (e.g. Management, Mission Support, Logistics

Support, Process Improvement, Cost Savings/Avoidance)

ACTION: (Specifically state what, where, how, and why – must be detailed)

DATE (S): (Self-explanatory)

JUSTIFICATION: (Bullet format – state why the action was accomplished and how the action exceeded contract requirement; must be specific)

IMPACT: (Bullet format – state how this action will improve the program; at what level the action was incorporated, the resulting cost savings, increased aircraft availability, recurring gains, efficiencies, etc.; how did this action improve quality, safety, etc.)

OPR: (Name, Location, and Phone)

GOVERNMENT EVALUATION: (Validate PSI or NSI justification and impact to the

Government – This section is to be completed by Government personnel only.)

02 Sep 14 Appendix F Page 11 of 11

ATTACHMENT 4

INCENTIVE/AWARD FEE REVIEW BOARD MEMBERS

Voting Members

HQ ACC AMIC/DR or DD (Chairperson) (Alternates AMIC PM/PK)

53 WEG/CC, CD, CDM or HQ ACC/A5T

HQ ACC AMIC/PK

HQ ACC AMIC/PKC

HQ ACC AMIC/PM

HQ ACC AMIC/PMA

Non-Voting Members / Advisors

HQ ACC/JA

ACC AMIC/DRF

ACC AMIC/DRQ

ACC AMIC/PCE

ACC AMIC/PLG

ACC AMIC/PSC

ACC AMIC/PKCA

ACC AMIC/PMAO

ACC AMIC/OL

Fee Determining Official

AFPEO/CM or delegated to ACC A5/8/9, ACC A5/8/9-2, or ACC A5T.