23_Atch_15_Performance_Incentive_Plan_(29_Apr_09).doc

ATTACHMENT 15: PERFORMANCE AND SCHEDULE INCENTIVE PLAN

GPS Advanced Control Segment (OCX)

Attachment 15: Performance and Schedule Incentive Plan for

FA8807-09-R-0003

29 April 2009

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PERFORMANCE AND SCHEDULE INCENTIVE PLAN

For

GPS Advanced Control Segment (OCX)

Contractor Name TBD

Contract Number TBD

COORDINATED:

JANET W. GRONDIN, Lt Col, USAF

DATE

Commander, GPAS

APPROVED:

DAVID M. MADDEN, Col, USAF

Commander, GPSW

JOY M. WHITE, SES, DAF

Director of Contracting, SMC

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1. Introduction

a. This incentive plan is one part of a three part incentive program for this GPS Advanced Control System (OCX) contract. The incentive covered by this plan is a performance and schedule incentive and represents approximately one-third of the OCX fee pool. The other incentives include award fee and the incentive fee associated with the Cost-Plus Incentive Fee (CPIF) contract type. Each incentive stands alone and has its own governing provisions. Award fee will be paid according to the terms in contract Attachment 5, “Award Fee Plan”. The CPIF incentive fee will be paid according to FAR 52.216-10, “Incentive Fee”. Award Fee and the CPIF incentive fee are not discussed in or governed by this plan.

b. The Performance and Schedule Incentive is the basis for the Global Positioning Systems Wing’s (GPSW) evaluation of the Contractor’s performance against annually established objective milestones and of the timely delivery of OCX Block 2.0. There are two principal goals of this plan. The first is to motivate optimum Contractor performance and to emphasize mission success. The second is to motivate on-time delivery of OCX Block 2.0 to the operational community to ensure support to GPS IIIA.

c. Performance incentives shall only be earned under the conditions defined in this plan and shall only be retained in their entirety based upon the Government’s acceptance (DD250) of CLIN 0200, “OCX Block 2.0 Development” no later than 60 calendar days after the delivery date for CLIN 0200 in Section F of the contract.

2. Evaluation Areas and Criteria

a. Performance Incentive Periods and Pool. The performance incentive emphasizes Contractor effort on R&D development CLINs 0100, 0200, 0300, 0350, 0600, and 0710. The periods and associated available incentive pool are shown in Table 1, “Performance Incentive Periods and Amounts”. The amount earned for each period will be added by the Government at the end of each period.

Table 1 Performance Incentive Periods and Amounts

15 Aug 10

Total

* To be inserted by the Government after receipt of proposals.

** To be inserted by the Government after final determination of milestone completion.

b. Performance Milestones. Prior the beginning of each performance incentive period, the Government will unilaterally select approximately four performance incentive milestones and the amount of the performance incentive fee pool allocated to each milestone based on importance to mission success, program progress, technical difficulty, or effort required. These milestones and the amounts of the annual performance incentive pool allocated to each will be listed in Annex 1, Table 1-1, “Performance Incentive Milestones by Period”. The amount earned for each milestone will be added to the table by the Government at the end of each period. The amounts earned will also be listed in Table 1. Notional completion dates are for reference only and are not part of the success criteria.

c. Milestone Completion. To earn the performance incentive for each milestone, the Contractor must successfully accomplish the milestone event during the evaluation period (See Table 1) in accordance with the established detailed exit criteria defined in Annex 1, Table 1-2 “Milestone Exit Criteria” for each milestone. Partial success will result in no performance incentive earned for a milestone. Failure to successfully complete a milestone event during the period will result in loss of the associated performance incentive amount. There shall be no rollover of lost incentive amounts. Table 1-2 will be updated prior to the beginning of each performance incentive period in accordance with the procedure in Section 2.e below.

d. Government Evaluation and Payment. The Contractor shall notify the PCO by letter upon completion of each milestone event. The OCX Program Manager will evaluate the completion of each milestone using the criteria in Table 1-2. If the OCX Program Manager determines that the milestone has been accomplished, he/she will recommend approval of the milestone to the GPSW Commander. If the GPSW Commander makes the final determination that the Contractor successfully completed the milestone, he/she will direct the PCO to notify the Contractor and to issue a contract modification, within 30 days of the determination, adjusting the value of the contract and obligating 100% of the amount of performance incentive earned for that milestone in accordance with Table 1-1.

e. Updates to This Plan. During the last quarter of a performance incentive period, the PCO shall request the Contractor provide recommendations to the OCX Program Manager for the next period’s milestones, weighting, and detailed evaluation criteria. The Program Manager shall consider the Contractor’s input but shall not be bound by it. The Program Manager shall recommend the milestone events, weightings, and associated exit criteria to the GPSW Commander who will make the final decision and direct the PCO to issue a unilateral modification updating this plan to incorporate the decision. The Commander may also direct other changes to this plan which the PCO may incorporate unilaterally prior to the beginning of the performance incentive period.

