J-9_Attachment_Performance_Incentive_Fee_Plan.pdf

ATTACHMENT J-9

PERFORMANCE INCENTIVE FEE PLAN

Third Party Advance Planning LPD 17, LSD 41, and LSD 49 Class Ships

N00024-14-R-4404

Applicable to CLINs 0001, 0003 and option items 1100, 1200, 1300, 1400, 3100, 3200, 3300, and 3400

1.0 INTRODUCTION

1.1. Purpose

The purpose of this plan is to establish the predetermined, objective, formula-type incentives, responsibilities, and procedures for evaluating Contractor performance and determining the performance incentive fee earned under this contract. See FAR 16.402-2, entitled “Performance incentives” and DFARS PGI 216.402-2, entitled “Technical performance incentives”.

1.2. Objective

The performance incentive fee is designed to provide economic motivation for the Contractor to produce high quality products and services on a timely basis that support Navy’s maintenance and modernization planning objectives. The purpose of this plan is to clearly articulate the performance incentives, and to establish the procedures for determining and funding performance incentive fee earned.

1.3. Performance Incentive Fee Periods

The Government will evaluate Contractor performance for each evaluation period in accordance with the criteria identified in this plan. The performance evaluation periods will be twelve (12) months (one evaluation period per calendar year). These periods are identified in Paragraph 5.0.

1.4 Performance Evaluation

Evaluation will take place no later than forty-five (45) calendar days after each evaluation period and the calculated fee will be provided in writing to the Contracting Officer within sixty (60) calendar days after the evaluation period. The Contracting Officer will issue a unilateral modification setting forth the specified performance incentive fee earned as soon as practicable.

The Contractor shall submit relevant evidence to the Government that it wishes to have considered in the evaluation for performance incentive fee no later than thirty (30) calendar days after completion of each evaluation period via CDRL A004, Contractor’s Progress, Status, and Management Report. As a part of the relevant evidence considered for performance evaluation, the Contractor shall note all circumstances caused by direct action of the Government, such as late GFI or funding or changed milestone scheduling, which impacted their ability to execute effort as planned. The Government, at its sole discretion, will consider those inputs in evaluating the Contractor performance.

2.0 SCOPE

The performance incentive fee pool will be identified and earned under CLIN 0009. Performance incentive fee will be evaluated and earned against the Quality and Technical Objective metrics described below.

Incentive # Performance Incentive Criteria Incentive Fee Amount 1 Accuracy of the Work Specification 80% 2 MSC Template Improvement 20%

Fee earned is a product of the score received for its efforts and the calculated performance incentive fee pool. In no event shall the total performance incentive fee earned per period be greater than the maximum incentive fee identified in Section B (NOTE A) of the contract.

The Government reserves the right to make changes in evaluation categories and factors or weights assigned to evaluation categories via unilateral modification prior to the start of any evaluation period. The Contractor shall be notified of any changes to criteria or weights thirty

(30) calendar days prior to the start of an evaluation period. The Contractor may also propose changes for any evaluation period; however, only those received at least sixty (60) calendar days prior to the start of an evaluation period will be considered for that period.

Performance incentive fee dollars for each evaluation period will not be obligated until the effective date of the written contract modification that specifically identifies the amounts earned for that period.

3.0 TERMINOLOGY

3.1 Performance Incentive Fee

An additional amount identified as part of each exercised CLIN, which the Contractor may earn in whole or in part under the contract. The amount of performance incentive fee is determined every twelve (12) calendar months for evaluation of Contractor performance using the specified performance incentive fee evaluation criteria.

3.2 Evaluation Periods

The Government will evaluate the Contractor’s performance against performance incentive fee criteria in a series of performance incentive fee periods as specified in this plan. A contract modification will fund the performance incentive fee earned for each period after the determination is made and the Contractor is notified.

3.3 Technical Instruction

Technical Instructions will be issued by the Contracting Officer’s Representative (COR) or the Contracting Officer to supplement the Performance Work Statement with specific details on work to be accomplished. Technical Instructions may contain quality, schedule and technical criteria.

3.4 Comments

Comments are any written or electronic feedback provided by the Government via the Contracting Officer’s Representative (COR), the Performance Monitor(s), or the Contracting Officer during the performance incentive period, provided against deliverables that were made in the current or any previous periods.

