Atch 05 - Award Fee Plan.docx

Clear/Cape Cod Upgraded Early Warning Radar CLIN 0002

RFP HQ0147-11-R-0002

Award Fee Plan

26 January 2012

Table of Contents Contents

1. INTRODUCTION

The objective of this Award Fee Plan is to incentivize the contractor to complete the Integration and Deployment phase for the Clear/Cape Cod Upgraded Early Warning Radar (UEWR) program CLIN 0002; resulting in certification and availability of the Clear UEWR for Ballistic Missile Defense use while maintaining the ITW/AA legacy capability during the process.

This award fee plan identifies the performance areas to be evaluated, the evaluation criteria, performance periods, and a methodology for evaluating the contractor’s performance. The plan also defines the organizational structure and process to direct and execute contract award fee clauses contained in contract TBD, CLIN 0002.

1.1 Sub-Objectives supporting the overall objective:

· Provide support with all agencies, contractors, and sub-contractors to minimize performance impacts, Category I deficiencies, and repeat deficiencies through a cohesive collaborative effort for the Integration & Deployment phase.

· Incentivize contractor utilization of small business at all tiers and further development of small business capabilities through inclusion of various initiatives designed to improve and grow the small business industrial base.

· Meet or exceed the quality requirements, schedule, and cost associated with the delivery of the Integration and Deployment phase.

· The Contractor shall adhere to corporate best practices and provide status to the Performance Monitor (PM) in the Quality Assurance Surveillance Plan (QASP).

· Develop innovative, cooperative, and cost effective solutions addressing possible negative impacts to cost, schedule, or baseline performance of the Integration and Deployment phase.

The plan also describes the processes for presenting an assessment of the Contractor’s performance to the Fee Determining Official (FDO). The specific criteria and procedures used to assess the Contractor’s performance assist the FDO in determining the amount of award fee earned in accordance with the Award Fee clause in Section G of the contract. The UEWR Program Manager will be responsible for implementing the program in accordance with the provisions of this plan. FDO decisions regarding the award fee include but are not limited to: 1) the contractor’s entitlement to the award fee and the amount of the award fee earned, if any; 2) the methodology used to calculate the award fee; 3) the calculation of the award fee; and 4) the nature and success of the contractor’s performance.

2. ORGANIZATION

The Award Fee organization consists of the Fee Determining Official (FDO), an Award Fee Advisory Council (AFAC), an Award Fee Review Board (AFRB), the Award Fee Secretariat (AFS), and the Performance Monitors. The Award Fee Review Board Members and Advisors Table is located at Attachment 1.

Specific Responsibilities of Award Fee Participants

1) The Fee Determining Official (FDO) will:

· approve the award fee plan and any significant changes

· approve the appointment of AFRB members

· ensure the award fee decision process is thorough and fair

· determine the amount of fee earned

· provide the contractor a written award fee decision that discusses contractor performance, specifies the amount of fee earned, and reiterates the areas of emphasis included in the expectations letter within 35 days after the end of the prior period

· direct the Contracting Officer to make changes to the award fee plan as necessary

· issue award fee expectations letters

2) The Award Fee Advisory Council (AFAC) will:

· advise the FDO on matters pertaining to the consistent application of award fees

· review and coordinate on the AFRB recommendation prior to the FDO briefing

· review award fee plan revisions and modifications

3) Award Fee Review Board (AFRB) will:

· evaluate contractor performance

· prepare an interim award fee performance briefing or letter to the contractor

· convene no later than 14 days after the close of the award fee period

· recommend an award fee amount to the FDO.

