ATTACHMENT J-8

**FEE PLAN**

**1.0 INTRODUCTION**

This contract is a cost-plus-incentive-fee/award-fee contract which
supports the primary goals of the NASA Space Flight Program: fly safely,
accomplish mission success (including meeting the manifest), and reduce
cost. This fee plan includes a combination of award fee, performance
incentive and cost incentive designed to emphasize excellence in
managerial, technical, schedule and subcontract management (including
Small, Small Disadvantaged, and Woman Owned Business performance) and
cost performance while providing the Contractor appropriate motivation
to achieve Program goals.

**2.0 AWARD FEE PROVISIONS**

The award fee serves as a tool to measure the Contractor's performance
on the health of the program and motivate continued improvement. The
Contractor can earn award fee from a minimum of zero dollars to a
maximum stated in Clause B.2 of this contract. Changes to these award
fee provisions will be via bilateral modification, except for internal
NASA processes and evaluation factors which are established unilaterally
by NASA.

Under Award Fee Provisions, NASA may evaluate the Contractor on any area
of performance within the spectrum of the contract. A significant
element of any award fee evaluation shall be the Contractor's
demonstrated performance in meeting or exceeding the SOW performance
standards. Thus, while the award fee process is subjective, these
standards may be used in award fee evaluation.

**2.1 ORGANIZATIONAL RESPONSIBILITIES**

**2.1.1 PERFORMANCE EVALUATION BOARD (PEB)**

The Performance Evaluation Board (PEB) is comprised of NASA officials
who are responsible for establishing specific evaluation criteria and
will assess the Contractor's performance related to the evaluation
factors listed in Section 2.3. At the end of each six-month evaluation
period (as identified in the tables in Attachment 1), the PEB will
prepare a written report documenting its evaluation which shall include
recommendations for an adjective rating and numerical score to be
assigned to the Contractor's performance during the evaluation period.
This report as well as a PEB presentation will be provided to the Fee
Determination Official (FDO).

**2.1.2 Performance Monitors**

NASA performance monitors shall evaluate and assess the Contractor's
performance in assigned areas and discuss the evaluation results with
Contractor counterparts as appropriate. Additionally, the performance
monitors shall use, at their discretion, evaluations and assessments
from NASA officials in preparing their report on assigned areas. The
performance monitors will periodically prepare reports for the PEB.

**2.1.3 PEB Chairman**

The Manager, Space Shuttle Program will serve as the PEB Chair. The PEB
Chair may reassign performance monitors at any time without advance
notice to the contractor.

**2.1.4 Fee Determination Official (FDO)**

The Deputy Associate Administrator for the International Space Station
and Space Shuttle Programs will serve as the FDO. The FDO, after
considering available pertinent information and recommendations, shall
make a determination in accordance with the provisions of this plan.

**2.2 PERIODIC (SIX MONTH) EVALUATION PROCEDURES**

All periodic performance evaluations will be final. A determination of
the performance score and the related dollars earned for each evaluation
period will be made by the FDO within 45 days after the end of the
period. Procedures to be followed in monitoring, assessing, and
evaluating Contractor performance during each period, are described
below.

**2.2.1** No later than 45 calendar days prior to the start of each
evaluation period, the Contractor may submit to the Contracting Officer
recommended areas of emphasis for the ensuing evaluation period that are
within the general factors listed in Section 2.3 of this plan.
Consideration will be given to the Contractor's recommendations;
however, it is the Government's responsibility to establish the specific
areas of emphasis for each evaluation period.

**2.2.2** No later than 30 days prior to the start of each new six-month
evaluation period, the Contractor will be notified by the Contracting
Officer of the selected areas of emphasis for that period as well as any
weightings NASA wishes to specify. Emphasis will be directed at
particular areas under the contract which appear to the Government to be
deserving of special attention and will be used in judging the
Contractor's performance. These areas of emphasis may not cover the
entire spectrum of performance that will be evaluated in determining
award fee scores and dollars earned. Other pertinent factors included
under the contract and general factors bearing upon overall performance
will be considered.

