6_TE-1_D14_Electronics Maintenance PRS

TECHNICAL EXHIBIT 1

D14

Electronics Maintenance

Performance Requirements

Summary

Leave this sheet blank

TECHNICAL EXHIBIT 1

PERFORMANCE REQUIREMENT SUMMARY

1 GENERAL. The purpose of this Performance Requirement Summary (PRS) is to describe the procedure the Government will use in measuring the Contractor's performance of the requirements specified in the PWS. This PRS defines the procedure the Government will use in measuring availability and compliance with contract requirements. The Government will assign a Contracting Officer's Technical Representative (COTR) and a Quality Assurance Evaluator (QAE) in writing to monitor the contractor’s performance in accordance with this PRS. The inclusion to or absence from this PRS of any contract requirements, however, shall not detract from the enforceability of those requirements, or limit the rights or remedies of the Government under any other provision of the contract, including the clauses entitled "Inspection of Services" and "Default."

Performance measurement of requirements will be accomplished by the use of Table 1 criteria. Explanation of data in Table 1 are explained as follows:

COLUMN 1: Specifies the Service required, which is paid for on the basis of a payment computation system defined in paragraph 4.

COLUMN 2: Defines the Standard of Performance for each listed service.

COLUMN 3: Maximum Allowable Defect Rate (MADR) is the maximum number or percentage of defective performance allowed by the Government for each service required, before considering the contract performance unsatisfactory.

COLUMN 4: Defines the lot or sample population used as the basis for surveillance or for payment computation purposes.

COLUMN 5: Provides the primary surveillance methods the Government will use to evaluate the Contractor's performance in meeting the contract requirements.

COLUMN 6: Shows the percentage of the CLIN Price that each listed requirement represents.

2 GOVERNMENT QUALITY ASSURANCE. Contractor performance will be compared to the contract standards and maximum allowable defect rate using the Quality Assurance Surveillance Plan.

2.1 The Government may use a variety of surveillance methods to evaluate the Contractor’s performance. Only one method will be used to evaluate a listed service during an inspection period for payment computation purposes. The methods of surveillance are:

2.1.1 Sampling. For services surveilled by sampling. Sample size is derived from tables borrowed from MIL-STD-105D. The lot size or number of tasks accomplished by Contractor for a particular service item is the number of service tasks performed in that evluation period. Sample size is derived form lot size as shown in table 2 of the PRS. The accept or reject levels for the inspection are derived from sample size as shown in table 3. These will be used as a basis for the Government's quality assurance procedures, with other areas reviewed periodically. Two types of sampling methods are:

2.1.1.1 Random Sampling. This method gives the truest unbiased evaluation possible of total contractor’s performance for each service. First a sample size is selected based on lot size from Table 2. The lot items are assigned a serialized number (1,2,3 . . . .12). Then a random number generator (pair of dice), matching the lot size number, generates the sample numbers to be inspected. These numbers are documented and keep on record along with inspection results. This method is based on statistical theory and estimates the Contractor’s overall performance for a given contract requirement. Once defects exceed the MADR, a CDR will be issued with this surveillance method.

2.1.1.2 Planned Sampling. Sample selection is based on an objective rationale to monitoring contractor performance. This method is used in service areas, which are required, but are not monitored in the PRS, such as Test Equipment calibration. Also it is used to support overall requirements in the PRS. Defects found during these inspections will be documented and used in accordance with this plan. Once the number of defects exceed the MADR or other contract requirements, a CDR will be issued with this surveillance method.

2.1.2 100% Inspection. Used to monitor contractor performance of an individual work order task or infrequently performed work and associated deliverables. Defects found during these inspections, will be documented and used IAW this plan. Once the number of defects exceed the MADR or other contract requirements, a CDR will be issued with this surveillance method.

2.1.3 Incidental inspection. Used to monitor the contractor performance in all areas of the contract. These types of inspections occur when the QAE observes defective performance of the contractor service. The QAE must document all such inspections and show the incidental nature of the QAE being present and the defect was observed. Once the number of defects exceed the MADR or other contract requirements, a CDR will be issued with this surveillance method.