· ensure fee recommendation is consistent with CPARS and presented at the FDO briefing

· recommend the criteria, percentages, and emphasis areas for the next award fee period

4) The AFRB chairperson will:

· structure the AFRB so as to include members who are familiar with the project and work performed by the Contractor in order to ensure a fair and reasonable assessment of the Contractor’s performance

· direct the efforts of the AFRB in analyzing performance data

· provide a fee recommendation to the FDO

· approve and issue a mid-term/interim award fee assessment letter and/or briefing to the contractor specifically notifying the FDO if the interim assessment is below 75%

5) The Contracting Officer’s Representative (COR)/Assistant Contracting Officer’s Representative (ACOR) is responsible for:

· the overall award fee process, this includes assigning Performance Monitors and the Recorder and requesting any other support required

· assembling an AFRB working group after each evaluation period to review, analyze, and provide recommendations to the AFRB

· ensuring that all evaluations are conducted consistently in accordance with Award Fee performance objectives and criteria

6) Performance Monitors: The COR will appoint Performance Monitors to evaluate contract performance. These may include Integrated Product Team leads, other MDA Supporting Directorates, and Defense Contract Management Agency (DCMA). Performance Monitors will:

· conduct all assessments according to contract requirements and the award fee plan so that evaluations are fair and accurate

· maintain written records of the contractors’ performance in their assigned evaluation areas and track award fee distributions throughout the life of the contract

· prepare interim and end-of-period evaluations addressing the contractor’s weaknesses and strengths

· brief the AFRB on their specific evaluation area(s)

· recommend changes to the award fee plans, as needed

· take refresher training annually

7) Procuring Contracting Officer (PCO): The PCO is the liaison between the contractor and the Government personnel. The PCO will:

· execute the required award fee contractual provisions into the BMDS Radar contract

· notify the contractor of changes to the award fee plan

· provide an award fee decision letter to the Contractor

· issue contract modifications awarding any award fee authorized by the FDO

8) AFRB Recorder: The recorder is a non-voting member of the AFRB and is responsible for:

· coordinating the administrative actions required by the Performance Monitors, the AFRB and the FDO, including:

1) receipt, processing and distribution of evaluation inputs from all required sources

2) scheduling and assisting with internal evaluation milestones, such as briefings

3) accomplishing other actions required to ensure the smooth operation of the award fee process

· assembling the draft ratings for interim, end of award fee period, and mission success elements from the ratings submitted by the performance monitors

· providing these ratings to the AFRB chairman for action

9) Award Fee Secretariat (AFS): The AFS participates in the Expectations Letter, AFRB, and FDO briefings, establishes centralized management of the award fee process, and maintains agency’s award fee policies, practices, and procedures. The AFS will facilitate timely award fee determinations by scheduling all award fee activities including Expectations Letter, and FDO briefings. The AFS will notify the AFRB chairperson to conduct the interim award fee assessment.

3. PROGRAM AWARD FEE PROCESSES

3.1. Award Fee Approach

The intent of this plan is to:

· give the contractor an incentive to exceed Agency requirements

· identify the maximum award fee percentage the contractor can potentially earn

· establish award fee periods for evaluation

· implement a positive fee scale whereby the available award fee pool for a period must be earned for performance and results rather than decremented for non-performance

· prevent the award of any fee in any evaluation period where the Government rates the Contractor’s overall performance for all performance elements below satisfactory

A summary of Award Fee earned and Award Fee remaining available will be documented throughout the life of the contract. This attachment will be updated by contract modification as awards are finalized. The contract modification will show a fee earned amount which will increase as award fee is earned. The total award fee amount allocated to the contract at time of award will be paid based on a Contract Performance Element (CPE) weighting of 35% and a Mission Success Element (MSEs) weighting of 65%. Any rollover of unearned award fee during the contract period of performance is prohibited per FAR 16.401 (e). The available award fee for each evaluation period will be taken from the table in the Award Fee Clause (G-14) under the column entitled “Pool Allocation”. The award fee earned will be paid based on the contractor’s performance during each evaluation period. The Award Fee is a zero (0) base fee with a minimum award fee of zero (0).

