CAMMO_Notional_Incentive_Plan_Ver_1_0.pdf

FA8823-13-R-0009

ATTACHMENT X: PERFORMANCE INCENTIVE PLAN

Consolidated Air Force Satellite Control Network (AFSCN) 1

Modifications, Maintenance, and Operations (CAMMO) 2

Contract 3

Attachment X: Performance Incentive Plan 4

31 Jan 2014 5

[This page intentionally left blank] 21

APPROVED BY: 23

____________________________________ Date: __________________ 28 JANET W. GRONDIN, Col, USAF 29 Chief, Spacelift Range and Network Systems Division 30 I do/do not delegate the role of Incentive Approving Official (IAO) to the Incentive Certifying 37 Official (ICO). 38 ____________________________________ Date: __________________ 42

ELLEN M. PAWLIKOWSKI 43

Lieutenant General, USAF 44 Air Force Program Executive Officer for Space 45

[This page intentionally left blank] 60

Revision Change Record 62

Revision Eff. Date Description Initials

Contents 66

1. Introduction ............................................................................................................................................ 7 67

2. Roles and Responsibilities ................................................................................................................... 8 68

3. Quality Performance Index (QPI) ........................................................................................................ 9 69

4. QPI-Based Adjustment Methodology.................................................................................................. 9 70

5. Changes to the Performance Incentive Plan ................................................................................... 10 71

6. Contract Termination ........................................................................................................................... 10 72

Appendix A: Performance Incentive Metrics ........................................................................................ 11 73

Appendix B: QPI Determination and Sample Calculations ................................................................ 15 74

Appendix C: Historical Record of QPI Determination ......................................................................... 19 75

1. Introduction 81

The Consolidated Air Force Satellite Control Network (AFSCN) Modifications, 82

Maintenance, and Operations (CAMMO) Performance Incentive Plan outlines the 83 incentive program for the CAMMO Contract. The goal of the CAMMO Performance 84

Incentive Plan is to ensure delivered services result in acceptable levels of 85 performance. This plan provides the policies and procedures used to determine the 86

CAMMO contractor’s profit as a percentage of the target profit based on the contractor’s 87 demonstrated performance. 88

The CAMMO contractor’s profit will be determined through the use of Quality 89

Performance Indexes (QPIs). The overall QPI is split into four quarterly QPIs which 90 facilitate the calculation of quarterly profit payments to the CAMMO contractor. If the 91 contractor fails to meet minimum levels of acceptable performance, as defined in the 92

Performance Incentive Metrics (PIMs) identified in Appendix A, the QPI calculation will 93 result in a loss of profit, to include the potential for having the quarterly profit reduced to 94 zero. 95

Additionally, in conformance with FAR Clause 52.216-16, the overrun/underrun share 96 will be evaluated on an annual basis for the Fixed-Price Incentive Firm (FPIF) Target 97

CLIN(s) XXXX. This will incentivize the CAMMO contractor to seek out opportunities for 98 cost savings. 99

The contractor’s underrun share will only be earned if satisfactory performance has 100 been demonstrated over the course of the contract year. Satisfactory performance shall 101 be defined by the overall QPI (the sum of the quarterly QPIs) and set to a level greater 102 than or equal to 70%. In the event that the overall QPI drops below this threshold for 103 satisfactory performance, any underrun share will not be earned by the contractor. If 104 the overall QPI meets or exceeds the standard for satisfactory performance, the 105 contractor will earn its portion of the underrun share. 106

The appendices to this document provide descriptions of the performance metrics, how 107 to calculate the QPIs, and example calculations. Appendix A describes the PIMs 108 including their minimum levels of performance, contributions to the QPIs, and how the 109 various QPIs are calculated. Appendix B provides examples of how the quarterly QPIs 110 are determined based on demonstrated performance levels of each PIM. 111

Appendix C shall contain a historical record of the QPI earned by the CAMMO 112

Contractor over the life of the contract. It will be updated by the PCO annually to reflect 113 the QPIs earned by the contractor over the course of the previous contract year. 114