**2.2.3** The COTR shall meet with the Contractor at the mid-point of
each evaluation period and at other such times as is deemed appropriate
to apprise the Contractor of its performance assessment. These meetings
shall address specific areas where Contractor performance requires
improvement. The Contractor will be provided a written assessment.

**2.2.4** After the end of each evaluation period, the PEB shall meet to
consider all the performance information it has obtained. At the
meeting, the PEB will summarize its preliminary findings and
recommendation in the Performance Evaluation Board Report (PEBR). The
contractor shall have the opportunity to make a presentation to the PEB
if they so desire. (See 2.2.7)

**2.2.5** The Contractor may furnish a self-evaluation report within 10
calendar days after the expiration of each evaluation period. This
self-evaluation report shall not exceed 20 pages in length. The PEB will
not submit its recommendation to the FDO until (1) the Contractor's
self-evaluation report has been received and considered, or (2) the
Contractor has provided written notification that a self-evaluation
report will not be submitted, or (3) the 10-day period provided for
submission of the report has expired.

**2.2.6** The PEB Chair is responsible for the preparation of the PEBR
and will present the findings and recommendation to the FDO. The report
will include an adjective rating and a recommended overall performance
score, upgrades score, and safety score with supporting documentation.
The Contractor will be notified by the Contracting Officer of the PEB
evaluation and recommended rating and score, and will be provided a
summary of the PEBR. The Contractor may provide additional information
for consideration by the FDO by notifying the Contracting Officer of its
desire to do so. This is an opportunity for the Contractor to provide
any information which the Contractor believes is relevant to its
performance and which may affect the FDO's determination. Any additional
information should be provided to the Contracting Officer within 5
calendar days of Contractor receipt of the PEB recommended rating and
scores. This additional Contractor information will be provided to the
FDO by the Contracting Officer through the PEB Chair.

**2.2.7** In addition to the information cited in Section 2.2.4, the
Contractor may choose to make a presentation to the PEB. If the
Contractor chooses to make a presentation, it must notify the
Contracting Officer no later than 3 calendar days before the scheduled
date of the PEB meeting. The presentation, if provided, will be limited
to 1 hour in length.

**2.2.8** The FDO will consider the recommendation of the PEB, the PEBR,
information provided by the Contractor, if any, and any other pertinent
information in determining the performance scores. The FDO's
determination of the scores will be stated in a written Award Fee
Determination (AFD).

**2.2.9** The AFD will be provided to the Contractor by the Contracting
Officer. The Contractor may, after notification of the determination,
request, through the Contracting Officer, a briefing by the PEB
Chairman. This briefing shall be conducted no later than 14 days
following the written request by the contractor.

**2.2.10** The contractor shall provide the Government a Corrective
Action Plan or an explanation of why corrective action is not required
for each weakness identified in the PEB report. The Corrective Action
Plan should include a description of the non- conformance, determination
of the root cause of the non-conformance, action required to correct the
weakness and prevent recurrences, and the schedule for completion of the
action. One copy of the report shall be delivered to the Contracting
Officer and two copies of the report shall be delivered to the COTR
within 30 calendar days after receipt of the PEB report.

**2.3 EVALUATION FACTORS**

NASA may evaluate the Contractor on any area of performance within the
spectrum of the contract (see Section 2.3.8 for specific cost evaluation
parameters). A significant element of any award fee evaluation shall be
the Contractor's demonstrated performance in meeting or exceeding the
SOW performance standards. The following are examples of critical
factors which will be included in any evaluation:

**2. 3.1 Management Effectiveness**

The Contractor will be evaluated based upon management performance in
providing a balanced, coordinated and motivated approach to managerial
excellence. This includes an assessment of the Contractor's performance
in the development, analysis and utilization of management data, total
available resources, and program controls to effectively accomplish
contract requirements. This will involve the assessment of Contractor
performance in planning, controlling, and managing Government facilities
and property, as well as contract and subcontract management. Also
included is the Contractor's track record on the assessment and
mitigation of risk. A critical element of this evaluation shall be the
effectiveness of the Contractor's continuous improvement program**.**

**2.3.2 Operational Safety**

Operational safety is of supreme importance to NASA. This includes
flight safety issues involving the flight crew, potential risks to
flight assets, and ground processing safety affecting personnel or
facilities. Consideration will be given to the maintenance of process
and product quality at all levels, and assumes the implementation of
performance measures as an indication of quality. Note: A specific score
will be provided for this factor.

