Attachment_4_-_PIF_Plan_27_June_2018.pdf

N00024-18-R-6407

ATTACHMENT 4

Performance Incentive Fee (PIF) Plan

For

Tactical Control System (TCS)

27 June 2018

Attachment 4 PIF PLAN N00024-18-R-6407 i

TABLE OF CONTENTS

Section Title Page

1.0 Introduction 1

2.0 Organization 1

3.0 Responsibilities 1

4.0 PIF Processes 2

5.0 PIF Determination and Reclama Procedures 2

6.0 Evaluation Periods/PIF Pool 3

7.0 Payment of PIF 3

8.0 PIF Plan Change Procedure 3

ANNEXES

Annex Title

1 Evaluation Criteria 4

Attachment 4 PIF PLAN N00024-18-R-6407

Applicable to Contract Line Item Numbers (CLINs) 0008, 0101, 0102, 0201, 0202, 0301, 0302, 0401, 0402, 0501 and 0502. Payable under CLINs 0009, 0107, 0108, 0208, 0209, 0308, 0309, 0408, 0409, 0508 and 0509.

1.0 INTRODUCTION

This Performance Incentive Fee (PIF) Plan provides the evaluation criteria for Contractor performance and assessment procedures for determining PIF earned based on the Contractor’s performance. PIF may be earned on any Performance Incentive Terms earned by the Contractor and exercised as an option by the Government.

Points shall be awarded during each evaluation period based on the evaluation of Contractor performance against the predetermined criteria. This plan may be changed during contract performance according to the procedures detailed in paragraph 8.0.

The Fee Determining Official (FDO) will use the performance assessment information generated by the Performance Incentive Fee Review Board (PIFRB) to determine whether a Contractor has earned PIF. Evaluations will be conducted on an overall assessment of contract performance (See Annex 1, Evaluation Criteria).

The contract uses elements characterizing performance-based methodology, i.e. performance standards, a Quality Assurance (QA) program and incentives (both positive (+) and negative (-)) for determining criteria in this PIF Plan.

The performance standards for evaluation criteria are the adjectival ratings necessary to earn PIF as described in this plan. The QA program is the annual process by which performance monitors rate applicable evaluation criteria described in this plan.

2.0 ORGANIZATION

The PIF organization includes the FDO and a Performance Incentive Fee Review Board (PIFRB) consisting of a Chairperson, Functional Area Participants, Advisory Members, a Recorder, the Procuring Contracting Officer (PCO) and selected Performance Monitors.

3.0 RESPONSIBILITIES

a. FDO. The FDO reviews the recommendations of the PIFRB, considers all pertinent data, and determines whether PIF is earned for each evaluation period. All FDO decisions and the methodology used to determine PIF are unilateral actions made solely at the discretion of the Government. The FDO may designate an alternate to act in his/her place should the need arise.

b. PIFRB Chairperson. The PIFRB Chairperson chairs the meetings of the PIFRB and appoints the non-mandatory members of the board. The PIFRB Chairperson briefs the FDO on the Contractor’s overall performance and recommends PIF earned. He/she also recommends PIF plan major changes to the FDO.

c. PIFRB Members. PIFRB members include Functional Area Participants and Advisory Members.

Members review performance monitors’ evaluations of Contractor performance, consider all information from pertinent sources including the Contractor’s self-assessments and prepare a summary report supporting the recommendation to the FDO whether PIF has been earned. The PIFRB will also draft recommended changes to this plan.

d. PIFRB Recorder. The PIFRB recorder is responsible for coordinating the administrative requirements of the performance monitors, the PIFRB members, and the FDO. The recorder prepares the official minutes/report for each PIFRB session. The recorder is a non-voting member of the PIFRB.

e. PCO. The PCO modifies the contract to reflect the FDO decision based on the PIFRB recommendations.

The PCO may also issue letters at any time when it is deemed necessary to highlight areas of Government concern.

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f. Performance Monitors. Performance monitors maintain written records of the Contractor’s performance so that a fair and accurate evaluation is obtained. Monitors prepare interim and formal evaluation reports, and submit them as directed by the PIFRB.

4.0 PIF PROCESSES

a. Evaluation Periods. Evaluations will be conducted sixty (60) days after completion of each CLIN Period of Performance (POP) to which PIF applies.

b. Evaluation Criteria. Evaluation criteria and rating/performance standards are provided in Annex 1.

Evaluation criteria and their relative weight may change during the life of the contract. Changes to evaluation criteria will be made in accordance with paragraph 5.0 below.

c. Formal Annual Assessments. The PIFRB Chairman or Recorder will notify PIFRB Members, Performance Monitors and the Contractor one (1) month prior to the scheduled assessment date. Performance Monitors will submit their assessments to the PIFRB not later than fifteen (15) days prior to the formal assessment date.

e. Self-Evaluation. The Contractor shall submit a written self-assessment to the Contracting Officer

Representative (COR) with a copy to the PIFRB Chairman not later than thirty (30) days prior to the assessment date. Self-assessments should address applicable evaluation criteria and may also contain information that could be reasonably expected to assist the PIFRB in evaluating its performance.

