HDTRA1-16-R-0027_CTRIC_III_AWARD_FEE_PLAN_DRAFT.pdf

AWARD FEE PLAN

For

COOPERATIVE THREAT REDUCTION INTEGRATING CONTRACT (CTRIC III)

Month Day, 2016

Approved:

[Name] Fee Determining Official [Title] Cooperative Threat Reduction

Table of Contents

1.0 INTRODUCTION AND ADMINISTRATION

2.0 ORGANIZATION

3.0 RESPONSIBILITIES

3.1 Fee Determining Official (FDO)

3.2 Award Review Board Chairperson

3.3 Award Review Board ................................................................... Error! Bookmark not defined.

3.4 CTR Integration Division (CTI)

3.5 Evaluation Monitors (EMs)

3.6 Task Order Contracting Officer

4.0 TASK ORDER PERFORMANCE EVALUATION CRITERIA

4.1 General

4.2 Basic CTRIC III Evaluation Criteria

4.2.1 Quality of Product or Service

4.2.2 Business Relations

4.2.3 Management of Key Personnel

4.2.4 Schedule

4.2.5 Cost Control

4.3 Rating Factors and Scale

4.4 Numerical Score and Description

5.0 AWARD FEE PROCESS

5.1 General

5.2 Award Fee Period

5.3 Amount and Allocation of Award Fee

5.4 End-of-Period Evaluations

5.4.1 Contractor’s Self-Assessment

5.4.2 Award Review Board

5.4.3 Formula for Awarding Fee

5.4.4 Contractor or Task Order Termination

6.0 AWARD FEE PLAN CHANGE PROCEDURE

AWARD FEE PLAN

1.0 INTRODUCTION AND ADMINISTRATION

The Cooperative Threat Reduction Integrating Contract (CTRIC III) is a multiple award, Indefinite Delivery/Indefinite Quantity (ID/IQ) acquisition for services to support the Defense Threat Reduction Agency (DTRA). Task Orders (TO) placed under these service contracts may include Award Fee (AF) provisions that will tie contractor’s earned fee to their level of performance. This Award Fee Plan (AFP) provides guidance and procedures for conducting the performance evaluations necessary to support these processes.

This AFP provides basic CTRIC III AF evaluation criteria. These criteria will be used as the basis to develop specific evaluation criteria for applicable TOs. The Government will augment these criteria as necessary with TO specific criteria and weighting; however, all CTRIC III Task Orders with AF provisions shall have their specific evaluation criteria rooted in this plan.

The Fee Determining Official (FDO) will determine the award fee earned upon review of the contractor’s performance against the criteria set forth in this plan. The award fee will be calculated and awarded semiannually. Every six (6) months beginning from the time of award, the Award Fee Review Board (ARB) will evaluate the contractor’s last six (6) months of performance. Timing of the evaluations and ARB are subject to change at the discretion of the Government. Evaluations will include both narrative elements and numerical scores. The evaluations serve as the primary data used by the FDO to decide the amount of fee to be awarded. Additionally, both narrative and numerical evaluations may be used in the development of the Contractor Performance Assessment Reporting System (CPARS).

The basic philosophy underlying the AFP emphasizes that the process is not a punitive one in which the contractor starts with a perfect score and loses points for less than satisfactory performance. Rather, the contractor earns points based on their performance of the required tasks as outlined in the Statement of Work (SOW), relative to the plan’s evaluation criteria. To achieve a score of Excellent (91 or above), the criteria require the contractor perform well above and beyond the minimum satisfactory level.

This AFP will also serve as the Quality Assurance Surveillance Plan (QASP). Per the Federal Acquisition Regulation (FAR) Part 46.4, a QASP must specify: 1) all work requiring surveillance and 2) the method of surveillance. This plan will outline the specific work that will be monitored during the award fee performance period, and the methods of surveillance to ensure contract compliance.

2.0 ORGANIZATION

The following personnel are involved with the award fee process:

AWARD FEE PRINCIPALS

• FDO: Director, CTR

• ARB Chairperson: Chief, Operations, CTR

• ARB Members:

− Program Managers, representing the program area − Chief, CTR Integration Division (CTI) − Branch Chief, CTR Contract Support Division (J4COC)

Although the FDO and ARB Chairperson will remain the same for all ARBs, the specific ARB membership may vary depending on availability.

