Attachment_0008_IncentiveDeterminationCriteriaV2.pdf

Attachment 0008 SUPPLEMENTARY INCENTIVE FEE DETERMINATION CRITERIA W9124G‐17‐R‐0002 V2 – 6 January 2017

Table of Contents

1.0 ARMY SUPPLEMENTARY INCENTIVE FEE DETERMINATION CRITERIA

1.1 Scope

1.2 Supplementary Incentive Fees - Mission Performance and Quality

1.3 Supplementary Incentive Fee - Mission Performance (SIF-MP)

1.4 Supplementary Incentive Fee – Quality (SIF-Q)

1.5 Reserved

1.6 Reevaluation

1.7 Consideration Review Board

2.0 AIR FORCE SUPPLEMENTARY INCENTIVE FEE DETERMINATION CRITERIA

2.1 Scope

2.2 SIFs - Mission Performance and Quality Standards Compliance

2.3 SIF - Mission Performance (Aircraft Availability Commitment Target (AACT)) (SIF – MP

(AACT))

2.4 SIF – Quality Standards Compliance (SIF-QSC)

2.5 Reevaluation

1.0 ARMY SUPPLEMENTARY INCENTIVE FEE DETERMINATION CRITERIA

1.1 Scope

The Government considers the mission performance and quality of aircraft maintenance services as critical. The contractor can earn a supplementary incentive fee as set forth herein. This attachment describes how the Supplementary Incentive Fees are calculated. All Army fleets are included in the supplementary incentive fee measurements, unless excluded in the fee calculation procedures below. Unearned supplementary incentive fees are not “rolled” from one period to the next.

1.2 Supplementary Incentive Fees - Mission Performance and Quality

The Government has determined that a supplementary incentive fee pool of $20,000,000 will be set aside each year to incentivize Mission Performance and Quality. The supplementary incentive fee pool will be divided into separate pools for Supplementary Incentive Fee – Mission Performance (SIF-MP) ($10,000,000), and Supplementary Incentive Fee – Quality (SIF-Q) ($10,000,000). The basis for determining supplementary incentive fees earned will be data gathered daily and tabulated monthly.

1.3 Supplementary Incentive Fee - Mission Performance (SIF-MP)

Mission performance success by the contractor will be determined through two distinctive measurements, Daily Mission Performance (DMP) and Monthly/Surge Mission Performance (MSMP). This measurement will balance the need for successful daily execution and support of the flight training mission with surge capability throughout the month to meet unexpected increases in the short term program due to student training issues, weather or other reasons.

Aircraft fleets with a density of less than 10 aircraft or negligible student load as determined by the Government will not be incentivized for mission performance.

The Contractor will be incentivized for meeting the scheduled training events as defined IAW Contract Attachment 0001, paragraph 3.1.1.3. The intent is for the Contractor to meet 100% of the scheduled requirements every day. The Contractor will be measured for every aircraft produced to satisfy a scheduled training requirement. Accepted aircraft shall be counted towards mission performance. There shall be no mission performance decrement for an aircraft that is rejected and spared. Aircraft that are rejected and not spared shall decrement mission performance. Additional Issue aircraft, including their rejects and spares, count toward Monthly/Surge Mission Performance only. Once issued, the aircraft belongs to the customer and can be used for multiple missions until returned to the contractor.

1.3.1 Supplementary Incentive Fee - Daily Mission Performance (SIF-DMP)

The SIF-DMP incentive pool will consist of $6,000,000 divided evenly over 12 months ($500,000) and then further broken down by the number of measured fleets to determine the available monthly fleet incentive pool. Once the training month is complete, the available monthly fleet incentive pool will be further broken by the number of scheduled training days to determine the daily available incentive pool per fleet. See calculation below.

For each day the contractual requirement is achieved at 100%, a “YES” will be recorded in the mission performance database. For each day the contractual requirement of 100% is not achieved by the Contractor, a “NO” will be recorded in the mission performance database. Each fleet will be measured separately and accumulate its own daily performance rate. After completion of the training month, the total number of days a “YES” was recorded, by fleet, will be counted and multiplied by the dollar amount established above. This will equal total amount of daily mission performance incentive earned by the Contractor. See calculation below.

Regardless of the daily mission performance supporting the training mission, no daily mission performance fee shall be earned for each day on any fleet that has an aircraft NMCM for over 60 days during the performance month.

No daily mission performance fee shall be earned for the entire month for any fleet that has six or more “NO” entries in the mission performance database during the performance month.

No daily mission performance fee shall be earned for all fleets if any one fleet does not receive a “YES” for at least one day of that performance month.

Any fleet not meeting 100% of daily contractual requirements for seven to ten days in a month will result in the monthly invoice being reduced by $500,000.00 for each affected fleet which will be reflected in a reduction in target profit.

Any fleet not meeting 100% of daily contractual requirements for 11 to 14 days in a month will result in the monthly invoice being reduced by $750,000.00 for each affected fleet which will be reflected in a reduction in target profit.

