Request for Information (RFI) - Performance Incentives, Contract Type for IT/Software Development Contracts

THIS IS NOT A SOLICITATION OR REQUEST FOR PROPOSALS. NO PROPOSALS ARE SOUGHT. This notice consists of four parts: PART I. INTRODUCTION PART II. BACKGROUND PART III. AREAS IN WHICH INFORMATION IS SOUGHT PART IV. HOW TO RESPOND TO THIS NOTICE I. INTRODUCTION The following is a Request for Information (RFI). This synopsis is for information and planning purposes and does NOT constitute a Request for Proposal (RFP). It is issued under the authority of FAR 15.201("Exchanges of information before receipt of proposals"). FAR Subpart 37.6, and the Office of Federal Procurement Policy's (OFPP) "A Guide to Best Practices for Performance-Based Service Contracting"(Oct. 1998), encourage agencies to use performance-based contracting methods that describe work requirements in terms of results required rather than the methods of performance of the work, establish objective measurable performance standards for key elements of the work, use a quality assurance surveillance plan (QASP) to measure work accomplishment against the standards, and use performance incentives to encourage contractors to meet and/or exceed the referenced standards. Furthermore, the Office of Management and Budget (OMB) has directed agencies to take immediate action to govern the appropriate use and oversight of contract types to minimize risk and maximize the value of Government contracts. OFPP's memorandum "Increasing Competition and Structuring Contracts for Best Results" (Oct. 2009) encourages agencies to collaborate with industry, use performance-based acquisitions, choose the best contract type for acquisitions, and use incentives to motivate lower costs in cost-type arrangements. These referenced documents may be accessed electronically at the OFPP website located at http://www.whitehouse.gov/omb/procurement/. Please frame any responses to this notice in accordance with the policies contained in these references. II. BACKGROUND The Department of Homeland Security (DHS) Immigration and Customer Enforcement (ICE) Office of the Chief Information Officer (OCIO) provides information technology (IT) services and products that enable ICE and DHS to meet their respective missions and to protect and secure our nation. In order to meet these goals, the OCIO has developed a number of critical IT initiatives that will help ICE modernize its IT systems, adapt and conform to modern IT management disciplines, and provide IT solutions throughout ICE. For additional information on ICE's mission see: http://www.ice.gov/about/index.htm Because of the lack of precise specifications and difficulties in estimating costs with accuracy, ICE OCIO has historically used cost-reimbursement contracts when contracting for software development of IT systems. The cost-plus-fixed-fee (CPFF) contract type is commonly used in software development contracts. CPFF contracts do not contain performance incentives based on the quality, timeliness, cost, or other elements of the work performed. The purpose of this notice is to request information from interested parties, including potential Offerors, about the feasibility of alternative contract arrangements for software development, including: - The use of Performance-Based contracting - The structure and administration of contract incentives - The use of various contract types for software development projects, including Firm-Fixed-Price (FFP), Cost-Plus-Incentive-Fee (CPIF), and Cost-Plus-Award-Fee (CPAF) III. AREAS IN WHICH INFORMATION IS SOUGHT Information and comments are solicited regarding the following Discussion Areas: Discussion Area 1: Performance-Based Contracting 1.1 Is there interest in Performance-Based contract arrangements for software development? 1.2 What benefits, problems and/or risks might exist in utilizing Performance-Based contracting techniques in the IT and software development arenas? 1.3 Do the benefits of motivating contractor performance with performance incentives outweigh the administrative costs and time burden to the Government and the Contractor? Discussion Area 2: Measuring Performance 2.1 What are the key elements of the process of software development that are critical to successful outcomes and results? 2.2 What performance requirements, e.g., tasks and deliverables, are susceptible to measurement? 2.3 What standards can or should be used to measure unsatisfactory, satisfactory, and outstanding achievement of the performance requirements identified? What are the best sources of performance standards? 2.4 Should standards be expressed in terms of technical performance (quality), timeliness (schedule), cost control, or some combination of these parameters? 2.5 What surveillance and measurement techniques can or should be used to determine whether the standards are not achieved, achieved, or exceeded? Discussion Area 3: Incentives and Contract Type 3.1 What types of incentives may be appropriate for use in software development efforts to motivate the contractor to meet and exceed the standards identified in Discussion Area (2)? 3.2 FAR Subpart 16.4 discusses two basic categories of incentive contracts, the fixed-price incentive contracts and the cost-reimbursement incentive contracts. Fixed-price incentive contract types include the fixed-price incentive (FPI) contract and the fixed-price with award fee (FPAF) contract. Cost-reimbursement incentive contract types include the cost-plus-incentive-fee (CPIF) contract and the cost-plus-award-fee (CPAF) contract. These four contract types focus largely on fee-based monetary incentives, and thus would have potential applicability and interest to the software development community currently working under cost-plus-fixed-fee (CPFF) arrangements. Is there interest in any of these arrangements? If so, under what circumstances and how should the incentives be structured and administered? If not, why not? 3.3 What performance incentives using a mechanism other than fee would be feasible and would they be of interest to the IT community? Please discuss and comment on the award of additional periods of contract performance (known as "award term" contracts). 3.4 Have software development projects been implemented successfully in a FFP, and/or CPIF/CPAF environment? If so, please explain. If possible, please provide samples. 3.5 What, if any, impact would the inclusion of performance incentives, FFP contract types, or other contract arrangements in future ICE software development contracts have on the decision to submit an offer? 3.6 Please discuss the possibility of breaking a Software Development project up into modules that could be priced as CPIF or CPAF for the initial phases, and transitioning to FFP as the "unknowns" become "knowns." 3.7 Please discuss problems that might be encountered utilizing any of the methods discussed, and provide suggested solutions or alternatives. Discussion Area 4: Other 4.1 If you have Federal Government Points of Contact that have implemented a successful software development project using FFP, contract incentives, and/or performance-based contracting, we'd appreciate it if you'd share their contact information with us. 4.2 Would the IT community benefit from a public meeting to discuss the information submitted in response to this notice? IV. HOW TO RESPOND TO THIS NOTICE Please direct any questions concerning this notice to Ms. Miranda Collins at Miranda.Collins@dhs.gov, or 202-732-2549. Please submit your information and comments, whether supportive or critical, to the Contracting Specialist electronically no later than December 22, 2009. Please submit the replies electronically to Miranda.Collins@dhs.gov. Electronic submissions should be submitted as an e-mail attachment in Microsoft Word. Please repeat each Discussion Area with questions and provide the response beneath. Please submit the information in the same order and using the same numbering scheme in this notice to facilitate evaluation and organization by Government reviewers. Please limit responses to 50 pages. Replies will be separated from, and have no bearing on, subsequent evaluation of proposals submitted in response to any resulting formal Requests for Proposals (RFPs). The use of information received in response to this notice may be used by ICE for acquisition planning and solicitation preparation activities. Eligibility in participating in a future acquisition does not depend upon a response to this notice. ICE will not critique the responses to this notice and the notice should not be used by Offerors to market their products/services. ICE does not intend to pay for the information solicited and will not recognize any costs associated with responding to this RFI. Proprietary information is neither sought nor desired by ICE. If such information is submitted, it must clearly be marked "proprietary" on every sheet containing such information, and the proprietary information must be segregated to the maximum extent practicable from other portions of the response (e.g., use an attachment or exhibit). Due to the Federal Government closure on Monday, December 21, 2009, the due date is extended to 12:00 P.M. on December 22, 2009.