**2.3.3 Quality**

The Contractor will be evaluated on the maintenance of the program
processes with required product quality at all levels, and
implementation of performance measures related to quality.

**2.3.4 Schedule and Manifest Effectiveness**

The Contractor will be evaluated against program schedules and key
interim milestones, including non-recurring elements such as performance
enhancements. This evaluation will consider all aspects of planning,
processing and operation in support of the NASA manifest, including not
only the effectiveness and quality of meeting the manifest, but also the
development and demonstration of flexibility and robustness in this
capability. The Contractor will also be evaluated on it\'s support of
long range manifest needs across the life of the Space Shuttle Program
through a program of maintenance, repair refurbishment, and logistics
planning that assures Program capability.

**2.3.5 RESERVED**

**2.3.6 Supportability**

The Contractor will be evaluated on its approach and plans for the long
term health and viability of the Program. This evaluation will assess
the Contractor's performance against the overarching program goals and
the ability of the Contractor to balance program health and assure
product and process integrity.

**2.3.7 Small/Small Disadvantaged/Woman Owned Business (SB/SDB/WOB)
Performance**

The Contractor will be evaluated on its efforts in achieving contract
SB/SDB/WOB goals. Award fee weighting for SDB performance will be 15
percent.

**2.3.8 Cost**

Cost evaluation under the award fee procedures will be limited to the
evaluation of Level-of-Effort, Program Provisioning, and Upgrades cost
performance. This evaluation will be related to the actual cost
performance of individual tasks versus the estimated cost for the tasks,
including any task requirement changes.

**2.4 EVALUATION PERIODS AND AWARD FEE CALCULATION**

**2.4.1 Maximum Available Award Fee**

The maximum available award fee is identified in Clause B.2.

**2.4.2 Evaluation Periods and Award Fee Available**

The available award fee dollars for each evaluation period are
delineated in Attachment 1, Table A, Operations. The parties agree that
available award fee in award fee period 16 shall be reduced by \$6.895
and performance fee shall be increased by \$6.895M, should a flight
scheduled for launch after 9/30/04 per the NSTS 08178 SSP Schedules
updated on 12/9/02 actually be launched prior to 10/01/04.

**2.4.3 Dollars Earned**

Upon the FDO's determination of Contractor's performance for each
period, the graded score, as a percentage, will be applied to the
dollars available in the period (per the tables in Attachment 1) to
determine the dollars earned.

**2.4.4 Dollars Not Earned**

All award fee dollars available for each evaluation period not earned
will not roll forward to subsequent award fee periods. A unilateral
contract modification will be

issued to remove these unearned dollars from maximum award fee available
on the contract. Dollars not earned will also be captured on Attachment
1.

**2.5 EVALUATION SCALE AND ADJECTIVE RATING**

Award Fee Rating Table, Attachment II, includes adjective ratings as
well as a numerical scoring system from 0 - 100. For this plan, earned
award fee dollars are calculated by applying the total numerical score
to available dollars. For example, a numerical score of 85 yields 85
percent of available award fee dollars. Notwithstanding the preceding,
the Contractor will not earn award fee for any evaluation period when
the performance score is "poor/unsatisfactory" (less than 61).