Any fleet not meeting 100% of daily contractual requirements for 15 or more days in a month will result in the monthly invoice being reduced by $1,000,000.00 for each affected fleet which will be reflected in a reduction in target profit.

1.3.2 Supplementary Incentive Fee - Monthly/Surge Mission Performance (SIF-MSMP) The formula used for calculation of the SIF-MSMP is set forth in Attachment 0022. The SIF- MSMP incentive pool will consist of $4,000,000. The available pool amount is $345,000 per month except for December which is $205,000. The contractor receives the SIF-MSMP amount reflected in Table 1 based on the cumulative total IAW Attachment 0005 of all measured fleets.

Note that the Table 1- Monthly/Surge Mission Performance Scale, does not graduate constantly

$6M/12 = $500,000 Amount of Measured Fleets

Available Daily Incentive Pool per Fleet per day

= Available Monthly Incentive Pool per Fleet

Number of Training

Days by Fleet

All fleets totalled together for monthly earnings.

Available daily incentive pool per fleet x

"YES" in mission performance database

Earned daily incentive fee per fleet and note the contractor can exceed 100% by producing Government requested additional aircraft that had not previously been scheduled (surge). If the monthly mission performance falls below 98% for any one fleet, no MSMP incentive fee will be earned for that month for all fleets. If annual mission performance for any fleet falls below 98%, the Underrun share ratio will revert to 100/0 (no cost underrun share to Contractor).

TABLE 1 Monthly/Surge Mission Performance Scale

Mission Performance

Incentive Fee Percentage

Incentive Fee Earned

(JAN - NOV)

Incentive Fee Earned

(DEC)

Mission Performance

Incentive Fee Percentage

Incentive Fee Earned

(JAN - NOV)

Incentive Fee Earned

(DEC)

101.5% 86.0% $296,700.00 $176,300.00 105.0% 100.0% $345,000.00 $205,000.00 101.4% 85.6% $295,320.00 $175,480.00 104.9% 99.6% $343,620.00 $204,180.00 101.3% 85.2% $293,940.00 $174,660.00 104.8% 99.2% $342,240.00 $203,360.00 101.2% 84.8% $292,560.00 $173,840.00 104.7% 98.8% $340,860.00 $202,540.00 101.1% 84.4% $291,180.00 $173,020.00 104.6% 98.4% $339,480.00 $201,720.00 101.0% 84.0% $289,800.00 $172,200.00 104.5% 98.0% $338,100.00 $200,900.00 100.9% 83.6% $288,420.00 $171,380.00 104.4% 97.6% $336,720.00 $200,080.00 100.8% 83.2% $287,040.00 $170,560.00 104.3% 97.2% $335,340.00 $199,260.00 100.7% 82.8% $285,660.00 $169,740.00 104.2% 96.8% $333,960.00 $198,440.00 100.6% 82.4% $284,280.00 $168,920.00 104.1% 96.4% $332,580.00 $197,620.00 100.5% 82.0% $282,900.00 $168,100.00 104.0% 96.0% $331,200.00 $196,800.00 100.4% 81.6% $281,520.00 $167,280.00 103.9% 95.6% $329,820.00 $195,980.00 100.3% 81.2% $280,140.00 $166,460.00 103.8% 95.2% $328,440.00 $195,160.00 100.2% 80.8% $278,760.00 $165,640.00 103.7% 94.8% $327,060.00 $194,340.00 100.1% 80.4% $277,380.00 $164,820.00 103.6% 94.4% $325,680.00 $193,520.00 100.0% 80.0% $276,000.00 $164,000.00 103.5% 94.0% $324,300.00 $192,700.00 99.9% 50.0% $172,500.00 $102,500.00 103.4% 93.6% $322,920.00 $191,880.00 99.8% 48.7% $167,960.53 $99,802.63 103.3% 93.2% $321,540.00 $191,060.00 99.7% 47.4% $163,421.05 $97,105.26 103.2% 92.8% $320,160.00 $190,240.00 99.6% 46.1% $158,881.58 $94,407.89 103.1% 92.4% $318,780.00 $189,420.00 99.5% 44.7% $154,342.11 $91,710.53 103.0% 92.0% $317,400.00 $188,600.00 99.4% 43.4% $149,802.63 $89,013.16 102.9% 91.6% $316,020.00 $187,780.00 99.3% 42.1% $145,263.16 $86,315.79 102.8% 91.2% $314,640.00 $186,960.00 99.2% 40.8% $140,723.68 $83,618.42 102.7% 90.8% $313,260.00 $186,140.00 99.1% 39.5% $136,184.21 $80,921.05 102.6% 90.4% $311,880.00 $185,320.00 99.0% 38.2% $131,644.74 $78,223.68 102.5% 90.0% $310,500.00 $184,500.00 98.9% 36.8% $127,105.26 $75,526.32 102.4% 89.6% $309,120.00 $183,680.00 98.8% 35.5% $122,565.79 $72,828.95 102.3% 89.2% $307,740.00 $182,860.00 98.7% 34.2% $118,026.32 $70,131.58 102.2% 88.8% $306,360.00 $182,040.00 98.6% 32.9% $113,486.84 $67,434.21 102.1% 88.4% $304,980.00 $181,220.00 98.5% 31.6% $108,947.37 $64,736.84 102.0% 88.0% $303,600.00 $180,400.00 98.4% 30.3% $104,407.89 $62,039.47 101.9% 87.6% $302,220.00 $179,580.00 98.3% 28.9% $99,868.42 $59,342.11 101.8% 87.2% $300,840.00 $178,760.00 98.2% 27.6% $95,328.95 $56,644.74 101.7% 86.8% $299,460.00 $177,940.00 98.1% 26.3% $90,789.47 $53,947.37 101.6% 86.4% $298,080.00 $177,120.00 98.0% 25.0% $86,250.00 $51,250.00

