Attachment_11_-_Draft_PIP_30_Jun_14.docx

ATTACHMENT 11

KIRTLAND HELICOPTER MAINTENANCE SERVICES

PERFORMANCE INCENTIVE PLAN

1.0 INTRODUCTION

1.1 The objective of this plan is to motivate the Contractor to consistently perform satisfactorily in areas of key importance related to UH-1 and HH-60 helicopter maintenance. This plan details the process that will be applied to calculate Performance Incentive Reductions (PIR) to be withheld from payment invoices when objective performance incentive thresholds are not met in the following areas described in PWS Section 3-2: Minimum Daily Aircraft, Monthly Maintenance Scheduling Effectiveness, Aircraft Technical Inspections, and Scheduled Observation Area Inspections. Performance will be monitored continuously and assessed on a monthly basis for Minimum Daily Aircraft and Monthly Maintenance Scheduling Effectiveness, and on a quarterly basis for Aircraft Technical Inspections and Scheduled Observation Area Inspections. PIR results may be addressed in Contractor Performance Assessment Report System (CPARS) assessments.

2.0 GENERAL PROCEDURES

2.1 Evaluation Periods. Evaluations will occur daily, monthly, and/or quarterly, as applicable. However, PIR will be calculated and applied on a quarterly basis. The PI evaluation periods are as follows:

2.2 Assessment and Payment Overview. The performance criteria described in PWS Section 3-2 and paragraph 3.0 Performance Incentive Procedures will be utilized. Results will be considered on a “pass/fail” basis for each respective measurement threshold. The Chief Contracting Officer Representative (COR) will present all quarterly performance evaluations and PIR calculations to the Functional Commander (FC) for validation. The final PIR determination is the unilateral decision of the Government. The CO will inform the Contractor in writing of the PIR amount assessed and the total amount the contractor may invoice for CLIN X001 and X002. The CO will provide this notice within 10 business days after the close of the PI evaluation period. The PIR will be applied to contractor invoices on a quarterly basis and one month in arrears. For example, Quarter 3 PIR will consider performance occurring April – June and any withhold will be implemented on the July invoice.

2.3 Procedures for Changing the Plan. Administrative changes to this plan (dates, validation process, etc.) may be executed unilaterally via contract modification no less than 15 calendar days prior to the start of the affected evaluation period. Otherwise, changes will require a bilateral agreement between the Government and Contractor. All changes to incentivized performance thresholds require a PWS revision and bilateral agreement between the Government and Contractor.

2.4 Contract Termination. If the contract is Terminated for Convenience of the Government during an active evaluation period, the standard evaluation process will apply on a prorated basis for the reduced period. Inclusion and implementation of this plan does not limit the Government’s rights to execute Termination for Default actions as authorized by contract clause 52.249-8, Default (Fixed-Price Supply and Service) or any other authority provided by the terms and conditions of the contract.

3.0 PERFORMANCE INCENTIVE PROCEDURES.

3.1 PIR Table: The PI applies 1% reductions for substandard performance in the Performance Measurement Areas identified below:

* Aircraft Technical Inspections and Scheduled Observation Area Inspections apply to both airframes. PIR formulas are shown in Para 3.2.2.

3.2 PIR Formulas.

Minimum Daily Aircraft – UH-1: PIR = 1% x CLIN X001 Minimum Daily Aircraft – HH-60: PIR = 1% x CLIN X002 Aircraft Technical Inspections: PIR* = [(CLIN X001 + CLIN X002)2] x 1% Scheduled Observation Area Inspections: PIR* = [(CLIN X001 + CLIN X002)2] x 1% Monthly Maintenance Scheduling Effectiveness – UH-1: PIR = 1% x CLIN X001 Monthly Maintenance Scheduling Effectiveness – HH-60: PIR = 1% x CLIN X002

*Calculated PIR applies to the cumulative value of CLIN X001 and CLIN X002

3.2.1 Sample Calculation.

Assume the following:

* Values are notionally assigned for illustrative purposes only.

Earned Performance Incentive calculations:

· 1st Qtr Performance: Contractor achieved all thresholds with the exception of performing at only 83% on Aircraft Technical Inspections in Nov 17

· 1st Qtr PIR:

Aircraft Technical Inspections: [($350,000 + $250,000)2] x 1% = $3,000 per CLIN

· Jan 17 Invoice reduction as submitted on 1 Feb 17:

CLIN X001: $250,000 - $3,000 = $247,000

CLIN X002: $350,000 - $3,000 = $347,000

Therefore, contractor may invoice for $247,000 on CLIN X001 and $347,000 on CLIN X002

· 2nd Qtr Performance: Contractor achieved all thresholds with the exception of performing only 94% on Monthly Maintenance Scheduling Effectiveness – HH-60 in Jan 18 and only 79% on Scheduled Observation Area Inspections in Feb 18

· 2nd Qtr PIR:

Monthly Maintenance Scheduling Effectiveness: $350,000.00 x 1% = $3,500.00 Scheduled Observation Area Inspections: [($350,000 + $250,000)2] x 1% = $3,000 per CLIN

· Apr 2018 Invoice reduction as submitted on 2 May 18:

CLIN X001: $250,000 - $3,500= $246,500

CLIN X002: $350,000 - ($3,500 + $3,000) = $343,500

Therefore, contractor may invoice for $243,000 on CLIN X001 and $337,000 on CLIN X002

3.3 Determination of Achieved Performance: Contractor performance will be monitored and evaluated continuously. Performance measurements and thresholds are objective in nature and will be calculated at the end of the incentivized period. Should the contractor wish to contend the performance calculations and/or the PI determination are in error, the contractor shall notify and provide substantiating documentation to the CO within three business days.

4.0 PERFORMANCE INCENTIVE PLAN RESULTS. The PM will present the proposed performance incentive results to the FC at the end of each quarterly evaluation period to ensure consistency and integrity in application of the Incentive Plan. The FC will validate the PM’s inputs, recommendations, and calculations. Performance Incentive results each period are not closed until final coordination with the FC. The final determination is the unilateral decision of the Government and will be communicated to the Contractor by the CO within 10 business days after the end of the evaluation period.

FA3002-13-R-0024

Attachment 11