Schedule_Incentive_CLIN_0005.pdf

CLIN 0005

SCHEDULE & QUALITY INCENTIVE ATTACHMENT

FA8202-18-R-1001

In addition to the profit/fee set forth elsewhere in the contract, the Contractor may be compensated with additional incentive monies as defined by this document. The effective start date for evaluation of adherence to the incentivized schedule is the contract award date. The effective end date for evaluation of adherence to the incentivized schedule is defined differently for First Article (FA) and Low Rate Initial Production (LRIP) articles and is detailed in the separate sections below.

It is anticipated that significant work can begin prior to any requested GFE items being delivered from AMARG. It will be the awardee’s responsibility to acquire/ship GFE from AMARG; delays in requesting shipment from AMARG are not grounds for the incentive clock to stop without proof from the awardee that sole responsibility for the delay rests with the Government and that the delays can be shown to be related to the contractor’s critical path to delivery.

Any earned incentive pay-out will occur after full FA/LRIP acceptance as defined in accordance with SOW Sections 3.4.3.6 and 3.4.3.7. This will ensure proper deductions are made for deficiencies that are discovered upon FA/LRIP installation and testing. Deficiencies are defined as a non-fulfillment of a specified requirement.

In addition to the profit/fee set forth elsewhere in the contract, the Contractor may earn an additional amount of up to $17,000,000 in incentives for delivery criteria as outlined below:

First Article (FA) Incentive: An incentive of $12,000,000 may be earned for delivery of FA unit (all five kits per SOW Section 5.4.2) to Hill AFB within 24 months of contract award. Deductions will be calculated based on calendar months and open issues without approved corrective action as follows:

1) $1,000,000 will be deducted for each month delivery exceeds the 24 month incentivized schedule, e.g., delivery during the 25th month after contract award yields a $11M incentive, delivery during the 26th month after contract award yields a $10M incentive, etc.

a) The delivery deadline dates are calculated on the day of the month corresponding to contract award date. For example, if contract award is on the 20th of February, then incentive deductions will start on 20th of February of the second year, regardless of leap year, or number of days in any given month.

2) $100,000 will be deducted for every issue without effective (defined, justified, and implemented) corrective action in place per Quality Assurance Plan (CDRL A017) and Non-Conformance Plan (CDRL A016) prior to FA acceptance per SOW 3.4.3.6.2.

Low Rate Initial Production (LRIP) Incentive: An incentive of $5,000,000 may be earned for respective deliveries of LRIP units (all five kits per SOW Section 5.4.2) to Hill AFB as follows: LRIP 1 incentivized delivery due date is FA delivery plus 3 months, LRIP 2 incentivized delivery due date is FA delivery plus 5 months, and LRIP 3 incentivized delivery due date is FA delivery plus 7 months. Deductions will be calculated based on calendar months and open issues without approved corrective action as follows:

1) $1,000,000 will be deducted for each month delivery exceeds any monthly deadline stated above, e.g., LRIP 1 and LRIP 2 are delivered at 3 and 5 months, respectively and LRIP 3 delivery occurs at 9 months after FA delivery the incentive is $3M; e.g., LRIP 1, LRIP 2, and LRIP 3 are each delivered at 4 month, 6 months and 8 months respectively the incentive is $2M.

a) The LRIP delivery deadline dates are calculated on the day of the month corresponding to FA delivery. For example, if FA delivery occurred on the 20th of March, then incentive deductions will start for LRIP 1 on 20 June, LRIP 2 on 20 Aug, and LRIP 3 on 20 Oct, regardless of leap year, or number of days in any given month.

2) $100,000 will be deducted for every issue without effective (defined, justified, and implemented) corrective action in place per Quality Assurance Plan (CDRL A017) and Non-Conformance Plan (CDRL A016) prior to LRIP acceptance per SOW 3.4.3.7.

Resolution of corrective actions shall be defined in the following plans as required in the SOW

3.3.2.1. Quality Assurance Plan

3.4.3.2.1. Non-Conformance Plan

3.4.3.6.1. First Article Exhibit Non-Conformances

3.4.3.6.2. First Article Exhibit Acceptance

3.4.3.7. Low Rate Initial Production