This award fee plan will be the basis for the Airborne Laser (ABL) System Program Office (SPO) evaluation of the Contractor's performance on the ABL PDRR contract, for the purpose of presenting an assessment of that performance to the Fee Determining Official (FDO). Award fee deals with those areas under the control of the Contractor which are amenable to qualitative and subjective evaluation. This award fee plan is intended as a proactive management tool to incentivize the Contractor to execute the ABL PDRR program as defined in the Integrated Task & Management Plan (ITAMP). The award fee pool will be allocated into an initial, eight (8) month period (to align the subsequent fee periods with the Government fiscal year) followed by eleven (11) semi-annual periods. Contained in those periods are TBD # of events and significant accomplishments with defined accomplishment criteria (TBD from Contractor's proposed ITAMP and Integrated Master Schedule (IMS), as negotiated with the Government), all of which will be considered when determining award fee. The specific criteria and procedures used to assess contractor performance and to determine the amount of award fee earned are described herein. The award fee earned and payable will be unilaterally determined by the FDO based upon review of the Contractor's performance against these criteria. Award fee determinations made by the FDO are final and are not subject to the "Disputes" clause of this contract nor reviewed by any Board of Contract Appeal (BCA), court, or other judicial entity. The award fee will be provided to the Contractor through contract modifications and is in addition to the cost plus provisions of the contract.

2.1 ORGANIZATION

The ABL PDRR contract's FDO is the Program Executive Officer for Weapons (AFPEO/WP). The FDO will establish an Award Fee Review Board (AFRB), chaired by the SPO Director and made up of Government SPO and Air Combat Command personnel (see Appendix A). The AFRB will assist the FDO by making award fee and rollover recommendations. These AFRB members also function as performance monitors, and perform an initial evaluation of the contractor's efforts based upon specific performance categories and evaluation criteria. Non-AFRB SPO personnel, as well as various Government and Government SETA technical and functional experts, will serve the AFRB as non-voting but contributing performance monitors/advisors. After the FDO has been presented the AFRB's recommendations and made his/her final determinations, the procuring contracting officer (PCO) will implement the required award fee contractual actions. The process whereby award fee determinations are made is presented in more detail in paragraph 3.

2.2 RESPONSIBILITIES

a. Fee Determining Official. The FDO is responsible for ensuring the integrity of the award fee process. The FDO approves this award fee plan and authorizes any substantive changes. The FDO formally appoints the AFRB Chairperson and approves the AFRB membership. The FDO will review the award fee and rollover recommendations of the AFRB, consider all appropriate data, and advise the Contractor and PCO of the final award fee and rollover determinations. b. Award Fee Review Board Chairperson. The Chairperson is the ABL SPO Director, and is responsible for conducting the AFRB deliberations in accordance with this plan. He/she nominates members to the AFRB so as to ensure the board membership represents all appropriate aspects of the contract. The Chairperson ensures the Contractor's performance against the award fee evaluation criteria is adequately and fairly evaluated. He/she briefs the AFRB's evaluation of the Contractor's performance and its award fee and rollover recommendations to the FDO. The Chairperson will conduct a debriefing which will enable the Contractor to understand the evaluation and improve performance in subsequent award fee periods. Lastly, the Chairperson may approve minor changes to the award fee plan, and transmits recommendations for significant changes to the FDO.

c. Award Fee Review Board. AFRB members are responsible for continuos monitoring and feedback of the Contractor's performance during each evaluation period, both across the entire contract and in their area(s) of responsibility. Each member will provide to the Recorder a written evaluation of that performance at the end of each period based on all pertinent information. The evaluations will both qualitatively and subjectively score the Contractor in each performance category, covering both strengths and weaknesses. The board will convene to arrive at award fee and rollover recommendations to be given to the FDO by the AFRB Chairperson. The AFRB members will then assist the Recorder in preparing the Chairperson's briefing to the FDO supporting the recommendations. Finally, the AFRB may recommend changes to the award fee plan.

