22Nov2019_Objective_Performance_Incentive_Plan.docx

Launch Enterprise (SMC/ECL) Systems Engineering & Integration (SE&I) Services

OBJECTIVE PERFORMANCE INCENTIVE PLAN

Solicitation # FA8811-20-R-0003

Date: 22 November 2019

Prepared by:

Launch Enterprise (SMC/ECL) Los Angeles Air Force Base, California 90245

Revision History

Table of Contents

1.0 INTRODUCTION

This plan establishes SMC/ECL’s performance incentives for the Systems Engineering & Integration-2 (SE&I-2) contractor (hereafter referred to as “the Contractor” or “SE&I 2 Contractor”. In addition to fixed fee that will be paid for the CPFF CLINs, the Contractor will have the opportunity to earn a performance incentive for meeting the criteria outlined in this plan. The available objective performance incentives will be in addition to the fixed fee and shall not exceed the statutory limits stated in FAR 15.404-4 when the performance incentive and fixed fee are combined. Fixed fee shall be payable per FAR 52.216-8. The performance incentive earning shall be payable per this incentive plan. Refer to Annex A of this incentive plan for the earnable performance incentive pools for the base and, if exercised, the option years.

This plan provides the policies and procedures used to determine the objective performance incentive earning for the SE&I-2 Contract. This Incentive Plan is applicable to the following SE&I-2 CPFF CLINs (0100-0105) and, if exercised, their respective option periods:

The SE&I Contractor’s overall total Objective Performance Incentive percentage shall not exceed 7% of the estimated cost of the CPFF CLINs that excludes the Cost of Money. This document will demonstrate how the total incentive pool is broken down into its component parts and how those parts are calculated.

2.0 GOAL

The purpose of this plan is to encourage the SE&I-2 Contractor to provide optimal performance and ensure that the Government achieves the following goals: Mission Success, and Assured Access to Space. The following goals for this contract were derived from the SMC/ECL goals and its relation to the performance on this contract:

1. Ensure Key personnel with appropriate qualifications are in place in time and minimize their attrition;

2. Ensure appropriate level of personnel with appropriate qualifications are in place to fulfill the requirements, and their impact to Government operations is minimized;

3. Provide timely, high quality technical support and forge solid working relationships that enable mission success and Assured Access to Space;

4. Ensure program and proprietary data is protected and security incidents are eliminated.

3.0 INCENTIVE STRUCTURE AND INCENTIVE PERIOD

The total objective performance incentive pool shall not exceed a total of 7% of the estimated cost of the CPFF CLINs that excludes the Cost of Money. The allocation of percentages are shown below. The performance incentive pool will be broken down into two components and shall not exceed the associated percentages. The two components were derived from SMC/ECL goals and objectives, and its relation to the performance objectives on this contract.

The Compromised Information Incidents criteria is assessed on a 100% - 0% gradation of the earned incentive. The earned incentive in 7.2 – 7.3 will be multiplied by the earned percentage from 7.1. A 0% in 7.1 will forfeit the Contractor of any performance incentive for the respective period of evaluation. A sample calculation is provided in Annex A of this document.

The Incentive Plan at contract award establishes the incentive criteria for the Base Year and Option Years. The Base Year Incentive plan at contract award is written to emphasize seamless handoff with minimal disruption. The criteria for each option year may change and the Government may provide the revised Incentive Plan prior to each option exercise. SMC/ECL has the unilateral authority to change the incentive criteria prior to the exercise and award of an option period. The decision to revise the incentive criteria shall not be subject to the Disputes Clause or the Contract Disputes Act.

4.0 Frequency of incentive payment determination

The performance incentive pool will be calculated and paid annually. SMC/ECL’s payment determination is expected to be completed no later than 60 calendar days after the conclusion of the base and option periods of performance in accordance with the terms of this performance incentive plan.

5.0 INDIVIDUAL AND ORGANIZATIONAL RESPONSIBILITIES

The incentive assessment organization consists of an Incentive Approving Official (IAO), an Incentive Reviewing Official (IRO), a Procurement Contracting Officer (PCO), and Performance Monitors.

5.1 Incentive Approving Official (IAO)

The Director, Launch Enterprise (ECL), is the IAO. The IAO approves all substantive and non-administrative changes upon recommendation from both the Program Manager (PM) and PCO. The IAO reviews the IRO recommendation and determines approval/ non-approval of the performance incentives based on the compilation of pertinent data affecting the Contractor's performance in meeting performance incentive criteria.