2. Roles and Responsibilities 115

This section describes the roles and responsibilities associated with the development 116 and execution of this CAMMO Performance Incentive Plan. 117

Incentive Approving Official (IAO) 118

The Air Force Program Executive Officer for Space (AFPEO/SP) will serve as the IAO. 119

The AFPEO/SP may delegate the IAO role to the Spacelift Range and Network 120

Systems Division Chief. The IAO approves the CAMMO Performance Incentive Plan 121 and any significant changes to be made to it upon the recommendation of the Incentive 122

Certifying Official (ICO) and Procuring Contracting Officer (PCO). 123

Incentive Certifying Official (ICO) 124

The Spacelift Range and Network Systems Division Chief will serve as the ICO. The 125

ICO reviews the CAMMO Performance Incentive Plan and recommends approval of the 126 performance incentives to the IAO based on compilation of pertinent data regarding the 127 contractor’s performance in meeting performance incentive criteria. 128

CAMMO Program Manager (PM) 129

The CAMMO PM oversees the contractor and is responsible for evaluating the 130 contractor’s performance. The CAMMO PM presents the results of the government’s 131 evaluation of the CAMMO contractor’s performance to the ICO. The CAMMO PM also 132 recommends any significant changes to be made to the CAMMO Performance Incentive 133

Plan to the ICO, including changes to appendices. 134

Procuring Contracting Officer (PCO) 135

The PCO is the formal representative of the government for the CAMMO contract and 136 acts as a liaison between the government and the contractor. The PCO formally 137 communicates changes to the CAMMO Performance Incentive Plan to the contractor via 138 contract modifications. The PCO also acts as the QPI Determination Official, being 139 responsible for the determination of the quarterly QPIs based on inputs from the 140

Government Surveillance Team. 141

Government Surveillance Team 142

The Government Surveillance Team is comprised of representatives from the AFSCN 143

Program Office (PO), the 50th Space Wing (50SW), and the Contracting Office [to 144 include the Contracting Officer Representatives (CORs)]. This team is responsible for 145 scoring the contractor’s performance on the performance metrics that are used to 146 determine the QPIs. Scoring of the performance incentive metrics is conducted IAW the 147 procedures described in Appendix A. The results of the scoring process are submitted 148 to the PCO for evaluation and determination of the quarterly QPI. 149

3. Quality Performance Index (QPI) 150

The CAMMO Performance Incentive Plan describes the methodology for determining 151 the QPIs. The QPIs are determined by scoring the individual PIMs based upon 152 contractor performance and assigning the appropriate score to each. 153

The PIMs are evaluated over the course of the evaluation period and compared to the 154 standards listed in Appendix A. Based on the observed performance, the PIMs are 155 assigned a score for the evaluation period. At the end of the quarter, the scores earned 156 for all evaluation periods within the quarter are summed to determine the quarterly QPI. 157

Examples of these calculations are in Appendix B. 158

In the situation where the contractor has met all PIMs for the entire contract year, the 159

QPI would be 100% (25% for each quarter), indicating that the contractor would receive 160

100% of the target profit. If the contractor has failed to meet one or more PIMs, the QPI 161 would be less than 100%. 162

The PIM table in Appendix A identifies how often they are assessed over the course of 163 the evaluation period (e.g. monthly or quarterly) and the location of the source of the 164 standard. The PIM score sheets will be filled out by the Government Surveillance 165

Team. These will be used to determine the QPI. 166

4. QPI-Based Adjustment Methodology 167

This section describes the adjustments made to the contractor’s profit through 168 application of the QPI. 169

In concert with the contractor’s submission of data in accordance with FAR 52.216-170

16(c), the government will determine the quarterly QPI in accordance with the 171 procedures described in Section 3 of this Performance Incentive Plan. As a result of the 172 determination of the QPI, the contactor’s profit shall be adjusted through the issuance of 173 a modification to the contract by multiplying it by the QPI for that period. 174