d. Recorder. The Recorder is a non-voting member of the AFRB and is responsible for coordinating the administrative actions required by the award fee plan. This includes: l) the receipt and distribution of the Contractor's self-evaluation to the AFRB members; 2) the receipt, processing and compilation of evaluation inputs from all AFRB members; 3) scheduling and conducting the AFRB meetings; 4) scheduling and preparation of the Chairperson's award fee recommendation briefings to the FDO; 5) drafting the FDO's award fee decision letters; 6) scheduling and preparing the debriefing to the Contractor; and 7) maintaining all appropriate files documenting the award fee process and results.

e. Procuring Contracting Officer. The PCO is responsible for all contractual actions required by this plan. This includes: 1) notifying the Contractor in writing of any changes to the award fee plan; 2) transmitting the FDO's award fee decision letters to the Contractor; 3) preparing and distributing the contract modifications awarding the fee authorized by the FDO; and 4) being responsible for all award fee documentation maintained in the official contract file.

a. AFRB members, with the assistance of the non-voting performance monitors/advisors, will continually monitor and provide feedback on the Contractor's performance during each evaluation period, both across the entire contract and in their area(s) of responsibility. They will maintain written records as necessary documenting the Contractor's performance.

b. Within five (5) working days after period close-out, the Contractor will submit to the SPO a written self-evaluation of their performance during the period. This self-evaluation will be in Contractor format but will not exceed 20 pages in length. No formal self-evaluation briefing will be given to the SPO.
c. Not later than fifteen (15) calendar days after a period close-out, the AFRB will complete its formal evaluation process. AFRB members will evaluate both the Contractor's overall performance during the period against the ITAMP, IMS, and TRD requirements, as well as his performance in completing all events and significant accomplishments during the period (see Appendix E for a listing of the events and accomplishments by fee period - see the negotiated ITAMP for their definitions). Members will subjectively assign point scores for the Contractor's efforts in each performance category noted in Appendix B, based on the evaluation criteria listed in Appendix C. AFRB members will then combine their individual scores with the relative weighting factors for each performance category (see Appendix B) to arrive at individual performance scores for the period. Members will provide the scores and written comments supporting the scores to the Recorder (note - scores in each performance category will reflect each AFRB member's assessment of the Contractor's performance across the entire ABL PDRR contract during the fee period being evaluated, whereas their individual written comments detailing the Contractor's strengths and weaknesses will be confined to each AFRB member's area of responsibility. This will obviate the need to weight AFRB members' scores based on the perceived criticality of their functional or technical areas to the ABL PDRR contract). The Recorder will call a formal AFRB meeting (note - a quorum of 90% of the AFRB is needed for the meeting to be "official"). At the AFRB meeting, individual member scores will be reviewed, discussed, re-evaluated if necessary, then averaged to arrive at the final performance score and grade to be recommended to the FDO. The award fee formulae from Appendix D will be applied to the AFRB's final performance score to calculate the amount of periodic fee to recommend to the FDO. At the formal AFRB meeting, any fee rollover recommendation will also be decided. Following the meeting, the Recorder will prepare a briefing for the AFRB Chairperson to give to the FDO explaining and supporting the periodic fee and any rollover recommendations. The Recorder will also draft a final fee decision letter for the FDO's signature.

d. Within twenty-five (25) calendar days of period close-out, the AFRB Chairperson will brief the FDO on the evaluation of the Contractor's performance during the period and the AFRB's recommendation of award fee amount to be paid and fee to be rolled over (if any).

e. The FDO will determine the award fee and any fee rollover and sign the fee decision letter. The letter will inform the Contractor of the amounts of award fee earned, fee to be rolled over (if any), and address the Contractor's strengths and weaknesses for the evaluation period. Within thirty (30) calendar days after each evaluation period, the PCO will forward the decision letter to the Contractor on behalf of the FDO.

f. The PCO will complete all contractual actions, including modifications, required to implement the FDO's award fee determination within five (5) calendar days after the FDO decision (i.e., NLT thirty-five (35) calendar days after period close-out). The Contractor may bill for the award fee immediately upon receipt of the authorizing modification.

g. The Chairperson will give a debriefing of the Contractor's performance to the Contractor.

For the initial evaluation period, the performance categories with their corresponding percentage weightings are set forth in Appendix B. These categories will be judged against evaluation criteria contained in Appendix C. During subsequent award fee periods however, performance category weightings and/or their evaluation criteria are expected to change as program priorities are altered. The preceding period's weightings and evaluation criteria will apply if the PCO does not give specific, written notice to the Contractor of any unilateral changes prior to the start of a new period.

