TE 8.12 EXAMPLE PAYMENT CALCULATIONS WHEN RESD IS USED August 2025.pdf
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- W9124G-25-R-A009
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This Technical Exhibit 8.12 details an example of payment calculations using Random Sampling with Extrapolated Deductions (RSED) for a Cantonment Grounds Contract at DPW Fort Rucker, AL scheduled for August 2025. The document outlines a comprehensive method for evaluating and deducting payments based on quality control assessments, specifically for grass cutting services in high visibility areas. The calculation process involves determining task value percentages, establishing an Acceptable Quality Level (AQL), sampling inspections, defect rate calculations, and extrapolating deductions for both inspected and uninspected work lots.
The exhibit provides a detailed breakdown of how payment deductions are calculated across four primary service components: timely completion, debris removal, grass cutting, and trimming. The government reserves the right to implement RSED surveillance at any time during the contract, with sample sizes determined by predefined tables. Deductions are calculated based on observed defect rates, with provisions for correcting defects and applying administrative costs. In the example provided, the total deductions for the sampled work would be $1,540.25, which encompasses service value lost, extrapolated deductions for uninspected lots, and a flat-rate administrative cost.
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TECHNICAL EXHIBIT 8.12
Example Payment Calculations When RESD is Used
TE 8.12-1 August 2025DPW Fort Rucker, AL Cantonment Grounds Contract
1. The Government reserves the right to start surveillance using Random Sampling with Extrapolated Deductions (RSED) at any time during the contract, to discontinue the use of RSED, and to resume the use of RSED without notice to the Contractor. The Government will use the attached tables entitled Table of Sample Sizes for Normal Sampling Levels and Table of Sample Sizes for Reduced Sampling Levels to determine sample sizes for RSED. The Table of Sample Sizes for Reduced Sampling Levels represents the minimum sample sizes the Government will use for extrapolation.
2. The Acceptable Quality Level (AQL) is defined as the defect rate above which the Contractor's quality control is not effective. The AQL does not represent a threshold above which payment deductions are taken.
Deductions are taken for all defects (with credit for rework to the extent appropriate) irrespective of whether the AQL was exceeded or not. When a defect rate exceeds the AQL, the Contractor will be notified and appropriate administrative actions will be taken in addition to the payment deductions discussed above. The AQL for each work requirement is shown in the Performance Requirements Summary (PRS) table in Attachment J-C1.
3. The following example illustrates the process that will be used to calculate the Contractor's payment deduction when RSED is used for surveillance.
GRASS CUTTING, HIGH
VISIBILITY AREA
T
IM
E L
Y
C O
M P
L E
T
IO
N
D E
B R
IS
E
M O
V A
L
G
A S
S
C U
T T
IN
T
IM
M
IN
A. Task value percent 15% 5% 60% 20%
B. Maximum payment for acceptable work - Unit cost from bid schedule times the quantity of work ordered that month times the task value %.
(EXAMPLE: 100 Acres times $50.00 per acre Times the Task Value %))
750 250 3000 1000
C. Cost Per Unit - (CLIN cost times Task Value %)
7.5 2.5 30 10
D. AQL = 6.5
E. Accept / Reject = 2/3 2/3 2/3 2/3
F. Lot Size = Number of parcels cut. 105 105 105 105
TE 8.12-2 August 2025DPW Fort Rucker, AL Cantonment Grounds Contract
G. Total Number of Acres in the Lot = 100 100 100 100
H. Sample Size (Normal) = Number of parcels
20 20 20 20
I. Total Number of Acres in The Sample
18 18 18 18
J. Number Of Observed Defects In Sample
6 5 7 4
K. Percentage Of samples Found Unacceptable - Observed Defect Rate (ODR) ((Defects Divided by Sample Size) x 100) (J/K)*100
30% 25% 35% 20%
L. Uninspected Parcels - (105-20, or Lot Size-Sample Size) (F-H)
85 85 85 85
M. Uninspected Acres Total Acres Minus Inspected Acres. (100 minus 18) (G-I)
82 82 82 82
N. Defects Corrected = 2 3 1 0
O. Revised Defect Rate for Corrected Defects. ((Observed Defects minus corrected Defects) divided by 20) (J- N)/H
20% 10% 30% 20%
P. Service Value Lost For Inspected Lot.
Acres in Sample x Unit Cost x Revised ODR (RODR) (18 x $7.50 x RODR) I*C*P
$ 27.00 $ 4.50 $ 162.00 $ 36.00
Q. Extrapolated Deduction for uninspected Lots - ODR x Uninspected Acreas x Unit Cost. M*K*B
$ 184.50 $ 51.25 $ 861.00 $164.00
R. Administrative Cost = Flat Rate $50.00
TE 8.12-3 August 2025DPW Fort Rucker, AL Cantonment Grounds Contract
S. Total Deductions = P (ALL) + Q
(ALL) + R
$ 1,540.25
TECHNICAL EXHIBIT
END OF SECTION
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