Performance_Incentive_Plan.pdf

Performance Incentive Plan

(PIP)

1.0. INTRODUCTION

It has been determined that a Performance Incentive Plan is the best method of effectively enforcing the contract. An incentive reduction will be applied for any personnel shortfall, less than the minimum number of personnel identified in the Key Personnel Chart, for any period lasting more than three weeks (applied daily thereafter). A shortfall is defined as any member(s) that are not able to fulfill the required duties set forth by the Performance Work Statement (PWS) (i.e.

not physically present, not able to perform duties, or does not have the necessary training/certification). This incentive provision is in addition to any other governmental rights contained in FAR 52.246-4, Inspection of Services clause. The contractor will be penalized and assessed based on the below direction.

2.0. PERFORMANCE INCENTIVE PROCEDURES

2.1. Reporting Periods. Reporting periods shall be based on the period of performance in accordance with the structure of the contract line items (CLINs), not to exceed 31 calendar days. Performance Assessment Reports (PARs) shall be partnered with the end of the month invoice (i.e. when the contractor bills at the end of the performance month, a PAR shall be submitted with the invoice). The PAR shall record the Key Personnel retention for the current reporting period and the previous reporting period (i.e. a PAR will account for a total of 61 calendar days). In the event that a previous reporting period does not exist, the contractor will submit for the period being invoiced and state that no previous reporting period is available.

2.2. Key Personnel. The incentive reduction shall be factored upon the Key Personnel categories, and the Government shall withhold a calculated percentage based on the minimum required threshold that the contractor is required to sustain (see Key Personnel Chart below):

Key Personnel Chart

Position Number Needed to Fulfill

Requirement

Location

Fire Chief 1 EAS Fire Fighter 8 EAS Fire Chief 1 WI

Fire Fighter 8 WI Fire Brigade 1 KS

Physician Assistant (PA) 1 EAS Nurse Practitioner or PA 1 EAS

Medical Doctor 1 WI Advanced EMT 1 WI

Airfield Manager 1 EAS Airfield Manager 1 WI

Site Manager 1 EAS Site Manager 1 WI Site Manager 1 KS

Security Guard 2 EAS Key - EAS (Eareckson Air Station), WI (Wake Island Airfield), KS (King Salmon Airport)

DRAFT

2.3. Performance Assessment Report

a. The contractor shall be required to submit a PAR to the Contracting Officer Representative (COR), which will verify the contractor’s Key Personnel minimum threshold requirement for the month being invoiced, prior to the contractor invoicing for any CLIN on the contract. The COR will verify the Key Personnel numbers and report to the Program Manger (PM) and Procuring Contracting Officer (PCO) prior to the contractor’s invoice being accepted. Should the report indicate that the contractor has not maintained the required minimum threshold of Key Personnel, according to the Chart above (for more than twenty-one (21) consecutive calendar days), then the Government will withhold a percentage of the payment for that invoice, and subsequent invoices until such time as the contractor again meets, or exceeds, the minimum threshold. Failure to maintain sufficient Key Personnel will also be reflected in the contractor’s CPARS report.

1. If the contractor does not report that they have fallen below the Key Personnel threshold, the PM, who approves/disapproves personnel entering and leaving the location(s), (WI/KS/EAS), will be able to verify the personnel discrepancy through the Site Arrival Notice requirement. The PM shall notify the PCO if this occurs, in order to document the file.

2. If the contractor does not identify their shortfall in Key Personnel in a timely manner, the CORs will be able to identify through surveillances, and will report this in a Corrective Action Report. The contractor shall be required to account for this shortfall in their PAR.

2.4. Calculation of Key Personnel Deduction.

a. Requirement. The contractor is required to maintain the number of Key Personnel listed in the table above. If the contractor falls below this requirement of Key Personnel for more than twenty-one (21) consecutive calendar days during a reporting period (this includes any carryover into the next reporting period), the Government shall deduct 10% at the end of the month from the FFP CLIN that is affected by this shortfall. An additional 20% shall be deducted for any continuous shortfall past the initial deduction and continuing beyond forty-two (42) consecutive calendar days of the contractor staying below the threshold. The 20% deduction of the FFP CLIN that is affected, by any shortfall lasting longer than forty-two (42) consecutive calendar days, shall be deducted from each additional monthly invoice that the shortfall is not remedied. The deduction assessment is reset upon the contractor filling all required Key Personnel positions in accordance with the table above and Section J, Attachment 14, Paragraph 1.0. If at any time the contractor drops below the required threshold, after being reset, the process will start over again.

b. Formula. Key personnel requirement drops below required minimum threshold, identified in the chart above (for more than twenty-one (21) consecutive calendar days), then the affected CLIN’s total payment is multiplied by .10 to give the amount to be deducted from the CLIN’s invoice.

Initial Performance Assessment below Threshold: Key Personnel drops below requirement for more than twenty-one (21) consecutive calendar days.

Affected CLIN (CLIN 0102) payment x .10 = ($) to be deducted

Performance Assessment continues below Threshold (in conjunction with Initial shortfall): Key Personnel shortfall continues beyond the initial reporting period and past forty-two (42) consecutive calendar days.

