Appendix_F_-_T-38_PI-AF_Plan_10_Dec_15.pdf

Solicitation Number: FA4890-15-R-0007

APPENDIX F

T-38 AIRCRAFT MAINTENANCE PROGRAM

PERFORMANCE INCENTIVE AND AWARD FEE PLAN

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1.0 INTRODUCTION

1.1 This Performance Incentive and Award Fee (PI/AF) Plan describes the process the Government will use to assess and determine the performance incentive and award fee earned by the Contractor. The objective is to motivate the Contractor to effectively implement quality processes and improve performance in the rated areas stated herein and in the contract directly impacting performance of PWS requirements. The PI/AF plan consists of two elements, quality and performance. The incentive is evaluated and calculated using a combination of objective and subjective criterion designed to optimize contractor performance and incentivize continual process and program improvements throughout the life of the contract. Each element will be evaluated and calculated separately on a semi-annual basis. The Contracting Officer (CO) and Program Manager (PM) are responsible to provide periodic performance feedback to the Contractor. The results will be used in conjunction with the yearly Contractor Performance Assessment Report System (CPARS) assessment to provide a complete program assessment of the Contractor’s performance on the T-38 Aircraft Maintenance Program (AMP) 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 1 Oct 16 - 31 Mar 17 Period 2 1 Apr 17 – 30 Sep 17 Period 3 1 Oct 17 – 31 Mar 18 Period 4 1 Apr 18 – 30 Sep 18 Period 5 1 Oct 18 – 31 Mar 19 Period 6 1 Apr 19 – 30 Sep 19 Period 7 1 Oct 19 – 31 Mar 20 Period 8 1 Apr 20 – 30 Sep 20 Period 9 1 Oct 20 – 31 Mar 21 Period 10 1 Apr 21 – 30 Sep 21 Period 11 1 Oct 21 – 31 Mar 22 Period 12 1 Apr 22 – 30 Sep 22 Period 13 1 Oct 22 – 31 Mar 23 Period 14 1 Apr 23 – 30 Sep 23 Period 15 1 Oct 23 – 31 Mar 24 Period 16 1 Apr 24 – 30 Sep 24 Period 17 1 Oct 24 – 31 Mar 25 Period 18 1 Apr 25 – 30 Sep 25

Table 1. Performance Incentive & Award Fee Evaluation Periods

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2.2 Assessment and Payment Overview. The objective and subjective evaluation criteria and calculations, as described in paragraph 3.0, will be utilized to calculate the recommended fee for presentation to the Fee Determining Official (FDO); ACC A3T will be the FDO. Semiannually, the PM will schedule the Performance Incentive/Award Fee Review Board (PI/AFRB), and present evaluation findings, objective criteria calculations and subjective criteria recommendations. The Acquisition Management and Integration Center (AMIC) Director (DR) or Deputy Director (DD) will chair the PI/AFRB. There must be a minimum of 3 PI/AFRB members to conduct a board. The PI/AFRB Chair shall recommend a total fee amount to the FDO who shall determine the final fee amount. The CO will modify the contract to incorporate the fee earned. Billing and payment of the fee will be made semi-annually.

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 AMIC/ DD. Changes each period to the Special Interest Items (SII) (reference Paragraph 3.2) are not considered substantial. The CO will notify the contractor of a SII via CO Letter, no later than 15 days before the start of the affected evaluation period.

2.4 Contract Termination. The Government will prorate the performance incentive/award fee pool to reflect months in which work was performed if the contract is terminated for the convenience of the Government after the start of an evaluation period. After termination for convenience, the remaining fee cannot be earned by the Contractor and, therefore, will not be paid.

2.5 Contractor Presentation. The Contractor will be provided the opportunity to make a presentation to the PI/AFRB prior to the PM’s presentation to the board. The presentation shall be limited to approximately 20 minutes and may complement, but not duplicate, inputs already submitted for consideration in a Contractor-determined format.

3.0 PERFORMANCE INCENTIVE AND AWARD FEE PROCEDURES.

3.1 Available Pool. The total PI/AF pool shall be $800K per year. The PI/AF pool for each 6-month period will be one half of the total available annual award fee pool ($400K). The pool will not increase as a result of approved wage & benefit equitable adjustments.

3.2 Determination of Fee Earned. The Performance Incentive and Award Fee is normally based on three (3) criteria, but may include a SII as a fourth (4th) criteria:

Maximum available fee - $400K (Without SII)

1. Quality/O&M Service (60%) – max $240K

2. Award Fee Inputs (30%) – max $120K

3. Customer Surveys (10%) – max $40K

Maximum available fee - $400K (With SII)

1. Quality/O&M Service (50%) – max $200K

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2. Award Fee Inputs (20%) – max $80K

3. Customer Surveys (10%) – max $40K

4. Special Interest Item (20%) – max $80K

Prior to the beginning of the period, the PM may assign one or more SIIs for up to 20% of the total available pool. When identified, the SII is an area of performance that the Government deems critical and requires special attention. The Contractor will be notified IAW paragraph 2.3.

