P1062 DD3 Modernization Complex Award Fee Plan.pdf

AWARD-FEE PLAN FOR

DRY DOCK 3 MODERNIZATION

NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VA

FEBRUARY 24, 2025

Approved:

Erin R. Quimby Fee Determining Official

Chief of the Contracting Office

NAVFAC ATLANTIC

Table of Contents

Section Title Page

1.0 Introduction 3

2.0 Organization 3

3.0 Responsibilities 3

4.0 Award-Fee Administration 4

5.0 Award-Fee Plan Change Procedures 5

6.0 Contract Schedule and Changes 5

7.0 Contract Termination 6

Annexes

Annex Title

Page

1 Award-Fee Organization 7

2 Award-Fee Allocation by Evaluation Periods 8

3.1 Award-Fee Evaluation Factors 9

3.2 Award-Fee Conversion Table 10

3.3 Earned Award-Fee Calculation Example 12

4.1 Performance Evaluation Criteria – Schedule Management 13

4.2 Performance Evaluation Criteria – Quality Management 15

5 Performance Evaluation Report Format 16

1.0 Introduction

This Award-Fee Plan is the basis for the P-1062 Dry Dock 3 Modernization, Norfolk Naval Shipyard, Portsmouth, Virginia evaluation of the contractor's performance and for presenting an assessment of that performance to the Fee Determining Official (FDO). It describes specific 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 Award-Fee are unilateral decisions made solely at the discretion of the Government.

The Award-Fee earned and payable will be determined by the FDO based upon review of the contractor's performance against the criteria set forth in this plan. The FDO 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 (KO), in writing, before the start of the affected evaluation period. Changes to this plan that are applicable to a current evaluation period will be incorporated by mutual consent of both parties.

2.0 Organization

The Award-Fee organization consists of: the FDO; an Award-Fee Evaluation Board (AFEB) which consists of a chairperson, the KO, a recorder, other functional area participants, and advisor members; and the Performance Monitors (PMs). The FDO, AFEB members, and PMs are listed in Annex 1.

3.0 Responsibilities

a. Fee Determining Official. The FDO approves the Award-Fee Plan and any significant changes. The FDO reviews the recommendation(s) of the AFEB, considers all pertinent data, and determines the earned Award-Fee amount for each evaluation period.

b. Award-Fee Evaluation Board. AFEB members review PMs’ evaluation of the contractor's performance, consider all information from pertinent sources, prepare interim performance reports, and arrive at an earned Award-Fee recommendation to be presented to the FDO. The AFEB may also recommend changes to this plan.

c. AFEB Recorder. The AFEB recorder is responsible for coordinating the administrative actions required by the PMs, the AFEB and the FDO, including: l) receipt, processing and distribution of evaluation reports from all required sources; 2) scheduling and assisting with internal evaluation milestones, such as briefings; and 3) accomplishing other actions required to ensure the smooth operation of the Award-Fee.

d. Contracting Officer. The KO is the liaison between contractor and Government personnel.

e. Performance Monitors. PMs maintain written records of the contractor's performance in their assigned evaluation area(s) so that a fair and accurate evaluation is obtained. Prepare interim and end-of-period evaluation reports as directed by the AFEB.

4.0 Award-Fee Administration

a. Available Award-Fee Amount. The available Award-Fee for each evaluation period is shown in Annex 2. The Award-Fee earned will be paid based on the contractor’s performance during each evaluation period.

b. Evaluation Criteria. If the KO does not give specific notice in writing 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 subsequent Award-Fee evaluation period. Any changes to evaluation criteria will be made by revising Annex 3 and notifying the contractor.

c. Interim Evaluation Process. The AFEB Recorder notifies each AFEB member and PM, 30 calendar days before the midpoint of the evaluation period. PMs submit their evaluation reports to the AFEB 15 calendar days after this notification. The AFEB determines the interim evaluation results and notifies the contractor of the strength and weaknesses for the current evaluation period. The KO may also issue letters at any other time when it is deemed necessary to highlight areas of Government concern.

