PERFORMANCE ASSESSMENT GUIDELINES:

A. The purpose of these Guidelines are to institutionalize a performance-based management system that encourages and rewards excellence, continuous improvement and timely communication.

B. In keeping with the objectives setforth above, any performance-based management contract must begin with the establishment of contract performance objectives, measures, and expectations which may be linked to pre-established performance incentives that, if achieved, will:
    1. enhance the Laboratory’s ability to accomplish its mission for the Department;

2. drive cost-effective performance improvements, focusing on efficient system performance while maintaining appropriate internal controls;

3. when possible, allow for meaningful trend and rate of change analysis; and

4. encourage benchmarking initiatives as a means of incorporating industry business standards, and "best practices" that are meaningful, appropriate, and consistent with Departmental requirements and deemed to reflect overall successful operations. "Best practices" should include cost/risk/benefit analysis.
  1. This performance-based assessment process has been developed to drive improvements and focus on effectiveness of systems and maintaining the appropriate level of internal controls. The assessment process should use "best practices" and reflect DOE’s and Contractor’s judgment as to the key performance elements which will enhance fulfilling the Department’s mission objectives. Assessment of contractor performance will be accomplished through the use of Performance Measures of science and other critical operations and a systems assessment or self-assessment which will include measures and self-assessment criteria for overall general operations of the Laboratory.
  2. Performance Measures (PM’s):

Part I - PM’s are the primary basis for assessing performance and determining the level of performance fee earned. The PM’s are developed to drive the maintenance of outstanding performance in support of DOE’s missions and to drive improvement in areas deemed critical to the Department or operation of the Laboratory. To determine the Laboratory’s overall performance, the PM’s are weighted to reflect the priority DOE attaches to the accomplishment of each. Performance against each of the PM’s is then assessed and rolled up into a rating for each performance area.

E. Systems Assessment:

In addition to the development of specific contract Performance Measures directly tied to incentives, an effective Performance Assessment process should institutionalize an internal self-assessment program which fosters assessment of existing internal systems, policies, and procedures and encourages continuous improvement. The Contractor’s self-assessment program shall be developed in formal agreement with the Contracting Officer and provide for the following:
    1. An assessment of performance against objectives, measures and expectations which have been identified under Part I — Performance Measures (Critical Operations).
    2. An assessment of system performance against objectives, measures and expectations which have been identified and included in Part II — Systems Assessment by mutual agreement of the parties. These system assessment measures are not directly linked to any contract performance incentive and are in addition to the Part I - Performance Measures (Critical Operations).
    3. An assessment of overall operations for:

(a) compliance with prime contract, law or other DOE, Federal, and State requirements (such as regulations, directives, etc.) as may be applicable pursuant to terms of the prime contract.

(b) the adequacy and the degree to which internal policies, procedures, and controls are implemented and are being met.

3. Identification of improvement opportunities and improvement plans.

F. Scoring:

Each of the PM’s identified in Part I has an associated expectation accompanied by a scale that translates the level of performance to an adjectival rating. Unless otherwise specified for a given measure, the scoring methodology used for evaluating the level of performance achieved is based upon the following adjectival ratings and their correspondent definitions:
    1. Outstanding: Significantly exceeds the standards of performance; achieves noteworthy results; accomplishes very difficult tasks in a timely manner.
    2. Excellent: Exceeds the standard of performance, although there may be room for improvement in some elements; better performance in all other elements more than offsets this.
    3. Good: Meets the standard of performance; assigned tasks are carried out in an acceptable manner — timely, efficient and economical; deficiencies do not substantively affect performance.
    4. Marginal: Below the standard of performance; deficiencies require management attention and corrective action.

      5.  

    5. Unsatisfactory: Significantly below the standard of performance; deficiencies are serious, may affect overall results, and urgently require senior management attention; prompt-corrective action is required. Does not meet the minimal requirements established at the marginal level.

For purposes of calculating cumulative ratings for each Part I Performance Area or for the Laboratory as a whole, it is necessary to equate the adjectival ratings to a number score so that the assigned weight for each measure can be applied in calculating a cumulative score or rating. The adjectival ratings achieved will equate to the following number value for purposes of determining cumulative scores:

Outstanding 4

Excellent 3

Good 2

Marginal 1

Unsatisfactory 0

The expectations assigned to each individual measure will result in an adjectival rating based on the level of performance achieved. The cumulative adjectival rating for each Performance Area, i.e., Science, ES&H, etc., or for overall contractor performance will be determined by converting the adjectival rating achieved by each PM to its corresponding number value which is then multiplied by the weight assigned to each measure. The individual numerical scores are then added and the sum of the numerical scores are then converted back to a cumulative adjectival rating. The following scoring ranges will be used when converting the cumulative numerical scores back to an adjectival rating for each performance area::

Outstanding >3.5 to 4.0

Excellent >2.5 to 3.49

Good >1.5 to 2.49

Marginal >0.5 to 1.49

Unsatisfactory 0 to 0.49

G. The Parties acknowledge that the performance levels achieved against the specific performance objectives, measures, and expectations established in the contract for the Part I - Performance Measures (Critical Operations) is the primary but not the sole basis for determining the Contractor’s final performance ratings and fee earned in any given performance period.

