SE3 - Attachment 1B - Final Fee or Profit Determination Formula (06NOV2017).xlsx
XLSX spreadsheet 45 KB Posted
- Solicitation number
- N00039-18-R-0059
About this file
This document contains an incentive fee calculation spreadsheet for a fixed-price incentive fee task order to install System X on a naval vessel. The task order number is 0200x with a target cost of $1,000,000 and target fee of 7% or $70,000. Actual costs came in at target. Quality and schedule performance were both rated outstanding at 5.0, earning unadjusted fees of $150,000 each. With weightings of 25% for cost, 50% for quality, and 25% for schedule, the incentive fee was $130,000. The fee is limited to 13% above target cost.
The related federal contract opportunity notice announces a pre-solicitation for the SPAWAR Afloat Global C4ISR Installations Contract with solicitation number N00039-18-R-0059. The Department of the Navy Information Warfare Systems Command is the issuing agency. The anticipated final RFP release date is March 20, 2018, with an industry day planned for three weeks later in San Diego.
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Incentive Fee Calculations
| Task Order Number: | 0200x | Notes, Assumptions and Intermediate Calculations | ||||||
| Task Title: | Install System X on USS Y | Cost Incentive Calculation | ||||||
| Add/Sub to/from Target based on share ratio | $ - 0 | |||||||
| Type (CPIF or FPIF): | FPIF | Total Cost Related Incentive Fee subject to Min and Max | $ 70,000.00 | |||||
| Maximum Fee for FPIF Task is only a theoretical value based on 100% cost savings (no actual costs). FAR 16.403-1 - Fixed-price incentive (firm target) contracts - does not allow a profit ceiling. Real-world fees will not approach this value. | ||||||||
| Start Date: | 1-Oct-10 | |||||||
| Planned Completion Date: | 30-Mar-11 | Cost Score Calculation | ||||||
| Savings (negative is overrun) | 0.0% | |||||||
| Target Cost: | $ 1,000,000.00 | Numerical Cost Performance Rating iaw definitions below = | 3 | |||||
| Target Fee | 7.00% | $ 70,000.00 | ||||||
| Max Fee | 15.00% | $ 630,000.00 | Unsat (=1) - Overrun greater than 14% | 0.14 | ||||
| Min Fee | 0% | $ - 0 | Includes Max Possible Fee To Cover Outstanding Quality & Schedule Incentives @ Target Cost | Marginal (=2) - Overrun greater than 5% up to 14% | ||||
| Sat (=3) - Plus or Minus 5% | 0.05 | |||||||
| T.O. Award Value: | $ 1,130,000.00 | Very Good ( =4) - Savings greater than 5% up to 16% | ||||||
| Outstanding (=5) - Savings of 16% or greater | 0.16 | |||||||
| Ceiling Price: | $ 1,130,000.00 | For FPIF, Max Payable limited to X% above target cost | 13% | |||||
| Cost related fee limit trigger for Poor Perf in other areas | ||||||||
| Actual Costs: | $ 1,000,000.00 | Performance in any other area is Unsatisfactory | FALSE | |||||
| Performance in any other area is Marginal | FALSE | |||||||
| Total Payable* | $ 1,130,000.00 | |||||||
| Quality/Schedule related fee limit trigger for Poor Perf in other areas | Quality | Schedule | ||||||
| Adjectival Performance Rating | Performance in any other area is Unsatisfactory | FALSE | FALSE | |||||
| Numerical Performance Rating | Performance in any other area is Marginal | FALSE | FALSE | |||||
| Weighting For Positive Monetary Incentive Fee Calculations | Weight (%) | Rating Area | Incentive Fee Earned | |||||
| 25% | Cost (Mandatory Min = 25%) | Satisfactory | 3.00 | $ 17,500.00 | Quality Fee Unadjusted prior to applying weighting | $ 150,000.00 | ||
| 50% | Quality (optional) | Outstanding | 5.00 | $ 75,000.00 | ||||
| 25% | Schedule (optional) | Outstanding | 5.00 | $ 37,500.00 | ||||
| Schedule Fee Unadjusted prior to applying weighting | $ 150,000.00 | |||||||
| Incentive Fee With No Cost Ceiling: | $ 130,000.00 | |||||||
| Incentive Fee With Cost Ceiling Applied: | $ 130,000.00 | |||||||
| Error Message Appears Here -> | NO ERROR, SUM OF WEIGHTS IS 100%. | Ceiling Price for FPIF orders occurs at X% above target cost. | 13% |
IF((E27-3)<0,(7%+(E27-3)*7/200)*$C$9,(7%+(E27-3)*4/100)*$C$9)
| Notes: | Cost Incentive Calculation Based On Share ratio and caps entered on the "Share Ratios and Fees" worksheet. | |
| (Share ratio iaw ASN RDA Memos dtd 10/28/03 & 12/23/04. Formulas iaw with FAR 16.402/403 and OSD DPAP Contract Pricing Reference Guide) |
| Below Value is maximum price at target cost with no ceiling: |
| $ 1,130,000.00 |
Quality and Schedule Scores Manually Inputted from QASP Performance Summary And Also Represent Ratings for CPARS Input iaw Performance Rating Definitions Below
* Total Payable Subject to Final Audit
No Incentive Fee Is Earned If Performance Is Unsat in Any Area (iaw ASN RDA Memo dtd 11/02/05)
Marginal Performance in one or more areas area will reduce the incentive fee otherwise earned in the remaining areas by half.