Following the determination of the QPI by the PCO, the QPI is multiplied by the target 175 profit to determine the quarterly earned profit. In the event that a quarterly QPI is 176 determined to be less than or equal to 17%, the quarterly QPI will automatically be 177 reduced to 0% for the respective quarter. As a result, the profit earned for that quarter 178 shall be reduced to zero. 179

5. Changes to the Performance Incentive Plan 180

This section describes the process for making changes to the CAMMO Performance 181

Incentive Plan. The Performance Incentive Plan will be reviewed annually. It may be 182 changed unilaterally by the PCO to adjust the QPI weight associated with each PIM 183 and/or to update Appendix C following a QPI determination only. All unilateral changes 184 will take effect at the beginning of the next performance period. The contractor will be 185 notified of the unilateral changes by the PCO at least 60 days prior to the next 186 performance period with a formal unilateral modification to follow. All other 187 modifications shall be made bilaterally with the contractor. 188

All significant changes to this plan must be approved by the IAO. Adjusting the 189 percentage weight associated with each Performance Incentive Metric shall be 190 considered a significant change. Updating the Historical Record of QPI Determination 191 in Appendix C and minor edits to update references shall not be considered a significant 192 change. 193

6. Contract Termination 194

In the event of the termination of this contract for convenience pursuant to FAR 52.249-195

2 or FAR 52.249-9, the performance period during which such termination occurs will 196 end, and the government will evaluate the contractor’s performance for the period of 197 performance as if the period had been completed. 198

Appendix A: Performance Incentive Metrics 199

This Appendix describes the performance incentive metrics and details on their 200 individual scoring. PIMs shall be monitored and reported on by the contractor within 10 201 business days of the closure of the respective evaluation periods. The contractor 202 performance, as reported to the government, will be reviewed by the government for 203 validity and accuracy using secondary, government monitored data. In the event of a 204 dispute, the PCO will review the pertinent data from both the contractor and the 205 government team responsible for calculating the PIM and make a unilateral decision 206 with regards to the result. All PIM performance values will be adjudicated at the end of 207 each evaluation period, whether monthly or quarterly, prior to the final determination of 208 the quarterly QPI. 209

Table A provides details on the PIM standards, scoring, and source of the requirement. 210

The PIMs used to determine the QPI are described as follows: 211

PIM-1: Operations Performance Score (PWS 3.1.1.1): This metric evaluates the 212 ability of the contractor to conduct AFSCN operations which result in successful satellite 213 operations. This metric shall be calculated monthly by the CAMMO contractor in 214 accordance with 50SWI 10-220. The final value will be rounded to the thousandths 215 decimal position (0.99764 = 0.998). 216

This is the only PIM that utilizes a graduated scoring methodology. Meeting or 217 exceeding the acceptable level of performance will result in earning the maximum 218 allowable score. If the standard is not met, but is missed by a relatively minor amount, 219 a partial score may be earned. 220

Additionally, whereas 50SWI 10-220 defines the acceptable level of performance as 221 being for each individual site, this PIM shall measure the metric across the entire 222 network (all AFSCN operational sides). 223

Details on these standards and possible scores are listed in Table A-1. 224

PIM-2: Operational Availability (Ao) (PWS 3.1.1.1): This metric measures the 225 probability that a system is operable and ready to perform its intended mission at any 226 given time within its operational environment. This metric shall be calculated monthly 227 by the CAMMO contractor in accordance with the Guidelines for Reliability, 228

Maintainability, and Availability (RMA) Metrics for the Air Force Satellite Control Network 229

(AFSCN) Common User Element (CUE), Volume I, Revision 3, Definitions and Metrics, 230 and Volume II, Data Sources and Procedures (henceforth referred to within this 231 document as the “RMA Guidelines”). 232

PIM-3: Mean Time to Restore Mission Functionality (MTTRF) (PWS 3.1.1.1): This 233 metric is defined as the average elapsed time, as a result of a critical failure, required to 234 restore a system to full operating status. This metric shall be calculated monthly by the 235