1.4 Supplementary Incentive Fee – Quality (SIF-Q)

The SIF-Q will be based upon the Contractor’s success at meeting quality standards. Therefore all contract actions performed are subject to inclusion in the Quality Incentive pool. Although meeting mission performance requirements is of the utmost importance to USAACE, Quality is the foundation of the maintenance system. The Quality incentive measures adherence to the Contractor’s Quality Management System and performance and compliance to contract, regulatory and procedural requirements.

The SIF-Q available pool is $10,000,000 annually, further divided in to the Supplementary Incentive Fee-Quality Assessment (SIF-QA) of $5,400,000 and the Supplementary Incentive Fee-Quality of Issue (SIF-QI) of $4,600,000.

1.4.1 Supplementary Incentive Fee – Quality Assessment (SIF-QA)

The SIF-QA is $5,400,000 ($1,350,000 quarterly). The quarterly available pool is divided in to a $1,000,000 quality base pool with an additional $350,000 designated as High Quality increases earned upon achieving 85.0, 90.0, 92.5, 95.0 and 97.5 points IAW Table 4.

The SIF-QA incentive criteria will be assessed by means of Corrective Action Requests (CARs) and QASP evaluations. All evaluations will be conducted IAW the procedures outlined in the QASP for each individual Evaluation Area. QASP evaluations will be based on the contract, Performance Work Statement requirements, regulations and procedural compliance. QASP Evaluation Area checklists with grading criteria for satisfactory or unsatisfactory compliance will be utilized for scheduled QASP evaluations and provided to the Contractor. These evaluations will be used to calculate the quarterly pass/fail percentage for each Performance Area and QASP Evaluation Area to determine the contractor’s success in achieving the standards for this incentive. In order to obtain SIF-QA incentives, two sequential measurements are applied as detailed in 8.4.1.1 through 8.4.1.3 below.

1.4.1.1 Measurement 1 Incentive Measurement Procedures: Corrective Action Request (CAR) Deductions.

The Contractor shall be deducted a percentage of the quality base pool amount for each corrective action request written within the quarterly rating period. The deduction percentage is dependent on the amount and level of CARs written during the quarterly period, IAW Table 2 below. An additional deduction for recurring CARs shall be assessed IAW 8.4.1.1.5 below.

1.4.1.1.1 Corrective Action Request Level I

Level I CARs are completed at the lowest level with concurrence by the QAS Section Chief, before sending to the QASP Program Manager for processing to the Contractor following procedures outlined in the QASP.

1.4.1.1.2 Corrective Action Request Level II

Level II CARs are completed at the QAS Section Chief level and approved by a COR before sending to the QASP Program Manager for processing to the Contractor following procedures outlined in the QASP. A Level I CAR is not required in order to issue a Level II CAR.

1.4.1.1.3 Corrective Action Request Level III

Level III CARs are written by a COR for deficiencies recorded and forwarded to the QASP Program Manager for processing to the Contractor following procedures outlined in the QASP.

A lower level CAR is not required in order to issue a Level III CAR.

1.4.1.1.4 Corrective Action Request Level IV

Level IV CARs are written by a Contracting Officer for deficiencies recorded and forwarded to the QASP Program Manager for processing to the Contractor following procedures outlined in the QASP. A lower level CAR is not required in order to issue a Level IV CAR.

1.4.1.1.5 Recurring Corrective Action Requests

Multiple CARs of the same level written within the same Performance Area for related nonconformance or discrepancies within 180 days will have an increased deduction amount and are defined as reoccurring CARs IAW Table 2-Corrective Action Request Deductions.

1.4.1.1.6 Corrective Action Request Reevaluation Process

The Contractor shall have three business days from receipt of any CAR they consider to be technically invalid to request reevaluation of the CAR to the QASP Program Manager for review by a COR. The Contractor shall submit a written explanation and supporting evidence. The Contractor may request a meeting to discuss the reevaluation request. The Government will provide a written response NLT three business days from receipt of the reevaluation request or requested meeting, whichever is later. The CAR response date will not change due to a reevaluation request unless requested by the Contractor through the QASP Program Manager and approved by the COR.