**2.6 PROVISIONAL PAYMENT OF AWARD FEE**

1.  Pending a determination of the amount of award fee earned for
    periodic evaluations, a portion of the available award fee for that
    period will be provisionally paid to the Contractor on a monthly
    basis. For the first two evaluation periods for the separate
    upgrades fee pool, the percentage of the available amount that will
    be provisionally paid will be equal to the percentage amount to be
    paid for the operations fee pool during those same periods. For all
    subsequent evaluation periods, the provisional payment for
    operations and upgrades will be calculated separately and will be
    based on an average of the two preceding periods for each of those
    pools individually. The provisional payment shall never exceed 80%.
    The amount of provisional fee which may be paid monthly in any
    evaluation period shall be prorated equally to the number of months
    in that period.

2.  Should, at any time, the Contracting Officer determine that the
    Contractor will not achieve a level of performance commensurate with
    the provisional rate, such rate may be reduced or discontinued.

3.  The Contracting Officer shall notify the Contractor, in writing, if
    it's determined that a reduction or discontinuance is to be made.
    This determination is not subject to "Disputes" clause

4.  All provisional award fee payments will be superseded by the
    periodic evaluation. If the FDO's determination for a period results
    in earned award fee above that provisionally provided, the
    Contracting Officer will issue a unilateral modification to
    recognize such and payment will be made based upon the unilateral
    modification. If the amount of award fee earned, as determined by
    the FDO, is less than the sum of the provisional payments for that
    period, the Contractor will either credit the next payment voucher
    for the amount over-paid or refund the difference to the Government,
    as directed by the Contracting Officer.

5.  Provisional payment of periodic award fee will be made prior to the
    first award fee determination by the Government.

**2.7 FEE REDUCTION FOR CATASTROPHIC LOSS**

Any available award fee for the current six month evaluation period is
subject to the section contained hereafter entitled "Fee Reduction for
Catastrophic Loss"

**3.0 COST INCENTIVE FEE**

A cost incentive will motivate the Contractor to control cost. This
incentive fee is based on the Contractor's performance relative to
target cost at the end of the basic contract period. The Cost Incentive
Fee payable under this contract shall be in accordance with the
provisions of FAR 52.216-10. If and when the contractor incurs any costs
in any of the categories set forth in paragraph (e)(4) of referenced
clause, the contractor shall notify the contracting officer of the
amount of such cost together with such supporting detail as the
contracting officer may reasonably require. Upon agreement or
determination of the amount of such cost, clause B.2 will be modified by
the entry of a new line item titled, "Excluded Costs," along with the
amount of the cost determined or agreed to. This amount may be increased
from time to time in the same manner. The total resulting amount will be
included in the contract total estimated cost, but will not be included
in the target cost, nor will it be considered in the determination of
the Contractor's incentive fee earning. Determinations made related to
cost incentive fee are subject to the "disputes" clause of the contract.

Costs associated with Level-Of-Effort, Program Provisioning, and
facilities will not be subject to the cost incentive feature of the
contract. Rather, cost performance for Level-Of-Effort and Program
Provisioning will be evaluated under Paragraph 2.0, Award Fee Provisions
of this Attachment. The Contractor is required to account for these
costs so as to ensure that no co-mingling of costs subject to incentive
provisions versus award fee provisions exists.

1.  **COST INCENTIVE FEE PARAMETERS**

**3.1.1 Target Cost**

The target cost for cost incentive fee purposes is found in Clause B.2.

**3.1.2 Maximum Cost Incentive Fee**

The maximum fee available on this contract is reflected in Clause B.2.
There is no maximum cost incentive fee identified in Clause B.2 since
the maximum cost incentive fee is flexible. The contract includes a
maximum available award fee as well as performance incentive fees. If
such fees are not achieved, there is additional flexibility under the
cost incentive provisions for the Contractor to achieve maximum
available fee.

Maximum Fee will be increased by an amount equal to 15% of the
negotiated Target Cost of fee-bearing changes to this contract. Maximum
Fee for changes to the Program Provisioning or Level-of-Effort portions
of the contract will be increased by the amount of fee negotiated for
the change.

**3.1.3 Cost Incentive fee at Target**

The cost incentive fee at target is found in Clause B.2.