5.2 Incentive Reviewing Official (IRO)

The IRO is the SMC/CoS and will serve as the reviewing official. The IRO reviews the Performance Incentive Plan and recommends approval of the performance incentives to the IAO based on his or her compilation of pertinent data regarding the Contractor’s performance in meeting the incentive criteria.

The IAO may also review the Contractor’s report(s) in assessing the Contractor’s compliance with this plan. The IRO provides a recommendation to the IAO concurring that the criteria of this plan have been met or non-concurring and providing rationale for their non-concurrence.

5.3 Procurement Contracting Officer (PCO)

The PCO is the liaison between the Contractor and Government personnel. The PCO prepares and distributes contract funding modifications obligating the appropriate amount of performance incentive earned by the Contractor, and maintains appropriate incentive assessment documentation as part of the official Government contract file.

The PCO will determine if changes to the plan are substantive or non-substantive. The PCO approves all non-substantive changes to the plan. The IAO approves all substantive changes to the Performance Incentive Plan.

5.4 Performance Monitors

Performance monitors are assigned to observe and maintain records of the Contractor’s performance. The performance monitors are assigned to specific criteria while they are responsible for monitoring and briefing the status to the IRO.

The performance monitor will compile and maintain records of the Contractor’s performance throughout the evaluation period. The Contracting Officer Representative (COR) in conjunction with the Program Managers in performing offices will maintain oversight of the performance monitors throughout the evaluation period.

6. INCENTIVE POOLS

Reference Annex A to this plan on instructions to complete. When completing, Offerors shall only include the Cost Plus Fixed Fee CLINs (excluding cost of money) (XX01-XX05).

7.0 INCENTIVE CRITERIA

7.1 Compromised Information Incidents

As defined in DFARS 252.204-7008, 252.204-7009, and 252.204-7012:

“Compromise” means disclosure of information to unauthorized persons, or a violation of the security policy of a system, in which unauthorized intentional or unintentional disclosure, modification, destruction, or loss of an object, or the copying of information to unauthorized media may have occurred.

“Contractor attributional/proprietary information” means information that identifies the contractor(s), whether directly or indirectly, by the grouping of information that can be traced back to the contractor(s) (e.g., program description, facility locations), personally identifiable information, as well as trade secrets, commercial or financial information, or other commercially sensitive information that is not customarily shared outside of the company.

“Controlled technical information” means technical information with military or space application that is subject to controls on the access, use, reproduction, modification, performance, display, release, disclosure, or dissemination. Controlled technical information would meet the criteria, if disseminated, for distribution statements B through F using the criteria set forth in DoD Instruction 5230.24, Distribution Statements on Technical Documents. The term does not include information that is lawfully publicly available without restrictions.

The Contractor shall ensure that no controlled technical information or Contractor attributional/proprietary information (e.g. Launch Service Contractors’ information) is compromised in violation of DFARS 252.204-7008, 252.204-7009, 252.204-7012 or the SE&I-2 Contractor Non-Disclosure Agreements or Associate Contractor Agreements. Compromising controlled technical information or Contractor attributional/proprietary information can potentially cause litigations and expose the US Government to liabilities.

To earn the performance incentive on this contract, the SE&I-2 Contractor shall report directly to the PCO and Program Manager (in addition to any reporting requirements under this contract) all compromised information in accordance with DFARS 252.204-7008, 252.204-7009, 252.204-7012 and shall have:

A. Zero (0) compromised information incidents – 100% of the potential performance incentive is available for 7.2 – 7.3 criteria B. One (1) compromised information incident – 80% of the potential performance incentive is available for 7.2 – 7.3 criteria C. Two (2) compromised information incident – 50% of the potential performance incentive is available for 7.2 – 7.3 criteria D. More than two (2) compromised information incident – 0% of the potential performance incentive is available for 7.2 – 7.3 criteria

The Contracting Officer is the final arbitrator of whether or not an event will be assessed as an incident. Furthermore, should any incident rise to such a significant level that the Government is exposed to serious liability and litigation risk, then the Contracting Officer can apply any multiplier to the potential performance incentive available for 7.2 and 7.3 criteria.

Per the SE&I-2 PWS, Section 2, Applicable Documents, Compliance, the SE&I-2 Contractor shall comply with all security requirements as described in the DD Form 254. Any security violations will result in Corrective Action Report (CAR).

If a compromised information incident occurs, the SE&I-2 Contractor can provide evidence that the incident is not due to SE&I-2 Contractor negligence, faulty processes, or other factors within the SE&I-2 Contractor’s control. The Government will consider the SE&I-2 Contractor’s written justification and determine if the incident is or is not counted against the Performance Incentive criteria.

