Section J - Attachment 7 - TIH Award Fee Plan DRAFT Clean version_27 Apr 10.doc

SECTION J

ATTACHMENT 7

Award Fee Plan

For Technology Insertion Hardware (TIH)

27 April 2010

TABLE OF CONTENTS

Section Title Page 1.0 Introduction

2.0 Organization 3.0 Responsibilities 4.0 Award Fee Processes 5.0 Evaluation Periods/Award Fee Pool 6.0 Payment of Award Fee 7.0 Award Fee Plan Change Procedure 8.0 Contract Termination

ANNEXES

Annex Title

1.

Award Fee Organization

2.

Evaluation Criteria 3.

Sample Award Fee Calculation 1.0

INTRODUCTION

This Award Fee Plan provides the basis for evaluation of the Contractor’s performance and describes specific criteria and procedures used for assessing Contractor’s performance and for determining award fee earned. Award Fee may be earned on any task order issued by the Contracting Officer under Contract Line Item Numbers (CLINs) 4000 and 6000.

The Technology Insertion Hardware (TIH) Award Fee Plan provides a streamlined, yet inclusive, methodology and set of criteria to accurately capture and report on TIH performance. The plan was developed with the following objectives:

· Provide for evaluation of the Contractor performance levels, taking into consideration contributing circumstances and Contractor resourcefulness.

· Focus the Contractor on areas of greatest importance for program success.

· Clearly communicate evaluation procedures and provide for effective communication between the Contractor and the Government.

Adjectival ratings and a corresponding percent will be assigned to each task order evaluated during a rating period on the basis of how the Contractor has performed against the predetermined criteria. This plan may be changed during contract performance, according to the procedures detailed in paragraph 7.0.

The Fee Determining Official (FDO) will use the performance assessment information generated to determine whether a Contractor has earned award fee. Evaluations will be conducted as an overall assessment of task order performance.

The contract uses elements characterizing performance-based methodology, i.e. performance standards and a quality assurance program for determining criteria in this Award Fee Plan. The performance standards for evaluation criteria are the adjectival ratings necessary to earn award fee as described in this plan. The quality assurance program is the process by which performance monitors rate pursuant to applicable evaluation criteria described in this plan.

2.0

ORGANIZATION

The award fee organization includes the FDO, an Award Fee Review Board (AFRB), and performance monitors. The AFRB consists of the Contracting Officer’s Representative (COR), who is designated as the Chairperson, the Contract Specialist, a Recorder, functional area participants, and advisory members. The members of the award fee organization are identified in Annex 1, Award Fee Organization.

3.0

RESPONSIBILITIES

a. Fee-Determining Official. The FDO reviews the recommendations of the AFRB, considers all pertinent data, and determines whether award fee is earned for each evaluation period. All FDO decisions and the methodology used to determine award fee 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. Award Fee Review Board Chairperson. The AFRB Chairperson chairs the meetings of the AFRB and appoints the non-mandatory members of the board. The AFRB Chairperson briefs the FDO on the Contractor’s overall performance and recommends award fee earned. He/she also recommends award fee plan changes to the FDO.

c. Award Fee Review Board Members. AFRB members review performance monitors’ evaluation of the Contractor’s performance, consider all information from pertinent sources, including the Contractor’s self-assessments, and prepare a summary report documenting the recommendation to the FDO whether award fee has been earned. The AFRB will also draft recommended changes to this plan.

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

e. Procuring Contracting Officer (PCO). The PCO modifies the contract to reflect the FDO decision based on the AFRB’s recommendations. The PCO may also issue letters at any time when it is deemed necessary to highlight areas of Government concern.