2.1.4 Operational Monitoring. These are sent to the COTR or QAE, by the operational units, for action. The COTR will document the complaint and determine if the complaint is valid. This quality assurance method is based on customer awareness and applies to all contract requirements. The COTR/QAE will insure that customers have access to PWS and explain contract requirements. Once the complaint is valid a defect is issued to the contract IAW this plan.

3. CRITERIA FOR EVALUATING PERFORMANCE. Performance of a listed service will be accepted and paid for at the maximum payment percentage specified in Table 1, column 6 of the PRS when the number of defectss found by the QAE during contract surveillance exceeds the Maximum Allowable Defect Rate (MADR) allowed in column 3. When the MADR is exceeded, the Contractor shall be required to complete block 10 of a Contract Deficiency Report explaining why the performance was unacceptable, how performance will be returned to acceptable levels and how recurrence of the problem will be prevented in the future. The COTR and Contracting Officer will evaluate the Contractor's explanation and determine if full payment, partial payment, or the contract termination process is applicable. The Contractor's payment for services rendered will be calculated, as stated in paragraph 4.

3.1 DETERMINING THE NUMBER OF DEFECTS FOR A REQUIRED SERVICE.

3.1.1 For services surveilled by random sampling, the number of defects that will cause less than the maximum payment is defined in the Accept/Reject Table or Table 3.

3.1.2 For services surveilled by other than random sampling:

3.1.2.1 If the MADR is a constant number of defects (for example, 2 defects), the number of defects that will cause less than maximum payment equals one plus the MADR (or 3 defects).

3.1.2.2 If the MADR is a percentage value, to determine the number of defects that will allow maximum payment, multiply the MADR by the lot size. If the resulting value has a decimal, round to the next higher whole number if the decimal is .5 or greater, and to the next lower whole number if the decimal is less than .5. One or more additional defects above the MADR will cause less than the maximum payment.

3.2 ACCEPTANCE OF RE-PERFORMANCE OR LATE PERFORMANCE WORK.

3.2.1 Except as otherwise provided below, defective or incomplete performance for Inventory Management, Casualty Maintenance is not subject to correction by re-performance or late performance, and the Contractor shall not be required or entitled to reperform, perform late, or otherwise correct defective service to improve an existing inspection rating or avoid a reduction in the full contract price.

3.2.2 At the sole election of the Contracting officer and upon notification, the Contractor shall re-perform or perform late any or all defective work found through inspection of services performed. Where the Contracting Officer elects, the Government will promptly notify the Contractor that specified defective services are to be re-performed or performed late, and completed within a reasonable time specified by the Contracting Officer. In such cases, the Government will inspect work identified for re-performance or-late performance, the Contractor may be liable for any damages sustained by the Government including, for example, the costs associated with re-inspection by Government.

4. CONTRACTOR PAYMENT.

4.1 Performance of a listed service in Table 1 will be accepted and paid for at the maximum payment percentage specified in column 6, if the number of defects found by the QAE during surveillance does not exceed the number of defects allowed by the MADR.

4.2 If system performance exceeds the MADR, the Government may pay less than the full percentage in PRS, column 6.

4.2.1 The payment for listed services that exceed the MADR will be calculated as follows:

4.2.1.1 For those services surveilled by operational monitoring, the maximum contract payment per month is multiplied by the maximum payment percentage for the service.

4.2.1.1.1 Example Payment Calculations using Casualty Response. Here is an example of payment computation for performance. The Government will reduce the Contractor's monthly payment using the following method:

Example 1: Assume the Contractor can earn 70% (based on PRS table) of FFP payment in any Contract Year. Assuming a FFP contract value of $72,000 total, the contractor could receive (70% x $72,000) or $50,400 annually. A monthly payment of $50,400/ 12 months OR $4200 per month maximum. Given that a Casualty response is made up of 2 critical elements: Initial callback time and time to operational readiness.

(1) The maximum fixed payment for any month of casualty maintenance is: $4200

(2) MADR for this requirement is: 9 hours max per outage

STANDARD

VALUE

(3) NOTE: The deduction for a late callback response or time to arrival for NDS or NAIS site will be negated, if the site is made operational within performance standard for operational.