Level I II III IV

Initial 0.25% 5% 10% 75%

Recurring 1% 10% 50% 100%

Corrective Action Request Deductions

Table 2

1.4.1.2 Measurement 2 Incentive Procedures: Percentage of Pass/Fail Inspections

Scheduled QASP evaluations as defined in the QASP will be used to award quality points based on the quarterly Pass/Fail percentages for each Performance Area. Quality points earned for all Performance Areas will be summed to determine the overall quarterly quality point total. Any Performance Area not achieving an 80% overall Pass percentage will receive zero quality points.

Any scheduled evaluation not completed by the Government will be counted as a satisfactory evaluation. Quality points shall be deducted for any QASP Evaluation Area total across all Performance Areas that falls below a 65% pass rate according to 8.4.1.2.1. See the quality point equation chart (Table 3) below.

1.4.1.2.1 QASP Evaluation Area Minimum Pass Rate

A deduction of one full quality point shall be applied to the overall quality point total for every QASP Evaluation Area (across all Performance Areas) with a quarterly pass rate below 65%. All like QASP evaluations for each Evaluation Area from all Performance Areas are combined to determine the contract wide pass/fail rate for this calculation.

1.4.1.2.1 QASP Validation

A monthly review will be held with the QAS Section and the Contractor Quality Management Representative (QMR) to review the technical validity of any QASP inspection identified by the Contractor. This review, if requested by the Contractor, will occur no later than the 20th of the month following the QASP close out. If the Contractor chooses not to submit items for reassessment, the QMR will send a memorandum or email to the QAS Section stating the Contractor requests no items for reassessment that month. The Contractor will provide the control number of the QASP, faults to be technically reassessed, any documentation (Contractor Procedures, Army Regulations or technical manuals), and an in depth explanation in writing for a QASP reassessment to the QAS Section Chief NLT the 15th of the month following QASP Completion. Once received, ACLC will have five days to reassess and determine validity of each item requested. Upon completion of the validation process, ACLC will provide a response to the Contractor within 5 business days. The QAS Section will annotate all QASP inspections assessed and provide a written determination through the QASP Program Manager to the Contractor. If the Contractor QMR does not agree with the results, the faults (to include documentation and evidence) will be sent through the Quality Director to the QASP Program Manager NLT the 1st working day of the following month for final determination by the COR.

Area Hanchey Knox Lowe Shell Cairns

CPM/

MED

ACRB SSB Safety Environmental

Quality Points Available

13 13 13 13 13 10 10 5 5 5 100

80.0% to 100%

79.9% or Below 0 0 0 0 0 0 0 0 0 0 0

Performance Areas

Table 3 Quality Point Equation Chart

Calculation is conducted on each Performance Area then all quality points are added to achieve overall quality points

Performance area [Quality Points Available] X [Pass Percentage] = Quality Points earned (13 x 80.9%= 10.5 Quality Points)

The COR will review the documentation and evidence submitted by the Contractor and shall provide final determination. Any requests received by the QASP Program Manager later than established suspense date will not be considered unless an extension was approved by the QASP Program Manager or COR.

1.4.1.3 Method of Fee Distribution

The annual total Supplementary Incentive Fee – Quality Assessment (SIF-QA) pool is $5,400,000 with a quarterly amount of $1,350,000. The quarterly available pool is divided in to a $1,000,000 quality base pool with an additional $350,000 designated as High Quality increases. Upon the end of the quarterly evaluation period, measurement one (deductions for CARs) will be applied to the quality base pool of $1,000,000. The result becomes the adjusted base pool. Measurement 2 will then be applied to the adjusted base pool as follows: All Performance Area quality points will be totaled and applied IAW Table 4. Achieving zero quality points in any Performance Area in Table 3 drops the maximum amount of incentive that can be earned to 25% of the adjusted base pool. No SIF-QA will be earned should the contractor receive zero quality points in more than one of the Performance Areas in Table

3. The Government will make every effort to render a decision on the amount of SIF-QA earned by the Contractor no later than 90 calendar days after the end of the quarterly evaluation period.