**3.1.4 Incentive Sharing Arrangement**

The Contractor may share in cost overruns/underruns to target cost as
follows:

**3.1.4.1 Underrun to Target Cost**

The Cost Incentive Fee payable under this contract shall be the target
fee increased by 35 cents for every dollar that total allowable cost
subject to the incentive is less than target cost.

**3.1.4.2 Overrun to Target Cost**

The Cost Incentive Fee payable under this contract shall be the target
fee decreased by 15 cents for every dollar that the total allowable cost
subject to the incentive is greater than the target cost for the first
\$150 million dollars of overrun and then 30 cents for every dollar
after that point. This arrangement would exist until all earned target
fee and award fee is exhausted. Overrun fee reductions will not impact
earned Objective Performance fees or earned Program Plus fees.

**3.1.5** **Award Fee Gate**

After completion of the basic contract period, not including the options
identified in Clause B.6, the parties will negotiate a target cost, and
an actual allowable cost pursuant to the incentive fee provisions
hereof. In the event the parties are unable to agree on the amounts to
be so allocated, the Contracting Officer will determine the amounts.
Such determination will be subject to the \"Disputes\" clause.

In the event the Contractor has experienced an underrun and has not
received a minimum award fee score of 81 for Safety, and a minimum
overall award fee score of 71, in a given period, the amount of
incentive fee that the contractor would otherwise have earned for that
period for such underrun will be forfeited. The incentive fee dollars
applicable to that award fee period will be allocated based on the
Percent of Cost Complete (POCC) method. At contract completion, the
amount of the underrun allocated to the specific award fee period will
be calculated based on the following formula:

**Step 1:** [Actual cost for the award fee period in which gate was
missed]{.underline} = % of cost

Actual total cost, at completion, subject to incentive fee

**Step 2:** % of cost X Total Underrun Incentive Fee \$\* = **Adjustment
\$ for period**

\*Underrun \$ X 35%

The adjustment \$ for the period would then be deducted from the total
underrun incentive fee. If the declaration of an underrun is made prior
to contract completion and ESTIMATED forfeiture of the incentive fee is
calculated because an award fee gate has been missed, a final forfeiture
amount will be determined using ACTUAL costs at contract completion.

**3.1.6** Failure to qualify to receive a share of the underrun in a
particular period does not prevent the Contractor from achieving a share
of the projected underrun in other periods wherein the award fee gate is
met.

**3.2 PAYMENT OF COST INCENTIVE BASED ON OVERRUN/UNDERRUN**

**PERFORMANCE**

3.2.1 The decision to either allow provisional fee associated with a
projected underrun to target cost or to modify fee payments based on an
overrun situation is at the discretion of the Contracting Officer. The
development of the incentive fee payment schedule is by mutual agreement
of the parties. The basic tool to be used to determine the payment of
provisional incentive fee based on underrun to target cost, or to reduce
fees based on overruns to target cost, is the Contractor's Estimate at
Completion (EAC) from the Contractor's 533 Report, adjusted as necessary
by the Contracting Officer.

**3.2.2** In the event the Contractor does not meet an award fee gate
for an evaluation period, the Contracting Officer shall make an
assessment of the amount of provisional fee associated with a projected
underrun the Government is willing to pay. However, in the event of an
overrun to target cost, there will be no adjustment for any award fee
gate missed when determining the contractor\'s overrun share per para.
3.1.4.2.

**3.2.3** If for any reason, the assessment by the Contacting Officer
related to missed award fee gates identifies that the Contractor has
been overpaid, the Contractor will repay the Government within 30 days.

3.  **TARGET FEE**

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1.  Payment of target fee will begin with the commencement of the
    contract.

2.  Provisional payments of target fee will be made to the Contractor on
    a monthly basis. The total target fee is delineated in Clause B.2.
    If for any reason, the assessment by the Contacting Officer related
    to missed award fee gates identifies that the Contractor has been
    overpaid, the Contractor will repay the Government within 30 days.

