Procurement Information Circular
MEASURING EFFECTIVENESS OF AWARD FEE CONTRACTS
PURPOSE: This Procurement Information Circular (PIC) is issued to provide guidance relative to completing the award fee data fields recently incorporated into the NASA PPDB as a result of the requirements contained in 16.401.
BACKGROUND: On October 14, 2009, the Federal Acquisition Regulation (FAR) was revised to implement section 814 of the National Defense Authorization Act for FY 2007 as well Section 867 of the National Defense Authorization Act for FY 2009. These statutes required, among other things, that Federal Agencies “collect relevant data on award and incentive fees paid to contractors; have mechanisms in place to evaluate such data on a regular basis; and include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes.” The implementing language in the FAR reads as follows:
FAR 16.401(f) states, “Incentive- and Award-Fee Data Collection and Analysis. Each agency shall collect relevant data on award fee and incentive fees paid to contractors and include performance measures to evaluate such data on a regular basis to determine effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes. This information should be considered as part of the acquisition planning process (see 7.105) in determining the appropriate type of contract to be utilized for future acquisitions.”
NASA has implemented these new FAR requirements by incorporating new evaluation fields in the NASA Past Performance Database (PPDB) that shall be completed on all award fee contracts. These new data fields are as follows:
1. Available award fee amount for the evaluation period
2. Amount of award fee earned for the evaluation period
3. Award fee rating for the evaluation period (Excellent, Very Good, Good, Satisfactory and Unsatisfactory).
4. Did the use of Award Fee motivate the Contractor’s overall cost, schedule and technical performance as measured against contract requirements in accordance with the criteria stated in the Award Fee Plan? Please explain.
5. Were the objectives enhanced by using an Award Fee contract as stated in the determination and findings required at FAR 16.401(d)? Please explain.
GUIDANCE: Contracting officers shall complete the above listed award fee fields in the NASA PPDB for all award fee contracts including hybrid contracts that contain award fee provisions. The award fee fields shall be completed beginning with the next regularly scheduled past performance evaluation. The award fee fields are not required to be completed for evaluations that were completed prior to the effective date of this PIC. In completing the fields, the following guidance is provided:
1. In the event that more than one award fee evaluation period has occurred during the past performance assessment period, an assessment must be completed for each award fee evaluation period. The award fee data must be entered for each award fee evaluation period in order for us to pull reports, analyze the data, and respond to OMB/OFPP data calls relative to this information.
2. For the field, “Did the use of award fee motivate the contractor’s overall cost, schedule, and technical performance as measured against contract requirements in accordance with the criteria stated in the award fee plan? Please explain”, you must first answer yes or no to the question: -and then provide a detailed narrative explanation supporting your yes or no assessment. This narrative should highlight how, through the award fee process, the contractor’s performance was improved (e.g. Maybe in an award fee evaluation period the contractor’s performance in an area was not excellent and this became an area of emphasis for the next award fee evaluation period and the contractor’s performance improved in that subsequent award fee evaluation period. You could cite such an example as to how the award fee process motivated the contractor towards excellent performance).
3. For the field “Were the acquisition’s objectives enhanced by using an award fee contract as stated in the determination and findings required at FAR 16.401(d)? Please explain”, you must first answer yes or no to the question: - and then provide a detailed narrative explanation supporting your yes or no assessment. This narrative should discuss whether the expected benefits cited in the initial award fee determination and finding were realized.
EFFECTIVE DATE: This PIC is effective as dated and will remain in effect until canceled or superseded.
HEADQUARTERS CONTACT: William G. Roets II, Contract Management Division, (202) 358-4483, email: William.Roetsfirstname.lastname@example.org.
/s/ B. Roets for
James A. Balinskas
Director, Contract Management Division