4.0 RESPONSIBILITIES AND PROCEDURES

4.1 Responsibilities

4.1.1 Contracting Officer’s Representative (COR)

The COR:

a. Appoints a Performance Monitor(s) (see 4.1.3 below)

b. Documents the performance incentive fee earned and initiates the release of the appropriate funding to the PCO for each performance incentive fee period

c. Submits to the PCO proposed changes and reviews contractor proposed changes to the performance incentive fee evaluation categories and factors or weights assigned to evaluation categories

4.1.2 Procuring Contracting Officer (PCO)

The PCO:

a. Issues unilateral modifications to the contract to fund the performance incentive fee earned for each evaluation period

b. Reviews the performance incentive fee documentation and advises the Program Manager as to when the performance incentive fee authorization to the Contractor is required

c. Issues unilateral modifications to make changes to the performance incentive fee evaluation categories and factors or weights assigned to evaluation categories

4.1.3 Performance Monitor(s)

The Performance Monitor(s) oversees Contractor performance, verifies the integrity of the performance metrics, and validates evidence that the requirements for performance incentive fee criteria have been met.

4.1.4 Change Procedure

It is anticipated that performance incentive fee performance evaluation criteria may need to be revised to place increased emphasis on specific areas, to take advantage of lessons learned, and to employ new approaches to measuring the quality of Contractor performance. Contractor proposed changes in the methodology or content of the Performance Incentive Fee Plan shall be submitted to the Government for consideration no later than 60 calendar days prior to the start of the performance incentive fee period for which the changes are proposed to take effect. Changes to the methodology or content of this plan will be made by the Government via a unilateral contract modification, no later than 30 calendar days prior to the start of the next performance incentive fee period.

5.0 PERFORMANCE INCENTIVE CRITERIA AND EVALUATION

The following sections describe the performance incentive fee criteria. The performance incentive fee evaluation periods are outlined below:

Period # CLINs

Evaluation Period

FROM TO

1 0001 and 0003 Contract Award 12 months after contract award

2 1100 and 3100 Date of Option 1 Exercise 12 months after option exercise date

3 1200 and 3200 Date of Option 2 Exercise 12 months after option exercise date

4 1300 and 3300 Date of Option 3 Exercise 12 months after option exercise date

5 1400 and 3400 Date of Option 4 Exercise 12 months after option exercise date

The Contractor’s performance will be evaluated in accordance with the performance incentive fee criteria and weights detailed in Paragraphs 5.1 through 5.2 of this plan.

5.1 Quality Performance Incentive #1 – Accuracy of the Work Specifications Submitted

5.1.1 Description

The purpose of this performance incentive is to provide incentives for the Contractor to deliver exceptional quality work specifications.

5.1.2 Measurement

The accuracy of the work specifications will be assessed at the time of initial submission of completed work specifications to the Government for review. The Government will review all work specifications submitted by the Contractor for adherence to the requirements of the Joint Fleet Maintenance Manual (JFMM), Volume VII, Chapter 4, Appendix 4-E. Specifically, the accuracy of only the following seven (7) attributes will serve as the basis for the evaluation:

1) Location of Work: The Contractor identifies the correct location of the work to be performed in accordance with Appendix 4-E, Section VII, paragraph B.2.b.

2) Identification: The Contractor identifies the correct equipment and quantity of the work to be performed in accordance with Appendix 4-E, Section VII, paragraphs B.2.c and B.2.d.

3) References: The Contractor correctly cites the applicable up-to-date references in accordance with Appendix 4-E, Section VII, paragraph B.3.

4) Requirements: The Contractor shall write work requirements utilizing standard phraseology in accordance with Appendix 4-E, Section VII, paragraph B.4.b.

5) Chronology: The Contractor shall write work requirements in chronological order of work accomplishment in accordance with Appendix 4-E, Section VII, paragraphs B.4.f. and B.4.g.

6) Tests and Inspections: The Contractor shall correctly identify Inspections and Tests that are not already required by Standard Items with the correct inspection and/or notification symbol, in accordance with Appendix 4-E, Section VII, paragraph B.4.k.