With respect to determining the Contractor’s final performance ratings and fee earned in any given performance period for the Part I - Performance Measures (Critical Operations), the Contracting Officer shall also consider the Laboratory’s performance in Part II — Systems Assessment (General Operations) and any other relevant information directly related to Part I, Performance Measures, which may be deemed to have had an impact (either positive or negative) on the Contractor’s performance. Other relevant information may become available from a number of different sources including but not limited to, the Contractor’s self-assessment, DOE’s day-to-day operational awareness, annual business reviews, (if applicable) Inspector General reviews, General Accounting Office (GAO) audits, for cause reviews, etc., as well as Contractor cooperation, interaction, and responsiveness to DOE throughout the performance period. This does not impact DOE’s rights under Part II, Section I, Clause I.116 — Conditional Payment of Fee, Profit, or Incentives.

Should the Contracting Officer contemplate considering other relevant information in establishing the performance ratings achieved in Part I — Performance Measures (Critical Operations) or Part II — Systems Assessment (General Operations) in any given performance period, the Contracting Officer shall give the Contractor written notice specifying the event and/or information being considered, the reasons for considering it relevant and significant, and the intended effect on the performance rating for the year. The Contractor will be given the opportunity to respond in writing and, if the Contractor requests, in a meeting to respond to the Contracting Officer’s intended action.

The Contracting Officer will issue his/her written assessment along with the proposed performance ratings to the Contractor within ten (10) working days of the above written notice.

H. Performance Measures (PM’s) and system assessment measures (SAM’s) should reference industry standards, best practices, or other standards which are meaningful, appropriate, and consistent with DOE requirements rather than trying to arbitrarily develop standards. To this end, benchmarking initiatives are strongly encouraged. When establishing benchmarks and setting targets, the parties should consider the return on the cost required to make further improvements.

I. The methodology for measuring each expectation shall be established by mutual agreement of the parties (except as may be otherwise specified in this contract) prior to the start of the performance period.

J. The Contracting Officer shall review, approve and periodically verify how the Contractor collects, compiles and scores its performance against the measures established annually and incorporated into the contract as Attachment 3 to this Appendix B.

K. Performance Measures and systems assessment measures and criteria will be developed in a team approach involving appropriate Ames Group, Chicago Office, and Headquarters, along with Iowa State University and Ames Laboratory representatives.

L. Failure to include a specific objective and/or measure in the contract as part of Attachment 3 does not preclude the Laboratory from having to comply with any contractual requirements, and failure to comply may result in the Contracting Officer modifying the performance rating achieved against a specific performance measure.
  1. The Director, Office of Science (SC-1) has the primary responsibility for evaluating and rating the Contractor’s performance in Science with input from cognizant DOE Assistant Secretaries, Office Directors and Program Managers as appropriate. The Contracting Officer has the primary responsibility for evaluating and rating the non-science Critical Operations and systems assessment performance areas in accordance with the measures and criteria setforth in Attachment 3 to this Appendix B. However, the Contracting Officer shall inform SC-1 of any issues or concerns that should be considered when evaluating the Contractor’s performance in Science. This is especially important in those areas where general operations performance could have a significant impact on the Contractor’s ability to conduct successful research for the Department. The Contractor has primary responsibility to compile the data necessary to document its performance against all measures.

N. For reasons beyond the Contractor's control, certain data input may not be available to meet the appraisal schedules outlined in Attachment 4 to this Appendix. The evaluation shall proceed according to schedule for measures which have complete data. Final ratings shall not be determined until all ratings are completed. A final assessment report with final adjectival ratings will only be issued when sufficient data is available to evaluate the Contractor’s performance against all measures. The Contracting Officer may, based upon the measures completed and the performance achieved, award a provisional portion of any performance incentive, pending the complete assessment of all measures, at which time the final incentives earned will be determined and awarded.

O. The Contractor and DOE agree to establish specific weights for Part I — Performance Measures (Critical Operations) areas. In addition, within each of these areas, individual measures will have expectations established to gauge Laboratory performance. If the Parties cannot reach agreement on either, the specific weights for the evaluation criteria or the individual expectations, the Contracting Officer shall have the right to establish such weights and/or expectations.
  1. In the event the Contracting Officer determines it necessary to exercise the right set forth in O above, the Contracting Officer will notify the Contractor in writing of the intended decision. The final weightings and/or expectations will be issued to the Contractor within 10 working days.

Q. The Contractor shall have the ability to earn a maximum annual performance fee as described in Attachment 5 of this Appendix B.