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

4.0

AWARD FEE PROCESS

a. Evaluation Periods. Contract level evaluations will be conducted at 6 month intervals within the contract year. Tasks which start in the middle of an award fee period, or that do not cover the entire award fee period, will be pro-rated.

b. Evaluation Criteria. Evaluation criteria and rating/performance standards are provided in Annex 2. 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 7.0 below.

c. Formal Assessments. The AFRB Chairman shall schedule the Assessment Date within thirty (30) days after completion of each evaluation period. The AFRB Chairman or Recorder will notify AFRB members, Performance Monitors, and the Contractor of the scheduled assessment date. Performance monitors shall submit their assessments to the AFRB within fifteen (15) days after the completion of each evaluation period.

d. Self Evaluation. The Contractor shall submit a written self-assessment to the AFRB Chairman (COR) not later than fifteen (15) days after completion of the evaluation period. Self-assessments should address applicable evaluation criteria, and shall also contain information that could be reasonably expected to assist the AFRB in evaluating the Contractor’s performance during the evaluation period. The self-assessment may not exceed one page per task order. It is in the Contractor’s best interest to constructively participate in the award fee evaluation process by submitting timely and concise self-assessments.

e. Forums. Prior to AFRB summary report, the AFRB Chairman may convene one or more forums with selected Contractor and performance monitor personnel to clarify and resolve differing viewpoints represented on the Contractor self-assessments and performance monitor assessments. The board may consider written reports from all interested parties.

f. Overall Assessment. The AFRB shall arrive at a consensus on the performance rating and advise the FDO of its recommendation including the reasons, rationale, and justifications for the assigned rating. The AFRB shall prepare a summary report of the strengths and weaknesses, and provide an assessment rating of the Contractor’s performance, within (15) days of the Assessment Date. The AFRB Chairman shall brief the assessment report and make a recommendation to the FDO. The FDO determines the overall assessment ratings and provides written notification to the PCO of the overall assessment rating. The briefing and FDO final assessment shall occur within ten (10) days. Within ten (10) days after receipt of the FDO’s final determination the PCO shall issue a unilateral modification to the contract to provide for the award fee earned for the evaluation period.

The following timeline illustrates the Award Fee Process:

End of Evaluation

Period

Assessment

AFRB

Summary

Report

65 Days

Contractor submits Self Assessment

FDO Determines Overall Assessment

5.0

EVALUATION PERIODS/AWARD FEE POOL

The following evaluation periods are hereby established. The Government reserves the right to adjust the evaluation period and allocation of award 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

Date of Award + 6 months

Date of Award + 12 months

2nd Year of Performance Start + 6 months

2nd Year of Performance Start + 12 months

3rd Year of Performance Start + 6 months

3rd Year of Performance Start + 12 months

4th Year of Performance Start + 6 months

4th Year of Performance Start + 12 months

5th Year of Performance Start + 6 months

5th Year of Performance Start + 12 months

The maximum award fee pool for each Task Order will be established upon award. The task order will outline the milestones and the percent of the Task Order award fee pool attributable to each milestone. If, during a six-month evaluation period, there are milestones that are partially achieved, the milestone will be considered incomplete, and no fee will be available to be earned for that milestone.

The award fee pool for a six-month evaluation period will be a roll up summation of the available award fee pools from the individual Task Orders. Thirty (30) days prior to the end of an evaluation period, the Contractor will propose a summation award fee pool for that evaluation period. The summation will include a roll up with line item visibility into the proposed award fee pool contribution for each Task Order based on a consideration of the effort as well as the performance milestones achieved during the evaluation period. The government will evaluate and provide feedback either concurring or recommending changes to the proposed award fee pool.

An example of the calculation is in Annex 3 ‘Sample award Fee Calculation’.

In accordance with the solicitation, Contractors are to propose a maximum Award Fee percentage (up to 10%). The Award Fee rate will be established upon award of the basic contract, and the same rate will be used for all cost-plus award fee task orders.

There will be no rollover of unearned award fee.

6.0

PAYMENT OF AWARD FEE

The Contractor shall be paid award fee, 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 award fee for the applicable evaluation period. The Contractor's invoice shall show the amount of award fee payable to each task order, and must cite the appropriate accounting data in order for payment to be made.