$1,000,000.00

0.0%

$1,000,000.00

100.0

1,350,000.00$

Quality Points Earned

Percentage Fee Earned

Incentive Fee Earned

>1- Area 0 Points 0.0% $0.00

1- Area 0 Points 25.0% $250,000.00

80.0 50.00% $500,000.00

80.1 50.25% $502,500.00

80.2 50.50% $505,000.00

80.3 50.75% $507,500.00

80.4 51.00% $510,000.00

80.5 51.25% $512,500.00

80.6 51.50% $515,000.00

80.7 51.75% $517,500.00

80.8 52.00% $520,000.00

80.9 52.25% $522,500.00

81.0 52.50% $525,000.00

84.9 62.25% $622,500.00

85.0 62.50% $675,000.00 $50,000

85.1 62.75% $677,500.00

85.2 63.00% $680,000.00

89.8 74.50% $795,000.00

89.9 74.75% $797,500.00

90.0 75.00% $850,000.00 $50,000

90.1 75.25% $852,500.00

92.4 81.00% $910,000.00

92.5 81.25% $962,500.00 $50,000

92.6 81.50% $965,000.00

94.9 87.25% $1,022,500.00

95.0 87.50% $1,125,000.00 $100,000

95.1 87.75% $1,127,500.00

95.2 88.00% $1,133,000.00

97.5 93.75% $1,287,500.00 $100,000

97.6 94.00% $1,290,000.00

97.7 94.25% $1,292,500.00

97.8 94.50% $1,295,000.00

97.9 94.75% $1,297,500.00

98.0 95.00% $1,300,000.00

99.0 97.50% $1,325,000.00

99.5 98.75% $1,337,500.00

99.6 99.00% $1,340,000.00

99.7 99.25% $1,342,500.00

99.8 99.50% $1,345,000.00

99.9 99.75% $1,347,500.00

100.0 100.00% $1,350,000.00

Table is not complete, Size reduced to show progression of incentive and High Quality Increases. NOTE:This example chart does not show any deductions for Measurement 1 or Measurement 2.

HIGH QUALITY INCREASES

Table 4

HIGH QUALITY INCREASES

QASP Incentive Fee Table

Quality Base Pool

Percentage of incentive lost due to measurement 1

Adjusted Base Pool

QASP Numerical Score

QASP Incentive fee payable to the contractor

1.4.2 Supplementary Incentive Fee – Quality of Issue (SIF-QI)

The SIF-QI incentive rewards the contractors ability to provide the customer quality aircraft when requested to perform the required mission. Aircraft fleets with a density of less than 10 aircraft or negligible student load as determined by the Government will not be incentivized for Quality of Issue Incentive. This incentive consists of $4,600,000 divided into two measurements; $3,600,000 distributed evenly over 12 months ($300,000 per month), and $1,000,000 for an end of year incentive if the overall yearly reject rate goal of 2.5% is achieved.

The SIF-QI incentivizes minimizing Progressive Issues, Alternate Issues, and all Rejects. The available monthly pool of $300,000 is subject to the following deductions for each occurrence;

$500 per aircraft Alternate issue, $1500 per aircraft Progressive issue, $1500 per controllable reject, and a $50,000 deduction for each fleet that exceeds the allowable monthly reject rate (see Attachment 0001, Performance Work Statement, Table 1- Maximum Reject Rate and Allowable Shortcomings). Deductions for Alternate and Progressive issue aircraft do not apply to Additional issue aircraft. All aircraft rejects, including Progressive and Alternate issue aircraft, are subject to controllable reject and reject rate deductions.

The yearly reject goal incentive of $1,000,000 shall be earned if the Contractor achieves an overall combined reject rate for all fleets of 2.5%. Total rejects combined for the year on all fleets divided by the total contracted aircraft issued on all fleets equals the yearly combined reject rate multiplied by 100. The yearly combined reject rate will be rounded to the nearest tenth of a percent and then applied to the next highest half of percent point bracket unless the reject rate rounded to the nearest tenth of a percent falls exactly on the half percent point total.

Calculation example #1-Yearly combined reject rate of 4.01 is rounded to 4.0, and would receive SIF-QI yearly reject goal incentive of $200,000.00. Calculation Example #2: 3226 total rejects divided by 84,402 total contracted aircraft issued equals 0.03822 multiplied by 100 for 3.822%. This number is rounded to 3.8% and then applied to the 4% bracket for incentive earned. The calculation and breakout distribution is shown in Table 6 below.

Alternate issue Progressive

20 X $1000 5 x $1500 $20,000.00 $7,500.00

Available Pool Total Controllable Rejects Deduction+ Total Alternate Issue Deductions + Total

Progressive Deductions Available

Remaining Pool

Deduction For Fleets Above Allowable Rate

Fee Earned by

Contractor

Table 5 SIF-Quality of Issue

$207,500.00=- $50,000.00$257,500.00=-$300,000.00 Controllable Rejects

10 x $1500 $15,000.00

No yearly reject rate goal incentive shall be earned if any fleet exceeds the allowable fleet reject rate in Attachment 000, Performance Work Statement, Table 1-Maximum Reject Rate and Allowable Shortcomings, for the year.

No yearly reject rate goal incentive shall be earned if the combined reject rate on all measured fleets is greater than 4.5%.