The PIFRB Chairman may convene one (1) or more forums with selected Contractor and Performance Monitor personnel present to clarify and resolve differing viewpoints represented on the Contractor self-assessments and Performance Monitor assessments.

The PIFRB shall prepare a summary report of the strengths and weaknesses and provide an assessment rating of the Contractor’s performance. The PIFRB Chairman shall brief the assessment report and make a recommendation to the FDO. The FDO determines the overall assessment ratings within one month of the formal assessment date and provides written notification to the Contractor of their overall assessment rating. The FDO’s decision will be reflected in a unilateral contract modification issued by the PCO.

5.0 PIF DETERMINATION AND RECLAMA PROCEDURES

Within ten (10) days after the end of each evaluation period, the Contractor shall furnish to the PIFRB such information as may be reasonably required, for each contract line item under review, to assist the PIFRB in evaluating the Contractor’s performance during that evaluation period.

The PIFRB evaluation will be scheduled within fifteen (15) working days of the end of each evaluation period. The Board may consider reports, both oral and written, from all interested parties. The Board shall arrive at a consensus on the performance rating and advise the FDO of its recommendation including the reasons, rationale, and justifications therefore. The Board findings shall be presented to the Contractor who will then be provided an opportunity to provide written comments on the evaluation findings to the FDO within five (5) working days. In such case, these comments shall be considered by the FDO in establishing the PIF earned.

The FDO shall provide the PCO a final performance evaluation and determination of the PIF earned for that period within five (5) working days after receipt of the Board’s findings or the Contractor’s written comments, whichever is later.

Within thirty (30) working days after receipt of the FDO’s final determination and the Procurement Request (PR), the Contracting Officer shall issue a unilateral modification to the contract to provide for the performance incentive fee earned for that period.

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6.0 EVALUATION PERIODS/PIF POOL

The following evaluation periods are hereby established. The Government reserves the right to adjust the evaluation period and allocation of performance incentive fee pool available for each period by unilateral contract modification, which shall be issued, if at all, prior to the start of the affected evaluation period(s).

Period Number Evaluation Period 0008 Period of Performance 0101 Period of Performance 0102 Period of Performance 0201 Period of Performance 0202 Period of Performance 0301 Period of Performance 0302 Period of Performance 0401 Period of Performance 0402 Period of Performance 0501 Period of Performance 0502 Period of Performance

There will be no rollover of unearned PIF.

7.0 PAYMENT OF PIF

The Contractor shall be paid PIF, if any, upon submittal of a proper invoice or voucher to the cognizant Payment Office, together with a copy of the unilateral modification to the contract authorizing payment of performance incentive fee for the applicable Evaluation Period. The Contractor's invoice shall show the amount of PIF payable to each sub-line item, which shall be directly proportionate to the amount or allowable Estimated Cost (exclusive of base fee and FCCOM) incurred by the Contractor during the Evaluation Period. The Contractor's invoice must cite the appropriate accounting data in order for payment to be affected. There will be no provisional, interim or advance billing of PIF prior to a final determination of the FDO and execution by the PCO of a contract modification authorizing payment.

8.0 PIF PLAN CHANGE PROCEDURE

Either the Government or the Contractor may propose changes to the PIF plan. The Government may make unilateral changes to the plan for evaluation periods that have not commenced. Government and Contractor proposed changes, to take effect in an evaluation period that has already begun, will be bilaterally negotiated. The PCO will provide written notification of plan changes to the Contractor prior to the changes taking effect. If the PCO does not give written notice to the Contractor of any change to the evaluation criteria prior to the start of a new evaluation period, then the same criteria listed for the preceding period will be used in the following evaluation period.

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ANNEX 1

PIF EVALUATION CRITERIA

Criteria Weight

Software Quality 70% Schedule 30%

1) Software Quality. This criterion rates the quality and maturity of software delivered by the Contractor. For each evaluation period, the Government will rate the following elements: Problem Trouble Report Resolution and First Pass Testing Effectiveness.

a. Problem Trouble Report (PTR) Resolution

TOTAL WEIGHT: 25%

Resolving 80-100% of all PTRs that have been ‘approved to fix’ between Test Readiness Review (TRR) and Software Delivery Verification Review (SDVR) All Priority 1 and 2 PTRs must be resolved.

