M67854-18-R-7600_-_Attachment_7_-_Performance_Incentive_Plan.pdf

M67854-18-R-7600

Attachment 7

GLOBAL COMBAT SUPPORT SYSTEM – MARINE CORPS

POST-DEPLOYMENT SERIVCES SUPPORT

PERFORMANCE INCENTIVE EVALUATION PLAN

CLINS X001, 0005, 0006

12 June 2018

I. INTRODUCTION

In accordance with the provisions of the Federal Acquisition Regulation (FAR) and applicable supplements, the purpose of this document is to outline the overall strategy to employ incentives under this contract. There are several different incentives possible within the contract on different contract line items (CLINS), and are summarized as follows:

1. CLINS X001 – Core Post-Deployment Services Support has two potential incentives. All task orders that include X001 will be subject the incentives as described in this Plan.

a. The first is a cost incentive using a Fixed-Price Incentive structure with a government/contractor share of any underruns of 50/50 and a government/contractor share of any overruns at 70/30, up to the point of total assumption (PTA).

b. The second incentive for these CLINS is for operational availability. This is based upon the average availability of the system over a period of time. If defined thresholds are met, then an incentive may be earned

2. CLINS 0005/0006 – Changes, Futures, and RICECPW Reduction – Work under these

CLINS is done via separately awarded task orders. Fixed incentives with defined thresholds may be added to tasks orders, but only at the Government’s sole discretion. Not all task orders with these CLINS will have incentives.

Evaluation of the incentives will be done in accordance with the contents of this plan, and will be considered for each individual task order that has an incentive included within it. The incentives on each task order will be independent of incentives on other task orders, but subject to the procedures contained within this Plan.

II. ORGANIZATIONAL STRUCTURE

A Government Performance Incentive Administration Board (PIAB) will be established to evaluate and award any incentives award earned (IAE) during each evaluation period. The board will meet to discuss, evaluate, and award incentives that are earned in the previous reporting period. This includes any task order with an incentive where performance is complete, and the final metrics are available for evaluation by the Board. The evaluation periods are discussed in

Section III.

A. Board Membership – The PIAB will be comprised of the following personnel

1. Performance Incentive Administration Board Chair and Determination Official –

This position will be filled by the Program Manager (PM) GCSS-MC.

2. Performance Incentive Administration Board (PIAD)- The Performance Incentive

Administration Board is comprised of the following members:

a. Contracting Officer

b. Contracting Officer’s Representative

c. APM Engineering or representative

d. APM Logistics or representative

e. Other government personnel designated by the Chair

3. Integrated Process Team – The IPT is the group of individuals that have knowledge of the contractor’s day-to-day performance on each task order. They are responsible for monitoring and reviewing the contractor’s performance in relation to the incentive criteria, and submitting evaluation reports via the COR to PIAB members for review. The IPT will be identified at the beginning of each task order and will be updated, as necessary, based upon personnel changes.

B. Roles and Responsibilities

1. Performance Incentive Administration Board Chair and Determination Official responsibilities including the following:

a. Appoint members of the Board.

b. Approve the Plan and any changes.

c. Convene the PIAB, and evaluate the findings for each task order by the PIDB members for the specific evaluation period.

d. Determine the performance incentive earned and payable on the subject task order(s) and ensure that is commensurate with, and accurately reflects the Contractor’s performance against the stated performance criteria.

e. Sign the Performance Incentive Determination to be delivered to the Contracting

Officer who shall provide the results of the Performance Incentive Determination to the Contractor.

2. Performance Incentive Administration Board Member responsibilities include the following:

a. Participate in PIDB meetings and briefings.

b. Review evaluation reports and determine the recommended IAE

c. Make a recommendation to the PIAD Chair for an award or non-award of the IAE for each task order that is being reviewed.

d. The COR shall be responsible for obtaining the reports from the IPT and preparing the documentation for Board review.