1.5 Reserved

1.6 Reevaluation

The Contractor shall submit valid, written requests for the Invalid Reject Assessment Process (IRAP) with complete supporting documentation to the appropriate airfield’s ACLC Office for review no later than two business days following the reject date. Supporting documentation shall include any documentation required to substantiate the credit request, e.g., DA Form 2408-13-1, DA Form 2408-13-2, referenced Technical Manual pages, etc. (NOTE: This list is not all inclusive). An extension not to exceed a total of seven business days following the reject date may be approved by ACLC if research from external agencies is required. ACLC will make an initial decision for all valid, timely-submitted IRAP requests on or before the twentieth calendar day of the next month for the previous month’s performance. The Contractor shall submit valid, written requests for consideration (ACO Consideration Credits or ACO Reject Credits) with complete supporting documentation to the Contracting Officer for review on or before the fifth calendar day of the next month for the previous month’s performance. ACLC will provide a technical recommendation for all valid, timely-submitted consideration requests to the Contracting Officer on or before the twentieth calendar day of the next month for the previous month’s performance. The Contracting Officer will provide written notification to the Contractor of the technical recommendations to the consideration requests on or before the twentieth calendar day of the next month for the previous month’s performance. The Government shall not consider any request for IRAPs or credits after the dates specified in this paragraph.

% FEE

4.5 100,000

4 200,000

3.5 350,000

3 550,000

2.5 1,000,000

= 3.8%

84402

Example

Overall Reject Rate

Table 6

Total Contracted aircraft issued

Total Rejects

1.6.1 Invalid Reject Assessment Process (IRAP)

A formal process for the Contractor to request Government review of a reject that the Contractor feels to be invalid. The Government will not consider IRAP requests for the following circumstances:

a. Parts Failure. For the purpose of measuring incentive fee, parts failure shall be considered the fault of the Contractor. Consideration is already provided within the allowable reject rate percentage.

b. A Contractor Technical Inspector (TI) agrees with the pilot that a grounding fault exists and the aircraft is rejected.

c. (Electronic Logbooks) A Contractor TI does not go to the aircraft within 30 minutes from time reported to the Maintenance Contractor. All the following steps shall be taken;

(1) The lead/mechanic/TI/MTP shall immediately attach a DA Form 2408-13-2.

(2) The lead/mechanic/TI/MTP shall log the time notified of the reject.

(3) The lead/mechanic/TI/MTP shall enter his/her name with PID.

(4) The TI shall enter the time he/she was notified for evaluation.

(5) The TI/MTP shall enter the time he/she arrived at the aircraft for evaluation and the results of that evaluation. The results of the evaluation will indicate if the discrepancy identified by the crew is present at the time of evaluation.

d. (Paper Logbooks) A Contractor Return-to-Service mechanic does not to go to the aircraft within 30 minutes from the time reported to the Maintenance Contractor and he/she fails to stamp the left margin and record in writing whether a fault is/is not present

e. An aircraft is re-issued as its own spare.

f. A maintenance action, other than MOC or tear-down inspection (if required by TM to determine if fault is present), of any type is completed on the rejected aircraft to bring it to a flyable status.

g. IRAP is submitted late, incomplete or without proper documentation and evidence to support request.

1.7 Consideration Review Board

If the Contractor wishes to challenge the Government’s initial IRAP determination or technical recommendations for consideration, the following shall apply:

a. The Contractor shall provide all complete, valid supplemental data and documentation to the Contracting Officer for the Government’s review on or before Noon on the twenty-third calendar day of the next month for the previous month’s performance.

b. A Review Board will meet NLT the twenty-fifth calendar day of the next month to allow the Contractor to present any further arguments for the initially-denied IRAPs or technical denial recommendations for the Government’s consideration prior to a final Government decision. If the 25th of the month falls on a non-work day, the board will be held on the next business day

c. ACLC will approve or disapprove requested IRAPs on or before the last calendar day of the next month following the previous month’s performance.

d. The Contracting Officer will issue a final written decision for requested Credits on or before the last calendar day of the next month following the previous month’s performance.

2.0 AIR FORCE SUPPLEMENTARY INCENTIVE FEE DETERMINATION CRITERIA

2.1 Scope. The Government considers the performance and quality of aircraft maintenance services as critical. Therefore, in addition to any profits made on the Firm Fixed Priced (FFP) effort the Contractor can earn a supplementary incentive fee as set forth herein. This attachment describes how the Supplementary Incentive Fees are calculated. Unearned supplementary incentive fees are not “rolled” from one period to the next.

Note: no Supplementary Incentive Fees will be award for merely meeting the incentive objective threshold.

2.2 SIFs - Mission Performance and Quality Standards Compliance. The Government has determined that a SIF pool of $400,000 will be set aside each year to incentivize mission performance and Quality. The SIF pool will be divided into separate pools for SIF – Mission Performance (Aircraft Availability Commitment Target (AACT)) (SIF-MP (AACT)) ($300,000) and Supplementary Incentive Fee – Quality Standards Compliance (SIF-QSC) ($100,000).