Affected CLIN (CLIN 0102) payment x .20 = ($) to be deducted

c. Reset. Upon contractor’s ability to rectify the shortfall of Key Personnel, in accordance with the chart above, then the twenty-one (21) consecutive calendar day counter will start over. This allows the contractor to invoice for the full amount without a deduction until such time that a shortfall situation, past twenty-one (21) consecutive calendar days reoccurs.

3.0. LIQUIDATED DAMAGES PROCEDURES

3.1. Air Station/Airfield Requirement

a. If any shortfall in the Key Personnel threshold affects Air Station/Airfield sustainment, or if the Air Station/Airfield must shut down for any failure to meet the PWS requirements, within the contractor’s control, then the Government shall collect Liquidated Damages (LDs) in accordance with FAR 52.211-11. Liquidated Damages shall be assessed in accordance with the following paragraphs until the Air Station/Airfield is operable by the contractor in accordance with the PWS.

3.2. Eareckson Air Station (EAS)

In the event that the Air Station at EAS has to be shut down, according to 3.1 above, the Government shall assess:

a. Government must provide Equipment and Personnel -

Mobilization of Equipment and Personnel - $300,000.00 Demobilization of Equipment and Personnel - $300,000.00

b. Government is able to use Contractor’s Equipment and only provide Personnel –

Mobilization of Personnel - $150,000.00 Demobilization of Personnel - $150,000.00

c. Rate charged to Contractor for each day that Personnel are provided –

Daily rate - $5,000.00

Amounts listed above are on a “worst case” scenario and shall be set as the “not to exceed” amounts to be charged to the contractor per occurrence. Actual amounts shall be billed to the contractor based on the scenario, at the time that the Government has to sustain the Air Station/Airfield, in the event the contractor fails to operate in accordance with the PWS. Mobilization and demobilization amounts are based on the availability of airlift support and regulations for personnel sustainment. The Daily Rate is based on the Joint Federal Travel Regulation guidelines for maximum personnel on location.

3.3 Wake Island Airfield

In the event that the Airfield at WI has to be shut down, according to 3.1 above, the Government shall assess:

a. Government must provide Equipment and Personnel -

Mobilization of Equipment and Personnel - $600,000.00 Demobilization of Equipment and Personnel - $600,000.00

b. Government is able to use Contractor’s Equipment and only provide Personnel –

Mobilization of Personnel - $300,000.00 Demobilization of Personnel - $300,000.00

c. Rate charged to Contractor for each day that Personnel are provided –

Daily rate - $5,000.00

Amounts listed above are on a “worst case” scenario and shall be set as the “not to exceed” amounts to be charged to the contractor per occurrence. Actual amounts shall be billed to the contractor based on the scenario, at the time that the Government has to sustain the Air Station/Airfield, in the event the contractor fails to operate in accordance with the PWS. Mobilization and demobilization amounts are based on the availability of airlift support and regulations for personnel sustainment. The Daily Rate is based on the Joint Federal Travel Regulation guidelines for maximum personnel on location.

3.4. Hold-Harmless.

The contractor has the right to allow the Government to use any equipment necessary to sustain the Air

Station/Airfield under a Hold-Harmless agreement. This agreement shall reduce the amount of LDs assessed toward the contractor during any period in which the Air Station/Airfield is being operated by the Government.

This shall ensure that the Government is released of any responsibility toward the equipment being utilized and shall guarantee the contractor a reduced LD rate.

4.0. RETENTION PLAN PROCEDURES

The Government will utilize the Retention Plan to determine how funds are being dispersed towards incentivizing Key Personnel on this contract. The contractor shall be required to submit an annual Deliverable (A049), see below, that shall account for any monetary amount utilized to incentivize Key Personnel on this contract, up to $1,000,000.00, for each performance year of service with the exception of Phase-In and Phase-out. This Deliverable will allow the Government the opportunity to assess any amount that the contractor has used toward their Retention Plan. In the event that all of the $1,000,000.00 set aside for the purpose of retention is not fully utilized, the Government shall equitably adjust the Retention Plan CLIN to deduct any funds that were not expended, up to the amount aforementioned.

4.1. Deliverable (A049)

Deliverable, A049, will be required from the contractor based on the implementation of the Retention Plan submitted in the proposal. A049 will demonstrate how the contractor allocated the $1,000,000.00 in funding towards the personnel performing on the contract. A049 shall be submitted not later than 10 days after the timeframe agreed upon, based on the proposed retention plan, in order for the Government to assess how funding was allocated. If A049 is not submitted by the contractor in a timely manner (10 days after the timeframe agreed upon), then the Government shall assume that the funding was not allocated during that performance period. A049 shall list the number of personnel receiving compensation according to the retention plan, names of personnel, amount distributed to each person, frequency of distribution to each person, performance period covered for the retention of personnel, and any other key factors that will help the Government assess the utilization of the Retention Plan. The contractor shall be remunerated for their Retention Plan efforts based on the above language, not to exceed $1,000,000.00. Any amount exceeding the $1,000,000.00 set by the Government shall be the sole responsibility of the contractor.