d. End-of-Period Evaluations. The AFEB Recorder notifies each AFEB member and PMs 30 calendar days before the end of the evaluation period. PMs submit their evaluation reports to the AFEB 15 calendar days after the end of the evaluation period. The AFEB prepares its evaluation report and recommendation of earned Award-Fee. The AFEB briefs the evaluation report and recommendation to the FDO. At this time, the AFEB may also recommend any significant changes to the Award-Fee Plan for FDO approval. The FDO determines the overall grade and earned Award-Fee amount for the evaluation period within 30 calendar days after each evaluation period. The FDO letter informs the contractor of the earned Award-Fee amount.

e. Contractor’s Self-Assessment. When the contractor chooses to submit a self-evaluation, it must be submitted to the KO no later than five working days after the end of the evaluation period. This written assessment of the contractor’s performance throughout the evaluation period may also contain any information that may be reasonably expected to assist the AFEB in evaluating the contractor’s performance. It is highly recommended that the contractor follow the Award-Fee Plan criteria in conducting and presenting their self-assessment, and include how they rate themselves on their performance for the period. The contractor’s self-assessment may not exceed 5 pages.

5.0 Award-Fee Plan Change Procedure

All significant changes are approved by the FDO; the AFEB approves other changes. Examples of significant changes include changing evaluation criteria, adjusting weights to redirect contractor’s emphasis to areas needing improvement, and revising the distribution of the Award-Fee dollars. The contractor may recommend changes to the KO no later than 15 days prior to the beginning of the new evaluation period. After approval, the KO shall notify the contractor in writing of any change(s).

Unilateral changes may be made to the Award-Fee Plan if the contractor is provided written notification by the KO before the start of the upcoming evaluation period. Changes effecting the current evaluation period must be by mutual agreement of both parties.

6.0 Contract Schedule and Changes

The contract provides a completion time from date of award to meet critical operations dates.

The original contract completion date will be determined and set at time of award of the contract The Contractor’s ability to adhere to the original contract completion date is intended as the overarching measure of the award fee plan as outlined below. For purposes of administering the AFP only, the specified completion date at contract award is fixed for the life of the contract and will not be adjusted due to changes, excusable/compensable delays. The contractor’s ability to maintain schedule inclusive of critical milestones and demonstrated flexibility in performance to accommodate changes and delays will be evaluated pursuant to the criteria provided in Annex

4.1. Critical milestones shall not be adjusted unless the FDO determines that it is in the best interests of the Government and makes changes to the AFP pursuant to paragraph 5.0 above.

7.0 Contract Termination.

If the contract is terminated for the convenience of the Government after the start of an Award- Fee evaluation period, the Award-Fee deemed earned for that 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 Award-Fee evaluation periods cannot be earned by the contractor and, therefore, shall not be paid.

Annexes:

1. Award-Fee Organization

2. Award-Fee Allocation by Evaluation Periods

3.1 Award-Fee Evaluation Factors

3.2 Award-Fee Conversion Table

3.3 Earned Award-Fee Calculation Example

4.1 Performance Evaluation Criteria – Schedule Management

4.2 Performance Evaluation Criteria – Quality Management

5. Performance Evaluation Report Format

Annex 1 – Award fee Organization

POSITION ASSIGNMENT

Fee-Determining Official (FDO) CCO LANT Lead Contracting Officer ROICC Contracting Director

Award fee Evaluation Board:

Chairperson ROICC Commanding Officer Recorder ROICC Construction Director Member ROICC Deputy ROICC Member Project Manager Member Design Manager Advisor Director, SIOP Department Advisor NNSY Public Works Officer Advisor NNSY Code 900F Director Advisor NAVFAC LANT Counsel

Performance Monitors:

Schedule Management ROICC Schedule Analyst, Construction Managers Managerial Effectiveness ROICC Engineering Technicians and Supervisors

Note: Board members and advisors may designate alternates as operations dictate.