| Performance Rating Definitions | ||
| Numerical Rating | Adjectival Rating | CPARS Color Rating |
| 4.5 ≤ Rating ≤ 5.0 | Outstanding | Dark Blue |
| 3.5 ≤ Rating < 4.5 | Very Good | Purple |
| 2.5 ≤ Rating < 3.5 | Satisfactory | Green |
| 1.5 ≤ Rating < 2.5 | Marginal | Yellow |
| Rating <1.5 | Unsat (Unsatisfactory) | Red |
N00039-18-R-0059 Attachment 1B
Quality & Schedule Scores
| Quality Subfactors | Score | Weight | Score * Weight |
| SOVT Functional Performance | 5 | 40 | 200 |
| Workmanship Quality | 5 | 20 | 100 |
| Quality of CORN Submission | 5 | 10 | 50 |
| Ship Installation Design (SID) Quality | 5 | 10 | 50 |
| Document Deliverable Quality | 5 | 20 | 100 |
| Totals | 100 | 500 |
Quality Score (Weighted Average) 5
| Schedule Subfactors | Score | Weight | Score * Weight |
| Meeting Schedule for Completion of Production Work | 5 | 40 | 200 |
| Meeting Schedule for Completion of All Task Order Work | 5 | 40 | 200 |
| Delivering documents through Task Orders | 5 | 20 | 100 |
| Totals | 100 | 500 |
| Schedule Score (Weighted Average) | 5 |
| Note: Score * Weight = Score Multiplied by Weight |
Share Ratios & Fees
Share Ratios
| Contract Max Gov't Share of Costs above Target Costs | 50.00% |
| Contract Minimum Gov't Share of Savings from Underruns | 50.00% |
| Task Order Government Share of Costs Above Target Cost | 50.00% |
| Task Order Contractor Share of Costs Above Target Cost | 50.00% |
| Task Order Government Share of Savings Below Target Costs | 50.00% |
| Task Order Contractor Share of Savings Below Target Costs | 50.00% |
Target Fee - CPIF
Contract Maximum Target Fee 5.00%
Task Order Target Fee 5.00%
Target Fee - FPI(F)
Contract Maximum Target Fee 7.00%
Task Order Target Fee 7.00%
| Maximum Incentive Fee* |
| * For CPIF Task Orders Max Cost Fee Calculations and for CPIF and FPIF Quality and Schedule Maximum Fee Calculations |
Contract Maximum Incentive Fee Percentage 15.00%
Task Order Maximum Incentive Fee Percentage 15.00%
Note: Cells highlighted in yellow can change from task order to task order.
PTA Calculator
| THIS CALCULATOR ONLY WORKS FOR FPIF TASK ORDERS! | |
| Actual Cost (See Note above.) | $ 1,000,000.00 |
| Ceiling Price (CP) | $ 1,130,000.00 |
| Target Price (TP) | $ 1,070,000.00 |
| Target Cost (TC) | $ 1,000,000.00 |
| Gov't Percentage Cost Share with Only Cost Incentives (GS) | 50.00% |
| PTA if cost is the only Incentivized Factor (Classic Formula) | $ 1,120,000.00 |
| Quality Fee | $ 75,000.00 |
| Schedule Fee | $ 37,500.00 |
| Cost Weighting Factor (CWF) | 25% |
| Quality Fee Earned (QF) | $ 75,000.00 |
| Schedule Fee Earned (SF) | $ 37,500.00 |
| Contractor Percentage Cost Share | 50% |
| PTA with Quality and Schedule Fees Factored in* | $ 1,000,000.00 |
| *Quality and Schedule Fees will be reduced by poor cost performance |
Point of Total Assumption (PTA) calculations do not affect incentive fees or contract costs. This worksheet and the PTA example are provided to explain the effects of this incentive plan on the PTA and to facilitate the extraction of PTA information if needed to respond to management requests.