7.2 Staffing Stability

The performance incentive for this section shall be earned through the accomplishment of the below criteria. The maximum performance incentive that can be earned in this section is 4% out of the 7% reserved.

All performance levels in between tiers of performance incentive criteria will be awarded at the lower criteria. For example, 97% staffed on day 31 after ATP, which falls between 95% staffed and 98% staffed (B and C tiers below) will earn the 95% tier which is 0.25% of the performance incentive pool.

1) FOC is defined as day 31 from ATP. Criterion to earn the performance incentive in “FOC Performance” area – for the Contractor to be eligible to earn the performance incentive in this area, the following criteria shall be met:

A) 100% staffed at FOC on day 31 after ATP – 1% of the performance incentive pool B) At least 98% staffed at FOC on day 31 after ATP – 0.75% of the performance incentive pool C) At least 95% staffed at FOC on day 31 after ATP – 0.25% of the performance incentive pool D) Less than 95% staffed at FOC on day 31 after ATP – 0% of the performance incentive pool

Note: The staffing level will be calculated as a percentage of the positions in the Contractor proposed staffing matrix (Attachment 8, Staffing Plan to the contract).

For areas 2 and 3 below, all Key personnel and all Non-Key personnel shall have qualifications and experience equivalent to that in Contractor’s proposed staffing matrix (Attachment 8, Staffing Plan to the contract) in order to be considered for the performance incentive unless COR and PCO have in writing exempted/relaxed the requirement for certain positions. The PCO will be the final decision authority for considering exigent circumstances on a case-by-case basis. Exigent circumstances do not include turnover due to other employment opportunities.

Retention will be calculated as:

((# proposed personnel – # of positions turned over) / (# proposed personnel)) * 100

2) Criterion to earn the performance incentive in “key personnel retention” area – for the contractor to be eligible to earn the performance incentive in this area, the following criteria shall be met:

A) 0 Key personnel attrition – 1.5% of the performance incentive B) 1 Key personnel attrition – 1% of the performance incentive C) More than 1 key personnel attrition – 0% of the performance incentive

Note. During the calculation for retention of key personnel, the following will be excluded and not counted against the Contractor’s retention rates:

3) Criterion to earn the performance incentive in “Non-key personnel retention” area – for the Contractor to be to earn the performance incentive in this area, the following criteria shall be met:

A) At least 95% retention – 1.50% of the performance incentive B) At least 90% retention – 0.75% of the performance incentive C) Less than 90% retention – 0% of the performance incentive

Note. During the calculation for retention of non-personnel, disability or death, and timely replacements that are provided within less than 10 business days of attrition will not be counted against the Contractor’s performance.

7.3 Customer Satisfaction Ratings

Customer satisfaction will be rated in the following sub-areas:

1. Validated formal complaints

The Contractor shall collaborate with the Government, including other contractors and Federally Funded Research and Development Contactor (FFRDC) (e.g. Aerospace) providing direct support to the Government, and industry partners (collectively called mission partners) to monitor Government activities and identify integration opportunities to support the Government in achieving and maintaining Assured Access to Space. To receive credit in this area, the Contractor should minimize incidences of non-cooperation with mission partners resulting in degradation of relationships, delay in schedule, or reduction in performance of any kind. The PCO will have unilateral authority to determine if a mission partner’s complaint is valid.

All complaints shall be reported to a COR by the Government representatives with minimum rank of O-5 or GS-14 equivalent. PCO determination of the validity of complaint will be final. Criterion to earn the performance incentive in this area is listed below:

A) 0 valid complaints – 1.50% of the performance incentive pool B) 1 valid complaint – 1.25% of the performance incentive pool C) 2-3 valid complaints – 1.00% of the performance incentive pool D) 4-5 valid complaints – 0.5% of the performance incentive pool E) More than 5 valid complaints – 0% of the performance incentive pool

2. Innovative Solutions

The Government defines innovation as any effort which significantly improves a process, methodology, or staffing mechanism that results in reduction to cost, schedule, or enhances performance. The Government will require that the Contractor provide a list of all action(s) that they have accomplished during the period of performance that they perceived to be innovations within 2 weeks from the last day of PoP. The Contractor’s input will be sent to the Government customers for validation through a survey of all Government customers (O-5 or GS-14 equivalent or higher Government employee) on the contract. Government customer validation must be obtained prior to considering any Contractor input as innovation. The survey method and documentation of the results shall be at the discretion of the Government. The Government will have unilateral authority to determine if the Contractor’s effort resulted in an innovation. Criterion to earn the performance incentive in this area is listed below:

A. More than 5 innovations – 1.50% of the performance incentive pool B. 4 – 5 innovations – 1.25% of the performance incentive pool C. 2 – 3 innovations – 0.75% of the performance incentive pool D. 1 innovation – 0.25% of the performance incentive pool E. 0 innovations – 0% of the performance incentive pool

7.4 Option Period Incentive Criteria

Prior to the exercise of each of the yearly option periods, the Government may unilaterally establish incentive criteria different from the above-listed incentive criteria. After the exercise of each of the yearly option periods, the Government may propose for bilateral modification incentive criteria that differs from the above-listed incentive criteria.