Annex 2 – Award-Fee Allocation by Evaluation Periods

The award-fee earned by the contractor will be determined at the completion of evaluation periods shown below.

The Award Fee amounts shown corresponding to each period is the maximum available award-fee amount for each evaluation period.

Evaluation Period From To Available Award-Fee

Period 1

Notice to Proceed for on site work

1 yr from Notice to Proceed for on site work

$5,000,000

Period 2

End Period 1 1 yr from end of Period 1

$1,000,000

Period 3

End Period 2 1 yr from end of Period 2

Period 4

End Period 3 1 yr from end of Period 3

Period 5

End Period 4 Original CCD $17,000,000

Annex 3.1 – Award-Fee Evaluation Factors

The following are performance factors that will be evaluated for calculation of earned award-fee.

Each factor has a weight assigned that, when multiplied by the average of the performance points awarded for that factor by all raters, determines the weighted performance points for that factor. If the average of the weighted performance element points awarded for each factor results in a minimum rating of Satisfactory, the weighted performance points are then summed to determine the total performance points, and used in conjunction with Annex 3.1 to determine the percentage to apply to the available award-fee to arrive at the earned award-fee that will be presented to the FDO for consideration. If the average of the performance points awarded for any factor or performance element for an award-fee pool results in a rating below a Satisfactory total performance points (i.e., rating of Unsatisfactory) in accordance with Annexes 4.1 and 4.2, the contractor will earn zero award-fee for that evaluation period.

Factor Weight

Factor #1 - Schedule Management 80%

Factor #2 - Quality Management 20%

Annex 3.2 – Award-Fee Conversion Table

ADJECTIVE RATING EARNED

PERFORMANCE

POINTS

PERCENT OF

AVAILABLE

AWARD-FEE

OUTSTANDING

100 100 99 98 98 97 97 95 96 94 95 92 94 91

VERY GOOD

93 90 92 88 91 86 90 84 89 82 88 80 87 78 86 76

GOOD

85 75 84 72 83 68 82 65 81 62 80 58 79 54 78 51

77 50 76 46 75 40 74 34 73 28 72 22 71 16 70 10

UNSATISFACTORY 0-69 0

When the weighted performance element points are summed to determine the Total Performance Points, Total Performance Points with a .5 down to the next whole number will be rounded down to that whole number. Total Performance Points with a .6 up to the next whole number will be rounded up to that whole number. For example:

A Total Performance Points of 83.3 will be rounded down to 83. A Total Performance Points of 83.7 will be rounded up to 84.

Annex 3.3 - Earned Award-Fee Calculation Example:

In this example, the available award-fee is $15,000,000. This example assumes the average of the performance points awarded for each factor results in a minimum rating of Satisfactory. The earned award-fee for the evaluation period, to be presented to the FDO for consideration, would be derived as follows:

Phase Example

Evaluation period available award-fee

$15,000,000

Total performance points 77.9 Percent of available award-fee from Annex 3.1 table

33%

EARNED AWARD-FEE $4,950,000

Annex 4.1 – Performance Evaluation Criteria – Factor #1 Schedule Management

Performance Elements

UNSAT

(0-69 points)

(0% available)

SATISFACTORY

(70-77 points)

(10-50% available)

GOOD

(78-85 points)

(50-75% available)

VERY GOOD

(86-93 points)

(76-90% available)

OUTSTANDING

(94-100 points)

(91-100% available)

Element #1 (80%) - Ability to maintain or recover the original contract completion date and original Government approved baseline schedule (*Also see other considerations section below).

Demonstrates flexibility in performance to accommodate shipyard operations, unforeseen changes, weather delays, and delivery delays of long-lead items without schedule slippage or provides a clear plan for how schedule will be recovered.

Fails to meet Key Performance Indicators (KPIs), overall schedule requirements and/or critical path milestones within the evaluation period.

