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Award Term (AT)September 14, 2007

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AT Standardization Team Members

Laurie DeClaire, Contracting Officer (CO), Institutional Procurement Office

Roberta Beckman, Team Lead, Projects Procurement Office Billy Autry, Deputy Manager, Procurement Policy & Systems

Office Jessica Miller, Team Lead, Institutional Procurement Office Stephanie Hunter, CO, Projects Procurement Office John Trahan, Team Lead, Space Station Procurement Office Lara Procknow, Contract Specialist, Institutional Procurement

Office Delene Sedillo, Manager, Projects Procurement Office Susan Sinclair, Technical, Extravehicular Activity (EVA),

Robotics, & Crew Systems Operations Liz Fountain, Alternate Contracting Officer’s Technical

Representative (COTR), Orion Project, Constellation Program

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Goals of the Presentation

Explain how Award Term may be implemented at JSC.

Obtain Industry feedback on JSC’s approach to Award Term.

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AT Defined

What is Award Term Contracting?

A non-monetary incentive that can stand alone or be used in combination with other contract incentives.

A disciplined process used to determine whether to continue a longer business relationship with a contractor.

• Contracts with a potential length greater than 5 years require a request for a deviation from FAR 17.204(e) & NASA FAR Supplement (NFS) 1817.204(e)(i).

It rewards a contractor with excellent performance with legal entitlement to a contract extension, conditioned only on:

• The continuing need for the services• Reasonableness of price• The availability of funds

It is not an option as defined in FAR 2.101.

Under a true AT incentive, if the contractor’s performance meets the AT criteria stipulated in the contract & if any stipulated conditions such as a continuing need & availability of funds are met, then the Government must either extend the contract or terminate it for convenience or default.

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AT Use

From our research, AT has been used on all contract types. Cost Plus Incentive Fee (CPIF) Firm Fixed Price (FFP)/Fixed Price Incentive (FPI) Cost Plus Fixed Fee (CPFF) Indefinite Delivery Indefinite Quantity (IDIQ) Cost Plus Award Fee (CPAF)

When is it appropriate to use Award Term? Service Contracts Recurring requirements When there is a known or anticipated requirement for service that extends

beyond 5 years The desired level of performance is feasible, but would be challenging to

achieve Exceptional contractor performance would be beneficial & desirable Performance, to a large extent, can be objectively measured

In order to continue to motivate the contractor, JSC’s position is to use CPAF during periods not subject to an AT evaluation.

JSC’s recommended position is to use the AF guidelines as our approach to AT.

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Team’s Charter

The Team was commissioned to develop an Award Term Plan Template which would be acceptable to the Agency and would contain the features that have been shown to best motivate contractors.

Develop a recommended evaluation format utilizing, where appropriate, the features of the award fee standardization team.

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Team’s Approach

Research and gather data on this new form of contract incentive

Review existing contracts, regulations, and procedures of implementing Award Term

Collect Best Practices Features of the Award Term Plans in place Lessons learned by those implementing Award Term

Use lessons learned to develop Award Term Plan, Clauses, & Evaluation Methodology

Final Objective: To develop products resulting in an award term evaluation plan, policy and clause guidance, Performance Evaluation Board (PEB) guidance, and presentation and training materials.

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Team’s Products

Award Term Plan Template Award Term/Award Fee Plan Template Contract provisions that describe the rights and

obligations of the parties under the incentive Award Term Performance Evaluation Board

Standardization Charts

Products may be found on the Procurement External Website at http://procurement.jsc.nasa.gov/procpub.htm

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Features of AT Plan

Award Term Plan1. Introduction

Description of the plan and unique features Evaluation periods determination of annual score Cost gate Shadow period AT evaluation is final

2. Organizational structure Performance Evaluation Board (PEB) Integration Team (IT) PEB Award Term Official (ATO)

3. Evaluation Period and Incentive Structure The schedule

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Features of AT Plan (Con’t)

Award Term Plan4. Evaluation Criteria and Weight

Mirrors Award Fee (AF) with the exception of cost

5. Evaluation procedures AOEs Contractor self-evaluation PEB findings ATO Preliminary AT determination Contractor response time ATO Performance Determination CAP