7.0

AWARD FEE PLAN CHANGE PROCEDURE

Either the Government or the Contractor may propose changes to the Award Fee Plan. The Government may make unilateral changes to the plan for evaluation period(s) that have not commenced. 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 evaluation period will be used in the following evaluation period. Government and Contractor proposed changes, to take effect in an evaluation period(s) that has already begun, will be bilaterally negotiated.

8.0

CONTRACT TERMINATION

If the contract is terminated for the convenience of the Government after the start of an evaluation period, the award fee deemed earned for that evaluation period shall be determined by the FDO using the normal award fee evaluation process. After termination for convenience, the remaining award fee amounts allocated to all subsequent evaluation period(s) cannot be earned by the Contractor and, therefore, shall not be paid.

ANNEX 1: AWARD FEE ORGANIZATION

Fee Determining Official (FDO):

In-Service Engineering Department Head, NUWC Keyport Code 40

(Alternate: Deputy In-Service Engineering Department Head, NUWC Keyport Code 40) Award Fee Review Board Chairperson:

TIH Contracting Officer’s Representative, NUWC Keyport Code 40

Award Fee Review Board Members:

Member

TIH Contract Specialist, NUWC Keyport Code 18

TIH NUWC Keyport Technical Project Manager

Team Sub Appointed Technical Representative

Recorder

Logistics Support Representative, NUWC Keyport

Code 434 Performance Monitors

PMS425 Technical Representatives

PMS401 Technical Representatives

PMS435 Technical Representatives

PMS450 Technical Representatives

NUWC Keyport TIH Technical Representatives

NUWC Keyport TIH Contracting Representatives

ANNEX 2: EVALUATION CRITERIA

1. Evaluation Criteria. The following are the Evaluation Criteria and assigned weighting.

2. Rating Guidelines. In accordance with FAR 16.401(e)(3)(iv), the following are the Adjectival Ratings and the associated Scores.

Note: All ratings will be rounded to the nearest whole percentage.

3. CRITERION - Technical Performance/Management Effectiveness. This area rates the Contractor’s performance in the professional discipline or technical scope of the contract. During the course of this contract and for each evaluation period, the Government will evaluate the Contractor’s performance against task based milestones relating to the following elements:

a.

The Contractor’s ability to develop and maintain a disciplined, co-operative task management process by effectively managing to the approved Contract Work Breakdown Structure and Integrated Master Schedules.

b.

The Contractor’s ability to develop and maintain interactive relationships with Government and Industry partners, including its vendors, which enhance the Navy’s ability to meet program goals. The Contractor will actively and constructively participate in partnering sessions and maintain a positive working relationship with other organizations and activities to support the SWFTS Technology Insertion processes. The Contractor will keep abreast of the advances in technology and interfaces to facilitate collaboration with the Submarine Advanced Development Community. The Contractor will have a change management process that maximizes flexibility in their design and production effort due to the dynamic nature of the development environment.

c.

The Contractor’s ability, when tasked for studies, analyses, and/or recommendations, to provide innovative solutions and improvements within the agreed to delivery dates and at a maturity level that requires little to no rework that offer the Government feasible and requirements-based alternatives. Recommendations shall take into account current program needs and priorities, business case considerations, and show how cost considerations were factored into the decision making process. The Contractor will stay aware of overall state-of-the-art possibilities as well as planned future program needs and requirements and factor them into the final responses provided to the Government.

d.