When a SII is identified, the Government will define requirements and apply award fee rating criteria in Table 3 and scoring as identified in para 3.2.2.1.2.

3.2.1 Performance Incentive Criteria (60%)

3.2.1.1 Quality/O&M Services Criteria (includes Service Summary (SS) Items & Quality Management System (QMS)). The Performance Incentive will be assessed using a Quality Performance Index (QPI) where the Contractor can earn points for exceeding critical SS standards and successfully executing the Contractor’s QMS. The Contractor can earn up to eighteen (18) points per 6 month period: three (3) points are available per month as defined below. Zero points are earned for meeting 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 1.5 and Appendix G (QMS Appendix).

3.2.1.2 SS Performance Incentive Point Assignment Explanation (2 possible points per month/12 possible points per period). Points are allocated each month based on objective mission performance against the SS metrics as listed below:

• Zero (0) points assigned for meeting all service summary metrics

• Negative one (-1) point assigned for each calendar month when the Government issues a CAR for failure to meet any service summary metric NOTE: The contractor still has the opportunity to earn points for meeting/exceeding the critical SS metrics as described below.

• A total of up to two (2) points will be earned when the Contractor meets/exceeds the following critical SS metric rates below. Points can be earned for each metric independently.

Table 2. Critical Service Summary Metrics

Categories Rate Points Earned

Total Fleet Aircraft Availability Rate1 ≥ 70% 1.0 Average Fleet Time (Hours) 225-245 .50 Aircraft Code 1 Reliability ≥ 90% .50

Note 1: To earn 1 point for total fleet aircraft availability rate, all operating locations must meet minimum aircraft availability metric.

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3.2.1.3 QMS Performance Incentive Point Assignment Explanation (1 possible point per month/6 possible points per period).

• Zero (0) points will be assigned for a calendar month when the Government issues one (1) CAR. NOTE: CARs issued against SS metrics will not count against QMS PI.

• One (1) point will be earned for each calendar month when the Government does not issue a CAR.

• Negative one (-1) points will be assigned for each calendar month when the Government issues two (2) CARs.

• An additional negative half (-.5) point per CAR will be assigned when the Government issues three (3) or more CARs. Negative points are limited to a maximum minus two (-2) points per month.

3.2.1.4 Quality/O&M Services Criteria Calculation. The overall QPI shall be calculated by dividing the Quality/O&M Services points earned by the Quality/O&M Services points available

(12) during the period and multiplying the result by the available fee for this factor:

3.2.1.4.1 Formula and Sample Calculation per period.

(Points Awarded / Total Points Available) x 60% x $400,000 = Fee Amount Earned Assumption: Available Fee pool = $400,000; Contractor earns 14 of 18 available points:

Points Awarded / Total Points Available: (14 / 18) = .78 .78 x .60 x $400,000 = $187,200

Performance Incentive Earned: $187,200

3.2.2 Award Fee and Customer Surveys. The following evaluations will be performed during each period:

3.2.2.1 Award Fee Inputs (30%): The Award Fee calculation is a subjective evaluation of the significance and/or value of the combined inputs.

3.2.2.1.1 Significant Achievements (SAs). Significant achievements can be submitted (attachment #2) to the PM for PI/AFRB consideration. SAs can be submitted by the contractor or Government personnel. Contractor submissions will be limited to no more than 5 per period and must provide a tangible benefit to the Government relevant to the T-38 AMP. The PM will provide submissions to PI/AFRB members within a week of the scheduled PI/AFRB. Board members will evaluate each input, determine an overall raw score (1-100%) and assign the recommended percentage of the award fee category to award.

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Table 3 Award Fee Ratings

Award Fee Adjectival Rating

Award Fee Overall Raw Score

Description

Outstanding 91%-100% Contractor achievement(s) significantly exceeded overall cost, schedule or technical performance requirements/expectations of the contract for this rating.

Excellent 76%-90% Contractor achievement(s) exceeded overall cost, schedule or technical performance requirements/expectations of the contract for this rating.

Good 51%-75% Contractor achievement(s) has slightly exceeded overall cost, schedule or technical performance requirements/expectations of the contract for this rating. However, the significance does not warrant a rating of Excellent.

Satisfactory No Greater than 50% Contractor has met overall cost, schedule and technical performance requirements/ expectations of the contract. No additional fee will be awarded in this area.

3.2.2.1.2. Sample Calculation Per Period. Assumption: Available Fee pool = $400K;

percentage assigned to award fee = 30%. Five PI/AFRB members review presented SAs and assigned averaged individual raw scores: 80%, 85%, 88%, 82%, 90%.

