Attachment_0003_-_PBIF_Plan.pdf

Attachment 0003

Performance-Based Incentive Fee Plan for the

Ammunition Supply Point/Theater Storage Area

(ASP/TSA) 2.0 Contract

APPROVED:

Fee Determining Official

W52P1J-15-R-0090 Section J

Intentionally left blank

TABLE OF CONTENTS

INTRODUCTION

CHALLENGES

OVERVIEW OF CONTRACT TYPE

PURPOSE

ORGANIZATION

RESPONSIBILITIES

PBIF PLAN CHANGE PROCEDURE

PBIF PLAN FEE POOLS AND ALLOCATIONS

FEE DETERMINATION PROCESS

PBIF EVALUATION CRITERIA

FORFEITURE OF FEE

CONTRACT TERMINATION…

APPENDIX 1

APPENDIX 2

APPENDIX 3

APPENDIX 4

1. INTRODUCTION.

The 1st Sustainment Command (Theater) (1st TSC) is tasked with supporting land operations in the U.S Central Command (CENTCOM) Area of Responsibility (AOR) that stretches from Egypt to Kazakhstan and includes Iraq and Afghanistan. The 1st TSC helps monitor ground maintenance across the theater, ensuring forces have the equipment and tools they need to perform their missions. In Camp Arifjan and Camp Buehring, Kuwait, the 1st TSC is responsible for the performance of the largest Ammunition Supply Point in the world managing over $2 billion worth of items to provide Class V munitions supply support for all ammunition stocks to United States Military/Government components, Department of Defense (DoD) agencies and as required, coalition forces in the

CENTCOM AOR. This requirement is for interconnected warehouse operations support services of Class V stocks that are critical to mission accomplishment, and cannot be efficiently acquired independently via separate competitive acquisitions. The principal functions performed in the ASP/TSA are the issue, storage, and receipt of munitions (both training and war-reserve), munitions components, munitions packing and packaging material, and munitions-related material. Associated functions include: supporting periodic munitions readiness inspections; stock accountability, stock control, warehousing;

munitions and non-munitions material salvage/residue accountability, munitions reclamation, amnesty, inventory, ASP/TSA munitions security; user turn-in; packaging, shipment, and performing maintenance on all assigned Government Furnished Equipment

(GFE).

2. CHALLENGES.

Challenges exist that may impact the potential for cost growth for the ASP/TSA contract.

The challenges include the uncertainties in the levels of effort required and mission requirements/changes (e.g., increasing attention to Iraq and Jordon, the drawdown in

Afghanistan, theater dynamics impacting ammunition requirements and readiness based on counter-measures contingency operations); continuously changing Force Protection levels at all locations; increased requirements emanating from new or changing regulations or statute; the need for a large multi-national contractor workforce (including supervisors) that must be recruited, trained, and retained; familiarity with the technical tasks associated with bulk munitions and theater reserve munitions, compliance with

Kuwaiti laws, policies, and customs; harsh working conditions in a foreign country with significant cultural and language differences; contract flexibility to allow increased manpower as the workload/volume increases and availability of government-furnished equipment.

3. OVERVIEW OF CONTRACT TYPE.

A hybrid cost-plus-fixed-fee (CPFF) with a performance-based incentive fee (PBIF) contract was determined to be the best contract type for this requirement (which is essentially a level of effort) as it incentivizes excellence and motivates the contractor to provide quality, responsive, flexible, and innovative services, as well as employ cost control and cost reduction efforts. A PBIF will properly incentivize the contractor to control costs, improve and/or sustain high levels of performance and quality, maintain high customer satisfaction, and flexibly manage the overall contract efficiently and effectively.

Unlike traditional incentives that can be earned independently, such as earning a schedule incentive while overrunning the contract’s target cost and losing cost incentive, CPFF–PBIF requires acceptable performance in every measured area. Most of the fee pool is in the incentive portion and is at risk to be gained or lost representing an “all or none” fee at each incentive event. If the contractor is unacceptable in any of the evaluated performance factors, then the contractor forfeits the entire incentive fee pool associated with that particular incentive event.

IAW FAR 16.301-3, the contract will include a requirement for an adequate accounting system capable of providing the timely development of all necessary cost data. In addition, appropriate Government surveillance during performance will provide reasonable assurance that efficient methods and effective costs controls are used.

4. PURPOSE.

This PBIF Plan describes the specific criteria and procedures that will be used to assess the Contractor’s performance and to determine the amount of Incentive Fee earned.

Actual PBIF determinations and the methodology for determining PBIF are unilateral decisions made solely at the discretion of the USG. Determinations are not subject to the

Disputes clause of the contract. The purpose of the PBIF Plan is to motivate the contractor to concentrate resources in areas critical to efficiently and effectively manage this service contract and achieve timely execution of the ASP/TSA operations. This plan is the basis for the evaluation of the Contractor’s performance and for presenting an assessment of that performance to the FDO. The PBIF Plan is the primary process and procedure in which the Government communicates to the Contractor its assessment of their performance in relation to the contract criteria established herein, strengths and weaknesses for the current evaluation period, and areas for improvement for the remainder of the evaluation period. The Government will use judicious reasoning in devising its assessment so that the resultant score is commensurate with the

Contractor’s actual performance. The intent of this PBIF Plan is to motivate and incentivize the Contractor toward continuous improvement, flexibility, and excellence in all areas of performance under the ASP/TSA contract, to include proactive management in executing the requirements.

5. ORGANIZATION.

Government personnel involved in determining the PBIF earned include: The Army

Contracting Command – Rock Island (ACC-RI), the 1st TSC, and the 408th Contract

Support Brigade (CSB) Contingency Contract Administration Services (CCAS). An

ACC-RI Division Chief, other than the Reachback Division Chief, will be the Fee

Determining Official (FDO). The ACC-RI, Chief, Reachback Division will be the Fee

Chairperson. 1st TSC will provide performance input through the assigned Contracting

Officer Representatives (CORs). CCAS will also provide performance input through the use of the Administrative Contracting Officer (ACO) and Quality Assurance

Representatives (QARs). The purpose of this structure is to ensure that a knowledgeable, comprehensive, fair, and consistent process is used to evaluate and communicate the Contractor’s performance

6. RESPONSIBILITIES.

6.1. FDO. The FDO approves the PBIF Plan and any substantive revisions thereto.

The FDO reviews the recommendations of the Fee Chairperson, considers all pertinent data, including overall contract performance, as well as, CCAS’s data relative to the successful achievement of objective criteria, and determines the earned PBIF amount for each evaluation period. Subsequently, the FDO will notify the Contractor, in writing, of the earned fee for the evaluation period with a description of the Contractor’s strengths, weaknesses, and areas of improvement for the future. The FDO will authorize the PCO to issue a contract modification to authorize for billing the earned fee amount payable to the Contractor.

6.2. Fee Chairperson. The Fee Chairperson will ensure that the Contractor’s performance review is thorough and covers all areas required to support the fee determination. The Chairperson’s performance evaluation recommendation will be transmitted to the FDO.

6.3. Procuring Contracting Officer (PCO). The PCO is the liaison between the

Contractor and Government on all issues and is responsible for the overall management of obtaining documents and disseminating documents. The PCO transmits the FDO letters to the Contractor. The PCO prepares and distributes the modification awarding the fee authorized by the FDO. The PCO ensures that the appropriate fee amount is certified and administratively reserved prior to the beginning of the applicable fee evaluation period. The PCO ensures that all unearned fee is de-committed after each evaluation period. The PCO notifies the Contractor of any changes to the PBIF Plan, after FDO approval. The PCO ensures the Chairperson’s recommendation and the FDO final decision are formally documented. The PCO maintains the official contract file containing the following documentation for each separate evaluation period:

1. FDO decision letter to the Contractor providing the earned PBIF amount to include strengths, weaknesses, and areas of improvement, if any.

2. Supporting rationale if the FDO’s final decision of earned fee differs from the Chairperson’s recommendation.

3. Copy of Fee Chairperson’s recommendation.

4. Performance evaluations.

5. Contractor’s self-assessment, including any applicable briefings.

6. Determination of fee pools and earned fee calculations.

6.4. Performance Monitors (PMs). PMs maintain written records of the Contractor’s performance in their assigned evaluation area(s) so that a fair and accurate evaluation is obtained. PMs will consist of those contracting personnel, to include contract administration personnel such as CCAS ACO, CORs, or other acquisition management professionals, requiring activity leadership, and subject matter experts most knowledgeable of the requirements regarding the

Contractor’s performance in the areas to be evaluated. PMs shall consider all information from pertinent resources, prepare performance reports. PMs may also recommend changes to the PBIF plan, which will be approved by the FDO.

6.5. ACO. CCAS ACOs will serve as the primary PMs. They will prepare input for the final evaluation reports/briefing charts as directed by the Fee Chairperson.

ACOs will also provide formal, timely, monthly feedback to their Contractor counterparts on performance as evaluated against the criteria.

6.6. CORs and QARs. CORs/QARs will gather data concerning the Contractor’s performance and the impact of the Contractor’s performance on their area of responsibility. The CORs/QARs will provide the ACO evaluation reports on

Contractor performance.

7. PBIF PLAN CHANGE PROCEDURE.

Prior to the start of the period, the Government shall review the plan for possible revisions or applicability.

The FDO may unilaterally change the plan prior to the beginning of an evaluation period.

The Contractor will be notified of unilateral changes to the plan by the PCO, in writing, a minimum of 15 calendar days before the start of the affected evaluation period.

The FDO approves all significant changes. Examples of significant changes include changing evaluation criteria and adjusting evaluation criteria weights to redirect the

Contractor’s emphasis to areas needing improvement. Increases in the contract fee pools, resulting from contract modifications, are not considered a significant change and will not require FDO approval.

Changes to this plan within the current evaluation period will be incorporated by mutual consent with the Contractor.

The Contractor may recommend changes to the PCO no later than 45 calendar days prior to the beginning of the new evaluation period. After approval of any suggested changes, the PCO shall notify the Contractor, in writing, 15 calendar days before the start of the affected evaluation period.

The PBIF plan, any changes to the PBIF, any earned PBIF, and any adjustments to the

PBIF pool will be executed through contract modifications.

8. FEE POOLS AND ALLOCATIONS.

The fee arrangement consists of a Fixed Fee (FF) and a PBIF. The ceiling for fee comprised of a FF and PBIF when combined shall not exceed 10% of the contract’s negotiated cost. Fee allocation is contemplated as follows:

8.1. FF STRUCTURE. The CPFF Plan has a FF on this contract unrelated to the PBIF structure. The ceiling for the FF is 3%. The percentage of the FF shall be proposed by the offerors at time of proposal submission, will be set at the inception of the contract, and represents the amount of fee the contractor will receive under the contract if the work is completed in accordance with the terms and conditions of the contract. It will be paid monthly provided the contractor meets the requirements of the contract.

8.2. PBIF STRUCTURE. PBIF earned will be determined based on the parameters as stated in this plan. The range for the PBIF percentage is greater than 0% and no higher than 7%. The percentage of the PBIF shall be proposed by the offerors at time of proposal submission, will be set at the inception of the contract, must be earned, and will be used as incentive for performance that exceeds average performance. The PBIF reflects the Government’s periodic evaluation of contractor performance, and will be paid on a semi-annual basis, subsequent to the FDO determination that contractor performance is evaluated to be above average, i.e., good, very good, or excellent. The PBIF Plan and criteria are overarching and will apply to the entire effort.

8.3. PBIF FEE POOL. The fee pool amounts to total PBIF dollars available throughout the life of the contract. Since the available PBIF during the evaluation period must be earned, the Contractor begins each period with 0% earned PBIF. Fee determinations will be made on a semi-annual basis and will take into consideration overall contract performance for each evaluation period. The fee for each period shall be composed of a PBIF pool based upon the final, negotiated, estimated cost of the contract and subsequent modifications minus all non-fee bearing cost elements. Fee will only be allowed on value-added costs, i.e., labor and labor-related costs, indirect costs, and G&A that are allocable and allowable costs included in the negotiated baseline. While not all inclusive, the following cost elements will not be included in the base when the Government computes the pool:

All Material Costs

Value Added Tax

Incentive Pay above Applicable Department of State Guidelines

Equipment Costs

Insurance

Facilities Capital Cost of Money

Pass Thru Subcontracts (subcontracts for which the prime contractor adds no or negligible value)

Travel

Other Direct Costs (ODCs), (e.g. sponsorship costs, housing, vehicle leasing, work visas, medical exams, etc.)

The costs identified above (whether incurred at the prime or subcontract level) will be excluded for the purpose of developing the base on which FF and PBIF will be calculated. Fees will be computed on labor-related costs, to include direct labor costs (exclusive of uplifts beyond State Department guidelines), fringe benefits, and associated other indirect costs/overhead/G&A, as described in the

Contractor’s Cost Disclosure Statement. Excessive pass-through charges

(DFARS 252.215-7004) are unallowable.

The Contractor must verify, in writing, that due diligence was exercised in developing the cost basis for the fee pools, and that appropriate exclusions were taken into account.

The FF pool and PBIF pool can be adjusted based upon significant discrete changes within the baseline that are negotiated changes to the level of effort.

The fee pools are based upon the final, negotiated, estimated cost of the contract and subsequent modifications minus all non-fee bearing costs elements. It is understood that the contractor shall have effective and efficient internal controls in place that are subject to the review and audit by the

Defense Contract Audit Agency (DCAA) and other Government agencies as appropriate.

8.4. NO ROLLOVER OF UNEARNED PBIF. The PBIF Plan describes the evaluation of contract services delivered within the respective evaluation period. The evaluation of the Contractor’s performance is final for that period and any “unearned” fee is not eligible to be earned in a future period. The

PCO will ensure that all unearned fees funds are de-committed after each evaluation period.

9. FEE DETERMINATION PROCESS.

Fee determinations will be conducted on a semi-annual basis and are in addition to the

Cost Reimbursement provisions of the contract. The PBIF earned and payable will be determined by the FDO based on a review of the Contractor’s performance by the Fee

Chairperson against the criteria set forth in this plan.

9.1 Informal Feedback. The Government may provide informal feedback during technical/functional meetings. Continuous informal feedback may also be provided during other meetings with the PCO, Senior Army Leadership, and Requiring Activity (1st

TSC) Leadership. While feedback provided to the Contractor in these forums may relate to performance issues, it will not relieve the Contractor from meeting established performance objectives.

9.2 Monthly Performance Evaluations. The ACO will provide formal, timely, monthly feedback to the Contractor on performance as evaluated against the objective and subjective criteria. The Government will consider feedback during monthly performance evaluations for all End-of-Period Evaluations. It is optional to provide monthly written feedback for the month immediately preceding the final briefings since the ACOs are preparing input to final briefing charts that capture the feedback for this month.

9.3 End-of-Period (Final) Evaluations.

Step 1: The contractor shall submit a self-assessment to the PCO within 14 calendar days after the end of the evaluation period. The PCO will provide a copy of this self-assessment to the Fee Chairperson within three calendar days. This written self-assessment of the Contractor’s performance throughout the evaluation period should contain any information that may be reasonably expected to assist the Fee Chairperson in evaluating the Contractor’s performance. The self-assessment shall not exceed 10 pages, double spaced, 12-point font.

Step 2: Performance Monitors will submit their input to the ACO, who acts as the primary PM, within 14 calendar days after the end of the evaluation period.

Step 3: The ACO will provide consolidated input, which will include the monthly performance evaluations, to the PCO within seven calendar days.

Step 4: The PCO will provide a copy of the consolidated input to the Fee Chairperson within three calendar days.

Step 5: The Fee Chairperson will review the consolidated input and the Contractor’s self- assessment, and consider all information from pertinent sources. The

Chairperson will prepare his/her evaluation report and recommendation of ratings and earned fee amounts. The Fee Chairperson shall properly document the rationale for their recommend fee. The Chairperson will brief the evaluation report and recommendation to the FDO within 14 calendar days of receiving the consolidated input and the Contractor’s self-assessment.

Step 6 (FDO Determination): The FDO may alter the Fee Chairperson’s recommendation as long as the FDO documents his/her decision in sufficient detail to show that the integrity of the fee determination process has been maintained. The

FDO will determine the overall rating and earned fee amount for the evaluation period within 14 calendar days after receiving the Fee Chairperson’s recommendation. This decision shall be documented. The FDO decision document will be forwarded to the

Contractor under a PCO cover letter within three calendar days.

Step 7: The PCO issues a contract modification within seven calendar days after the

FDO’s decision is made authorizing payment of the earned PBIF amount.

10. PBIF EVALUATION CRITERIA.

10.1. Performance Categories. The following performance categories and criteria serve as guidelines to evaluate Contractor performance. The PBIF performance categories are either subjective or objective. The subjective category is Management Performance and the objective category is ASP/TSA Mission Performance.

The same criteria listed for the preceding period will be used in following evaluation periods unless the FDO, through the PCO, gives specific notice in writing to the

Contractor of any change to the evaluation criteria prior to the start of a new evaluation period.

10.1.1. Management Performance.

The sub-elements of Management Performance are Program Management and Cost

Control. The weight assigned to this category is 40%. Each criterion description includes lists of subjective attributes that define the scope of performance upon which the FDO may consider to determine the criteria adjectival and numerical ratings. These subjective attributes are not intended to be sub-elements. It is recognized that for any given evaluation period performance associated with these attributes may simply meet the contract requirements, and therefore, have no substantive impact on the performance evaluation. For that reason they are neither weighted in the PBIF plan nor individually rated in the evaluation. Instead, they provide guides as to the broad spectrum of performance that may be relevant to and considered for evaluation of performance against each criterion.

For subjective criteria, the evaluation shall:

1. Review all observations and findings, and determine that each has a nexus to the established criteria attributes.

2. Consider all relevant observations and findings, and determine the adjectival rating. This determination is based on an assessment of where most of the

Small Arms (thru .50 Caliber)

Medium Caliber 20-40MM

Packaged Artillery/Tank/Mortar

Artillery Projectiles

Large Missiles

Small Missiles

Pyrotechnics

Grenades

Rockets

CAD and PAD

Demolition Materials

Propellant Charges

All other

MILVAN/ISO Containers, all munitions

Break Bulk on 40 ft trailers

Air Force Pallets (463L pallets)

TABLE 1: PBIF PERFORMANCE CATEGORIES

2. Production Metrics C.1.2.5.2

ASP/TSA Mission Performance (objective) (60%)

1. Production Metrics C.1.2.5.1

Management Performance (subjective) (40%)

1. Program Management

2. Cost Control findings and observations best fit the adjectival ratings definition.

3. Consider the most significant observations and findings to determine the appropriate numerical rating. In essence, this involves considering those findings that had the greatest impact on overall performance, and weighing them based on the impact they had on meeting criterion objectives.

4. Document the PBIF determination in sufficient detail to demonstrate the rationale for and reasonableness of the ratings.

10.1.1.1. Program Management Criteria.

The Government’s evaluation will be based on performance expectations of a consistently high-performing contractor. The purpose is to evaluate the contractor’s management capabilities and success in integrating all aspects of the ASP/TSA mission to successfully achieve mission objectives. Subjective assessment will be made of the contractor’s proactive management and leadership in implementing and maintaining appropriate management processes and controls.

The Government’s rating will consider the contractor’s performance against the full spectrum of management attributes. The subjective attributes listed below provide elements of performance that the Government considers representative of a consistently high performing contractor. These subjective attributes are not intended to be sub-elements. It is recognized, that for any given evaluation period, performance associated with these attributes may simply meet the contract requirements, and therefore may have no substantive impact of the PBIF evaluation. For that reason, they are neither weighted in the PBIF plan, nor individually rated as part of the evaluation process.

Instead, they provide guides as to the broad spectrum of performance that may be relevant to and considered for evaluation of performance against the Management

Performance category. The evaluation will focus on those attributes where the contractor’s performance most significantly influences the overall Government assessment of this performance:

Success in minimizing employee turnover (especially key personnel, i.e., managers, department heads and first line supervisors), filling vacancies expeditiously, and ensuring the staff has adequate skills to perform assigned work.

Maintenance of an effective and efficient organization structure and management system identifying and qualifying personnel with duties, responsibilities, and authorities necessary to achieve ASP/TSA mission goals.

Accountability for actions taken by the contractor workforce to include subcontractor personnel. Timely and accurate communication of events or issues that are important to the success of the ASP/TSA mission.

Demonstrated ability to practice proactive management to identify and anticipate problems and implement effective countermeasures prior to adverse impact.

Maintenance of Government-approved business management systems. For the purpose of the PBIF evaluation, the following will be assessed: Property, Purchasing, Accounting, Billing, and Estimating systems. The contractor will not be responsible in those cases where the Government review has not been conducted or where the review has been conducted but the report is pending.

Timely and effective contract administration, including:

a) timely submission of current, accurate and complete proposals;

b) effective implementation of business plans (Continuity of Operations Plan

(COOP), Quality Control Plan, Safety Plan, and Inventory Management

Plan); and

c) timely distribution of contract deliverables, etc.

RATINGS:

Average or Below (0-70): Program Management performance meets the minimal essential standards. As a result, there has been a substantive adverse impact on achieving the objectives stated in the opening paragraph 10.1.1.1 of Program

Management. Indicators of average or below performance are identified below:

Management does not promote a sense of adherence to contract requirements by the workforce.

Management fails to address staffing issues resulting in inefficient allocation of resources; inadequate levels of staffing; unqualified and untrained personnel; lacks identification and effective handling of employee morale problems; etc.

The workforce is underutilized and inefficient.

Contractor defines problems without factual supporting information and rationale.

Management is ineffective in addressing problems when they occur, and in implementing solutions.

No clear lines of authority or effective communication with Government and other agencies.

Discipline in operations is rarely adhered to or promoted by management.

Documented evidence revealing tolerance of work practices that put people or the environment at risk or management to penalizing workers’ attempts to promote a safer work environment for themselves or their coworkers.

Failure to demonstrate commitment towards achieving approval of any business management system requiring Government approval.

Proposals are submitted late, are sometimes unacceptable and/or the change process does not proceed without adverse impacts to estimated cost and performance. Contractor does not ensure all proposal data, including subcontractor data, is adequate for technical review and cost analysis. The contractor is uncooperative regarding Government requests for missing information.

Technical/periodic reports and other deliverable data are not submitted in accordance with the contract data requirements and are in formats not easily understood. Discrepancies are major and require extensive time and effort to correct.

Information is provided only when requested.

Good (71-80): Program Management performance is recognized as being generally effective in meeting the objectives stated in the opening paragraph 10.1.1.1 of Program

Management. Substantive observations and findings identified throughout the rating period are best represented by the following levels of performance:

Management requires the establishment and maintenance of a sense of adherence to contract requirements by the workforce.

Management essentially addresses staffing issues such as allocation of resources; levels of staffing; qualifications and training of personnel; identification and effective handling of employee morale problems; etc.

The workforce is kept productively employed.

The Government is informed of all critical and some minor issues and events that may affect the success of the ASP/TSA mission and this project.

Periodically verifies adherence to procedures governing operations.

Contractor establishes clear lines of authority and provides effective communication with Government and other agencies. Minimal impacts experienced because of communication problems.

Contractor implements management control systems that provide for identification of problems to the appropriate management level. Contractor clearly defines problems with factual supporting information and rationale. Management addresses most problems when they occur, and subsequently implements solutions.

The majority of business management systems requiring Government approval are approved or adequate progress towards approval is evident.

Contractor ensures all proposal data, including subcontractor data, is adequate for technical review and cost analysis.

Very Good (81-90): Program Management performance is recognized as being efficient and effective in meeting the objectives stated in the opening paragraph

10.1.1.1 of Program Management. Substantive observations and findings identified throughout the rating period are best represented by the following levels of performance:

Occasionally promotes and verifies adherence to procedures governing operations.

Management substantially addresses staffing issues such as allocation of resources; levels of staffing; qualifications and training of personnel; identification and effective handling of employee morale problems; etc. Additionally, the contractor continuously reviews labor resource allocations in order to minimize labor usage, while maintaining adequate staffing levels to achieve the ASP/TSA mission goals with an acceptable quality of work and maximum productivity.

The workforce is actively and essentially fully engaged in meeting contractual and mission requirements.

Contractor identifies open items and risk resolution alternatives and defines preferred solutions. Contractor provides comprehensive status of open items and risk items at management level and provides results to the Government.

Takes the initiative in coordinating scheduled meetings and reviews and responds quickly to action items and questions.

Management anticipates and addresses most problems and implements solutions.

Management identifies problems, causes and solutions that have a potential for impact on cost and performance. Solutions minimize impacts and life cycle costs.

Contractor implements an effective program to identify and resolve internal problems that adversely affects contractor’s performance in meeting Government needs. Contractor takes corrective action to minimize impacts.

Management initiates and promotes strong two-way communication with

Government.

Contractor seeks continual interaction with Government representatives on contract status, goals, and objectives. Contractor coordinates with the

Government to ensure contractor interpretation of contract tasking is correct.

Takes the initiative to see that all relevant personnel are kept informed.

The Government is informed in a timely manner of all critical and most minor issues and events that may affect the success of the ASP/TSA mission.

Management encourages the establishment and maintenance of a sense of adherence to contract requirements and a desire for continuous improvement.

The majority of business management systems requiring Government approval is approved or is satisfactorily progressing towards approval by the next rating period.

Responsive to Government technical and business management requests, such as Requests for Proposals and cost reporting. Contractor responds effectively to directed contract changes accomplishing procurement actions on a timely basis within the constraints of the contractor’s system and in a cost effective manner.

Acceptable proposals are submitted timely, and the change process proceeds with no adverse impacts to estimated cost and performance. Cost proposals are well organized and provide visibility to the Government.

All technical/periodic reports and other deliverable data are submitted in accordance with the contract data requirements and are in a format that is easily understood.

Discrepancies are minor and easily corrected.

Excellent (91-100): Program Management performance is recognized as being proactive, efficient, and effective in meeting the objectives stated in the opening paragraph 10.1.1.1 of Program Management. Substantive observations and findings identified throughout the rating period are best represented by the following levels of performance:

Management proactively anticipates staffing issues to ensure optimal allocation of resources; adequacy of staffing; qualified and trained personnel;

identification and effective handling of employee morale problems; etc.

Additionally, the contractor proactively re-evaluates staffing levels, labor loading, and overtime for effectively and efficiently achieving the ASP/TSA mission goals without degrading performance.

Contractor’s team consists of highly qualified and motivated personnel, with an emphasis on productivity. Contractor minimizes changes of key personnel.

The contractor’s workforce (including subcontractor personnel) is actively and fully engaged in meeting the contract requirements.

All approved business management systems requiring Government approval are maintained in an approved or adequate status.

Management demonstrates the highest degree of foresight into program planning, depth of analysis, accomplishment of tasks, advance identification of problems and problem resolution, integrating a total program concept and a comprehensive management approach. Critical milestones are planned as early possible to provide for maximum program contingency time. Contractor demonstrates a concern for the correct understanding of contract tasking and cost growth avoidance, and is responsive to the changing nature and levels of work.

Contractor develops and effective, efficient contractor team that reflects strong, open lines of communication. Improvements to the mission result from high quality communication with Government and other external focal points with no program impacts attributed to poor communication. Contract maintains complete and effective coordination and liaison with Government. Contractor independently supports mission activities in a consistent and cooperative mode.

Contractor demonstrates initiative in planning, analyzing, and assessing the total impact of potential problems. Contractor identifies high-risk/problem areas early, plans alternative/parallel courses of action, and keeps the Government well informed of developments. Life cycle costs are minimized by problem solutions.

Management is proactive in establishing and maintaining adherence to contractual requirements and a desire for continuous improvement.

Maintains complete and accurate suggestion program records and responds in a timely manner to employee suggestions, concerns and complaints.

Routinely and frequently promotes and verifies adherence to disciplined conduct of operations.

Management is proactive in anticipating and addressing problems and is proactive in implementing solutions.

High quality proposals are submitted timely, and the change process proceeds with no adverse impacts to estimated cost and performance. No deficiencies, for completeness and accuracy, are noted in contractor proposal submittals.

All technical reports and other deliverable data are submitted well ahead of schedule. They far exceed the contract data requirements and are submitted in a format that is complete, clear, concise, technically accurate and easily understood.

10.1.1.2 Cost Performance.

Cost performance is an assessment of the contractor's demonstrated management and control of contract costs while efficiently and effectively achieving contract requirements.

The Contract Funds Status Report (CFSR) will be utilized as a parameter to support the measurement of cost control. The period of consideration is limited to the performance evaluation period. The contract baseline is established through contract negotiations.

Accuracy, timeliness, and reliability of cost and funding status information will be considered in the evaluation. The evaluation should take into account all known factors influencing the contractor's cost performance that are beyond the control of the contractor

(that are not already taken into account in changes to the contractual baseline).

The subjective attributes listed below provide the scope of performance that the

Government considers representative of a consistently high performing contractor. The subjective attributes are not intended to be sub-elements. It is recognized, that for any given evaluation period, performance associated with these attributes may simply meet the contract requirements, and therefore may have no substantive impact on the performance evaluation. For that reason they are neither weighted in the PBIF plan nor individually rated as part of the evaluation process. Instead they provide guides as to the broad spectrum of performance that may be relevant to and considered for evaluation of cost performance. The evaluation will focus on those attributes where the contractor’s performance most significantly influences the overall Government assessment of this performance. Note: Cost avoidance will not be considered for purposes of earning the

PBIF. For example, not hiring up to negotiated staffing levels, not purchasing equipment or materials will not be considered cost reduction for purposes of earning the performance incentive.

The contractor effectively controls cost growth and demonstrates total ownership of contract cost, and has an integrated cost planning, status and forecasting process.

Internal controls, reporting measures, policies and procedures to keep the

Government informed on cost status throughout the period of performance.

The contractor demonstrates effective risk mitigation to minimize cost growth

(e.g. lean six sigma type efforts).

The contractor's CFSR data accurately depicts contract cost status and the contractor's analysis and assessment accurately and realistically depicts the forecast cost of the contract.

The contractor's variance analysis clearly addresses the issues to which the contractor's management is focusing their time and attention, and provides the government with insights to the root cause, ongoing mitigations, and impacts on time and resources to complete.

The contractor effectively uses the resources internal to the contract in a cost effective manner to address emergent risks within the contractor's contractual responsibilities.

The contractor maintains a favorable trend in percent cost variance that is evidence of contractor effectiveness in maintaining cost control over an extended period of time while meeting contract performance objectives.

RATINGS:

Average or Below (0-70): The Contractor’s cost management is recognized as meeting the minimal essential standards as stated in the opening paragraph 10.1.1.2 of Cost

Performance. Substantive observations and findings identified throughout the rating period are best represented by the following levels of performance:

The CFSR report often fails to provide accurate analysis of estimate-at-completion

(EAC) and cost variances including root causes, impacts, and mitigation efforts.

Explanations of changes to the EAC are not clear and analysis of variances including root causes, impacts, and mitigation efforts are not clear and/or accurate.

The contractor provides untimely and inaccurate billings and accruals information, statements of funds required, and funds status

(expenditures/obligations).

The contractor's spend plan is not well integrated with the negotiated cost baseline, and it does not clearly reflect the essential funding requirements to meet contract objectives.

There is a negative cost variance that was primarily caused by failures of the contractor to efficiently or effectively plan, manage costs, or implement internal controls; and/or the cost variance does not accurately portray the contractor's cost performance due to failure of the contractor to maintain the cost baseline or their cost management systems.

The Contractor consistently overruns its proposed cost for the contract primarily caused by failures of the contractor

Good (71-80): The contractor's cost management is recognized as being effective in managing and controlling contract costs as stated in the opening paragraph 10.1.1.2 of

Cost Performance. Substantive observations and finding reveal the contractor's overall cost performance is best described as follows:

The CFSR is updated periodically and usually provides a realistic projection and accurate analysis of EAC and cost variances including root causes, impacts, and mitigation efforts.

The contractor provides timely billings and accruals information; statements of funds required (or excess) and funds status (obligations/disbursements) with few errors that are minor in scope.

The contractor demonstrates above the minimum effective cost management.

Provides a measure for controlling all cost at or slightly below contract-estimated costs. Deferral of work and failure to meet required staffing levels shall not be considered as meeting this standard.

The contractor's spend plan is integrated with the negotiated cost baseline, and reflects the funding requirements to meet contract objectives.

There may be a slight positive or negative cost variance, but generally the causes indicate that the contractor is reasonably managing and controlling costs.

However, there are areas in planning, cost management, or implementing internal controls that require immediate attention to reduce the risk of degradation in cost performance.

The Contractor overall avoids overruns of its proposed cost for the contract.

Very Good (81-90): The contractor's cost management is recognized as being efficient, and effective in managing and controlling contract costs as stated in the opening paragraph 10.1.1.2 of Cost Performance. Substantive observations and finding reveal the contractor's overall cost performance is best described as follows:

Funds requirements reflect constant scrutiny to ensure accuracy.

The CFSR is routinely updated and realistically depicts the estimate to complete and provides accurate analysis of EAC and cost variances including root causes, impacts, and mitigation efforts.

The contractor with few exceptions provides timely and accurate billings and accruals information, statements of funds required (or excess) and funds status

(obligations/disbursements).

The contractor demonstrates qualitative cost savings and or cost avoidances through the implementation of innovative approaches, enhancements in efficiencies, improvements in productivity, etc. Provides measures for controlling all costs below contract-estimated costs. Deferral of work and failure to meet required staffing levels shall not be considered as meeting this standard.

The contractor's spend plan is sufficiently integrated with the negotiated cost baseline and reasonably reflects the essential funding requirements to meet contract objectives as well as projected work during the current fiscal year.

There is a positive cost variance that is recognized as being the result of effective contractor planning, cost management, and internal controls. However, some relatively minor improvements are required to ensure that efficient and effective cost performance is maintained.

The Contractor rarely overruns its proposed cost for the contract.

Excellent (91-100): The contractor's cost management is recognized as being proactive, efficient, and effective in managing and controlling contract costs as stated in the opening paragraph 10.1.1.2 of Cost Performance. Substantive observations and findings identified throughout the rating period are best represented by the following levels of performance:

Financial reporting is clear, accurate, and pro-active. Funds requirements data and projections reported are extremely accurate and received ahead of schedule.

The CFSR is updated monthly and realistically depicts the estimate to complete and provides accurate analysis of EAC and cost variances are fully explained, such as including well defined root causes, impacts, and mitigation efforts.

Cost variances are recovered without impact to overall effort.

The contractor provides timely and accurate billings and accruals information, statements of funds required (or excess) and funds status

(obligations/disbursements).

The contractor demonstrates cost savings and or cost avoidances through the implementation of innovative approaches, enhancements in efficiencies, improvements in productivity, etc. Reductions in direct costs to the Government below contract estimated costs are noteworthy. Documented savings are apparent. Deferral of work and failure to meet required staffing levels shall not be considered as meeting this standard.

Contractor consistently anticipates possible sources of cost growth and seeks ways to avoid potential cost problems. Contractor proposes innovative and thoroughly cost- effective approaches to problems with which the Government agrees.

The contractor's spend plan is fully integrated with the negotiated cost baseline and Government funding projections and accurately reflects the essential funding requirements to meet current contract objectives as well as all projected work.

There is a positive cost variance that clearly resulted from the contractor's efficient and effective planning, cost management, and internal controls.

The Contractor consistently stays at or below its proposed cost for the contract.

10.1.2. ASP/TSA Mission Performance. The ASP/TSA Mission Performance criteria assess the contractor’s demonstrated ability to manage the workload of the ASP/TSA mission. The weight assigned to this category is 60%. The ASP/TSA Mission

Performance evaluation will be based on objective criteria as contained in PWS paragraphs 1.2.5.1,1.2.5.2 and 1.2.5.3.

The objective criteria listed below provide the scope of performance that the

Government considers representative of a consistently high performing contractor and are not intended to be sub-elements. It is recognized, that for any given evaluation period, performance associated with the objective criteria may not be a current contract requirement due to fluctuations in the types and quantities of ammunition workload. For that reason they are neither weighted in the PBIF plan nor individually rated as part of the evaluation process. Instead they provide guides as to the broad spectrum of performance that may be relevant to and considered for evaluation. The evaluation will focus on those attributes where the contractor’s performance most significantly influences the overall Government assessment of this

10.1.2.1 ASP/TSA Mission Performance Ratings.

TABLE 2: ASP/TSA MISSION PERFORMANCE OBJECTIVE CRITERIA & RATINGS

Sub-Elements

Average

Or Below

Good

Very Good

Excellent

0-70 71-80 81-90 91-100

PWS .1.2.5.1

Production Metrics

Meets the metrics in

C.1.2.5.1

Exceeds the metrics in C.1.2.5.1

1-10%

Exceeds the metrics in C.1.2.5.1 by

11-15%

Exceeds the metrics in C.1.2.5.1 by 16% or more

PWS .1.2.5.2

Production Metrics

Meets the metrics in

C.1.2.5.2

Exceeds the metrics in

C.1.2.5.2 by 1-10%

Exceeds the metrics in C.1.2.5.2 by

11-15%

Exceeds the metrics in C.1.2.5.2 by

16% or more

PWS 1.2.5.3.

Applying Production

Metrics to

Accountability

Meets the metrics in

C.1.2.5.3.

Exceeds the metrics in

C.1.2.5.2 by 1-10%

Exceeds the metrics in C.1.2.5.2 by

11-15%

Exceeds the metrics in C.1.2.5.2 by

16% or more

11.2. Performance Adjectival Ratings and Corresponding Descriptions.

TABLE 3: PERFORMANCE ADJECTIVAL RATINGS & CORRESPONDING

DESCRIPTIONS ADJECTIVAL

RATING

PERFORMANCE DESCRIPTION

AVERAGE

OR

BELOW

The Contractor’s performance is equal to, or less than the minimum required level in several areas. Areas of good performance are offset by deficiencies and problems, reducing performance to a level that is minimally acceptable under the contract. Contractor’s performance of tasks is inadequate and inconsistent. Quality, responsiveness, and timeliness in many areas require attention and corrective action.

Contractor corrective actions have not been taken or are ineffective.

Overall contract performance must be improved in order to avoid possible termination or other remedies under the terms of the contract.

GOOD

Contractor exceeds some contract requirements in a manner demonstrating commitment to the program. Work is completed better than the minimum required performance. Areas of deficiency and minor problems are more than offset by areas of good performance.

Contractor performance of most tasks is adequate with some tangible benefits to the Government directly attributable to the Contractor’s effort or initiative. Although there are some areas of very good or better performance, these are sometimes offset by lower-rated performance in other areas.

VERY GOOD

Performance in most tasks is of a high quality and approaching the best that could be performed by the Contractor. Although some areas may require improvement, these areas are minor and are more than offset by better performance in other areas. Few, if any, recurring problems have been noted, and the Contractor takes appropriate corrective action. A few minor problems are experienced within the evaluation period of performance without impacting the overall level of

EXCELLENT

Performance is exceptional, effective, efficient, and fully responsive.

Performance is of the highest quality that could be achieved under the contract.