7) Reports: The Contractor invokes the necessary reports in order to record results of inspections, tests, and work accomplished, in accordance with Appendix 4-E, Section VII, paragraph B.4.l.

The Government will utilize the Navy Maintenance Database (NMD) as the source of the work specifications that the Government will review for accuracy. Work specifications that do not meet the standards described above will be returned to the Contractor for correction via NMD. A record of all review comments will be maintained within NMD and will be used as Objective Quality Evidence (OQE) in support of incentive fee determination. The Government will provide summaries of OQE associated with specification accuracy throughout each performance incentive evaluation period.

5.1.3 Calculation of Performance Incentive Fee (Incentive #1)

Performance incentive fee earned by the Contractor for each evaluation period will be calculated as a percentage of all work specifications submitted with no errors on any of the seven (7) attributes described in paragraph 5.1.2, at time of initial review, compared to the total number of work specifications submitted to the Government during each evaluation period, in accordance with Table 1 below. There will be no rollover of unearned performance incentive fee into subsequent periods.

Percent of Accurate Work Specifications Submitted Performance Incentive Fee Earned 100% 100% of associated fee

99%-99.9% 95% of associated fee 98%-98.9% 90% of associated fee 97%-97.9% 80% of associated fee 96%-96.9% 70% of associated fee 95%-95.9% 60% of associated fee 94%-94.9% 50% of associated fee 93%-93.9% 40% of associated fee

92% - 92.9% 30% of associated fee 91% - 91.9% 20% of associated fee 90% -90.9% 10% of associated fee

Less than 90% No Fee Table 1. Work Specification Incentive Fee Schedule

5.2 Quality Performance Incentive #2 – Master Specification Catalog (MSC) Template Improvement

5.2.1 Description

The purpose of this performance incentive is to provide incentives for the Contractor based on the quality and quantity of the feedback provided to the Government for purposes of MSC template improvement.

5.2.2 Measurement

The Government will consider continuous feedback concerning the quality of Standard Work Templates (SWTs) and Class Standard Work Templates (CSWTs) for incorporation into the MSC. Feedback can take the form of changes to existing templates and incorporation of new templates. All feedback shall be submitted to the Master Specification Catalog Management Office (MSCMO) in accordance with the JFMM with a copy to the COR.

Template recommendations should be based on template usage during availability execution that, if implemented, will result in a reduction of Request for Contract Changes (RCCs) during maintenance or modernization execution. Recommendations shall be materially supported by trend analysis demonstrating, at a minimum, two (2) instances of template use during availability execution.

The Government is also interested in template recommendations that affect ship repair hazards including chemical, physical, and safety in accordance with the Department of Labor’s Occupational Safety and Health Administration (OSHA) regulations standards (29 CFR 1926.30).

5.2.3 Calculation of Performance Incentive Fee (Incentive #2)

Performance incentive fee earned by the Contractor for each evaluation period will be calculated as the total number of template recommendations, including new templates added or modifications to existing templates, submitted by the Contractor to the Government during the performance incentive period, in accordance with Table 2 below. The number of recommendations will be computed at the template level. Multiple recommendations to a single template will be counted as one (1) recommendation. If the Contractor submits a template recommendation for a particular Ship Class that can be applied to a different Ship Class in the MSC, the Government will multiply the individual template recommendation times the number of individual Ship Classes it applies (e.g. Contractor submits one (1) DDG 51 template recommendation that is also applicable to LHD and LHA Class Ships; (1) Template Recommendation X (3) Ship Classes (DDG 51, LHD, and LHA) = (3) Template Recommendations). There will be no rollover of unearned performance incentive fee into subsequent periods.

Number of Template Recommendations Submitted Performance Incentive Earned (see NOTE)

91-100 100% of associated fee 81-90 95% of associated fee 71-80 90% of associated fee 61-70 80% of associated fee 51-60 70% of associated fee 41-50 60% of associated fee 31-40 50% of associated fee 21-30 40% of associated fee 16-20 30% of associated fee 10-15 20% of associated fee

5-9 10% of associated fee 1-4 5% of associated fee 0 No Fee

Table 2. MSC Feedback Incentive Schedule