80 + 85 +88 +82 +90 = 425 425 / 5 = 85% Excellent

Average score of SAs (total of board members scores/number of board members) ($400K x 30%) x 85% = $102K award fee earned

3.2.2.2 Customer Survey (10%). The Customer Survey calculation is based on the average score of customer surveys submitted rather than total points. The PM will request customer surveys from each operating location’s host wing operations/maintenance group commander and flying squadron commander. The Customer Survey format and scoring methodology are located at Attachment 1.

3.2.2.2.1. Sample Calculation Per Period. Assumption: Available pool = $400K;

percentage assigned to customer survey = 10%.

Question 1 Question 2 Question 3 Service

Survey Survey 1 Scores 2 2 1 5 Survey 2 Scores 1 0 1 2

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Survey 3 Scores 2 2 2 6 Survey 4 Scores 2 2 1 5 Survey 5 Scores 2 1 1 4 Survey 6 Scores 2 2 1 5 Survey 7 Scores 1 0 1 2 Survey 8 Scores 2 2 2 6 Survey 9 Scores 2 2 1 5 Survey 10 Scores 2 1 1 4 Survey 11 Scores -1 0 0 -1 Survey 12 Scores 2 1 1 4 Total 47 Sum of surveys / Max possible score all survey (72)

47/72 x 100 = 65.27%

Available Pool: ($400K x 10%) x 65.27% = $26,108 award fee earned

3.3 Performance Incentive/Award Fee Results. The PI/AFRB will consist of 3 to 6 voting members identified in Attachment 4 to validate the proposed Performance Incentive/Award Fee results. The PM will present the proposed results each period to the PI/AFRB to ensure consistency and integrity in application of this plan. The Contractor may be present for the PM’s presentation; however, they will be excused prior to deliberations. The PI/AFRB will consider the PM’s inputs, recommendations, and calculations prior to reaching a final consensus on a recommended fee amount. The PI/AFRB Chair will forward the recommended amount, rationale, and supporting documentation to the FDO for final approval.

3.3.1 Positive Significant Incidents/Negative Significant Incidents (PSI/NSI). A PSI or NSI identified during the period may increase or decrease respectively, the overall incentive/award fee at the discretion of the FDO. The FDO can determine a NSI warrants zero incentive/award fee and cancel the PI/AFRB. If a PSI evaluation warrants an increase in the awarded fee, the increase cannot exceed the total available pool for that period. Once determined, the CO will immediately notify the Contractor of any PSIs or NSIs for review by the PI/AFRB. After the initial deliberations of Board results, the PM will present any PSIs or NSIs for that period. Examples:

Positive Significant Incidents:

Examples include but are not limited to :

• Innovations significantly improving aircraft availability rates

• Extraordinary management actions significantly improving mission success

• Extraordinary proactive actions taken to ensure sustainment of aircraft, equipment readiness, and/or cost savings

Negative Significant Incidents:

Examples include but are not limited to:

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

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• Serious, significant, and/or chronic management problems or performance problems attributed to a lack of effective Contractor management.

3.3.2 The final fee determination is the unilateral decision of the Government. The FDO considers the PI/AFRB recommendation, but is solely responsible for the final fee determination.

If the FDO decision differs from the recommendation of the PI/AFRB, the FDO shall document their decision rationale for the contract file. The FDO will provide the CO a written performance incentive/award fee decision and, barring unforeseen circumstances, the CO shall notify the Contractor of the final decision within 30 calendar days after the PI/AFRB.

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Attachment 1

Service Survey

Please answer the following questions using the ratings provided:

1. Communication 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. Responsiveness 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:__________________________

3. Quality of Maintenance and Mission Effectiveness How well has the Contractor performed intermediate-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 2 Good Contractor occasionally exceeds mission requirements 1

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

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Attachment 2

Contractor/Government Significant Achievement Award Fee Input Format

All award fee inputs are due to the Program Manager as they occur within 20 days of the event occurrence but not later than five (5) days after the end of the Award Fee period (via email distribution) to the PM.

FY-XX - Title

ACTION:

• Fully identify and explain specific actions taken by Contractor personnel.

IMPACT:

• Provide specific impact of actions. Examples include, but are not limited to actual dollar savings or cost avoidance to the Government or other efficiencies provided to the Government’s advantage.

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Attachment 3

Special Interest Item(s)

This SII will evaluate the Contractor’s efforts in transitioning from the current T-38 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 T-38 AMP 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 .

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Attachment 4

PI/AFRB Members

Award Fee Review Board Voting Members

HQ ACC AMIC/DD (Chairperson)

HQ ACC AMIC/PM

HQ ACC AMIC/PK

HQ ACC AMIC/PMA

HQ ACC AMIC/PKC

HQ ACC A3TO

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

Non-Voting Members / Advisors

ACC/JAQ

ACC AMIC/DRQ

AFGSC/A4M

T-38 AMP CO

T-38 AMP PM

Fee Determining Official (FDO)

HQ ACC/A3T