3.0 RESPONSIBILITIES

3.1 FDO

The FDO approves the AFP and changes thereto. The FDO will review ARB recommendations(s), consider all pertinent data, and determine the contractor’s final score and corresponding award fee amount. The FDO designates an alternate ARB chairperson if the Operations Lead, CTR is unable to perform required duties and may delegate their own authority.

3.2 ARB Chairperson

The Operations Lead, CT will serve as the ARB Chairperson, and will conduct the ARB. The Chairperson will ensure that all ARB members understand and follow award fee processes. In addition to these duties, the chairperson will:

• Review the ratings and comments of the members and Evaluation Monitors (EM),

• Reconcile wide disparities in the evaluations,

• Recommend an award fee amount to the FDO,

• Approve the delegation of the duties of other members of the ARB.

3.3 ARB

ARB members will review the EM’s appraisals for TO performance subject to AF provisions.

The ARB voting members will consider all information from pertinent sources and arrive at AF recommendations for the FDO’s consideration. At any time, the ARB may recommend changes to the FDO regarding this AF plan.

3.4 Chief, CTI

CTI has the overall responsibility for facilitating the CTRIC III AF program. Tasks include scheduling events and meetings, providing training to the EM and other individuals performing duties regarding the AFB, recommending AFP changes to the FDO for approval, updating the AFP, collecting inputs from EMs and the contractors, and preparing correspondence to the contractor for coordination and signature. CTI will ensure that AF funding packages are initiated, processed, drafting letters to CTRIC III contractors notifying them of the FDO’s decision, and coordinated with the Contracting Officer (CO) regarding the publication of contract modifications announcing award fees.

3.5 EMs

EMs are Government personnel having knowledge of a contractor’s performance on a TO and providing inputs to the ARB. Depending on the TO being evaluated, they may include the TO Project Manager/Officer, the TO Contract Specialist, the Defense Contract Management Agency (DCMA) representatives, and other DTRA/Government Agency representatives who have knowledge of the contractor’s performance with respect to CTRIC III. Using the evaluation templates, they will provide a thorough assessment that addresses each of the five evaluation criteria referenced later in this AFP.

EMs will maintain detailed written records of each contractor’s performance to assist him/her in completing the evaluations. They will reference correspondence, reports, data items, meetings, and conversations that serve to demonstrate the contractor’s day-to-day performance of contract objectives. EMs will submit any proposed changes to the AFP not less than sixty (60) days prior to the beginning of the applicable evaluation period.

3.6 Task Order CO

The CO is the liaison between the contractor and government personnel on a particular TO. The CO will ensure funds are available and modify the contract accordingly after each award fee period as applicable.

4.0 TASK ORDER PERFORMANCE EVALUATION CRITERIA

4.1 General

Contractors will be evaluated on a TO basis. The Government will use evaluation criteria in this AFP, in addition to specific criteria associated with the individual TOs, as appropriate.

Additionally, the Government may use evaluation information when developing CPARS inputs.

This AFP is a Government developed and applied approach used to make sure systematic quality assurance methods are used to monitor performance, and appropriate incentives are applied. The intent is to ensure that the contractor is performing in accordance with the TO, and the standards and quality levels identified in the AFP to ensure the Government pays only for the level of services received. The Government will monitor the contractor's performance in completing all work requirements are conducted in accordance with the execution of the TO, and in conjunction with the award fee criteria as discussed below.

All tasks within the TO SOWs, all contractor work products, and all Contract Data Requirements Lists (CDRLs) require surveillance. In an effort to minimize the performance management burden, simplified surveillance methods shall be used by the Government to evaluate contractor performance when appropriate. The primary methods of surveillance are routine monitoring performed by the COR, program input through either formal or informal feedback, CPARS, and Award Fee Evaluations. The Government shall use the monitoring methods cited to determine whether the performance standards/service levels have been met. If the contractor has not met the minimum requirements, it may be asked to develop a corrective action plan to show how and by what date it intends to bring performance up to the required levels. Likewise, if the contractor exceeds the performance standards, an award fee will be paid in accordance with the award fee plan criteria as discussed below.

