J-7_INCENTIVE_AWARD_FEE_PLAN_EAST_COAST.docx

INCENTIVE/AWARD FEE PLAN

USMC REGIONAL GARRISON FOOD SERVICE CONTRACT III (RGFSC)

For

East Coast RGFSC III

INCENTIVE/AWARD FEE PLAN DATE: ______________ REVISION: ____________

ACQUISITION PROGRAM MANAGER:

Program Manager, RGFSC III, Marine Corps Installation Command (MCICOM)

PROCURING CONTRACTING OFFICER:

Contracting Officer, MCICOM Contracts Division

APPROVED BY:

KEVIN NUNES Date Director, MCICOM Contracts Division Table of Contents

1.0 Introduction

This Incentive/Award (I/A) Fee Plan provides the basis for evaluation of the Contractor's performance, for determining semi-annual Incentive Fee payments and for developing an assessment of subjective elements of performance. It describes specific formulas for application of Incentive Fee payments as well as criteria and procedures used to assess the Contractor's performance and to determine the amount of Award Fee earned. Actual Award Fee determinations and the methodology for determining the Award Fee are unilateral decisions made solely at the discretion of the Government and are not subject to the Disputes Clause (FAR 52.233-1).

The I/A Fee authorizations will be provided to the Contractor through contract modifications. The Award Fee earned and payable will be determined by the Award Fee Determining Official (AFDO) based upon review of the Contractor's performance against the criteria set forth in this plan. The AFDO may unilaterally change this plan prior to the beginning of an evaluation period. The Contractor will be notified of changes to the plan by the Contracting Officer, in writing, before the start of the affected evaluation period. Changes to this plan that are applicable to a current evaluation period may only be incorporated by mutual consent of both parties.

2.0 Program Goals and Incentive/Award Fee Criteria

2.1 Program Goals

The USMC has developed the following seven primary goals which provide a clear focus for all activities relating to the RGFSC III:

· GOAL 1: Provide high-quality meals that meet the nutritional requirements;

· GOAL 2: Provide high-quality service;

· GOAL 3: Provide meals that are prepared in accordance with (IAW) food safety standards;

· GOAL 4: Provide meals in a clean and pleasant environment;

· GOAL 5: Provide meals in a timely fashion;

· GOAL 6: Provide sustainment of Government Furnished Property (GFP);

· GOAL 7: Provide capable and responsive management.

2.2 Performance Incentives and Award Fee Criteria

Performance incentives and Award Fee criteria have been developed to focus Contractor efforts toward accomplishment of these goals. This plan provides four objective performance incentives based on a Marine Customer Satisfaction Index along with an Award Fee based on clearly articulated, regular feedback on Business and Operations Management criteria. The application of these incentives is described in detail in Evaluation Methodology. They are:

· Food Quality Incentive

· Service Quality Incentive

· Cleanliness Incentive

· Speed of Service Incentive

3.0 I/A Fee Pool Calculation and Methodology

3.1 Total Fee Pool (TFP) Calculation

The Total Fee Pool (TFP) is the maximum dollar amount the Contractor is able to earn during the I/A Fee Period. The TFP is obtained by using the following calculation:

TFP = (# of meals served during I/A Fee Period) x (KTR Fee CLIN) For example, if there are 7,500,000 meals served during the I/A Fee Period, and the KTR Fee CLIN is $0.55, the TFP would be calculated as follows:

(7,500,000) x ($0.55) = $4,125,000

3.2 Incentive Fee Pool Calculations

The Incentive Fee Pool represents 70% of the TFP and is to be divided among four incentives as follows: the Food Quality Incentive represents 30% of the TFP, the Service Quality Incentive represents 20% of the TFP, the Cleanliness Incentive represents 10% of the TFP, and the Speed of Service Incentive represents 10% of the TFP.

The Incentive Fee Pools for the four incentives are obtained by using the following calculations:

(1) Food Quality Incentive Fee Pool = (TFP) x (Food Quality Incentive Weight)

(2) Service Quality Incentive Fee Pool = (TFP) x (Service Quality Incentive Weight)

(3) Cleanliness Incentive Fee Pool = (TFP) x (Cleanliness Incentive Weight)

(4) Speed of Service Incentive Fee Pool = (TFP) x (Speed of Service Incentive Weight)

3.3 Award Fee Pool Calculation

The Award Fee Pool represents 30% of the TFP.

The Award Fee Pool is obtained by using the following calculation:

· Award Fee Pool = (TFP) x (Award Fee Weight)

The Incentive Fee is determined by the lower bound customer survey ratings for the I/A Fee Period. The customer ratings are based on an adjectival rating scale which corresponds to a 1-5 numerical rating scale. At the end of the I/A Fee Period, the lower bound average score will be determined for each of the performance incentives.