The Contractor’s ability to employ solutions and processes which emphasize standardization, globalization and modularity. The Contractor is encouraged to employ innovative techniques to ensure the end products are affordable, maintainable, and easily installed. The Contractor should seek to maximize first pass yield of designs and products that minimize workmanship, reliability, and other quality defects. The Contractor will demonstrate, through the use of metrics, continuous process improvements that add value to program requirements.

e. The Contractor’s ability to employ risk management and provide mitigation strategies that are technically sound with consideration into schedule and cost constraints. The Contractor’s ability to keep the Government team informed as risks are identified.

f. The Contractor’s ability to develop and maintain an Integrated Master Schedule developed in a collaborative process with the Government Program Office.

g. The Contractor’s accurate response to Request For Proposals.

h. The Contractor’s ability to deliver accurate and complete Contract data requirements to include CDRLs.

i. The Contractor's ability to meet proposed small business subcontracting goals as proposed in the accepted subcontracting plan.

RATING/PERFORMANCE STANDARDS FOR TECHNICAL PERFORMANCE/ MANAGEMENT EFFECTIVENESS

Contractor has met and exceeded almost all of its SB subcontracting goals.

Contractor has met and exceeded many of its SB subcontracting goals.

Contractor has met and exceeded some of its SB subcontracting goals.

Contractor has met its proposed SB subcontracting goals.

Contractor has not met any of its SB subcontracting goals.

4. CRITERION - Schedule: This area rates the Contractor’s performance in responding to schedule milestones. During the course of this contract and for each evaluation period, the Government will evaluate the Contractor’s performance against task based milestones relating to the following elements:

a. The Contractor’s ability to provide deliverables (services) in accordance with the contract schedule. The Government will consider whether deliverables are submitted ahead of schedule or late and are in compliance with the task order requirements and the IMS. The Contractor will adhere to the schedule, and promptly communicate any anticipated delays and mitigation strategies to minimize effect on program deliverables. If corrections/rework/revisions are required, the amount of time the Contractor takes to perform these actions will be counted towards the final delivery date determination.

b. The Contractor’s ability to respond timely to Request For Proposals as specified in the contract.

c. The Contractor’s ability to deliver Contract data requirements to include CDRLs in a timely manner.

RATING/PERFORMANCE STANDARDS - SCHEDULE

5. CRITERION - Cost Control/Cost Reporting Performance. This area rates the Contractor’s performance in managing and controlling costs. During the course of this contract and for each evaluation period, the Government will evaluate the Contractor’s performance against task based milestones relating to the following elements:

a. The Contractor’s ability to maintain cost control and actively pursue cost containment and reduction through innovative approaches and superior management of resources.

b. The Contractor’s ability to identify potential problems and implement corrective action to minimize cost impacts. The Government is notified immediately of significant problems and the Contractor works with the Government to develop viable resolutions and overcome delays without additional cost.

c. The Contractor’s ability to submit cost proposals that are well constructed and contain sufficient detail to support an in-depth cost analysis. The basis of estimates is provided for all cost elements including cost breakdowns, trends, indirect rates and the elements in the pools which comprise the rates are provided for prime and subcontractor costs sufficient to perform analysis for cost reasonableness.

RATING/PERFORMANCE STANDARDS – COST CONTROL/COST REPORTING PERFORMANCE

ANNEX 3: SAMPLE AWARD FEE CALCULATION

1. Determination of the Maximum Award Fee Pool:

The Maximum Award Fee Pool available for payment will be determined by the final price established for each task order.

25% Available

60% Available

50% Available

Example of TIH Roll Up Summation of the Maximum Award Fee Pool.

2. Sample TIH Award Fee Calculation:

Ex. TIH Evaluation

TIH Maximum Award Fee Pool = $100,000

Award Fee Score Calculation

Score

* Weight = Score Technical Performance, Management Effectiveness:

75%

* 50% = 37.5%

Schedule Performance:

85%

* 25% = 21.25%

Cost Control/Reporting:

92%

* 25% = 23.0%

Overall Award Fee Score = 81.75%

Award Fee Earned Calculation: (Maximum Award Fee Pool * Overall Award Fee Score)

Award Fee Earned: $223,000 * 81.75% = $182,302.50 i ii