(4) Assume The first NDS site outage callback was more than 3 hours, but the vendor responded and repaired outage within the 9 hour window, and the site went down over the next 24 hours for the same cause. What would the calculation be for First NDS Casualty Response ?

(6) First NDS Casualty Response Deductions:

Callback late: $ 4200 x 5%= $210

Time to operational: $ 4200 x 20%= $840

Site down within 48 hour window: Redo at no cost to Gov’t.

(7) The second NDS site outage in same month was repaired and made operational in 20 hours total or beyond the performance standard, and assuming the callback was made within 3 hours and it was not beyond the Contractor’s control to complete in a timely manner. The Deduction for the second casualty would be:

$4200 x 20%= $ 840.00

(8) The monthly payment for Casualty Maintenance would be:

$ 4200 – 1890 = $ 2310.00

Note: Deductions are taken for all deficient service (i.e. quality of work performed or not meeting OEM specifications), not just the deficient service that exceeds the MADR.

4.2.1.1.2 For those services surveilled less than monthly or infrequently, such as inventory or preventive maintenance.

Example 1: Assume the Contractor has sent the Gov’t an invoice for 2 Preventive Maintenance tasks performed in that month at a value of $ 5,000 ea. A complaint was reported at one of two sites where PM tasks were performed. The deduction computation is as follows:

(1) The maximum payment for 2 Preventive Maintenance tasks is:

$5,000 x 2= $10,000

(2) When any work is not up to quality standards at 1 of 2 random sites inspected. Vendor to re-perform work found unacceptable.

(3) Vendor to immediately receive payment for PM successfully performed. Invoice is not to be paid on defective PM until work is re-performed.

(4) Total payment due for that month is: (Total # PM)x Payment per PM) minus (defective PM value) =

(2 x $5,000) -($5,000)= $5,000.00

(5) Defective PM work to be re-performed for 100% credit minus any direct costs for Coast Guard to re-inspect work, if any.

Example 2: Assume the annual payment for inventory management using PRS table is (30% x $ 72,000 FFP portion)or $21,600. Contractor has sent the Gov’t a monthly invoice for Inventory Management, Of the 500 inventory items, a sample of 50 items are chosen at random on a quarterly basis for QA inspection. The QAE determines that 9 of the inventory records do not coincide with physical inventory. Inspections are conducted quarterly by ESU. The deduction computation is as follows:

(1) The maximum monthly payment:

$21,600/12= $1,800

(2) Sample size for lot size of 500 (see Table 2)is: 100

(2) 5% MADR rate for sample size of 100 (see Table 3) is:

5 defects

(4) Assume that 9 defects were found and 5 defects are the max allowable Defect Rate, then a deduction is due the vendor for the entire quarter of service, since inventory is reviewed quarterly by Gov’t. Vendor is to correct discrepancies found unacceptable, but deduction stands.

(5) Deduction is as follows:

(% found defective)x (items in inventory)x(Months of service)x monthly payment)=

(9/100)x(3)x($1,800)= $ 486

(6) Total payment due for that month is: (Total monthly payment for Inventory Management) – (deduction for defective service for quarter)

$1,800 – $486 = $1,314.00

Performance Requirements Summary

Table 1

SERVICE

PERFORMANCE

STANDARD

MAXIMUM

ALLOWABLE

DEFECT

RATE

MONTHLY

LOT SIZE

METHOD OF

SURVEILLANCE

MAXIMUM

PAYMENT

Performed Quarterly

1. Callback Response Time .

2. Site operational within MADR.

3. Site operational for 48 Hours after successful Casualty Repair.

PWS: C-5.7.2.3 NDS and C-5.7.1.3 NAIS 9 hours maximum per outage

# Casualty Response and Maintenance Callouts

Customer Monitoring

1. Work done to specifications in PM tasking in schedule in TE-5.

2. Work done to quality standards in OEM technical manual and TE-5.

3. Completeness of Report.

customer complaints PM performed

Customer Complaints

SAMPLE SIZE TABLE

TC"TABLE 2" \l Table 2

Accept and Reject #

TC"TABLE 3"\l Table 3

Acc Rej

MADR 5.0%

Acc Rej

MADR 6.5%

Acc Rej

HSCG8909-R-65M206

ATTCH 2 TE-1