This worksheet is provided as The Point of Total Assumption (PTA) is the cost at which the contractor assumes total responsibility for each additional dollar of contract cost.
| CP = Ceiling Price |
| TP = Target Price |
| TC = Target Cost |
| GS = Gov't percentage cost share above target cost = (1 - CS) |
| CWF = Cost Weighting Factor |
| QF = Quality Fee Earned |
| SF = Scheduling Fee Earned |
| CS = Contractor Percentage Cost Share above Target Cost = (1 - GS) |
| PTA = | CP - TP(CWF) + TC (CWF)(GS) - QF - SF |
| (1-(CWF)(CS)) |
When the non-cost factors of quality and schedule are not incentivized, then QF = 0 and SF = 0, and the formula can be reduced to the classic formula for PTA:
| PTA = CP – TP + TC |
| GS |
Point of total assumption (PTA) is the cost at which the contractor assumes total responsibility for each additional dollar of contract cost.
The above "classic" formula is true as long as the incentive fee does not become zero before the ceiling price (CP) is reached, Quality and Schedule factors are not incentivized, and CP>TP.
Actual Cost Note: When actual costs rise to more than 5% above target cost, any quality and scheduling fees earned are cut in half, and the PTA can increase as additional Government (was incentive fee) money is available to apply to actual costs. Quality and scheduling fees are eliminated when actual cost rise more than 14% above target. This also can cause the PTA to jump.
PTA Example Example Showing Change in PTA caused by costs becoming marginal and unsatisfactory (and affecting Quality and Schedule Fees).
| Actual Cost | 1000000 | 1010000 | 1020000 | 1030000 | 1040000 | 1050000 | 1050001 | 1060000 | 1070000 | 1080000 | 1090000 | 1100000 | 1110000 | 1120000 | 1130000 | 1140000 | 1140001 | 1150000 |
| Ceiling Price (CP) | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 | 1130000 |
| Target Price (TP) | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 | 1070000 |
| Target Cost (TC) | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 |
| Gov't Percentage Cost Share with Only Cost Incentives (GS) | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| PTA if cost is only Incentivized Factor (Classic Formula) | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 | 1120000 |
| Quality Fee | 42900 | 42900 | 42900 | 42900 | 42900 | 42900 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 0 | 0 |
| Schedule Fee | 44200 | 44200 | 44200 | 44200 | 44200 | 44200 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 0 | 0 |
| Cost Weighting Factor (CWF) | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 | 0.33 |
| Quality Fee Earned (QF) | 42900 | 42900 | 42900 | 42900 | 42900 | 42900 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 21450 | 0 | 0 |
| Schedule Fee Earned (SF) | 44200 | 44200 | 44200 | 44200 | 44200 | 44200 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 22100 | 0 | 0 |
| Contractor Percentage Cost Share | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| PTA with Quality and Schedule Fees Factored in* | 1023712.5748503 | 1023712.5748503 | 1023712.5748503 | 1023712.5748503 | 1023712.5748503 | 1023712.5748503 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1075868.26347305 | 1128023.95209581 | 1128023.95209581 |
| *Quality and Schedule Fees will be reduced by poor cost performance |
Actual Cost 1000000 1010000 1020000 1030000 1040000 1050000 1050001 1060000 1070000 1080000 1090000 1100000 1110000 1120000 1130000 1140000 1140001 1150000 Ceiling Price (CP) 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 1130000 PTA with Quality and Schedule Fees Factored in* 1023712.5748502994 1023712.5748502994 1023712.5748502994 1023712.5748502994 1023712.5748502994 1023712.5748502994 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1075868.2634730539 1128023.9520958085 1128023.9520958085 NMCI Crash Protection Point of Total Assumption (PTA) calculations do not affect incentive fees or contract costs. This worksheet and the PTA example are provided to explain the effects of this incentive plan on the PTA and to faciltate the extraction of PTA information if needed to respond to management requests.
This worksheet is provided as The Point of Total Assumption (PTA) is the cost at which the contractor assumes total responsibility for each additional dollar of contract cost.
CP = Ceiling Price TP= Target Price TC= Target Cost GS = Gov't percentage cost share above target cost = (1 - CS) CWF = Cost Weighting Factor QF = Quality Fee Earned SF = Scheduling Fee Earned CS = Contractor Percentage Cost Share above Target Cost = (1 - GS)
PTA = CP - TP(CWF) + TC (CWF)(GS) - QF - SF
(1-(CWF)(CS))
When the non-cost factors of quality and schedule are not incentivized, then QF = 0 and SF = 0, and the formula can be reduced to the classic formula for PTA:
PTA = CP – TP + TC
GS
Point of total assumption (PTA) is the cost at which the contractor assumes total responsibility for each additional dollar of contract cost.
The above "classic" formula is true as long as the incentive fee does not become zero before the ceiling price (CP) is reached, Quality and Schedule factors are not incentivized, and CP>TP.
Actual Cost Note: When actual costs rise to more than 5% above target cost, any quality and scheduling fees earned are cut in half, and the PTA can increase as additional Government (was incentive fee) money is available to apply to actual costs. Quality and scheduling fees are eliminated when actual cost rise more than 14% above target. This also can cause the PTA to jump.
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