3.  In order to qualify to earn target fee in an evaluation period, the
    Contractor must achieve an overall award fee score of 61. If such
    award fee gate is not met, the Contracting Officer will reduce the
    total target fee by the amounts reflected on Attachment III for each
    award fee period in which the gate is not achieved.

4.  Notwithstanding, target fee payment may be reduced during any period
    in which the Contacting Officer determined that the Contractor will
    overrun the Target Cost. The Contracting Officer will notify the
    Contractor, in writing, if it is determined that such provisional
    payments will be reduced or discontinued subject to final
    determination at completion.

**3.4 REDUCTION FOR CATASTROPHIC LOSS**

All cost incentive fees (target fee and underrun fee) available for a
current six month evaluation period are subject to the section contained
hereafter entitled "Fee Reduction for Catastrophic Loss."

**4.0 PERFORMANCE INCENTIVE FEE**

The Performance Incentive serves an as effective tool to motivate and
ensure safe and successful missions utilizing objective, mission
specific criteria. The performance incentive shall be determined in
accordance with the following process.

1.  **EVALUATION PROCEDURES**

**4.1.1** The Contractor will be evaluated for each Space Shuttle
Mission in accordance with the Performance Incentive criteria identified
in this plan. In a letter to the Contractor three months prior to
flight, the Contracting Officer's Technical Representative (COTR) shall
identify, the major mission objectives associated with each mission.

**4.1.2** Within 10 days after the completion of a mission, the
Contractor shall submit a written report to the Contracting Officer with
its recommendation as to the "successful completion" of each performance
incentive criteria.

**4.1.3** The Contracting Officer shall, in conjunction with the COTR
and Space Shuttle Program Manager, confirm the "successful
accomplishment" of each criteria and issue a written determination.
Further, the Contracting Officer will issue a unilateral modification to
the Contractor recognizing the earning of the specific performance
incentives within 30 days of flight completion.

**4.1.4** Payment of the authorized performance incentive fee shall be
executed by the NASA Financial Management Office upon receipt of the
unilateral contract modification.

**4.1.5** The Contracting Officer's determination for performance
incentive fee is subject to the "Disputes" clause of the contract.

**4.2 PERFORMANCE INCENTIVE CRITERIA**

**4.2.1** The Contractor's performance in meeting major program
objectives will be measured utilizing the objective, predefined criteria
established below. The fee associated with successful completion of
these criteria is stated below. These criteria, as well as the
associated fee, will change only through bilateral agreement. The
following criteria are established per flight. The contract allows for a
slight fluctuation in flight rate without contract modification (clause
H.33, Launch Schedule Variations). Therefore, if the Contractor flies
eight flights per year, these fees are available for each flight;
conversely, if the Contractor flies six flights per year, the fees
herein are available for six flights only, for the basic period of
performance under the contract. For Option 1 under the contract, if the
Contractor flies five flights per year in Option Year 1, these fees are
available for each flight; conversely, if the Contractor flies three
flights per year in Option Year 1, the fees herein are available for
three flights only.

**Performance Criteria for Each Mission through after**

**06/30/98 07/04/98**

Delivery of a Flight Ready Integrated Space

Shuttle Vehicle (SSV) and Supporting Systems \$2.5M \$2.870M

Certification of Mission Specific Flight and

Ground Teams \$0.5M \$0.500M

Integrated Mission Performance

-   Launch Countdown Start Through Orbit Insertion \$1.0M \$1.290M

-   Major Mission Objectives Enabled \$1.0M \$1.120M

-   Deorbit Preparation Through Landing/

    Recovery - Safe Return \$1.0M \$1.075M

-   Launch Delay (Reduction in Fee) Mission

    Management Team (MMT) L-2 to SSME Start

-   First occurrence per flight (\$1.0M) (\$1.0M)

-   Subsequent occurrence per flight (\$0.5M) (\$0.5M)

Pad Abort (Reduction in Fee) (\$3.0M) (\$3.0M)

Intact Abort (Reduction in Fee) (\$5.0M) (\$5.0M)