3. Schedule Incentive

a. Background. The second main objective of this Performance and Schedule Incentive Plan is to emphasize the need to deploy OCX Block 2.0 as quickly as possible to support warfighter and civil needs for new signals. This part of the incentive plan focuses on that objective.

b. Amounts at Risk. The total of all Performance Incentives earned under this plan is shown in the “Total” cell for “Earned Performance Incentive” of Table 1. This total amount is at risk under the schedule incentive portion of this plan.

c. Requirement. The parties agree that the amount shown in the “Total” cell for “Earned Performance Incentive” of Table 1 represents the estimated value to the Government of having OCX Block 2.0 delivered no later than 60 calendar days after the delivery date for CLIN 0200 in Section F of the contract. As stated in Section 3.b above, this amount is at risk of having to be repaid to the Government if the final acceptance of Block 2.0 occurs more than 60 calendar days after the delivery date in Section F. The delivery date for CLIN 0200 is specified in Section F of the contract. If the Government has signed the DD250 for CLIN 0200 any time on or before 60 calendar days after the delivery date in Section F, the Contractor shall retain all performance incentives earned on this contract. However, if the Government signs the DD250 for CLIN 0200 more than 60 days after the Section F delivery date, the Contractor shall remit to the Government 10% of all earned incentive each 30-day period that the DD250 remains unsigned until either Block 2.0 is delivered or the Contractor has remitted to the Government all performance incentives earned under this Attachment, whichever occurs first. The requirement to return 10% of the earned incentive is effective on the first day of the 30-day period regardless of how many days into that period CLIN 0200 is ultimately delivered. See Annex 2 for sample calculations.

Annex 1 Performance Incentive Evaluation Criteria 1-1 Performance Incentive Milestones

In accordance with Section 2.e of this plan, the GPSW Commander will identify performance incentive milestones and their weightings for each performance incentive period prior to the beginning of that period. The PCO will incorporate this information into Table 1-1 prior to the beginning of each performance incentive period. The sum of the weightings for each period must add up to 100%.

Table 1-1 Performance Incentive Milestones by Period

Date Period

Milestone

Weighting

Period 1 Total

* To be inserted by the Government after receipt of proposals.

** To be inserted by the Government after final determination of milestone completion.

1-2 Milestone Exit Criteria

Table 1-2 below defines the exit criteria for each performance incentive milestone identified in Table 1-1 above. Table 1-2 will be updated prior to the beginning of each performance incentive period in accordance with the procedure in Section 2.e of this plan.

Table 1-2 Milestone Exit Criteria by Period

Title: Staffing Ramp-Up Complete

Purpose: *

Exit Criteria: *

Title: Block 1.0 & 2.0 Preliminary Design Review Complete

Exit Criteria: *

Title: Block 1.0 Critical Design Review Complete

Exit Criteria: *

Title: To be completed by Offeror

Exit Criteria: *

* To be completed by the Offeror Annex 2 Sample Calculations

2-1 Sample Performance Incentive Calculations

In this sample calculation, assume the Contractor completes Block 1.0 and 2.0 IBR on April 5, 2010 and Block 1.0 and 2.0 SSR on May 10, 2010 but does not complete Block 1.0 and 2.0 PDR until 12 September 2010.

15 Aug 10

Date Period

Milestone

Weighting

Period 1 Total

2-2 Sample Schedule Incentive Calculations

In this sample calculation, assume the delivery date for CLIN 0200 in Section F is 31 July 2013. The Contractor has earned performance incentive as follows:

15 Aug 10

Total

The Schedule Incentive will be calculated as follows:

· If the Contractor delivers Block 2.0 on 27 September 2013, it will retain all of its earned performance incentive ($17,250,000).

· If the Contractor delivers Block 2.0 on 31 December 2013, it will lose 40% of its previously earned performance incentive ($6,900,000) and will retain $10,350,000.