6. Changes to the AT Performance Evaluation Plan Unilateral & mutual agreement changes

7. Performance Metrics

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AT Contract Period of Performance Scenarios

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Shadow Eval Eval Eval Eval EvalPeriod Period 1 Period 2 Period 3 Period 4 Period 5

Mock Earn Earn Earn Earn EarnEval Year 6 Year 7 Year 8 Year 9 Year 10

1 Options would need to be in place in case contractor does not earn term. Gives Govt. time to conduct a new competitive procurement

2 If the contractor fails to earn an award term in one year that does not preclude them from earning an award term in a subsequent year, however, the year that was lost cannot be regained. For example, If the contractorfails to earn contract year seven during the period 2 evaluation they are still allowed to earn year seven withthe period 3 evaluation. However, in this example, the maximum period of performance for this contract has been reduced from 10 years to 9 years. If the contractor fails to earn award term in two successive evaluation periods, the contractor forfeits all remaining unearned award term.

3 Some kind of a performance incentive will be incorporated into the contract during the years in which an award term evaluation is not made to continue to motivate the contractor to strive for excellent performance. (award fee or some otherperformance incentive)

4 It is recommended that a shadow period be utilized when employing this type of incentive arrangement. The rationale supporting the duration of the shadow period shall be addressed in the acquisition strategy.

5 It is recommended that the basic period of performance be at least three (3) years but not longer than five (5) years. Remember the goal is to develop a mutually beneficial long-term relationship with a quality contractor and encourage process improvements which yield better performance at lower prices.

Base Period = 5 Years

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AT Contract Period of Performance Scenarios (Con’t)

EXAMPLE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

a.b.c.d.

Shadow Eval Eval Eval Eval EvalPeriod Period 1 Period 2 Period 3 Period 4 Period 5

Mock Earn Earn Earn Earn EarnEval 1 Year 1 Year 1 Year 1 Year 1 Year

Contract Year 6

Contract Year 7

Contract Year 8

Contract Year 9

Contract Year 10

a. The contractor earned award term every year. b. The contractor failed to earn term during the second evaluation period. The max. POP was shortened to 9 years.c. The contractor failed to earn term during the third and fourth evaluation periods. The max. POP was shortened to 7 years.d. The contractor failed to earn term during the first and second evaluation periods. The max. POP was shortened to 5 years.

Base Period = 5 Years

Base Period = 5 YearsBase Period = 5 YearsBase Period = 5 Years

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Features of AF/AT Plan Template

Contains the features discussed in the AT plan with the following additions

Two separate and distinct evaluations occur• Award Fee• Award Term

Award Fee earned at end of each 6 month evaluation Award Term is preliminary for the first 6 month evaluation,

final after the second 6 month evaluation Added Appendices for Award Fee score conversion and

Award Fee distribution

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Highlights of AT Standardization Evaluation

Evaluation Criteria Cost gate (Meet/Does Not Meet) Mirrors the AF Standardization Guidelines in the areas of

Technical, Management, Safety, Small Business, etc.

Unique Features of AT Maximum period of performance up to 10 years Two semi-annual evaluation periods (scores averaged

annually) AT earned only when an annual rating of excellent is

achieved Shadow period (mock evaluation)

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AT Performance Evaluation Board (PEB) Standardization Charts

Award Term (AT) Evaluations mirror Award Fee Evaluations with a few exceptions

Award Term/Award Fee contract features include: Prime Contractor Key Subcontractors Period of Performance Contract Type Options

Award Term unique contract features include: AT Plan

Fee structure will remain stable during the evaluation period

Cost Gate must be met before AT Evaluation performed

Award Term decision based on two successive evaluation periods

Unearned AT is lost

Award Term Official (ATO) rather than Fee Determination Official (FDO)

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Rollout of AT Activities

Provide feedback on our proposed approach to ‘Got Input’ at http://procurement.jsc.nasa.gov/procpub.htm by September 21, 2007

Review & revise process based on comments Brief Management

Final posting of any changes to the following website: http://procurement.jsc.nasa.gov/procpub.htm

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Click here to find Award Term Products

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Award Term Productswill be located here