Early Mission Termination (Reduction in Fee) (\$1.0M) (\$1.0M)

Solid Rocket Booster Recovery n/a \$0.040M

**4.2.2 Objective Criteria and Evidence of "Successful Accomplishment**"

**4.2.2.1 Delivery of a Flight Ready Integrated Space Shuttle Vehicle
(SSV)**

**and Supporting Systems**

SSV requirements will be as defined in the Flight Definition and
Requirements Directive (FDRD) and other applicable requirements as
defined by the COTR based on the Delta Launch Site Flow Review (LSFR)
(approximately launch minus 4 months). The target date will be to the
launch date defined at the Delta LSFR, with adjustments made for changes
not resulting from the SFOC Contractor's performance. "Successful
accomplishment" of this criteria is evidenced by the absence of
Contractor induced constraints to continue launch countdown operations
at the Prelaunch MMT Review. Delays to the target Prelaunch MMT Review
date greater than 7 calendar days caused by the SFOC Contractor will
result in loss of this incentive. If a launch is delayed due to
Contractor induced constraints, subsequent missions for which launch
dates had previously been defined may also be impacted as a result of
processing flow constraints. To avoid a "cascading" effect in such
instances, the launch dates of impacted subsequent flights will be
adjusted without prejudicing the contractor's opportunity to
successfully accomplish this criterion if the subsequent flight delays
are due entirely to processing flow constraints and not due to
Contractor induced constraints.

**4.2.2.2 Certification of Mission Specific Flight and Ground Teams**

Certification of Mission Specific Flight and Ground Teams: The
Contractor must prepare and certify the flight and ground operations
teams for launch, mission, and recovery operations in support of flight
and manifest objectives. "Successful accomplishment" of this criteria is
evidenced by the absence of contractor induced constraints to call to
station for launch and mission support as scheduled in support of the
launch date set at FRR.

**4.2.2.3 Integrated Mission Performance**

**4.2.2.3.1 Launch Countdown Start Through Orbit Insertion**

This criterion focuses on the integrated flight and ground operation of
the systems and mission teams to accomplish a safe launch and orbital
insertion. "Successful accomplishment" of this criterion is evidenced by
the SSV achieving required orbit insertion.

**4.2.2.3.2 Major Mission Objectives Enabled**

This criterion focuses on the availability of "system" support required
to enable the major mission objectives as defined under section 4.1.1.
"Successful accomplishment" is evidenced by the absence of flight or
ground anomalies attributed to the Contractor's performance which
preclude accomplishment of major mission objectives.

**4.2.2.3.3 Deorbit Preparation through Landing/Recovery - Safe Return**

This criterion focuses on the integrated flight and ground operation of
the systems and mission teams to accomplish a safe deorbit, landing, and
recovery. "Successful accomplishment" is evidenced by completion of a
safe landing and recovery of the crew, the Orbiter, and payload
objectives as defined under section 4.1.1.

**4.2.2.3.4 Launch Delay (Reduction of Fee)**

If the planned launch of the SSV has to be rescheduled past the date set
at the Prelaunch MMT Review, but before Space Shuttle Main Engine (SSME)
start due to the performance of the Contractor, the Contractor shall be
assessed a reduction in fee as shown in section 4.2.1.

**4.2.2.5 Pad Abort (Reduction in Fee)**

If a Pad Abort occurs due to Contractor performance, then the contractor
shall be assessed a reduction in fee as shown in Section 4.2.1.

**4.2.2.6 Intact Abort (Reduction in Fee)**

If an Intact Abort occurs due to the Contractor's performance, then the
Contractor shall be assessed a reduction in fee as shown in Section
4.2.1. Intact Abort is defined as a safe return of the Orbiter to a
planned landing site under an intact abort mode: Abort-to-Orbit (ATO),
Abort-Once-Around (AOA), Transatlantic Abort Landing (TAL), or Return to
Launch Site (RTLS).