5. AWARD FEE DOLLAR AMOUNTS

5.1 EARNED AWARD FEE
The fee for the ABL PDRR contract will consist of $TBD, based on a 12% award fee pool. There is no base fee on this contract. The award fee pool allocated by fee period is shown in Appendix E. The Contractor will earn periodic award fees based on the FDO's approved final performance score and the award fee formulae set forth in Appendix D.

5.2 ROLLOVER
Award fee dollars associated with events, significant accomplishments, etc., scheduled for completion in one period but subsequently rescheduled to future periods may be forwarded to those future periods (i.e., rolled over) at the discretion of the FDO. The primary factor in any rollover decision will be the degree to which the slippage is outside the control of the Contractor. The AFRB will judge that degree of Contractor responsibility and recommend any rollover to the FDO. Any rollover of award fee will be targeted towards specific SPO or ACC concerns or issues requiring the Contractor's attention. Unearned award fee from completed fee periods or associated with completed events, significant accomplishments, etc., will never be rolled over.

As shown in Appendix E, award fee evaluations will begin with an initial, eight (8) month period, 31 Jan 97 - 30 Sep 97, which will align the subsequent fee periods with the Government fiscal year. The remaining evaluations will be conducted semi-annually through 31 Mar 03. As a result, there will be no formal interim evaluations on the ABL PDRR contract, although the SPO may issue informal feedback during the periods.

7. CONTRACT TERMINATION

In the event of a termination of the ABL PDRR contract for the convenience of the Government, an AFRB will be convened to evaluate the Contractor's performance during the current, open period and determine the earned award fee. This evaluation will be conducted in accordance with this plan.
8. CHANGES TO THE AWARD FEE PLAN

The Government will discuss proposed changes to the award fee plan with the Contractor and will solicit the Contractor's views on those changes. However, the Government reserves the right to make unilateral changes to this award fee plan prior to the start of an evaluation period. These changes may include revisions to performance category weightings, evaluation criteria, or award fee pool dollars allocated to the remaining periods. The PCO will advise the Contractor in writing of any such changes not less than thirty (30) days prior to the start of the affected period. Subsequent to the commencement of an affected period, changes may only be made by mutual agreement of the parties. The FDO will approve any significant changes, whereas the AFRB Chairperson may approve minor modifications.

The award fee process is recognized as qualitative and subjective in nature, but every effort will be made to ensure fairness. The written records of the AFRB members, the inputs from other pertinent sources (e.g., non-voting performance monitors/advisors, DPRO, DCAS, DCAA, etc.) and the Contractor's self-evaluation assist in providing the checks and balances necessary to ensure award fee integrity.

A: Cost (including performance to cost baseline and cost 15%
control)

B: Schedule (including performance to schedule baseline, 15%
critical path analyses, and schedule recovery)

C: Technical (including ABL system design, systems engineering 50%
and integration, configuration control, test & evaluation, and
logistics and sustainment)

D: Program Management (including subcontract management, 20%
security, and data)

Note: It is anticipated that the cover transmittal letter of the final, approved award fee plan will emphasize the following areas for award fee period #1:

Category A: Cost

- IPT/budget allocations complete at contract award.

- Earned value baseline detail planned for at least six months and fully integrated to the team members and IPTs within 60 days after contract award.

- Cost tracking tools installed and in use by IPTs within 30 days after contract award.

Category B: Schedule

- Earned value baseline integrated with the IMS within 60 days after contract award.

- Staying within proposed schedule(IMS) during the contract startup period.

- Schedule tracking tools installed and in use by IPTs within 30 days after contract award.

Category C: Technical

- IPTs manned.

- Technical design objectives understood at all layers of IPT structure.

- Technical requirements and tasks allocated to the lowest levels.

- Critical design and risk mitigation activities underway.

- Execution of technical effort proceeding according to ITAMP/IMS.

- Initial Design tools installed and in use by IPTs within 30 days after contract award.

Category D: Program Management

- Manning of teams for execution of the program.