Award fee deals with those elements under the control of the contractor, which are susceptible to subjective as well as qualitative and objective evaluation. Award fee determinations and the methodology for determining award fee are unilateral decisions made solely at the discretion of the Government Fee Determining Official (FDO). The specific elements, criteria, and procedures used to assess contractor performance and to determine the amount of award fee earned are described below.

3.2 Performance Elements

Contractor performance will be evaluated in two performance elements: Contract Performance and Mission Success Elements. Both categories of performance elements will be evaluated with the scale and ratings definitions found in Attachment 2.

3.2.1 Contract Performance Element (CPE)

This element assesses the contractor’s performance in three performance areas: Program/Technical/Schedule Management, Cost Management, and Small Business Utilization. Attachment 2 contains the details of how the contractor’s performance in this element will be evaluated.

3.2.2 Mission Success Element (MSE)

This element measures the contractor’s timely and effective performance of events critical to successful Integration and Deployment phase completion. Overall program execution and the successful delivery of Integration and Deployment capabilities are the focus of these events. MSEs will be evaluated for payment as part of the end-of-period evaluation for the award fee period in which the MSE is completed. Attachment 4 contains the details of how the contractor’s performance in this element will be evaluated.

3.3 Award Fee Periods

The Award Fee Periods are described below:

· Period 1 covers the period from the date work is initiated under CLIN 0002 through the end of that Government Fiscal Year (ending 30 September).

· Subsequent Periods will cover whole Government Fiscal Years through the end of the contractor’s effort on CLIN 0002.

3.4 Interim Feedback

The AFRB chairman will also provide the contractor an interim assessment for each award fee period. These interim assessments will be accomplished in writing.

3.5 New Work

Award Fee associated with new work added to the contract by contract modifications will be added to the appropriate performance elements.

3.6 Expectations Letter

A letter to the contractor detailing the Agency’s expectations of the Contractor’s performance for the next award fee period must be presented to the Contractor prior to the beginning of the new award fee period. The expectations letter will:

· Contain criteria that clearly define MDA’s expectations of the Contractor

· Identify special focus areas for the applicable award fee period

· Address cost, schedule, and performance risk as applicable

· Emphasize the Contractor’s adherence to corporate best practices

3.7 End-of-Period Evaluations

· The contractor shall not provide either formal written or verbal contractor self-assessments for mid-term and final periods to the Award Fee Review Board. The IPT process should be utilized during the board process so that the contractor can highlight and/or disagree with any of the award fee evaluation and discuss strengths and weaknesses.

· Approximately three weeks prior to the end of the period, Performance Monitors will provide a written evaluation report of the Contractor's performance based on the award fee criteria to the AFRB Recorder. For MSEs, the Recorder will consolidate evaluation inputs upon completion of each MSE.

· Prior to the close of an award fee evaluation period, or upon completion of a MSE, the Contracting Officer Representative (COR) may convene the Performance Monitors to analyze all written evaluation reports against the Award Fee Criteria. The objective of the COR and Performance Monitors is to prepare a draft recommendation to the AFRB. Performance Monitors and other support personnel will provide clarification of evaluations and/or provide additional information to the AFRB.

· Approximately two weeks after the close of an award fee evaluation period or upon completion of a MSE, the AFRB Chairperson will convene the AFRB. The contractor must be present at the AFRB as a non-voting member to discuss any discrepancies, clarifications, etc. The contractor will leave the AFRB prior to final deliberations.

· Within fifteen (15) days after the AFRB, the AFRB will present to the FDO the recommended award fee percentage and rationale for the recommendation consistent with the award fee criteria.

· The FDO will make the final decision regarding the Contractor's performance rating and the resultant award fee amount. Following the FDO’s final decision, the program office will prepare a letter of award fee determination. The award fee letter will include a discussion of contractor performance, award fee earned, and reiterate areas of emphasis for the next award fee period. An FDO designee, if requested, will also brief the Contractor on the results to include strengths and weaknesses. The Government will make its best effort to issue a contract modification implementing the award fee within thirty-five (35) days after period end or event completion.