3. IPT responsibilities include the following

a. Be familiar with the contract and specific task order requirements and the Performance

Incentive Plan, including the performance rating criteria.

b. Conduct assessments according to the contract and task order requirements, ensuring the evaluations are fair and accurate.

c. Maintain written records of the contractor’s performance

d. Provide briefings and/or required reports to the PIDB members through the PIDB

Chair.

e. Understand and monitor the contractor’s performance and the performance requirements necessary to achieve the identified levels of performance for each Task order.

IV. EVALUATION AND DETERMINATION PERIOD

The evaluation period for the Incentive Award Earned (IAE) will be as follows:

Contract Line Item Type of Incentive Evaluation Period

CLINS X001 Cost Incentive Task Order Period of

Performance

CLINS X001 Operational Availability

Performance Incentive

Every six months.

CLINS 0005/0006 Performance or Schedule

Incentive

Task Order Period of

Performance

The PIAB will met twice a year, starting approximately one year after the award date of the contract. The PIAB determination periods will be January – June and July – December for task orders ending during those timeframes.

V. EVALUATION CRITERIA, EVALUATION AND SCORING

There are different evaluation criteria, evaluation methodology, and scoring for CLINS X001 and

CLINS 0005/0006 as described below.

A. Incentives and Evaluation for CLINS X001

This contract has incentives to encourage cost control and performance capabilities under these

CLINS. Under CLINS X001, there are two incentives: 1) cost incentive for PDSS Core Services, and 2) Operational Availability Performance Incentive. For CLINS 0005/0006, there is a an

Incentive CLIN for work conducted under Futures Initiatives, Changes, and RICECPW, which will be used at the sole discretion of the Government on selected orders. A description of the calculation, application, and payout of each of the incentives is included below. All incentives are determined independent of each other, however, the Cost Incentive will not be payable if the

Operational Availability falls below the identified threshold.

Cost Incentive: Applicable to CLINS 0001, 1001, 2001, 3001 and 4001. These CLINS are incentivized to encourage overall Total Cost Reduction. At the end of each year of performance, upon settlement of the final costs, the appropriate share ratio will be applied to determine what fee, if any, is earned by the contractor. This fee will be available for payment as the final total price under the respective performance CLIN. The cost incentive will not be payable, even if an amount is earned, if the Operational Availability falls below the threshold for the year as described below.

Operational Availability (Ao) Performance Incentive: In addition to cost control, operational availability is a priority of GCSS-MC. This is an incentive that can be earned in addition to the cost incentive. The minimum acceptable Operational Availability that permits the payment of any incentives is 85% for task orders that include CLINS 0001, 1001, 2001, 3001, or 4001. If the

GCSS-MC system falls below 85% for the full period of performance of CLINS 0001, 1001, 2001, 3001, or 4001, there is 0% cost incentive fee paid to the vendor for that period in addition to the

0% Operational Availability fee earned for that performance period.

Operational availability is calculated and evaluated on a six month basis for the purposes of the performance incentive for CLIN X001 and on an annual basis equal to the period of performance of the task order (one year) for the cost incentive. Not more than two evaluations will be done for each task order under CLINS X001 for the performance incentive, but results for a rollover incentive can carry over to the next evaluation period of the next task order. The formula for the calculation of the operational availability can be found in Performance Work Statement paragraph

3.6.1.1 Reliability. This incentive will be calculated and payable, if applicable, based upon when the PIAB is able to meet and the availability of the final calculations.

This is a sliding-scale incentive based upon the performance achieved for Operational Availability.

At an Ao less than 85% for the period, there is no incentive, but will impact the Cost Incentive.

From 85% to just below 90% Ao, there is no incentive and does not impact the Cost Incentive.

The performance incentive is applicable when the availability reaches 90% or above.

The Target Availability is 96%. Rounding to the nearest 100th will be done for the calculation of the Ao. From 90% to 100% Ao, the approximate potential fee is a % of the Target Cost. The following chart shows the correlation between the approximate Ao and approximate incentive valued based upon a six month evaluation cycle.