- Visible/interactive buy-in of senior prime/associate/subcontractor management to program goals, milestones, performance, and budget.

- IPT empowerment/communication.

- Process to reallocate derived requirements/budget between IPTs established and in use.

- Proper emphasis on risk identification/management.

- Emphasis on ensuring all management systems are responsive, accurate, and operating within 60 days of contract award.

This category evaluates the contractor team's performance as compared against their earned value baseline. This also assesses the contractor's ability to identify potential cost problems early, recovery from actual cost problems, and indirect cost control management. This category also assesses the contractor's implementation of cost/affordability management tools, including the integration of the ITAMP/IMS and earned value baseline, metrics, and the daily use of these tools by the IPTs to manage their efforts.

Unsatisfactory - IPTs lack an understanding for properly executing their effort within their assigned allocated budgets. Cost status usually not known by Contractor personnel and Government team member intervention is frequently required to control costs. Little evidence of a systematic approach for controlling costs. No attempt to identify opportunities for cost avoidance or reduction. Planned effort versus earned value correlates poorly. IPTs do not initiate timely corrective actions when problems arise. Cost Performance Report (CPR) variance explanations are of poor quality. ABL PDRR contract estimated cost at complete show significant growth. ABL PDRR Contract Funds Status Report (CFSR) does not reconcile to the CPR.

Satisfactory - IPTs have a working knowledge for properly executing their effort within their assigned allocated budgets. Cost control system functioning and used by IPTs. IPTs are identifying and attempting to solve cost problems. Significant cost variances are usually identified ahead of time and understood by IPT members. IPTs attempt to identify cost avoidance or reduction opportunities. Planned effort versus earned value generally correlates. CPR variance explanations are of acceptable quality. ABL PDRR contract estimated cost at complete shows only moderate growth. ABL PDRR CFSR generally reconciles to the CPR.

Very Good - IPTs are effectively executing their effort within their assigned allocated budgets. Cost control system is well utilized and fully understood by IPTs. Previously identified significant cost variances are brought under control while requiring minimal intervention by Government team members. IPTs successfully identify and implement cost avoidance and reduction opportunities. Planned effort versus earned value almost always correlates. CPR variance explanations are of good quality and recommended solutions to variances are actively pursued. ABL PDRR contract estimated cost at complete shows minimal growth. ABL PDRR CFSR almost always reconciles to the CPR.

Excellent - IPTs are executing their effort within their assigned allocated budgets while providing continuous improvement to the timeliness and accuracy of the cost management system. Use of cost control systems is evident at every IPT level. Previously identified significant cost variances are brought under control and corrected immediately requiring no intervention by Government team members. Cost avoidance and reduction opportunities are successfully identified and implemented at every IPT level. Planned effort versus earned value (work accomplished) correlates. CPR variance explanations are of high quality and are used as working documents by IPTs for statusing problem resolution. ABL PDRR contract estimated cost at complete shows no growth. CFSR reconciles to the CPR.
Category B - Schedule:

This category evaluates the contractor team's performance as compared against their earned value baseline and IMS. This also assesses the contractor's ability to identify potential schedule problems early, recovery from actual schedule problems, and the projection of the impact of near-term schedule impacts on long-term events. This category also assesses the contractor's implementation of schedule management tools, including the integration of the ITAMP/IMS, earned value baseline, critical path network, metrics, and the daily use of these tools by the IPTs to manage their efforts.

Unsatisfactory - Integrated Task and Management Plan (ITAMP) significant events, accomplishments, and tasks within the IPT's control are late in almost every instance. IPTs lack an understanding for executing their scheduled efforts. Integrated Master Schedule (IMS) status usually not known by IPTs, frequently requiring government team member intervention to maintain schedule. Inadequate critical path analyses and system logic networks being performed by the IPT. Schedule variance explanations are of poor quality and do not correlate to the IMS. Serious schedule problems arise due to inattention at the IPT and system integration level. Significant ABL PDRR contract delays occur due to events within the control of the IPTs requiring frequent government team member intervention.

