J-05_Performance_Incentive_Plan_(PIP).pdf

PERFORMANCE INCENTIVE PLAN (PIP)

This Performance Incentive Plan (PIP) is comprised of two one-year Incentive Option Periods (IOPs).

This plan details the IOP process and explains how the incentive is applied.

Definitions

“Incentive Option Period (IOP),” refers to a period of performance established under this competitively awarded contract in which the Service Provider (SP) may be awarded an option in the future based on a contingency. In this case, the contingency is defined as the SP receiving exclusively “Very Good” or higher Contractor Performance Assessment Reporting System (CPARS) documented ratings in all evaluated areas of contract performance considered at the effective Determination Point.

“Determination Point (DP),” refers to the scheduled point in time when the Administrative Contracting Officer (ACO) makes a unilateral decision as to whether the SP has become eligible or ineligible for an opportunity to perform a future IOP. An affirmative determination does not automatically entitle the SP to perform during a particular IOP, but rather affords the SP an opportunity to perform during a particular IOP contingent upon the ACO determining the requirements of FAR Part 17.202 – Use of Options are met and exercising the IOP IAW FAR 52.217-9, Option to Extend the Term of the Contract.

“Eligible,” refers to the ACO’s affirmative decision that the SP has met the required criteria, (i.e., received exclusively “Very Good” or higher CPARS ratings in all evaluated areas of performance) which in turn, supports the ACO’s decision to exercise either Option 5 (IOP 1) or Option 6 (IOP 2).

Introduction

The objective of this incentive approach is to motivate consistent “Very Good” or better performance in all CPARS rated areas from the onset of SP performance. For this reason, the DP for IOP 1 eligibility relates directly to initial performance quality (the base period of performance). The subsequent IOP DP considers performance occurring during the first option period.

IOP Parameters

The SP becomes eligible or ineligible for IOPs based on CPARS performance ratings. One or more CPARS rating(s) below “Very Good” in any rated area (i.e. Quality, Schedule, Management, Small Business Utilization, and Regulatory Compliance) shall result in the loss of eligibility for the IOPs. Only “Very Good” or higher CPARS ratings in all rated areas will guarantee continued IOP eligibility.

All IOPs will be executed in accordance with FAR 52.217-9, Option to Extend the Term of the Contract, as the unilateral right of the Government. As such, it should be understood that becoming “eligible” for IOPs does not guarantee future performance of 5P th P or 6P th P Option Periods. In addition to maintaining eligibility through “Very Good” or higher CPARS ratings, the IOPs remain contingent upon the Government’s unilateral right to exercise the three option periods consistent with the requirements of FAR Part 17.207 – Exercise of Options.

Within 45 days of CPARS finalization, at the applicable DP described in Section 17.18.4. below, the ACO will determine whether the SP is eligible or ineligible for a particular IOP. The ACO will notify the SP as soon as practicable upon making the determination.

IOP Implementation

This section illustrates the DPs and IOP eligibility process. There are up to two possible DPs (DP #1 and DP #2) and each is described below. Each DP makes reference to “IOP 1”, and/or “IOP 2”. IOP 1 refers to the 5P th P Option Period, and IOP 2 refers to the 6P th P Option Period. To merit an opportunity to become eligible for IOP 2, the SP must be eligible for IOP 1 first. The below figure is a visual chart depicting the IOP DPs and IOP eligibility process:

23-Aug-18 23-Aug-19 23-Aug-20 23-Aug-21 23-Aug-22 23-Aug-23

Transition Option Option Option Option Option

Phase-In & Period 1 Period 2 Period 3 Period 4 Period 5 Base Period

IOP 1 IOP 2

DP #1 DP #2

***Note: The contract durations depicted in this chart indicates maximum periods of performance if ALL options are exercised IAW FAR 52.217-9.

DP #1.

Eligible. The SP has achieved CPARS ratings of “Very Good” or better in all evaluated performance areas during the base period. The SP becomes eligible for IOP1, therefore, the possible contract duration becomes five years. Although eligible for IOP1, this option may or may not be exercised by the ACO in accordance with FAR 52.217-9. If the SP becomes eligible for IOP 1 at this determination point, the SP establishes an opportunity to become eligible for IOP2 at DP #2.

DP #1

Met Criteria IOP 1 Eligible

(5‐Yr Contract)

DP #2

Met Criteria

IOP 2 Eligible

6‐Yr Contract)

IOP 1 & 2 Ineligible

(4‐Yr Contract) IOP 2 Ineligible

(5‐Yr Contract)

YES YES

N

O

N

O

Ineligible. The SP did not achieve annual CPARS ratings of “Very Good” or better in all evaluated performance areas during the Base period of performance. Since the SP must be eligible for IOP 1 to merit an opportunity to become eligible for IOP 2, the SP becomes ineligible for IOP 2.

DP #2.

Eligible. The SP has achieved CPARS rating of “Very Good” or better in all evaluated performance areas during the Option 1 period. If at decision point #1, the SP was eligible for the 1st incentive option; then the SP now becomes eligible for the 2nd incentive option and the possible contract duration becomes six years. Although eligible, this option may or may not be exercised by the ACO in accordance with FAR 52.217-9.