Potential Incentive Per Six Month Evaluation Cycle

Ao Incentive - % Value of Target Cost

90% 1.00%

91% 1.125%

92% 1.25%

93% 1.375%

94% 1.5%

95% 2.125%

96% 2.75%

97% 3.125%

98% 3.5%

99% 3.875%

100% 4.25%

The fee calculation has three elements.

1. Calculated annual Ao rounded down to the next 100th.

2. Fee % with the associated annual calculated Ao

3. Target Cost for CLIN 0001, 1001, 2001, 3001, or 4001.

If a fee is earned, it will be calculated as follows:

For the applicable Ao, the corresponding fee % derived from the table will be applied to the Target

Cost for the applicable CLIN for Core PDSS services. The fee will be a % of the Target Cost and will be an additional fee on top of any Cost Incentive earned. All fee values will be rounded down to the nearest whole dollar. Any incentive earned for operational availability will be provided on

CLIN 0007.

Rollover Incentive: If the contractor does not meet the 95% Ao level, then the contractor will be eligible for a rollover incentive in the next evaluation period to incentivize operational availability.

This will only be available for the next period if the Ao is less than 95% in the evaluated period.

Each rollover incentive is only available for one evaluation period and is not cumulative. The rollover incentive is equal to the difference between the 95% incentive values minus the achieved incentive value % divided by 2 as described in the following formula:

(95% Incentive Value – Actual Incentive % Value)

Any Ao below 90% will be assigned an Actual Incentive % Value of 0 in the formula, so the maximum rollover is limited to 1.0625% of the Target Cost for any evaluation period.

In order to earn the rollover incentive the contractor must achieve at least the 95% Ao level in the next evaluation period. If the contractor reaches at least 95% in the next evaluation period then the incentive award will be the amount earned for the Ao achieved plus the rollover incentive amount up to the maximum Ao level.

An example is provided below:

Period 1: Final calculated Ao achieved is 91% with a fee of 1.125%

Target is 95% with a fee of 2.125%

Incentive available for rollover = (2.125-1.125) = 0.5%

Period 2: Final calculated Ao achieved is 96% with a fee of 2.75%.

Incentive payable for Period 2 is fee at 2.75% + 0.5% = 3.25%

If the Ao for Period 2 does not reach at least 95% then the incentive is not earned and a different incentive for the next period may be calculated and rolled over based upon the actual Ao achieved.

. Incentives and Evaluations for CLINS 0005/0006

For task orders issued against CLINS 0005/0006 that include an incentive, objective assessments will be used to evaluate the contractor’s overall performance and corresponding IAE during the evaluation period. The Maximum Possible Incentive Amount will be placed on the task order at award, but will not be available for payment until a determination by the PIAD is made.

Technical Performance

The technical performance criteria will measure the Contractor’s performance in achieving specific thresholds identified within the task orders. The technical performance metric will be based upon operational efficiency, with objective metrics being established for each task order that clearly delineate the expected threshold level(s) of performance required to earn incentive payments. A specific, fixed value will be assigned to each threshold level. If the contractor fails to meet the performance threshold(s) specified in the task order, then the IAE will be $0.00.

Schedule Performance

The schedule performance criteria will measure the contractor’s performance in terms of the delivery schedule. Task orders that have a critical time component may have a schedule incentive for exceeding expected performance. The schedule performance metric will be based upon objective dates that clearly define the expected threshold level(s) of performance to earn the incentive. A specific, fixed value will be assigned to each threshold level. If the contractor fails to meet the performance threshold level(s) specified in the task order, then the Incentive Amount

Earned will be $0.00.

Incentive Limits

The Maximum Possible Incentive Amount (MPIA) will be determined at the time of the task order award. The MPIA is not subject to adjustment from changes or other modifications to the task order, and will be set at the initial task order award. The MPIA for tasks on CLINS 0005/0006 is limited to the following parameters:

1. Not more than 10% of the value of the firm-fixed price portion of any task order with an incentive.

2. In the rare instance that a task is only cost reimbursement, the MPIA is limited to 10% of the initial estimated cost at task order award.

3. For task orders that combine technical and schedule incentives, the combined, total maximum performance incentive amount may not exceed 10% of the value of the firm-fixed price portion of the task order.

The MPIA is at the sole discretion of the Government and may be less than 10%.

Combining Incentives

The Government may combine incentives for technical and schedule performance. The total value of both incentives combined may not exceed 10% of the firm-fixed price of the initial task order value. Each incentive may be weighted within the task orders, and will be clearly delineated what the respective weighting is, and the value of each of the threshold levels based upon the weighting.

The task order may state that neither incentive is payable if both do not meet the first threshold level. In the event that the incentives are combined, the maximum incentive is equal to the MPIA.

The incentives may be considered separate or combined together, resulting in the payout of only one, both, or neither incentive at all depending on the relationship and criticality associated with each criteria.

Scoring - Threshold Levels

Specific threshold levels with objective criteria and fixed fee values at each level will be defined in each task order with an incentive. The levels denotes below will be clearly defined with the task orders. They are not cumulative, and only one rating level may be earned for each incentivized task order. The amount of the incentive available will be determined as a fixed price based on the initial value of the base task order. The incentive is not subject to revision due to changes in the requirement through modification. The following table is an example of what will be used in each task order:

Rating Level Amount of Maximum

Possible Incentive Amount

Earned

Description

Level 4 100% Meets Threshold Level 4 Criteria threshold as stated in the task order for technical or schedule performance.

Level 3 75% Meets Threshold Level 3 Criteria threshold as stated in the task order for technical or schedule performance.

Level 2 50% Meets Threshold Level 2 Criteria threshold as stated in the task order for technical or schedule performance.

Level 1 25% Meets Threshold Level 1 Criteria threshold as stated in the task order for technical or schedule performance.

Base 0% Does not meet the thresholds levels for any criteria as stated in the task order for technical or schedule performance.

The number of threshold levels and the % of the MPIA may vary from task order to task order, and is at the sole discretion of the Government. The minimum number of threshold levels is one and the maximum is four. When incentives are combined, the minimum total threshold levels is one per incentive (two combined) and maximum is four per incentive (eight combined).

If incentives are combined, then each incentive will have its own rating matrix that includes the amount of the maximum possible incentive earned.

VI. USE OF INCENTIVES

Not all task orders will have an incentive. The use of incentives for awarded tasked orders on

CLINS 0005/0006 is solely at the discretion of the Government. When incentives are used on the task orders, it is designed to provide economic motivation for the contractor to provide timely, high quality outputs that exceed the minimum requirements of the task order. The payment of any performance incentive is contingent upon compliance with contractual requirements, and performance to the degree specified in this Plan, all in conjunction with the specific metrics identified in each task order that has an incentive included.

VII. CHANGES TO PERFORMANCE INCENTIVE PLAN

The Government reserves the right to unilaterally change the Performance Incentive evaluation methodology, areas of emphasis for each task order, period of evaluation, individual metrics, and other matters covered in this plan. Any changes to the individual metrics will ensure that responsibility for performance remains within the contractor’s scope of control for each task order.

All changes will be submitted, and must be approved by the PIAB. Any changes to the plan will only affect task orders that are awarded more than 60 days after the changes are approved. Changes to the Plan are not retroactive.

If requested by the Government, the contractor may propose specific metrics or areas for evaluation under the technical performance or delivery incentive for any task order that will have an incentive.

VIII. INCENTIVE PAYMENT

The Performance Incentives are not subject to the “Allowable Cost and Payment” clause of this contract, and is only payable once a determination is made by the PIAB Chair and notification provided to the contractor. Payment of the performance incentive on CLINS X001 and CLINS

0005/0006 are payable on CLIN 0007. Payment of the cost incentive on CLINS X001 is payable on CLINS X001.