The lower bound score will then be translated to an Earned Rating Percentage (ERP) by dividing the lower bound score by the maximum possible score (which is a “5”). For example, if the Food Quality lower bound score for the I/A Fee Period is 3.50, the ERP would be calculated as follows:

(3.50) / (5.00) = 70.0% The minimum requirement for the Contractor to receive reimbursement for any of the incentives is a composite rating of 60% or higher on that element. Therefore, on any of the four incentives, should a Contractor receive a composite survey rating of less than 60%, the incentive fee for that element will be forfeited for the entire 6-month period. Any remaining incentives receiving a composite rating of higher than 60% will receive payment.

Once the ERPs have been determined for all survey ratings, the Earned Incentive Fee is obtained using the following calculations:

(1) Food Quality Earned Incentive Fee = (Food Quality Incentive Fee Pool) x (Food Quality ERP)

(2) Service Quality Earned Incentive Fee = (Service Quality Incentive Fee Pool) x (Service Quality ERP)

(3) Cleanliness Earned Incentive Fee = (Cleanliness Incentive Fee Pool) x (Cleanliness ERP)

(4) Speed of Service Earned Incentive Fee = (Speed of Service Incentive Fee Pool) x (Speed of Service ERP)

4.2 Earned Award Fee Evaluation Methodology

The Award Fee evaluation will be conducted by an Award Fee Review Board (AFRB). The composition of the AFRB, specific roles and responsibilities as well as the processes for the AFRB and the Award Fee determination will be detailed in the subsequent sections contained in this document.

· To determine the Earned Award Fee, the Contractor will be evaluated on the following criteria: Provide high-quality meals that meet the nutritional requirements; Provide high-quality service; Provide meals that are prepared in accordance with (IAW) food safety standards; Provide meals in a clean and pleasant environment; Provide meals in a timely fashion; Provide sustainment of Government Furnished Property (GFP); Provide capable and responsive management.

The Government reserves the right to focus on different criteria from one fee period to the next based on changing priorities of the program. The Government will inform the Contractor prior to the start of a new fee period if the criteria will be different than the last.

The AFRB will deliberate and assign the Contractor an AFRB Score with a corresponding adjectival rating. For Contractor performance that falls below the “Satisfactory” level (an Award Fee Evaluation Score below 50), which is the minimum requirement, no award fee payment will be recommended. The AFRB Score corresponds to an Award Fee Earned Percentage of the Award Fee Pool as illustrated in Appendix 1 - Award Fee Conversion Table.

Once the Award Fee Earned Percentage has been determined by the AFRB, the Earned Award Fee is obtained using the following calculation:

(1) Earned Award Fee = (Award Fee Pool) x (Award Fee Earned Percentage)

5.0 Award Fee Board Organization and Responsibilities

The Award Fee Board consists of the following program personnel:

5.1 Award Fee Determining Official

The AFDO approves the Award Fee Plan and any significant changes. The AFDO reviews the recommendation(s) of the AFRB, considers all pertinent data, and determines the earned Award Fee amount for each evaluation period. Any and all changes to the Award Fee Plan must be approved by the AFDO prior to the start of the period in which the changes take effect.

5.2 Award Fee Board Chairperson

The AFRB Chairperson is responsible for the overall functioning of the AFRB in the performance of its members. The AFRB Chairperson is a voting member of the AFRB. Specific responsibilities include:

(1) Scheduling meetings of the AFRB and notifying its members of the meetings;

(2) Conducting the AFRB meeting, coordinating deliberations, and preparing the Award Fee Board Report;

(3) Presenting the Award Fee Board Report and recommendations to the AFDO regarding earned Award Fee or plan changes.

5.3 AFRB Member

The AFRB Members are comprised of the Contracting Officer (KO), and two Customer Representatives. All three AFRB Members are voting members of the AFRB. The Director, Food Service and Subsistence Program HQMC I&L LFS, MCICOM G-4, will select the two Customer Representatives who will represent the customers as AFRB Members.

5.4 AFRB Recorder

The AFRB recorder is responsible for coordinating the administrative actions required by the Performance Monitors, the AFRB and the AFDO, including:

(1) Maintenance of records of all meetings in developing the award fee plan including documenting all meetings and reasoning for developing the plan as established (a copy of which will be provided to the KO for retention in the contract file);

(2) Receipt, processing and distribution of evaluation reports from all required sources;

(3) Scheduling and assisting with internal evaluation milestones, such as briefings;

(4) Accomplishment of other actions required to ensure smooth operation of the process.

5.5 AFRB Presenter

The AFRB Presenter is responsible for assembling comments of Performance Monitors who maintain written records of the Contractor's performance in their assigned evaluation area(s) and preparing an End-of-Period Incentive and Award Fee Evaluation Report (EPIAFER) and presenting it to the AFRB.

6.0 Award Fee Process

AFRB members must participate in a semi-annual meeting to evaluate the Contractor's performance, consider all information from pertinent sources, prepare an Award Fee Board Report, and arrive at an earned Award Fee recommendation to be presented to the AFDO. The AFRB may also recommend changes to this plan.