4.2 Basic CTRIC III Evaluation Criteria

The following criteria provides the basis for CTRIC III contractor performance evaluations at the TO level. General in nature, their formats mirror CPARS requirements. Sub-criteria specific to each TO (e.g. technical and management performance) may and should be incorporated into each TO at award. EMs must make distinctions between unsatisfactory, marginal, satisfactory, very good, and exceptional performance. The evaluation areas are:

• Quality of Product or Service

• Business Relations

• Management of Key Personnel

• Schedule

• Cost Control

4.2.1 Quality of Product or Service

This evaluation area assesses the contractor’s conformance to contract requirements, specifications, and standards for good management and technical performance. The evaluation is inherently subjective in nature. The Quality of Product or Service evaluation will consider all or some of the following elements:

• Program Management

• Technical Task Performance

• Quality of Deliverables

• Communications

• Health, Safety, and Environment

The evaluation will be based on the individual TO requirements. The highest scores will be awarded to contractors who:

• Exceed TO requirements in a manner beneficial to the Government, with special emphasis on the proactive identification and management of risk factors associated with management and technical performance;

• Provide deliverables that contain very few, non-repetitive minor errors that are quickly and effectively corrected by the contractor;

• Perform the tasks effectively with minimal Government oversight;

• Communicate effectively (formal and informal) in person or by telephone, facsimile, and E-mail to prevent surprises and provide advance notification of significant incidents, project difficulties, achievement of TO milestones, and anticipated changes to the schedule or budget;

• Keep the Government informed about items of local interest, personnel or policy changes in host nation organizations and political news that could impact current or future tasks;

• Conduct innovative health and safety training programs for employees and subcontractor personnel;

• Demonstrate health and safety practices that quickly and reliably ensure safe work habits are adopted at all levels; and

• Proactively ensure the environmental wellbeing of the work site and the local area.

The Government may review all contractually required reports such as lost time accident reports, incident reports, training records, weekly narrative reports, and other available information to assess the contractor’s performance in this area.

4.2.2 Business Relations

This evaluation area assesses the integration and coordination of all activity needed to execute the contract; for example, the timeliness, completeness and quality of problem identification, corrective action plans and proposal submittals; the contractor’s history of reasonable and cooperative behavior; customer satisfaction; timely award and management of subcontracts. The highest scores will be awarded to contractors who:

• Demonstrate proactive management throughout the business cycle to include timely award and management of subcontracts, cost and performance problem identification, corrective actions, proper estimating, accounting, and billing.

• Demonstrate they have taken positive steps to develop and maintain good relationships with local communities, and local, regional, and state officials, and other organizations who can demonstrate that such steps have a positive impact on task performance. Evidence might include reduced problems with site access, fewer protest or strikes, improved access to labor pools and materials, or timely licensing and permitting when this had not been possible before.

• Demonstrate good working relationships with appropriate representatives of host government, other host country commercial enterprises, and appropriate regulatory agencies.

• Demonstrate that they mentored host country subcontractors teaching them business skills such as how to estimate costs, prepare proposals, negotiate subcontracts, and use sound business practices.

4.2.3 Management of Personnel

This evaluation area assesses the contractor’s performance in selecting, retaining, supporting, and when necessary, replacing personnel. The highest scores will be awarded to contractors who:

• Assigning, retaining, and managing qualified personnel for all positions as required by the

SOW;

• Integrate, manage, and direct subcontractor’s activities to provide the government with timely and accurate cost, schedule, and performance reporting to accomplish project goals and objectives;

• Supporting contractor personnel to enable them to work effectively;

• Taking prompt and proper corrective action when advised by the Government, or of the contractor's own discovery, of poor performance output by any individual or group of individuals provided for under the contract;

• Replacing all key personnel with a person that meets or exceeds the qualifications required by the position within 20 days of a key personnel's departure, and notify the CO and the COR in accordance with the Key Personnel Clause 252.215-9004 in the contract of all changes in order to ensure compliance.

• The highest level of performance is achieved for this specific criterion when the contractor meets this timeline 100% of the time throughout the period, as well as provided quality resolutions to the satisfaction of the Government.