2.3 SIF - Mission Performance (Aircraft Availability Commitment Target (AACT)) (SIF – MP (AACT)) ($300,000 annually). Aircraft Availability has become the cornerstone for maintenance, measuring the ability of the SP to provide sufficient TH-1H aircraft to accomplish mission requirements. The Aircraft Availability Commitment Target (AACT) is 15 aircraft provided to the 23 FTS daily. The SP will be incentivized for exceeding the AACT as defined IAW Contract Attachment 017, paragraph 3.16.1, Performance Standard A(2), Aircraft Availability (AA) Commitment Target. The AACT incentive criteria will be assessed by means of effectiveness and the average number of the AACT provided to the 23 FTS for each given month. In order to obtain AACT incentives, two sequential measurements are applied. These are Measurement 1: AACT Effective Rate of 90% or higher as a “go - no go” standard prior to applying the second measurement and Measurement 2: Average Daily Aircraft Provided (ADAP).

The ADAP is the average number of aircraft identified for AACT provided to the 23 FTS each fly day for the month.

The Aircraft Available (Actual) may be adjust to reflect the fiscal year Aircraft Available (Target) Primary Aircraft Inventory (PAI) sited in the HQ AETC Program Allocation.

Failure to be effective for any given month will result in zero AACT SIF for that respective month.

Providing less than 14.0 ADAP for any given month will result in that respective monthly invoice being reduced according to Table 7 which will be reflected in a reduction in target profit.

2.3.1. Measurement 1. AACT Effective Rate. The SP will be considered effective for a given month if they met the AACT thresholds of 15 aircraft daily for 90% of scheduled flying days in that month (i.e. 18 of 20 days), Performance Work Statement (PWS), paragraph 3.16.1, Note A(2).

CORs will validate each aircraft identified on the daily aircraft prime flyers and spares report to ensure each identified aircraft is mission capable (MC); any deficiencies noted by the COR shall be addressed according to PWS paragraph 6.2.2. The validated MC aircraft on the daily aircraft prime flyers and spares report will be used to record AACT each scheduled fly day. Failure to provide the report no later than one hour prior to first scheduled take-off with 15 or more MC aircraft identified by tail number will result in the SP being considered not effective for that give day.

2.3.2. Measurement 2. Average Daily Aircraft Provided (ADAP). The AACT is 15. The ADAP is the average number of AACT aircraft verified by the COR to be mission capable provided to the 23 FTS each fly day for the month. The following shall be used to calculate the monthly ADAP. The total number of AACT aircraft provided each fly day divided by the total number of fly days in the month equals the ADAP. For example, a given month with 20 fly days requires a minimum of 300 MC aircraft be provided to achieve an ADAP of 15.0 aircraft. The ADAP will be rounded to the nearest tenth.

Example of a month with 20 fly days;

1 day, 13 MC aircraft provided (1 x 13 =13 aircraft) 1 day, 14 MC aircraft provided (1 x 14 = 14 aircraft) 5 days, 15 MC aircraft provided (5 x 15 = 75 aircraft) 7 days, 16 MC aircraft provided (7 x 16 = 112 aircraft) 4 days, 17 MC aircraft provided (4 x 17 = 68 aircraft) 2 days, 18 MC aircraft provided (2 x 18 = 36 aircraft)

Total Fly 20 days (1+1+5+7+4+2=20).

Total 318 MC aircraft verified (13+14+75+112+68+36=318).

Total 318 MC aircraft divided by 20 fly days equals 15.9 ADAP (318 / 20 = 15.9).

Total MC aircraft provided for this example month is 318 aircraft (13+14+75+112+68+36). The 318 aircraft provided is divided by 20 fly days = 15.9 average ADAP. ADAP of 15.9 would earn 90% of the AACT SIF.

2.3.3. Mission Performance (AACT) (Monthly) incentive pool. The $300,000 pool amount is further divided by twelve to obtain the monthly available pool amount of $25,000. Monthly pools will be calculated (funded) in three month increments to line up with the quarterly pools (see table 1).

TABLE 7

Mission Performance (AACT) (Monthly)

ADAP

(Actual)

Incentive Fee Percentage

Incentive Fee

16.0 or Greater 100.0% $25,000

15.9 90.0% $22,500

15.8 80.0% $20,000

15.7 70.0% $17,500

15.6 60.0% $15,000

15.5 50.0% $12,500

15.4 40.0% $10,000

15.3 30.0% $7,500

15.2 20.0% $5,000

15.1 10.0% $2,500

15.0 – 14.0 0.0% $0

13.9 -10% -$2,500

13.8 -20% -$5,000

13.7 -30% -$7,500

13.6 -40% -$10,000

13.5 -50% -$12,500

13.4 -60% -$15,000

13.3 -70% -$17,500

13.2 -80% -$20,000

13.1 -90% -$22,500

13.0 or less -100% -$25,000

2.4 SIF – Quality Standards Compliance (SIF-QSC). The SIF-QSC will be based upon the SP’s success at meeting quality performance objectives. The SIF-QSC is annually set at $100,000 for the Air Force incentive pool. The quarterly (every 3 Months) incentive fee pool is $25,000.