Satisfactory - ITAMP significant events, accomplishments, and tasks within the IPT's control are generally completed on time. IPTs have a working knowledge for properly executing their scheduled effort as delineated in the IMS. IPTs perform adequate schedule analysis. IPTs and system integration managers generally use system logic networks for schedule integration and analysis. Schedule variance explanations are of acceptable quality and generally correlate to the IMS. Workaround plans are actively developed and implemented to keep most significant events, accomplishments, and tasks on schedule. Only moderate delays in the ABL PDRR contract occur due to events within the control of the IPTs.

Very Good - Almost all of the ITAMP significant events, accomplishments, and tasks within the IPT's control are completed on time with minor slips of remaining activities. IPTs are effectively executing their scheduled effort as delineated in the IMS. Integrated system schedule analysis ongoing. IPTs know status of all activities and independently develop workaround plans should schedule slips occur. Schedule variance explanations are of good quality and correlate directly to the IMS. Recommended solutions to variances are actively pursued. IPTs and system integration managers resolve problems before they cause an adverse impact to the contract. Minor delays in the ABL PDRR contract occur due to events within the control of the IPT.

Excellent - ITAMP significant events, accomplishments, and tasks within the IPT's control are completed on time or ahead of schedule. IPTs providing continuous improvement to the timeliness and accuracy of the IMS. Accurate, concise information from system schedule analyses is consistently used by the IPTs to maintain or accelerate schedule. Schedule variance explanations are of high quality, correlate directly to theIMS, and used as working documents by IPTs for statusing problem resolution. No delays within control of the contractor occur to the ABL PDRR contract.
Category C - Technical:

This category assesses the progress and quality of the development, integration, and verification of the Laser and Beam Control/Fire Control systems, with respect to meeting ABL weapon system requirements. This category assesses the contractor team's performance associated with BMC4I, aircraft, test and evaluation, ground support, training, system engineering, software engineering/integration, ILS/R&M, and air vehicle integration. This also includes integration of specialty engineering disciplines, scalability/traceability, and integrated (system, hardware, software) metrics system, weight/cost management, and modeling/simulation and affordability. This category assesses the contractor's team progress and performance towards implementing a proactive risk assessment/mitigation plan to successfully demonstrate ABL boost phase intercept lethality and to achieve ABL weapon system performance within cost/schedule constraints.

Unsatisfactory - The projected ABL PDRR system performance fails to meet many Government requirements. Little evidence that a rigorous systems engineering process is being used. Incomplete, inaccurate, and unprofessional work requires significant rework. Expertise is lacking in critical technical areas causing significant problems or lack of progress. The Contractor is often unable to resolve technical problems, and the Government must frequently lead or prod the Contractor. IPTs are not working effectively as a team to resolve issues. There's little apparent effort to consider the scalability and traceability of the PDRR system to an EMD ABL system that meets Government requirements. Risk mitigation planning and execution are not effectively preventing adverse impacts to the PDRR contract.

Satisfactory - The projected ABL PDRR system performance meets most Government requirements. An adequate systems engineering process is being used. Acceptable quality work requires only occasional rework. The Contractor has expertise in all critical technical areas and is making adequate technical progress. The Contractor is often able to resolve technical problems, and only occasional Government guidance is needed. The scalability and traceability of the PDRR system to an EMD ABL system that meets Government requirements is generally considered. Risk mitigation activities prevent issues in almost all moderate and high risk areas from adversely impacting the ABL PDRR contract.

Very Good - The projected ABL PDRR system performance meets almost all Government requirements and design margin gives confidence the ABL PDRR system will meet all critical performance requirements. An aggressive systems engineering process is being used. Professional quality work rarely requires rework. The Contractor has expertise in all technical areas and is making significant technical progress. The Contractor shows initiative in resolving technical problems, and works effectively with Government IPT counterparts to identify and resolve technical issues. Only rarely is Government guidance needed. The scalability and traceability of the PDRR system to an EMD ABL system that meets Government requirements is always considered. Effective risk mitigation activities prevent most technical issues from adversely impacting ABL PDRR cost, schedule, or performance.