CAMMO contractor in accordance with the RMA Guidelines. 236

PIM-4: Scheduled versus Actual Downtime (PWS 3.4.2.1): This metric evaluates the 237 contractor’s ability to accurately predict downtime requirements for scheduled 238 maintenance. It is measured as the average of the differences between the scheduled 239 downtime and the actual downtime (to the nearest quarter-hour increment), as 240 percentages of the scheduled downtime over the course of the contract quarter. 241

PIM-5: Emergency Depot Level Maintenance (EDLM) Response (PWS 3.4.3.1): 242

This metric evaluates the contractor’s ability to rapidly activate a maintenance team and 243 prepare them and required equipment/parts for deployment. It is measured as the 244 readiness to deploy and not actual deployment to ensure limited travel availability (e.g. 245 next available flight to a location being five days away) does not penalize the contractor. 246

This is measured as the average number of total actual hours (not working hours) 247 between the notification to the contractor of an EDLM condition (by an authorized 248 government representative) and the contractor’s maintenance team being en route to 249 the respective site over the course of the contract quarter. This metric shall be 250 calculated by the CAMMO contractor over the course of the contract quarter. 251

PIM-6: Urgent Depot Level Maintenance (UDLM) Response (PWS 3.4.4.1): This 252 metric evaluates the contractor’s ability to rapidly activate a maintenance team and 253 prepare them and required equipment/parts for deployment. It is measured as the 254 readiness to deploy and not actual deployment to ensure limited travel availability (e.g. 255 next available flight to a location being five days away) does not penalize the contractor. 256

This is measured as the average number of total actual hours (not working hours) 257 between the notification to the contractor of a UDLM condition (by an authorized 258 government representative) and the contractor’s maintenance team being en route to 259 the respective site over the course of the contract quarter. This metric shall be 260 calculated by the CAMMO contractor over the course of the contract quarter. 261

PIM-7: Off-Site In-house Repairs (PWS 3.4.8.2, 3.4.8.3): This metric evaluates the 262 contractor’s ability to provide timely, in-house depot repair to items requiring repair. It is 263 calculated as the average time from the induction of an item for repair until the shipment 264 of the serviceable item to the Air Force supply system as measured over the course of 265 the contract quarter. This metric shall be calculated by the CAMMO contractor over the 266 course of the contract quarter. NOTE: Stocklisted item repair data is not tracked under 267 this metric. 268

PIM-8: Off-Site Vendor Repairs (PWS 3.4.8.2, 3.4.8.3): This metric evaluates the 269 contractor’s ability to manage external vendor relationships and agreements resulting in 270 timely depot repair to items carrying a repair status. It is calculated as the average time 271 from the induction of an item for repair until the shipment of the serviceable item to the 272

Air Force supply system as measured over the course of the contract quarter This 273 metric shall be calculated by the CAMMO contractor over the course of the contract 274 quarter. NOTE: Stocklisted item repair data is not tracked under this metric. 275

PIM-9: Corrective Action Request (CAR) Response Time (PWS 3.6.3.26): This 276 metric evaluates the contractor’s ability to provide an acceptable cause and corrective 277 action to the PCO on, or prior to, the due date for a CAR. This metric is measured as a 278 percentage of CARs that the CAMMO contractor responded to with an acceptable (as 279 determined by the PCO) cause and corrective action on, or prior to, the due date for a 280

CAR. This metric shall be calculated by the CAMMO contractor over the course of the 281 contract quarter. 282

PIM-10: Software Delivery Deficiencies (PWS 3.7.3.3, 3.7.3.4, 3.7.3.5): This metric 283 evaluates the contractor’s ability to deliver software releases (including Sub-System 284

Software Version Releases, Software Maintenance Actions [SWMAs], and Inter-Range 285

Operation Number [IRON] Databases) with no Category One (CAT-I) Deficiency 286

Reports (DRs) over the course of the contract quarter. DRs measured under this metric 287 are those discovered during field evaluation and within 30 days following operational 288 acceptance. This metric shall be calculated by the CAMMO contractor over the course 289 of the contract quarter. 290

Table A: Monthly Performance Incentive Metrics 291

PIM

No.