4. CHANGES TO THE AWARD FEE PLAN

The FDO will approve all significant changes; the AFRB Chairperson approves other changes. Examples of significant changes include: changing evaluation criteria, adjusting weights to redirect contractor’s emphasis to areas needing improvement, and revising distribution of award fee dollars. After approval the PCO will notify the contractor in writing of any changes. Content of this award fee plan and criteria in the expectations letter for the current period is considered binding. Content affecting future periods will be reviewed prior to the end of each award fee period and updated as necessary. MSE content, at a minimum, are reviewed along with the award fee period in which they occur. Unilateral changes affecting future periods or events may be made by the FDO to the award fee plan prior to the beginning of each award fee period. Changes to the award fee plan after the start of the evaluation period will be implemented by a bilateral contract modification.

5. CONTRACT TERMINATION

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

ATTACHMENT 1

Award Fee Review Board Members and Advisors

UEWR Fee Determining Official (FDO)

Office symbol

AWARD FEE REVIEW BOARD (AFRB) MEMBERS

Chairperson: ESC/HSIG UEWR Program Manager

Procuring Contracting Officer (PCO)

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Director for Acquisition Representative

Deputy Program Director, MDA/SN Sensors Program

Program Manager/Contracting Officer’s Representative

ESC/HSIG, Hanscom AFB, MA

Commander DCMA or designee

Director of Quality, Safety, and Mission Assurance Representative

Program Director, BMDS Worldwide Deployment Representative

Program office Senior Cost Analyst MDA/DOB

Representative(s) of customer organizations as determined by the AFRB Chairperson

Director of Contracting Representative

ADVISORS

Recorder

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Award Fee Secretariat

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General Counsel Representatives, MDA/GC, or designee

Performance Monitors as determined by the AFRB Chairperson

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NON VOTING MEMBERS

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Contractor Representative(s)

ATTACHMENT 2

The following Ratings and Rating Definitions apply to both CPEs and MSEs:

CONTRACT PERFORMANCE ELEMENT

The Contract Performance Element (CPE) assesses the contractor’s performance in three areas: program/technical/schedule management, cost management, and small business utilization. Within each Performance Area, criteria are established that provide guidelines for evaluation of the Contractor's performance that will be evaluated in execution of the requirements with an overall CPE weighting of 35% with MSEs being weighted 65% in a given period. The criteria for each Performance Area are as follows:

Performance Area A: Program/Technical/Schedule Management (65% of Contract Performance Element) The first performance area is Program/Technical/Schedule management with a relative weight of 65%.

Program/Technical performance is defined as successful completion of tasks set forth in the statement of work (SOW) for the period of performance being evaluated and it demonstrates the functional requirements provided with the SOW. Schedule Management performance is defined as successful achievement of events that are listed in the Integrated Master Schedule during the award fee period. Areas which may be evaluated include:

· Executing and maintaining support with all agencies, contractors, and sub-contractors to provide smooth integration, installation, and mission success

· Executing resource management that provides effective near and long term allocation, and best source assessments and decisions on using Government, contractor, and sub-contractor resources

· Controlling quality to meet or exceed the requirements and schedule associated with the delivery of the Integration and Deployment phase

· Executing innovative, cooperative, and cost effective solutions addressing possible negative impacts to cost, schedule, or baseline performance of the Integration and Deployment phase without adding risk

· Exercising risk and quality management to maintain standardization of the configuration between the UEWR at Clear and previous upgrades of Thule, Beale and RAF Fylingdales

· Effective management of a contractor Integrated Product and Cross Product teams (IPT/CPT) demonstrating a cohesive collaboration with other contractors, agencies, and subcontractors to minimize schedule impact from external sources

· Effective management in timeliness of interim milestone deliveries

· Effective schedule management as measured by the Schedule Performance Index

· Resource management that provides effective near and long term allocation, best source assessments, and decisions on using Government, contractor, and sub-contractor resources

Performance Area B: Cost Management (30% of Contract Performance Element)

The second performance area is Cost management with a relative weight of 30%.