Excellent - The projected ABL PDRR system performance meets Government requirements. Margin is evident throughout the design to accommodate unknowns and ensure requirements will be met. A superb systems engineering process is being used. Highest caliber work, rework not required. The Contractor has national expertise in all technical areas and is making outstanding technical progress. The Contractor shows great initiative and effectiveness in identifying and resolving technical problems with Government IPT counterparts. The scalability and traceability of the PDRR system to an EMD ABL system that meets or exceeds Government requirements is always considered. Risk areas are identified early and risk mitigation activities are very effective in preventing adverse cost, schedule, and performance impacts to the ABL PDRR contract. Areas requiring Government assistance are identified early enough to permit timely resolution.

Category D - Program Management:

This category evaluates the contractor team's effectiveness in implementing the IPT philosophy at all levels of their organization. This category places special emphasis on inter-IPT and inter-company integration. This also includes IPT empowerment, ownership, accountability for their product and processes, and open, timely communications/coordination at all levels. This category also assesses the contractor's overall program management performance, including program control and contracting. This includes developing/maintaining the organization, ensuring personnel are empowered with the necessary tools/authority to accomplish their mission, and planning/replanning the program as needed to successfully complete ABL PDRR and EMD. Program control includes budget execution/planning, contract funding, cost estimating, program schedules, cost/schedule/performance analysis, programming/planning/financial guidance and policy, and subcontract management, Contracting includes administration/execution of the contract, responsiveness to negotiating and executing contract changes, and ensuring contractual direction is properly transmitted to all appropriate activities.

Unsatisfactory - Contractor management is unaware of program status. Workaround plans for contingencies are either nonexistent or not being effectively used. In-house, subcontractor, and vendor status is not known, substantial subsystem and vendor problems result, and not all subcontracting plan goals are met. Lack of management motivation accelerates the need for contingencies and delays problem resolution. Loss of experienced personnel has been significant and the training of less experienced replacements has been time-consuming.

Satisfactory - Overall program status is known. Workaround plans in existence and generally utilized. Periodic checks of in-house subsystem progress prevents significant contract slips. Communication with Government is adequate. Management's motivation to control the contract is evident at most levels. Adequate administrative support for contract. Contractor exhibits adequate control over subcontracted efforts and achieves subcontracting plan goals.

Very Good - Methodology established for tracking program at all levels. Critical contract issues are well understood and managed by the Contractor. Workaround planning is used by all levels of Contractor's organization and problems are quickly brought under control. In-house subsystem status is always known and only minor slips occur. Communication with Government is proactive due to effort by Contractor. Management's motivation to control the contract is evident throughout most of the organization and results in some tangible or intangible benefits to the Government, such as improved quality, performance, responsiveness, or generally enhanced effectiveness of operations. Good efficiency implemented by Contractor administration. Subcontracted efforts are well managed; all subcontracting plan goals are achieved and some exceeded.

Excellent - Methodology established and maintained throughout IPT structure for tracking and resolution of critical contract issues. Superb awareness of all aspects of program status, and outstanding communication with Government prevents problems from becoming significant. Workaround planning is extremely effective due to additional effort by Contractor. Contractor awareness prevents slips in the events and significant accomplishments during period. Management's motivation to control the contract is maintained at all levels of the organization and results in significant tangible or intangible benefits to the Government, such as improved quality, performance, responsiveness, or generally enhanced effectiveness of operations. Superb management of all subcontracted efforts and virtually all subcontract plan goals are exceeded.

Formulae:

$ Fee = 0, for final performance scores < 50

$ Fee = [(final performance score/100) x fee pool available during period], for final scores > 50

PERIOD 1: 31 Jan 97 30 Sep 97 TBD based on Contractor's TBD
ITAMP & IMS as negotiated
with the Government

PERIOD 2: 01 Oct 97 31 Mar 98

PERIOD 3: 01 Apr 98 30 Sep 98

PERIOD 4: 01 Oct 98 31 Mar 99

PERIOD 5: 01 Apr 99 30 Sep 99

PERIOD 6: 01 Oct 99 31 Mar 00

PERIOD 7: 01 Apr 00 30 Sep 00

PERIOD 8: 01 Oct 00 31 Mar 01

PERIOD 9: 01 Apr 01 30 Sep 01

PERIOD 10: 01 Oct 01 31 Mar 02

PERIOD 11: 01 Apr 02 30 Sep 02

PERIOD 12: 01 Oct 02 31 Mar 03