Description % of Overall

QPI

Score per Evaluation

Period

Minimum Level of Performance

Monthly Performance Incentive Metrics

Ops Performance Score

Source: PWS 3.1.1.1 24%

2% ≥ 0.998

1% ≥ 0.996

0% < 0.996

AFSCN AO

Source: PWS 3.1.1.1 12%

1% ≥ 87.0%

0% < 87.0%

MTTRF

Source: PWS 3.1.1.1 12%

1% ≤ 2.0 hrs

0% > 2.0 hrs

Quarterly Performance Incentive Metrics

Scheduled vs Actual

Downtime Source: PWS 3.4.2.1

8% 2% within +/- 3%

0% outside +/- 3%

EDLM Response

Source: PWS 3.4.3.1 4%

1% ≤ 24 hrs

0% > 24 hrs

UDLM Response

Source: PWS 3.4.4.1 4%

1% ≤ 72 hrs

0% > 72 hrs

Off-Site In-House Repairs

Source: PWS 3.4.8.2, 3.4.8.3

4% 1% ≤ 30 days

0% > 30 days

Off-Site Vendor Repairs

Source: PWS 3.4.8.2, 3.4.8.3

4% 1% ≤ 80 days

0% > 80 days

CAR Response Time Source: PWS 3.6.3.26

16% 4% = 100%

0% < 100%

Software Delivery Deficiencies

Source: PWS 3.7.3.3, 3.7.3.4, 3.7.3.5

12%

3%

= 0 CAT-I DRs w/in 30 days of field evaluation for all releases

0%

> 0 CAT-I DRs w/in 30 days of field evaluation for all releases

Appendix B: QPI Determination and Sample Calculations 294

This Appendix provides sample calculations for the determination of the QPI and 295 consequently, the total profit. The values used are purely hypothetical in an effort to 296 demonstrate how the calculations are conducted. 297

Table B-1 demonstrates how the observed level of performance relates to the minimum 298 acceptable levels of performance. Cells shaded in green indicate PIMs that, during the 299 evaluation period, met or exceeded the criteria for acceptable performance 300

(summarized in the “Standard” column). PIM-1, Operations Performance Score, is the 301 only metric that deviates from the pass/fail methodology incorporated into this plan. 302

Since it uses a graduated set of standards, any evaluation period where mid-level 303 performance was observed is shaded yellow. For all PIMs, evaluation periods that fail 304 to meet the minimum standards are shaded red. 305

Table B-2 demonstrates how the demonstrated levels of performance relate to an 306 earned score and consequently, the QPI. Thus a cell shaded red (failed to meet 307 criteria) in Table B-1 will have a score of zero in Table B-2. Cells meeting this criterion 308 in Table B-2 are also shaded red. 309

Table B-2 also demonstrates how the scores are used to calculate the Quarterly QPIs. 310

All scores that fall under the respective quarter are summed to determine the QPI for 311 that quarter. All of the monthly scores under a PIM are added as part of the quarterly 312

QPI. Thus, if a monthly PIM is allocated a possible 2% per month and all three months 313 met the standards for acceptable performance, the total contribution for that PIM to the 314 quarterly QPI would be 6%. 315

Table B-3 demonstrates how the resulting QPI is used to determine the quarterly profit. 316

Table B-1: Example of Score Calculations Based on Observed PIM Performance 318

Measured Performance for each PIM (by evaluation period)

Performance Metric Standard Q1 Q2 Q3 Q4

1 - Ops Performance Score

≥ 0.998

0.997 0.998 0.995 0.998 0.999 0.998 0.998 0.997 0.999 0.999 0.999 0.998 ≥ 0.996

2 - Operational Availability ≥ 87.0% 86.0% 87.0% 88.0% 88.0% 90.0% 90.0% 91.0% 90.0% 89.0% 90.0% 90.0% 89.0%

3 - MTTRF ≤ 2.0 hrs 1.8 hrs 1.9 hrs 2.3 hrs 1.3 hrs 0.8 hrs 1.1 hrs 1.8 hrs 0.9 hrs 1.2 hrs 2.4 hrs 1.3 hrs 2.1 hrs