Cost control is defined as the management of resources to effect the completion of tasks within the confines of the contract cost agreed to at contract award. Included in cost control is the maintenance of an effective and informative reporting system that appropriately reflects the Contract Work Breakdown Structure, a baselined Integrated Master Plan and Schedule, and useful Earned Value Management data to ascertain essential contract work values. The extent to which actual costs are confined to awarded costs and the quality of the cost reporting system will be evaluated to determine the rating and grade given by the performance monitors. Factors which may be used to evaluate this are:

· Degree to which functionally complete integrated or modernized capability or work products are delivered as planned, Budgeted Cost of Work Scheduled (BCWS) versus Budgeted Cost of Work Performed (BCWP) and within agreed Actual Cost of Work Performed (ACWP) to Budgeted Cost of Work Performed (BCWP) cost and Estimate at Completion (EAC).

· Degree in which the Contractor has control over planning work, controlling resources, measuring performance, recording cost, and controlling contract changes.

· Degree of proactive and innovative solutions in pursuit of program cost reduction in life cycle and redesign cost objectives.

· Degree to which costs are kept at budgeted cost of work performed.

· Degree to which proactive and innovative cost reduction concepts and initiatives are input into the total program cost without increasing or adding risk.

Performance Area C: Small Business Utilization (5% of Contract Performance Element) The third performance area is Small Business Utilization with a relative weight of 5%.

Small business utilization measures the contractor’s ability to provide maximum practicable opportunity for small businesses to participate in the Clear / Cape Cod UEWR program. Success in this area requires the contractor to implement a contract specific Small Business Utilization Strategy to exceed subcontracting plan goals and accomplish MDA small business objectives outlined in the Award Fee Expectations Letter, identify and act on new opportunities to increase competition and reduce single-point failures throughout the supply chain, and leverage Small Business Innovation Research / Small Business Technology Transfer investments to meet MDA/SN mission requirements and strengthen the BMDS industrial base.

PERFORMANCE

OBJECTIVE

MEASURE

Small Business Cumulative Utilization Small Business Utilization Exceeds Contract Small Business Subcontracting Plan Goals Exceptional Small Business Utilization is within 10%(1st yr) 7% (2nd yr) 3% (3rd yr) 1% (4th yr) meets (5th yr) Contract Small Business Subcontracting Plan Goals Very Good - Satisfactory Small Business Utilization is Not within 10% (1st yr), 7% (2nd yr) 3% (3rd yr) 1% (4th yr) does not meet (5th yr) Contract Small Business Subcontracting Plan Goals Unsatisfactory

ATTACHMENT 3

MISSION SUCCESS ELEMENT

The Mission Success Element measures the contractor's ability to successfully execute each of two Integration and Deployment System Level Events. To successfully achieve a mission success event, the contractor is required to meet the event objectives and exit criteria within 30 days of the scheduled event. The projected event and success criteria dates will be determined based upon the contractor’s Integrated Master Schedule (IMS). This Award Fee Plan will be updated to reflect agreed upon changes to the IMS. Activities or actions by the contractor and outside influences that affect the projected event date will be presented to the FDO for consideration in determining the award fee amount. The Government will evaluate mission success events considering whether the contractor’s performance meets objectives or success criteria defined for the event, the contractor’s performance in task execution, and the contractor’s efforts to mitigate the impacts of scheduling conflicts from outside sources.

Due to the importance the Government places on completing these two mission success events, if either event is not successfully completed on schedule, the FDO may elect to award no fee for a delayed or failed event.

It is incumbent upon the contractor to immediately notify the Government Program Manager when the date for an MSE is likely to slip outside the award fee period. Immediate notification is defined as at least 45 days before the event was scheduled to start. Prompt notification will be a consideration for the FDO in determining whether all, some, or none of the fee associated with the affected MSE Events will remain available to be earned.