Incentive for all Option periods are expected to be consistent with the above with the exception of the FOC Performance criteria.

8.0 SURVEILLANCE METHODS

8.1 Surveillance

The Government may inspect and evaluate, up to 100%, the Contractor’s results and overall performance to determine acceptability.

8.2 Customer Comment:

A customer is defined as supported Government organizations/units. Any customer that observes unacceptable services, either incomplete or not performed, for any of the above performance objectives should immediately contact the SMC/ECL, 30th OG and 45th OG Program Manager. Customer comments and complaints will be considered in assessing the appropriate performance incentive earned by the Contractor.

8.3 Third Party Audits:

Contractor evaluation by a third party organization that is independent of SMC/ECL (i.e. DFAS, DCAA, DCMA) will be considered in assessing the appropriate performance incentive earned by the Contractor. All documentation supplied to, and produced by, the third party should be made available to SMC/ECL by the third party.

9.0 INCENTIVE PAYMENT DETERMINATION

Incentive payments shall be made at the end of the base or option periods in accordance with the terms of this performance incentive plan. The Contractor shall submit a written statement to the PCO justifying any potentially earned performance incentive. This statement should include all applicable evidence needed for the Government to determine if the Contractor has met the performance incentive plan.

In the event the Contractor satisfied all of the of the incentive criteria, the full performance incentive amount shall be earned. If, due to factors beyond the Contractor’s control or factors that might otherwise contribute to a schedule delay and the Contractor is unable to meet any of the criteria, the Contractor shall document such situations in writing to the SMC/ECL PCO and PM. The PCO will consider the Contractors written justification and determine if the justification warrants that the Contractor will not be penalized.

After considering all criteria noted in this performance incentive plan and inputs from the PM, PCO, IRO, germane Contractor written reports, and other relevant information, the IAO will unilaterally determine whether the Contractor met or failed to meet the criteria established herein. Within ten (10) business days of the PCO’s receipt of the IAO’s determination, the PCO will issue: (1) a contract modification obligating the appropriate amount of incentive or (2) issue formal notification to the Contractor advising of SMC/ECL’s determination.

10.0 Performance Incentive Plan Change Procedure

Prior to the exercise of an option period, SMC/ECL may unilaterally change any provision of the performance incentive plan. The decision to change the incentive criteria shall not be subject to the Disputes Clause or the Contract Disputes Act. All substantive changes to this performance incentive plan following the exercise of an option period shall be via bilateral modification of the contract.

11.0 TERMINATION

Termination for Cause will be governed by FAR Clause 52.249.6, Termination (Cost-Reimbursement). Upon Termination for Cause, SMC/ECL will not pay an incentive for partially completed criteria.

In the event SMC/ECL terminates this contract for convenience, the Contractor shall submit a Termination Proposal subject to negotiation and agreement of the parties. Any incentive payment determinations made by the IAO prior to the termination for convenience shall not be affected by the termination for convenience decision.

ANNEX A– Contractor Proposed Performance Incentive

The Offeror shall complete tables for the base period and each option period and insert the information in paragraph 6 of this incentive plan.

Base Period Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0100-0105): $____________

Incentive Criteria

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 1 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0200-0205): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 2 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0300-0305): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 3 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0400-0405): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 4 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0500-0505): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 5 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0600-0605): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 6 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0700-0705): $____________

Incentive Criteria

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 7 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0800-0805): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 8 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 0900-0905): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Option Year 9 Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 1000-1005): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Performance Incentive for Extension of Services Period Pool

Total Estimated Cost (excluding cost of money) (CPFF CLINs 1100-1105): $____________

Incentive

Weighting To be Proposed by Offeror Incentive Criteria (Calculated by multiplying the Weighting by the Incentive Pool)

Sample Performance Incentive Calculation:

(75% of Total)

(100% of Total)

Assumptions: Total incentive pool is $700K, the Contractor earned 75% in 7.2 and 100% in 7.3 and has one compromised information incident which reduced total incentive to 90% of the earned incentive. Therefore, the Contractor earned $540K for this incentive period.

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