4 - Scheduled vs Actual Downtime ≤ +/- 3.0% -1.2% 2.1% 1.8% -2.2%

5 - EDLM Response ≤ 24 hrs 26 hrs 0 hrs (no EDLMs) 18 hrs 22 hrs

6 - UDLM Response ≤ 72 hrs 74 hrs 63 hrs 54 hrs 68 hrs

7 - Off-Site In-House repair ≤ 30 days 24 days 20 days 32 days 25 days

8 - Off-Site Vendor Repair ≤ 80 days 92 days 74 days 68 days 47 days

9 - CAR Response Time = 100% 100% 100% 100% 100%

10 - Software Delivery Deficiencies

= 0 CAT-I

DRs 0 CAT-I DRs 0 CAT-I DRs 0 CAT-I DRs 0 CAT-I DRs

Table B-2: Example of QPI Calculation Based on PIM Scores 320

Resulting Score (by evaluation period)

Performance Metric Score per Eval. Per.

Q1 Q2 Q3 Q4

1 - Ops Performance Score

2% 1% 2% 0% 2% 2% 2% 2% 1% 2% 2% 2% 2%

1%

2 - Operational Availability

1% 0% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

3 - MTTRF 1% 1% 1% 0% 1% 1% 1% 1% 1% 1% 0% 1% 0%

4 - Scheduled vs Actual Downtime

2% 2% 2% 2% 2%

5 - EDLM Response 1% 0% 1% 1% 1%

6 - UDLM Response 1% 0% 1% 1% 1%

7 - Off-Site In-House repair

1% 1% 1% 0% 1%

8 - Off-Site Vendor Repair

1% 0% 1% 1% 1%

9 - CAR Response Time 4% 4% 4% 4% 4%

10 - Software Delivery Deficiencies

3% 3% 3% 3% 3%

Quarterly

QPI:

0% (17%)1 25% 23% 23%

Overall

QPI:

71%

Note 1: Since the PIM scores sum to 17% (which is < 17%), the quarterly QPI is reduced to 0%. 322

Table B-3: Example of Profit Determination Using QPIs 324

Example Calculations of Profit Payment

Target Profit1: $6,000,000

Quarter: 1Q 2Q 3Q 4Q

Potential Quarterly Profit1:

$1,500,000 $1,500,000 $1,500,000 $1,500,000

Quarterly QPI2: 0% 25% 23% 23%

Payment Amount1 (QPI * Target Profit)

$0 $1,500,000 $1,380,000 $1,380,000

Total Profit3: $4,260,000

Overall QPI (sum of quarterly QPIs): 71% Note1: All dollar amounts will be rounded to the nearest whole dollar 325

Note 2: All QPIs shall be maintained to the hundredths decimal point. Due to the calculations of the QPIs, 326 no rounding of values should be required at this level (no digits other than 0 should occur at the 327 thousandths or smaller positions). 328

Note 3: At the conclusion of the option year, cost sharing associated with underrun/overrun would be 329 calculated separately, and appropriate adjustments made to determine final total profit payment. 330

Appendix C: Historical Record of QPI Determination 331

Performance Period

QPI

Quarterly Overall

Year 1 1 Jun 2015 – 1 Jun 2016

Q1 TBD

TBD

Q2 TBD

Q3 TBD

Q4 TBD

Year 2 1 Jun 2016 – 1 Jun 2017

Q1 TBD

TBD

Q2 TBD

Year 3 1 Jun 2017 – 1 Jun 2018

Q1 TBD

TBD

Q2 TBD

Year 4 1 Jun 2018 – 1 Jun 2019

Q1 TBD

TBD

Q2 TBD

Year 5 1 Jun 2019 – 1 Jun 2020

Q1 TBD

TBD

Q2 TBD

Year 6 1 Jun 2020 – 1 Jun 2021

Q1 TBD

TBD

Q2 TBD

Year 7 1 Jun 2021 – 1 Jun 2022

Q1 TBD

TBD

Q2 TBD