Milestones were not achieved by no-later-than dates and no executable recovery plan is presented.

Fails to demonstrate flexibility in performance, causing negative impact to project execution or customer mission requirements.

Meets most Key Performance Indicators (KPIs), schedule requirements and clearly demonstrates the majority of critical path milestones within the evaluation period were achieved by no-later-than dates and any future milestones are achievable.

Demonstrates flexibility in performance, resulting in few negative impacts to project execution or customer mission requirements, from which the contractor can recover and maintain original project completion date based on a recovery plan that is executable.

Meets Key Performance Indicators (KPIs), schedule requirements and clearly demonstrates all critical path milestones within the evaluation period were achieved by no-later-than dates and any future milestones are achievable.

Regularly demonstrates flexibility in performance, resulting in only minor negative impacts to project execution or customer mission requirements, from which the contractor can clearly recover and maintain original project completion date based on a recovery plan that is executable.

Exceeds requirements of Key Performance Indicators (KPIs), schedule requirements and clearly demonstrates all critical path milestones within the evaluation period were achieved by no-later-than dates.

Schedule maintains 30 to 45 calendar days of schedule float to mitigate risk of missing the original project completion date.

Almost always demonstrates flexibility in performance, causing no negative impact to project execution or customer mission requirements.

Exceeds requirements of Key Performance Indicators (KPIs), schedule requirements and clearly demonstrates all critical path milestones within the evaluation period were achieved by no-later-than dates.

Schedule maintains more than 45 calendar days of schedule float to mitigate risk of missing the original project completion date.

Always demonstrates flexibility in performance, causing a positive impact to project execution and customer mission requirements.

Annex 4.1 – Performance Evaluation Criteria – Factor #1 Schedule Management Continued

Performance Elements UNSAT

(0-69 points) (0% available)

SATISFACTORY

(70-77 points)

(10-50% available)

GOOD

(78-85 points)

(50-75% available)

VERY GOOD

(86-93 points)

(76-90% available)

OUTSTANDING

(94-100 points)

(91-100% available)

Element #2 – 10% Proactive management that identifies problems early and works effectively to provide solutions to overcome problems and increase performance

Fails to identify problems in a timely manner.

Solutions, when and if implemented, are ineffective and have no positive impact on project schedule.

Problems are generally identified in a timely manner.

Contractor generally provides sufficient information on alternate solutions.

Solutions successfully mitigate schedule impacts resulting in only minor short term negative impacts to project schedule.

Problems are identified in a timely manner.

Contractor provides sufficient information on alternate solutions.

Solutions successfully mitigate impacts resulting in no negative impact to project schedule.

Often identifies and anticipates problems prior to adverse impact.

Contractor often provides organized and detailed alternatives including risk assessment, trade off analysis between cost, schedule, and performance, plan of action, and implementation schedule.

Solutions mitigate impacts and have some positive impact to estimated cost and schedule.

Almost always identifies and anticipates problems prior to adverse impact.

Contractor almost always provides organized and detailed alternatives including risk assessment, trade off analysis between cost, schedule, and performance, plan of action, and implementation schedule.

Solutions mitigate impacts and have notable positive impacts to estimated cost and schedule.

Element #3 – 10% Collaboration and cooperation with other contractors, State and Federal Government permitting agencies, shipyard operations, and all other applicable Government stakeholders to ensure contract requirements and critical path dates are met.

Fails to collaborate or cooperate with other contractors and Government.

Rarely involves the appropriate team members in discussions, issue resolution, etc.

Lack of collaboration and cooperation causes negative impact to project execution or customer mission requirements.

Collaborates and cooperates with Government and other contractors when requested and sometimes does so proactively.

Usually involves the appropriate team members in discussions, issue resolution, etc.

Collaboration and cooperation results in only minor negative impacts to project execution or customer mission requirements.

Usually proactively collaborates and cooperates with Government and other contractors.

