1. 1 Award Fee Evaluation Update to Guidance & Best Practices Industry Briefing October 26, 2011

2. AGENDA TOPICPRESENTER WELCOMECindy Maclean Purpose and BackgroundJessica Corley Award Fee Definitions ChangesLinda Riviera Safety Definition ChangesJenny Arkinson Cost Evaluation ChangesJenny Arkinson Performance Evaluation Guidance - Sensitive Predecisional Data2

3. 3 Purpose and Background Purpose: Review the new regulations and impacts to the current JSC award fee guidance, processes, and outcomes Regulation changes affecting award fee: Definitions and Scoring Range (FAR 16.401 and 16.405-2, NFS 1816.405 revised February 8, 2011) Applies to all Award Fee Contracts Awarded after 10/14/2009 Safety Mishap Thresholds (NASA Procedural Requirements NPR 8621.1B revised March 15, 2010) Applies to all Contracts Cost Evaluation for EVM (NASA Procurement Circular (PIC) 10- 17 issued November 15, 2010) Applies to all Earned Value Management (EVM) Award Fee Contracts

4. 4 Definitions and Scoring Range Applies to all Contracts Awarded after 10/14/2009  Background:  GAO audit found that some government agencies were not tying award fees to performance objectives and outcomes  NASA’s guidance and practices in this area were found to be in compliance  GAO findings resulted in:  Changes to the scoring range  More integration of cost and technical performance in the definitions  New definitions were written broadly and allowed us to maintain flexibility in scoring  Contracts Affected:  All solicitations and new contracts awarded after October 14, 2009

5. 5 Evaluation Definitions Applies to all new Award Fee Contracts Awarded after 10/14/2009 AdjectiveGrade RangeDefinition Excellent91 - 100Contractor has exceeded almost all of the significant award-fee criteria and has met overall cost, schedule and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period. Very Good76 - 90Contractor has exceeded many of the significant award-fee criteria and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period. Good51-75Contractor has exceeded some of the significant award-fee and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period. Satisfactory50Contractor has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period. UnsatisfactoryBelow 50Contractor has failed to meet overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award-fee evaluation period.

6. Key Definition Changes OLD: Excellent (91-100): Of exceptional merit; exemplary performance in a timely, efficient, and economical manner; very minor (if any) deficiencies with no adverse effect on overall performance. Very good (81-90): Very effective performance, fully responsive to contract requirements; contract requirements accomplished in a timely, efficient, and economical manner for the most part; only minor deficiencies. Good (71-80): Effective performance; fully responsive to contract requirements; reportable deficiencies, but with little identifiable effect on overall performance. NEW: “Contractor has exceeded… Excellent (91-100) …almost all of the significant award-fee criteria and has met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award- fee evaluation period.” Very Good (76-90) …many of the significant award-fee criteria…. Good (51-75) …some of the significant award- fee criteria…… 6

7. Key Definition Changes (Continued) OLD: Satisfactory (61 – 70): Meets or slightly exceeds minimum acceptable standards; adequate results… Poor/Unsatisfactory (0) Does not meet minimum acceptable standards in one or more areas; remedial action required in one or more areas; deficiencies in one or more areas which adversely affect overall performance NEW: “The Contractor has…… Satisfactory (50): … met overall cost, schedule, and technical performance requirements of the contract in the aggregate as defined and measured against the criteria in the award-fee plan for the award fee evaluation period.” Unsatisfactory (<50): … failed to meet… Performance Evaluation Guidance - Sensitive Predecisional Data7

8. 8 Safety Mishap Definition Changes Applies to all Contracts 8 This update is a result of a revision to NPR 8621.1B effective April 1, 2010 Increase in Property Damage Thresholds for Mishaps Mishap Definitions Type A: Fatality or permanent total disability or hospitalization of 3 or more employees and property damage >$2M Type B: Permanent partial disability or hospitalization of 2 or less employees and property damage $500K Type C: Days Away Cases, Restricted Duty Case and property damage of $50K Incident: Medical treatments and property damage of $1K

9. 9 Cost Evaluation for Contracts with EVM All Award Fee Contracts with EVM NASA Procurement Information Circular (PIC) 10-17 issued November 15, 2010 states: Cost control should be balanced against other performance requirement objectives Cost control evaluation factor is not tied directly to any EVM metrics Earned Value can be used as one of many factors in evaluating cost. Other inputs are considered in the cost evaluation.

10. CONCLUSION There are minimal impacts to the JSC Award Fee Standardization Guidelines due to these changes The revised definitions are clear and flexible Cost control is balanced against other performance requirement objectives These charts will be posted to the BA website http://procurement.jsc.nasa.gov/geninfo.html Performance Evaluation Guidance - Sensitive Predecisional Data10