The contractor’s performance will be evaluated using the process defined in paragraph 3 of the Award Fee Plan. The contractor will be evaluated on mission success at the end of the award fee period in which the event was completed. The contractor will be notified via the FDO letter that is issued at the end of the period.

MSEs are identified in attachment 4. The contractor will be notified of any changes to the MSEs using the Change Process defined in paragraph 4 of the Award Fee Plan.

ATTACHMENT 4

Mission Success Event

Date Scheduled

Actual Date

Fee Available

Fee Earned

75%

25%

MSE Total:

100%

Mission Success Event Criteria

Description: USAF completes testing and certifies that the common baseline UEWR system meets all ITW/AA requirements.

Summary Objective:

· Successful Completion of the FDE and Trial Period

· Meets legacy ITW/AA requirements during FDE

· Successful operational acceptance for ITW/AA operations

Success Criteria:

· Complete On-Site DT&E according to government approved test plan (less any PIDS “shalls” that require either completion of construction or operation throughout the trial period before sign off)

· All operator, analyst, and maintenance training complete consistent with the Approved Training Plan

· FDE entry criteria satisfied

· Successful completion of FDE

· Successful completion of Trial Period

· All “in-scope” Cat 1 Deficiency Reports shall be closed

· All “in-scope” IA Cat 1 and Cat 2 Findings shall be mitigated

· All “in-scope” Cat 2 Deficiency Reports shall have an agreed closure plan

· Successful operational acceptance for ITW/AA operations

Mission Success Event Criteria

Description: Legacy equipment is removed and facility is restored to operational condition.

Summary Objective: UEWR meets all specification requirements after de-modification of legacy hardware and restoration of facility to operating condition.

Success Criteria:

· FDE & Trial Period successfully completed

· Contractor completes the facilities modifications on or ahead of schedule

· All facilities sub-systems are installed, tested and meet all performance requirements necessary to support the installation and checkout phase

· All “in scope” documented Deficiencies are corrected or otherwise accounted for by the Government

· The Quality Control/Assurance Program has been well managed and adherence to Final Plans and Specifications is documented

· All UEWR Hardware and Software are operating according to specification

· All “in-scope” Cat 1 Deficiency Reports shall be closed

· All “in-scope” IA Cat 1 and Cat 2 Findings shall be mitigated

· All “in-scope” Cat 2 Deficiency Reports shall have an agreed closure plan

ATTACHMENT 5

PERFORMANCE MONITOR’S REPORT

Name of Evaluator: _________________________ Contract Number: HQ0147-11-R-0002 Award Fee Period: ___________________________

Criteria Area Rating. Each evaluated area will be assigned a numeric score (0-100) derived from the award review and evaluation worksheet (Attachment 5) average score by area. The numeric score will be multiplied by the evaluation area award fee percentage to determine the Area Award Fee. Specific strengths and weaknesses will be described for each area. The Lead Performance Monitor will total the Area Award Fee percentages achieved which becomes the overall Award Fee achieved. The Lead Performance Monitor will translate the overall Award Fee numerical score to the Award Fee rating per the definitions in Attachment 2.

(0-100:

Avg from worksheets)

(Area Score x Area Award Fee Percentage)

RATIONALE

Program/Technical/ Schedule Management

65%

Cost Management Performance

30%

Small Business Utilization

5%

OVERALL AWARD FEE

AWARD FEE RATING

ATTACHMENT 5

AWARD REVIEW AND EVALUATION WORKSHEET

Completed by Lead Performance Monitor (Name):__________________________ Period of Performance: _______________________________________

Technical/Schedule Management Performance Cost Management Performance Small Business Utilization

1.

2.

3.

4.

5.

6.

7.

Average Score by Area

The specific criteria and procedures used to assess the Contractor’s performance and to determine the amount of award-fee earned in accordance with the “Award Fee” clause in Section G of the contract.

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