4.2.4 Schedule

The contractor will be evaluated on the timeliness of completing the TO requirements, meeting milestones, achieving delivery schedules, accomplishing administrative requirements, and responsiveness to change. The highest scores will be awarded to contractors who demonstrate they have managed their operations to meet contract schedule milestones insofar as they are under the contractor’s control. Additionally, the evaluators will consider early identification and mitigation of schedule risk factors, even when outside the contractor’s span of control, the manner and timeliness of reporting such risk factors, and effectiveness of suggested remediation.

4.2.5 Cost Control

The contractor will be evaluated in managing the elements of cost, which are under contractor control, and cost baseline adherence. The highest scores will be awarded to contractors who demonstrate they have initiated process improvement, value engineering, and other initiatives that result in cost reductions without sacrificing schedule, product, or performance. The Cost Performance Report, or alternative monthly status report, will be examined to determine the accuracy of the contractor’s cost estimates. Evaluators will take into consideration the disparity between actual cost and the contractor’s TO estimate. Particular emphasis is placed on performance in identifying and managing cost risk factors in response to anticipated new in-scope requirement that will involve a trade-off between performance and cost.

4.3 Rating Factors and Scale

The applicable ARB member will rate the contractor on each award criteria for each TO within their purview using the following scale. Each score will be multiplied by the weight assigned to each criterion. The sum of those products will constitute the combined score for award fee determination at the TO level.

4.4 Numerical Score and Description

Adjectival

Rating Score Range Award-Fee Pool Available To Be Earned Description

Exceptional 91-≤100 91%-100%

Contractor has exceeded almost all of the significant award-fee criteria and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

Very Good 80-≤91 76%-90%

Contractor has exceeded many of the significant award-fee criteria and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

Satisfactory 70-≤80 51%-75%

Contractor has exceeded some of the significant award-fee criteria and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

Marginal 60-≤70 No Greater Than 50%

Contractor has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

Unsatisfactory 0-≤60 0%

Contractor has failed to meet overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

5.0 AWARD FEE PROCESS

5.1 General

Each CTRIC III TO containing award fee provisions will receive fee determinations twice a year. Award fees will be determined for each active TO, and provided by modifications to the TOs. Formal award fee evaluations will be made only at the end of the semiannual award fee periods. This does not preclude normal contract monitoring activities and performance discussions with the contractor during award fee periods.

5.2 Award Fee Period

The normal award fee period will be six (6) months, beginning from the award of the ID/IQ.

Depending on when a TO is awarded, the first award fee period may occur after less than six (6) months of performance. A minimum of three (3) months of performance will be required before an ARB. Therefore a TO’s first award fee period will end three (3) to nine (9) months after TO award. A TO’s last award fee period will be adjusted to coincide with the end of the TO’s period of performance, but the evaluation will occur during the next regular semiannual Award Review Board meeting. Each award fee TO will include the schedule for its award fee periods.

5.3 Amount and Allocation of Award Fee

The amount of the Award Fee Pool will be identified in each TO that contains AF provisions during Integrated Product Team’s (IPT) Pricing/Collaborative Proposal Evaluation activities with the contractor. After the AF pool amount is established the base fee (if any) will be deducted, and the remainder of the pool will be allocated over the AF evaluation periods.

The allocation of the AF pool depends in large part on the acquisition strategy, and individual circumstances of each procurement. The Government may leverage the contractor’s expenditure profiles during the evaluation process. The AF total may be allocated equally among the evaluation periods if the risks and type of work are similar or do not change. Otherwise, the Government may distribute larger AF pool portions if there is greater risk or critical milestones occur during specific evaluations periods. This permits the Government to place greater emphasis on those evaluation periods. The AF earned will be paid based on the contractor’s performance during each evaluation period. Unearned fees shall not be carried forward to subsequent award fee periods.

5.4 End-of-Period Evaluations

5.4.1 Contractor’s Self-Assessment

The contractor may submit a written self-assessment evaluation, for the evaluation period, to the CO and Project Manager by the first business day following the end of each award fee evaluation period specified in this plan. A self-assessment submitted after the first business day may not be considered by the EMs. The written statement shall include summaries of incurred costs during the period, and progress on task requirements. The contractor’s self-assessment will not exceed two pagers per TO, and may include a contractor proposed point score for each criterion.

Margins shall be no less than one (1) inch, no headers/footers, no columns, and the contractor shall use Arial twelve (12) point font. Any material beyond five (5) pages will not be considered.