Involves the appropriate team members in discussions, issue resolution, etc.

Collaboration and cooperation mitigates negative impacts to project execution or customer mission requirements.

Frequently proactively collaborates and cooperates with Government and other contractors.

Almost always involves the appropriate team members in discussions, issue resolution, etc.

Collaboration and cooperation has some positive impact on project execution and customer mission requirements.

Always proactively collaborates and cooperates with Government and other contractors.

Excels at involving the appropriate team members in discussions, issue resolution, etc.

Collaboration and cooperation has notable positive impact on project execution and customer mission requirements.

Annex 4.1 – Performance Evaluation Criteria – Factor #1 Schedule Management Continued

*Other Considerations for Factor #1 Schedule Management Performance

Key Project Milestones and schedule requirements include completion of construction permitting, long lead material orders, completion of work identified on the drawings under “Phasing Notes”, Cofferdam installation, Wet Well structure installation, Dock walls and floor installation, and completion of Critical Systems acceptance testing will be considered as a part of the schedule requirements/evaluation and assessment of the Contractors ability to meet the contract completion date as outlined in Annex 4.1.

After contract award and before the beginning of each evaluation period, the FDO may identify specific milestones from the contractors approved schedule for evaluation under Factor #1. At the end of each evaluation period, the contractor’s current schedule and any plan for schedule recovery will be reviewed against the baseline schedule to evaluate schedule milestones and construction progress in order to ensure recovery plans are realistic and achievable such that they will result in the mitigation of any anticipated or realized project schedule delays.

NOTE: “Schedule requirements” refers to meeting or improving upon the completion dates for tasks identified on the schedule.

Annex 4.2 – Performance Evaluation Criteria – Factor #2 Quality Management

Performance Elements

UNSAT

(0-69 points) (0% available)

SATISFACTORY

(70-77 points)

(10-50% available)

GOOD

(78-85 points)

(50-75% available)

VERY GOOD

(86-93 points)

(76-90% available)

OUTSTANDING

(94-100 points)

(91-100% available)

Element #1– 100% Proactive QC system that monitors the quality of work either self- performed by the contractor, or performed by any tier subcontractor; and makes prompt deficiency corrections to satisfy contract requirements.

Consistently fails to deliver quality product and workmanship. Poor quality work requires frequent rework.

Often fails to adequately address and correct quality deficiencies in a timely manner. Often fails to adhere to approved quality control plan. These failures often lead to poor quality products or workmanship and an unacceptable amount of rework.

Meets most minimum quality standards.

Generally, addresses and corrects quality deficiencies in a timely manner.

Always addresses and corrects quality deficiencies.

Generally, adheres to approved quality control plan. Results in products and workmanship that meets minimum quality standards with an acceptable amount of rework.

Always meets, occasionally exceeds, minimum quality standards. Usually addresses and corrects quality deficiencies in a timely manner.

Always addresses and corrects quality deficiencies. Usually adheres to approved quality control plan.

Results in good quality products and workmanship with infrequent rework.

Always meets, sometimes exceeds, minimum quality standards.

Almost always addresses and corrects quality deficiencies in a timely manner.

Always addresses and corrects quality deficiencies.

Almost always adheres to approved quality control plan.

Results in high quality products and workmanship with infrequent rework.

Always meets, often exceeds, minimum quality standards.

Always addresses and corrects quality deficiencies in a timely manner.

Always addresses and corrects quality deficiencies. Always adheres to approved quality control plan.

Results in exceptional quality products and workmanship with minimal rework.

Annex 5 - Performance Evaluation Report Format

CONTRACTOR PERFORMANCE REPORT

TO BE COMPLETED BY EVALUATION MONITORS & AFEB MEMBERS

Evaluation Period: Contract Number:

Contractor: Date of Report:

Factor Weight Performance Points (0-100) Total

1. Schedule Management

0.80

Comments:

2. Quality Management 0.20

Comments:

Total Percentage

Rater’s Signature: Date: