Attachment__0003-_Profit_Fee_Calculation_Worksheet.docx

W58RGZ-17-R-0001

Attachment 0003 9 November 2016

PROFIT/FEE CALCULATION WORKSHEET

The contractor will prepare a Fee or Profit proposal as necessary for each Task and/or Delivery Order, hereafter referred to as “order”, using the worksheet entitled “Profit/Fee Calculation Worksheet” and the information provided in the Order Request for Proposal (ORFP). Fee or Profit will be calculated in accordance with the procedures described below:

Performance Risk. This factor addresses the contractor’s degree of risk in fulfilling the contract requirements. The factor consists of two parts:

1) Technical – the technical uncertainties of performance. Projects involving development, production, or application of innovative new technologies with extremely complex, vital efforts to overcome difficult technical obstacles that require personnel with exceptional abilities, experience, and professional credentials will receive a higher rating. Projects for relatively simple, non-complex technological efforts such as studies, analyses, or demonstrations with a technical report as the primary deliverable will be rated lower. Assigned value range from 3% – 7% with the average project assigned a value of 5% as a multiplier to the Technical Risk Factor assigned a weight of 65%. However, the PCO may assign a value significantly below normal for routine services, production of simple items, rote entry or routine integration of Government-furnished information, or simple operations with Government-furnished property.

2) Management/Cost Control – the degree of management effort necessary to ensure contract requirements are met and to reduce and control costs. Management/Cost Control includes consideration of six (6) elements or services to be provided. These elements are assigned percentages and rated according to the Order complexity. The average of the total of these percentages is a multiplier to the Management/Cost Control Risk Factor assigned a weight of 35%; however, the PCO may assign a value below normal for projects with minimal added value by the prime contractor, routine efforts requiring minimal supervision, the contractor’s cost estimating system is marginal, or the contractor has made minimal effort to initiate cost reductions:

a) Site Supervision - Projects requiring a low degree of supervision will be rated lower than intensely supervised projects. Assigned value range from 3% – 7% with the average project assigned a value of 5%.

b) Subcontracting - Order projects which include subcontracts greater than 60% of the Order total cost shall be weighted below 5%; while projects with subcontracts less than 60% of the Order total costs shall be weighted above 5%. (i.e. 90% subcontracting would be rated near 3%; 30% subcontracting would be rated near 7%). Assigned value range from 3% – 7% with the average project assigned a value of 5%. However, notwithstanding any other clauses or provisions contained within the contract, the prime contractor is not allowed to charge Fixed Fee against the Fixed Fee portion paid to subcontractors for performance on any Cost-Plus-Fixed-Fee order. No Fixed Fee shall be paid on travel.

c) Project Planning and Estimating - Projects requiring the prime contractor to conduct the majority of the planning will be weighted above 5%, while projects with greater subcontractor planning will receive weights below 5%. Assigned value range from 3% – 7% with the average project assigned a value of 5%.

d) Common Services - Projects where the prime contractor provides a majority of the common services for the project (i.e., security services, warehousing, common utilities, mobilization facilities, life support, etc.) will be rated higher than those where the majority of services are provided from other sources. Assigned value range from 3% – 7% with the average project assigned a value of 5%.

e) Project Participants - Weights depend upon the level of involvement by Regulatory Agencies, Operating Contractors, Using Agencies, assistance by the Prime Contractor’s home office (backup resources), and the PIF. Projects with intense PIF support/decision making will be rated lower. Projects with extensive outside influence (i.e., regulatory requirement, mandated agreements, etc.) will receive a higher rating. Assigned value range from 3% – 7% with the average project assigned a value of 5%.

f) Schedule - Orders for projects requiring rapid mobilization and completion, time-critical actions, regulatory constraints will receive a higher rating. Other Orders are weighted proportionately in accordance with considered factors with those without time constraints. Assigned value range from 3% – 7% with the average project assigned a value of 5%.

Contract Type Risk. The degree of cost risk accepted by the contractor under varying contract types determines the contract type risk factor. A working capital adjustment is an adjustment added to the profit objective for contract type risk and is only applicable to fixed price contracts that provide for progress payments. Firm-fixed-price contracts with performance-based payments have an assigned range from 2.5% – 5.5% with the normal assigned value of 4%. Firm-fixed-price contracts with progress payments have an assigned range from 2% – 4% with the normal assigned value of 3%. Firm-fixed-price, level of effort contracts have an assigned range from 0% – 1% with the normal assigned value of 0.5%. Cost-plus-fixed-fee contracts have an assigned range from 0% – 1% with the normal assigned value of 0.5%; however, the fee on CPFF orders cannot exceed the statutory limitation of 10% as provided in 10 U.S.C. 2306(d).

Contractor Facilities Capital Employed. This factor focuses on encouraging and rewarding capital investment in facilities that benefit DoD and is estimated/determined by employing DD Form 1861, Contract Facilities Capital Cost of Money.

Cost Efficiency. This special factor provides an incentive for contractors to reduce costs. To the extent the contractor can demonstrate cost reduction efforts benefiting the pending contract; the PCO may increase the profit/fee objective by an amount not to exceed 4% of the total objective cost. The PCO has maximum flexibility in determining the best way to evaluate the benefit the contractor’s cost reduction efforts will have on the pending contract.

PROFIT/FEE CALCULATION WORKSHEET

Contract Number:

Order Number:

Modification Number:

Order Number & Title:

Performance Risk

Range

Assigned Value multiplied by 65%

Management/Cost Control Elements

Management/Cost Control

Performance Risk (Composite)

Sum of Technical & Mgt/Cost Control Weighted Values Total Cost Excluding Facilities Capital Cost of Money (FCCOM) multiplied by Performance Risk (Composite) Weighted Value

Contract Type Risk

Range

Total Cost Excluding FCCOM multiplied by Contract Type Risk Assigned Value

PROFIT/FEE CALCULATION WORKSHEET - CONTINUED

Contract Number:

Order Number:

Modification Number:

Order Number & Title:

Working Capital (Applicable to FFP w/Progress Payments ONLY)

Contractor Facilities Capital Employed

Cost Efficiency

Total Cost Excluding FCCOM multiplied by the Cost Efficiency Assigned Value

*See http://www.treasurydirect.gov/govt/rates/tcir/tcir_opdirsemi.htm

TABLE A – Working Capital Length Factor (Applicable to FFP w/Progress Payments ONLY)