2.4.1 SIF - Quality (SIF-Q). The quality incentive criteria will be assessed by means of Corrective Action Requests (CARs) and Air Force rated QASP evaluations. The Air Force supply and maintenance QASPs will be the basis of the evaluations and evaluations will be based on a combination PWS, AF Instructions, technical data, regulations and procedural compliance. These will be used to determine the quarterly pass/fail percentage used to indicate the SP’s success in achieving the performance objectives defined in the PWS. All evaluations will be conducted in accordance with the QASP standard operating procedures. In order to obtain Quality incentives, two sequential measurements are applied. These are Measurement 1: reducing the incentive pool dollars by the number of Level II, III and IV corrective action requests (CARs) prior to applying the second measurement. Measurement 2: uses QASP evaluations pass/fail rates and reoccurring deficiencies to determine the amount of the quality incentive paid, after measurement 1 reductions.

Note: Failure to meet one or more of the minimum QASP evaluations performance thresholds in PWS, paragraph 3.16.3 will result in zero Quality SIF for the quarter.

2.4.1.1 Measurement 1 Incentive Measurement Procedures: Corrective Action Request (CAR). The SP shall be deducted a percent of the quality pool dollars for each corrective action request written within the rating period. The amount of the deduction is dependent on the number of CARs written and their level(s).

2.4.1.1.1 Corrective Action Levels. Corrective action requests written by the Government are classified in three different levels. Level II is a CAR written by a Contracting Officer Representative (COR), Level III is a CAR written by a Program Manager (PM) or Functional Commander (FC), and Level IV is a CAR written by a Contracting Officer (KO). A CAR shall be written for any major non-conformance of the contract.

2.4.1.1.1.1 Corrective Action Request Level II. Corrective action requests written by a COR for deficiencies recorded. These CARs will have a deduction of one percent of the quality pool for each valid CAR in a rating period.

2.4.1.1.1.2 Corrective Action Request Level III. Corrective action requests written by the PM or FC for deficiencies recorded. These CARs will have a deduction of three percent of the quality pool for each valid CAR in a rating period. Level II CARs are not required to be submitted prior to issuance of a Level III CAR.

2.4.1.1.1.3 Corrective Action Request Level IV. Corrective action request written by a KO for deficiencies recorded are considered Level IV CARs. These CARs will have a deduction of five percent of the quality pool for each valid CAR in a rating period. Level II or Level III CARs are not required to be submitted prior to issuance of a Level IV CAR.

2.4.1.1.1.4 Repeat Corrective Action Request. Corrective action requests written for the same discrepancies in the same rating period, over consecutive rating periods or twice or more during a fiscal year will have an increased deduction amount per CAR. A Level II will increase to a 10 percent deduction of the quality pool amount; a Level III will increase to a 25 percent deduction of the quality pool amount; and a Level IV will increase to a 50 percent deduction of the quality pool amount.

2.4.1.2 Measurement 2 Incentive Procedures: Percentage of Conforms/Non-conforms Evaluations. Completed monthly and quarterly inspections as defined in the Air Force supply and maintenance QASPs will be used to determine the Conforms/Non-conforms (pass/fail) percentages and reoccurring deficiencies on a quarterly basis. See Table 2, Quality Incentive Percent Equation Chart below for example.

TABLE 8

SIF - Quality (Quarterly)

Quality Incentive Percent Equation Chart Base + Option (Periods)

QASP Pass Percentage

Incentive Fee Percentage

Incentive Fee

95%-100% 100% $ 25,000.00 90%-94% 75% $ 18,750.00 85%-89% 50% $ 12,500.00 80%-84% 25% $ 6,250.00

79% & Below 0%

2.4.1.2.1 Reoccurring Deficiencies. If any QASP evaluation area Technical Inspection (ex.

Foreign Object Damage, Tool Control, Phase, MIS) pass rate is below 85% or Program Management Inspection (ex. Engine Management, MOC, Scheduled Maintenance, Supply) is below 80% for twice or more during the fiscal year, a deduction of one QASP pass percent per circumstance shall be applied.

2.4.1.3 Method of Fee Distribution. The yearly total quality pool is $100,000 with a quarterly amount of $25,000.

Measurement 1: Corrective Action Report (CAR) reductions, if applicable. The percentage (%) earned will be deducted for each level II, III, or IV CAR received according to paragraphs 2.4.1.1

– 2.4.1.1.1.4.

Measurement 2: QASP pass percentage will be computed from the monthly COR reports using the total number of all rated evaluations rated conforms divided by total number of inspections (technical and observations) X 100 during the 3-month period. Deduct one percent for each reoccurring deficiency earned according to 2.4.1.2.1 from the QASP pass percentage for the total quality incentive percent.

2.5 Reevaluation. The Contractor shall submit all complete, valid supplemental data and documentation to the Government to request reevaluation within 5 duty days of an incident/inspection/deficiency. The Government will provide a written decision by the 20th day from receipt of request. The Government decision is final.