5.4.2 Award Review Board

The ARB Chairperson shall convene the board within thirty (30) days following the end of each evaluation period. The FDO shall attend the board and be familiar with the discussions and recommendations being formulated. The ARB shall consider the contractor’s self-assessment and information provided by the EMs. ARB will subjectively assign a point score to each of the separate award fee criteria by TO. After adjusting for the weight of each criterion, the aggregate score will then be inserted into the AF formula to determine the recommended total award for that period. The ARB Chairperson will provide a recommended award fee to the FDO who will make the final determination. Additionally, the ARB may recommend any significant changes to the AF Plan for FDO approval at this time (see paragraph 6.0).

The FDO determines the overall grade and earned AF amount for the evaluation period, and informs the contractor of the earned award fee amount by letter within forty five (45) calendar days after each evaluation period. The CO issues a unilateral TO modification authorizing payment of the earned award fee amount, or a modification decreasing the obligated funding by the amount of the unearned award fee, within fifteen (15) calendar days after the FDO’s signature on the award fee letters.

5.4.3 Formula for Awarding Fee

The following formula for calculating the award fee shall be built into the award fee software:

Award Fee Criterion Weight % X Evaluation =

(Raw Score) Weighted Score

Quality of Product or Service From TO Business Relations From TO Management of Key Personnel From TO Schedule From TO Cost From TO

Aggregate Score (Sum of Weighted Scores: “X” in the formula below) X = Combined score for award fee criteria Y = Percent of award fee pool earned

If 0≤X<60 then Y=0 If 60≤X<70 then Y=25 + [2.5*(X-60)] If 70≤X<80 then Y=50 + [2.5*(X-70)] If 80≤X<90 then Y=75 + [1.5*(X-80)] If 90≤X<98 then Y=X If 98≤X<100 then Y=100

The following graph depicts the relationship between the ARB scores and the award fee.

60 70 80 90 98 100

100 100

Pe rc en t o f A w ar d

Fe e

Po ol

Score

5.4.4 Contractor or Task Order Termination

If the contract or a TO is terminated for the convenience of the Government after the start of an AF evaluation period, the AF earned for that period will be determined by the FDO using the normal AF evaluation process. After termination for convenience, the remaining AF amounts allocated to all subsequent award fee evaluation periods cannot be earned by the contractor and, therefore, shall not be paid.

6.0 AWARD FEE PLAN CHANGE PROCEDURE

Proper and fair evaluation of a contractor’s performance requires that the contractor have full understanding of the evaluation criteria during execution. This section describes how changes to the AF Plan and its criteria are made in an equitable manner.

All significant changes are approved by the FDO, while the ARB chairperson approves changes that are only administrative in nature. Examples of significant changes include changing evaluation criteria, adjusting weights to redirect contractor’s emphasis to areas needing improvement, and revising the formula for calculating. The contractor may recommend changes to the CO no later than thirty (30) days prior to the beginning of the new evaluation period.

After approval, the CO will notify the contractor in wiring of any change(s). The CO may make unilateral changes to the AF/term plan before the start of the upcoming evaluation period by providing the contractor written notification. Changes affecting the current evaluation period may be by mutual agreement of both parties.

If the CO does not give specific notice in writing to the contractor of any change to the evaluation criteria prior to the start of a new evaluation period, then the same criteria listed for the preceding period will be used in the subsequent AF evaluation period. If the FDO determines that an AF criterion is unable to be evaluated during a specified Award Fee period, the AF points allocated to that criterion will be reapportioned to the other applicable criteria in the same weight proportions as originally defined, with remaining point(s) allocated to the most highly rated criterion.

Example:

Original Weight Reallocated Weights Criterion One: 50% 56% Criterion Two: 30% 33% Criterion Three: 10% Deleted Criterion Four: 5% 5.5% Criterion Five: 5% 5.5%

(Ten (10) points deleted: fifty percent (50%) of the ten (10) points go to Criterion One: thirty percent (30%) of the ten (10) points go to Criterion Two; five percent (5%) of the ten (10) points go to Criterion Four; five percent (5%) of the ten (10) points go to Criterion Five; remaining points goes to Criterion One.)

6.0 AWARD FEE PLAN CHANGE PROCEDURE