Revised Attachment J8-Incentive and Monitoring Framework.pdf

Attachment J.8 Incentive and Monitoring Framework

USAID CHEGAR Incentive and Monitoring Framework - Revised

I. Performance Incentive Plan

Under USAID CHEGAR, offerors will provide a detailed cost and a minimum fee that does not exceed 2% of the target cost. Once awarded, the contractor will be reimbursed for all reasonable, allowable and allocable costs, in accordance with the Limitations of Funds Clause—FAR 52-232-

22. An incentive payment, up to 8% of the target cost will be calculated based on the measure below and be paid on a quarterly basis.

USAID intends to provide performance incentives (PI) based on the performance against two key performance indicators. These performance incentive payments will be based on the key performance metrics below the project costs that are approved for reimbursement on a semi-annual basis (for a total of 6 payments over the lifespan of the three-year contract). Contractors should propose a reasonable base fee not exceeding 2% in accordance with the quantity and risks. The maximum incentive fee for this procurement will be 8% of the target cost. Indicators are defined so that they are within the manageable control of the contractor. The contractor is invited to suggest additional industry-specific indicators that will improve performance monitoring and maximizing efficiency. Performance will be tracked on a monthly basis; however, the incentive calculations will be made on a quarterly basis.

Key Performance Metric Target Fee Structure Fee Application

On time delivery

This key performance metric measures the timeliness to which health facilities receive medical commodities in accordance with the pre-established distribution plan agreed with the contractor.

91-100%

81-90%

71-80%

Tier 3 (91-100%): 4%

Tier 2 (81-90%): 3%

Tier 1 (71-80%): 1%

Applied to the expected target cost for the quarter

In full delivery

This key performance metric measures the completeness of deliveries in accordance with the pre-established distribution plan agreed with the contractor.

96-100%

90-95%

85-89%

Tier 3 (>96-100%): 4%

Tier 2 (90-95%): 3%

Tier 1 (85-89%): 1%

Applied to the expected target cost for the quarter

II. Illustrative Performance Monitoring Plan

USAID intends to track performance on a monthly basis; however, the incentive calculations will be made on a quarterly basis.

Key Performance Metric

Data Acquisition Plan Data Quality Considerations Data Analysis

On time delivery

Data collection method:

Submitted & approved in CHEGAR reporting to be reviewed by LMSC

Data Source: Agreed upon plan signed by DPS and signed proof of delivery (POD)

Frequency: Monthly

Data Quality Assessment: DQA performed quarterly for a randomly selected province, and on an as needed basis when performance problems or complaints are raised

Potential Limitations: Districts may not have distribution plans

Mitigation Plan: Make clear the distribution plan requirement before starting distributions in each geographic area.

Reported monthly with quarterly and semi-annual and annual review of trends by USAID IHO, LMSC, and CMAM serve as the basis for the semi-annual incentive payment

In full delivery

Data collection method:

Submitted in CHEGAR reporting

Data Source: Delivery notes

Frequency: Monthly

Data Quality Assessment: DQA performed quarterly for a randomly selected province, and on an as needed basis when performance problems or complaints are raised Potential Limitations: Delivery notes without signature and/or date Mitigation Plan: Training at the start of implementation on how to fill out delivery notes and conduct quality assurance during data review meetings

Reported monthly with quarterly and semi-annual and annual review of trends by USAID IHO, LMSC, and CMAM serve as the basis for the quarterly incentive payment

Performance Monitoring Roles:

USAID Integrated Health Office (IHO), and third parties will monitor the performance of the CHEGAR contractor. A critical 3rd party monitor role will be the Last Mile Supply Chain (LMSC) project that will help monitor, track and validate the data reported for the incentive indicators. Other third parties include: host government officials at the national and sub-national level, health facilities and PEPFAR and other service delivery partners that support health facilities. Over the lifespan of the contract, CMAM and LMSC will play a prominent role in monitoring performance before the contract is due to end and responsibilities for last mile distribution should begin to transition to CMAM. The monitoring roles for the three main institutions validating CHEGAR’s performance, are detailed in the table below:

Monitoring Activity USAID IHO LMSC CMAM (starting in year 3)

Desk review, progress versus agreed deliverables and milestones Monthly Monthly Monthly Central review performance data reported by CHEGAR contractor Quarterly Quarterly Quarterly Conduct site monitoring visits with data validation checks Quarterly Monthly Ad hoc

Participate in in-person provincial level performance reviews with provinces/DPSs

Ad hoc Quarterly Ad hoc

Conduct data quality assessment Ad hoc Quarterly Ad hoc

Review corrective action plans and completion of agreed actions As needed As needed Ad hoc

[End of Attachment J.8]