6.1 Award Fee Board Preparation

At the completion of each I/A Fee Period, the AFRB Chairperson will schedule an AFRB Meeting to take place within 60 calendar days following the end of the period. Simultaneously, the Contracting Officer will determine the Incentive and Award Fee Pools for the period.

6.2 AFRB Meeting

The AFRB Chairperson will conduct an AFRB Meeting whereby Government representatives give a presentation on their perspective regarding Contractor performance during the period. The Contractor will be invited to give a presentation providing performance information from their perspective. Following the meeting, the AFRB will deliberate, and then write an AFRB Report and Award Fee Recommendation. The AFRB Chairperson will brief the AFDO on the AFRB Report and Award Fee Recommendation.

6.3 Award Fee Determination

The AFDO will make an Award Fee Determination and prepare an Award Fee Determination Letter to be sent to the Contractor informing them of the results.

6.4 Contractor Rebuttal

While the Award Fee Determination is not subject to the Disputes Clause, the Contractor may present rebuttal information that they wish to have the AFDO consider. If so, the Contractor must respond, in writing, within 10 calendar days of AFDO Determination, requesting AFDO reconsideration of the Award Fee Determination. Once rebuttal information is received, the AFDO will respond, in writing, within 10 calendar days of receipt of the Contractor’s response, as to the final determination.

6.5 Payment of Fees

Upon conclusion of the 10 calendar day rebuttal period following AFDO letter transmittal, and subsequent reconsideration, should that be required, the Contracting Officer will execute a modification providing payment authorization for both Incentive Fees based on the objectively-based formula calculations and Award Fee based on the subjectively-based Award Fee Determination. Unexpended funds remaining from the Incentive/Award Fee Pool will be de-obligated and the Contractor will be instructed to invoice per contract modification. .

7.0 Incentive/Award Fee Plan Changes

Should the Government wish to make changes to the Incentive/Award Fee Plan, they must be approved by the AFDO and the Contractor must be notified in writing prior to the start of the period. The Contractor may recommend changes to the Contracting Officer no later than 30 calendar days prior to the beginning of the new evaluation period. Changes to this plan that are applicable to a current evaluation period may only be incorporated by mutual consent of both parties. Additionally, once the I/A Fee Period begins, there may not be any changes to the Incentive/Award Fee Plan without mutual agreement of both parties. Examples of changes include revising evaluation criteria, adjusting weights to redirect Contractor's emphasis to areas needing improvement, and amending the distribution of the Award Fee dollars displayed in the Award Fee Conversion Table.

Appendix 1 Award Fee Conversion Table

Excellent

91%-100%

Very Good

76%-90%

Good

51%-75%

*AFRB Scores which fall in between whole numbers (e.g., 88.5) will be issued an Award Fee Earned Percentage in accordance with the linear correlation for its adjectival rating range.Appendix 2 Definitions Incentive Fee: Fee paid to the Contractor semi-annually reflecting on a formula-based calculation of a statistical sampling; the statistical sampling is based on objectively-determined Marine Survey Ratings Award Fee: Subjective fee payment to the Contractor semi-annually based on an Award Fee Determination Total Fee Pool:

(i.) Total Fee Pool (TFP) Period 1: Amount of money available for semi-annual (I/A) Fee payment; pool amount is determined to be seven percent (7%) of the meal unit price reflected in CLIN X001AA (FULL FOOD SERVICE (FFS)) and X001AB (MANAGEMENT AND MESS ATTENDANT (M&MA) multiplied by the number of meals served in the I/A Fee Period (as determined by Contractor meal accounting records).

(ii.) Total Fee Pool (TFP) Period 2: Amount of money available for semi-annual I/A Fee payment; pool amount is determined to be seven percent (7%) of the meal unit price reflected in CLIN X001 AA (FULL FOOD SERVICE (FFS)) and X001AB MANAGEMENT AND MESS ATTENDANT (M&MA) multiplied by the number of meals served in the I/A Fee Period (as determined by Contractor meal accounting records).

Marine Survey: Government survey provided under controlled conditions to Marines dining in Marine Corps mess halls; surveys are used to objectively evaluate Contractor performance for delivery of important food service program goals Number of Meals Served: Calculation made semi-annually after the end of the I/A Fee Period of the number of meals served at all mess halls covered under the contract; determined by Government KO based on review of meal accounting records provided by Contractor Composite Rating: Computation of a simple average (utilization of standard deviation lower-bound values) of the ratings from a random-sample survey of Marines at USMC mess halls over each I/A Fee Period KTR Fee CLIN: Meal Unit Price in CLIN multiplied by seven percent (7%).

Minimum Requirement: Contractor performance level required to receive reimbursement on any single Incentive Fee element or the Award Fee component