25%

Resolving 70-79.9% of all PTRs that have been ‘approved to fix’ by SDVR

20%

Resolving 50-69.9% of all PTRs that have been ‘approved to fix’ by SDVR

12%

Resolving less than 50% of all PTRs that have been ‘approved to fix’ by SDVR

0%

Multiple variants of Technical Insertion/Advanced Processor Build TCS software will be delivered annually under this effort. It is vitally important that any software issues (identified as PTRs) are resolved in a timely manner. Due to the complex nature of this effort, it is anticipated that PTRs will occur in almost every build delivered to the Government. However, the timely resolution of PTRs identified as ‘approved to fix’ by the PMS425 Chief Engineer or Technical Direction Agent (TDA) representatives at NUWC NPT control the ultimate quality of the software.

PTR resolution will be defined as valid software problems corrected by code modification. For a PTR to be rated as resolved, it must be verified and validated ‘corrected’ in formal software build delivery, and closed by the Configuration Control Board. PTRs that are adjudicated or closed without a software change will not be counted in this metric as part of the SW Quality PIF criteria.

b. First Pass Testing Effectiveness

TOTAL WEIGHT: 45%

First pass test percentage during Formal Test of 98% or greater.

45%

First pass test percentage during Formal Test of 95% to 98%

30%

First pass test percentage during Formal Test of 90% to 95%

15%

First Pass test percentage during Formal Test of less than 90%

During BYG-1 controlled Formal testing, these criteria apply to the percentage of all requirements met during the first run of Production Verification Tests (PVTs), Integration Verification Tests (IVTs), and External Interface Tests (EITs). The Government will look at the percentage of System Segment Specification (SSS) and SWFTS General

Attachment 4 PIF PLAN N00024-18-R-6407

Requirements List (GRL) passed for each test individually as identified in the contractor’s Test and Evaluation Program Plan and Test Requirements Document. These criteria will determine the initial quality of the software, and its maturity leading up to the Software Delivery Verification Review. The Government desires mature software to enter formal testing.

2) Schedule. This criterion rates the Contractor’s ability to exceed schedule requirements and their agility in reacting to schedule changes. For each evaluation period, the Government will evaluate the Contractor’s schedule performance against the following benchmarks:

TOTAL WEIGHT: 30%

Provides and executes a revised program plan when given updated government Integrated Master Plans (IMPs). Execution includes meeting all approved System Engineering Plan (SEP) entrance and exit criteria for internal milestones and existing external stakeholder commitments.

30%

Meets all external milestones and executes against all approved SEP entrance and exit criteria of program milestones after revised program plan is established as new POR baseline. May not meet all internal milestones, or asks for relief in achieving them.

15%

Inability to execute against all approved SEP entrance and exit criteria of program milestones after revised program plan is established as new POR baseline, with significant deficiencies preventing milestone execution.

Calculating the PIF Earned

Determination of the Maximum PIF Pool:

The Maximum PIF Pool available for payment under each Completion CLIN shall not exceed four percent (4%) of the Target Cost (less Cost of Money) funded under each line item.

Maximum PIF Pool = (Target Cost - COM) * Maximum PIF

Example:

(Target Cost – COM) = $25,000,000 Maximum PIF = 4% Hours Funded = 1,000 hours Hours Worked = 700 hours PIF Score = 88%

Maximum PIF Pool example:

Maximum PIF Pool = (Target Cost - COM) * Maximum PIF Target Cost-COM = $25,000,000 Max PIF = 4% = 0.04 Maximum PIF Pool = $25,000,000 * 0.04 Maximum PIF Pool = $1,000,000

Attachment 4 PIF PLAN N00024-18-R-6407

Determination of the Final PIF Pool:

The Final PIF Pool for each CLIN will not be determined by the actual cost incurred, but by the number of allowable hours worked. Therefore, the Final PIF Pool for each CLIN shall be calculated by multiplying the Maximum PIF Pool by the fraction of Hours Worked to Hours Funded.

Final PIF Pool = Maximum PIF Pool * (Hours Worked/Hours Funded)

Final PIF Pool example:

Final PIF Pool = Maximum PIF Pool * (Hours Worked/Hours Funded) Maximum PIF Pool = $1,000,000 Hours Worked = 700 hours Hours Funded = 1000 hours Hrs Worked/Hrs Funded = (700/1000) = 0.70 Final PIF Pool = $1,000,000 * 0.70 Final PIF Pool = $700,000

Determination of the PIF Earned:

The PIF Earned for each CLIN will equal the Final PIF Pool multiplied by the PIF Score given by the FDO as stipulated in this PIF plan.

PIF Earned = Final PIF Pool * PIF Score

PIF Earned example:

PIF Earned = Final PIF Pool * PIF Score Final PIF Pool = $700,000 PIF Score = 88% = 0.88 PIF Earned = $700,000* 0.88 PIF Earned = $616,000