PERFORMANCE INCENTIVES IN NIAID BASIC AND VACCINE RESEARCH CONTRACTS

Release Date:  December 15, 2000

NOTICE:  AI-01-003

National Institute of Allergy and Infectious Diseases

Response Date:  January 22, 2001

THIS IS NOT A SOLICITATION OR RFP. NO PROPOSALS ARE SOUGHT. Any responses to 
this Request for Information (RFI) should be submitted by Monday, January 22, 
2001. This notice consists of four parts: Part I.(Introduction); Part 
II.(Background); Part III. (Areas In Which Information Is Sought); and 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 11.101 ("Order of precedence for requirements documents") 
requires agencies to develop requirements documents to meet agency needs that 
utilize performance-oriented documents based on voluntary industry consensus 
standards to the maximum extent practicable. To similar effect, FAR Subpart 
37.6 ("Performance-Based Contracting")(FAC 97-18, 6/6/00), 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. These 
referenced documents may be accessed electronically at the OFPP website 
located at http://www.arnet.gov. Please frame any responses to this notice in 
accordance with the policies contained in these references. II. BACKGROUND: 
NIAID, an Institute of the NIH, provides the major support for scientists 
conducting research aimed at developing better ways to diagnose, treat and 
prevent the many infectious, immunologic and allergic diseases that afflict 
people worldwide. Specifically, NIAID conducts basic research and vaccine 
research in the following areas: AIDS, Asthma and Allergic Diseases, Emerging 
Diseases, Enteric Diseases, Genetics and Transplantation, Immunologic 
Diseases, Malaria and Other Tropical Diseases, Sexually Transmitted Diseases, 
and Vaccine Development. For additional information on NIAID’s mission see: 
http://www.niaid.nih.gov/facts/overview.htm Because of the lack of precise 
specifications and difficulties in estimating costs with accuracy, NIAID has 
historically used cost-reimbursement contracts when contracting for basic 
research. The cost-plus-fixed-fee (CPFF) is commonly used in basic research 
contracts with commercial organizations (in either its completion or term 
forms), and the cost contract(no fee) is commonly used in such contracts with 
nonprofit educational institutions(colleges and universities) and other 
nonprofit research organizations. These contract types 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 incorporating performance incentives into cost-reimbursement 
basic research contracts at NIAID, and to request information on the 
structure and administration of any incentives, including problems expected 
to be encountered and solutions proposed. III. AREAS IN WHICH INFORMATION IS 
SOUGHT: Information and comments are solicited regarding the following 
Discussion Areas: (1) What are the key elements of the process of conducting 
basic research that are critical to successful outcomes and results? Which 
elements motivate research personnel and research organizations? What 
research performance requirements, e.g., tasks and deliverables, are 
susceptible to measurement? Discussion Area (2): What standards can or should 
be used to measure unsatisfactory, satisfactory, and outstanding achievement 
of the performance requirements identified in Discussion Area (1) above? What 
are the best sources of performance standards? Should standards be expressed 
in terms of technical performance (quality), timeliness (schedule), cost 
control, or some combination of these parameters? Discussion Area (3): What 
surveillance and measurement techniques can or should be used to determine 
whether the standards identified in Discussion Area (2) above are not 
achieved, achieved, or exceeded? Discussion Area (4): What types of incentive 
contracts may be appropriate for use in basic and vaccine research efforts to 
motivate the contractor to meet and exceed the standards identified in 
Discussion Area (2) above?  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 commercial research organizations 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? For educational and other nonprofit organizations, who typically 
perform basic and vaccine research for NIAID under cost-reimbursement (no 
fee) contracts, what performance incentives using a mechanism other than fee 
would be feasible and would they be of interest to the academic community? 
Please discuss and comment on the following possibilities: award of 
additional periods of contract performance (known as "award term" contracts); 
favorable disposition of data and other intellectual property rights; special 
recognition by NIH/NIAID of individual researchers; insertion into the 
contract of a direct reimbursable line item to compensate the research 
contractor for scientific meeting attendance, acquisition of research 
equipment, and/or the establishment of a merit award fund for outstanding 
research personnel. Discussion Area (5): What problems and risks might exist 
in utilizing performance-based contracting techniques in the basic research 
and vaccine research arenas? In particular, do the benefits of motivating 
contractor performance with performance incentives outweigh the 
administrative costs and time burden to the government and the contractor? 
What, if any, impact would the inclusion of performance incentives in future 
NIAID basic and vaccine research solicitations have on the decision to submit 
an offer? Would the NIAID research contracting community benefit from a 
public meeting at NIAID's Bethesda, MD, campus to discuss the information 
submitted in response to this notice? IV. HOW TO RESPOND TO THIS NOTICE: 
Please submit your information and comments, whether supportive or critical, 
to the Contracting Officer at the above address no later than Monday, January 
22, 2001. Please submit the replies in hard copy and on diskette in Microsoft 
Word Version 6.0 or higher. You may also submit your responses to Mr. 
McFarlane electronically at Pmcfarlane@niaid.nih.gov. Electronic submissions 
should be submitted as an e-mail attachment in Microsoft Word Version 6.0 or 
higher. It would be helpful to repeat each question and provide your response 
beneath. Please submit the information in the same order and using the same 
numbering/lettering system in this notice to facilitate evaluation and 
organization by government reviewers. Interested parties who have or are 
planning to respond to the OFPP Notice of Solicitation of Public Interest 
(Federal Register, October 24, 2000, Volume 65, Number 206, Page 63628) are 
encouraged to attach their replies to that notice along with their replies to 
this notice. 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 NIAID for acquisition planning and 
solicitation preparation activities. Any subsequent solicitations will be 
synopsized prior to their release. Eligibility in participating in a future 
acquisition does not depend upon a response to this notice. NIAID will not 
critique the responses to this notice and the notice should not be used by 
offerors to market their products/services. NIAID 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 NIAID. 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). Please direct 
any questions concerning this notice to Mr. Mc Farlane.

INQUIRIES:
Paul D. McFarlane, Senior Contracting Officer
Contract Management Branch, NIH, NIAID
6700-B Rockledge Drive, Room 2114
Bethesda, MD  20892-7612
T 301-496-0349; F 301-402-0972
E-mail:  Pmcfarlane@niaid.nih.gov


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