**4.2.2.7 Early Mission Termination (Reduction in Fee)**

If an early mission termination occurs due to the Contractor's
performance which prevents accomplishment of a major mission objective,
the Contractor shall be assessed a reduction in fee as shown in Section
4.2.1

**4.2.2.8 SRB Recovery**

The SRB Recovery Phase begins immediately upon successful booster
separation from the Shuttle Orbiter/External Tank and continues through
descent and booster splashdowns to the point of stabilized spar buoy
positions. Successful accomplishment of this criterion is when the SRB
Recovery System performs in accordance with the requirements of the Part
I CEI Specification."

3.  **PROVISIONAL PAYMENTS**

Provisional payments are not available for performance incentive fee.

**4.4 FEE REDUCTION FOR CATASTROPHIC LOSS**

Any available performance incentive fee for a mission is subject to the
section entitled "Fee Reduction for Catastrophic Loss."

**4.5 FEE AVAILABILITY FOR FIRST AND LAST FLIGHTS**

The first flight to take place under this contract is subject to the
"Performance Criteria for Each Mission" delineated in Section 4.2.1.

The only "Performance Criteria for Each Mission" related to the last
flight are those which fall within the completion date of this contract
as specified in Clause F.2.

**4.6 CONTRACTOR ACCOUNTABILITY**

The Parties hereby agree to an affirmation period, for purposes of
defining performance fee accountability which will end on June 30, 1998.

During this period:

-   The contractor is accountable for its performance as well as the
    performance of its subcontractors (at any tier) during the term of
    the contract.

-   The contractor shall not be accountable for the first occurrence or
    discovery of any performance problem that is found to be caused by
    efforts performed by The Boeing Company or Lockheed Martin
    Corporation (The Stakeholders). This shall include any subcontractor
    at any tier under those subcontracts authorized under contracts
    awarded to the Stakeholders prior to the SFOC, which contracts or
    subcontracts have now been consolidated within the SFOC; and

-   The contractor is accountable for any subsequent occurrence or
    discovery of any performance problem found to be caused by either of
    the Stakeholders or their subcontractors at any tier.

After the affirmation period has ended, the contractor shall remain
accountable for its performance as well as its subcontractor\'s (at any
tier) performance under the contract. Additionally, the contractor shall
be held accountable for the performance of the Stakeholders and their
subcontractors at any tier, of effort performed previous to
\[incorporation into\], or as part of, the SFOC.

Beginning March 12, 2002, the contractor will continue to be accountable
for all performance during the contract period. Performance problems,
which are a result of original defects in design, manufacturing, or
workmanship are not accountable to the contractor unless it is
determined that an existing defect in design, manufacturing, or
workmanship was not discovered due to a lack of reasonable test,
inspection, procedures, or processing by the contractor or its
subcontractor (at any tier). In such cases, the contractor shall be
accountable for this failure irrespective of when the hardware was
built.

1.  **PROGRAM PLUS FEE**

As identified in Clause B.2, Program Plus Fee is available under this
contract.

The use of this fee is at the discretion of the Space Shuttle Program
Manager (SSPM). For application, the SSPM will identify requirements or
performance parameters and the amount of fee available. The Contractor
will be allowed to provide input as to whether the incentive is
commensurate with the delta requirement; however, it is understood that
incentive application is a NASA unilateral option. The Contracting
Officer will issue a unilateral administrative modification documenting
the available program plus incentive, time frame for completion, and
"successful accomplishment" criteria. (See attachment V) Upon completion
of the incentive or time frame, the Contracting Officer shall, in
conjunction with the SSPM and COTR, issue a determination. If program
plus fee is earned, the Contracting Officer will issue a unilateral
contract payment modification and will forward the modification to the
JSC Financial Management Officer for payment. If the program plus fee is
not earned, a modification will be issued removing the program plus fee
from the contract value. The unearned program plus fee may not be used
again. At the completion of the entire contract period of performance,
any Program Plus Fee that has not been made available to the Contractor
for incentive will be paid based on the average overall award fee score
for the entire contract period of performance. The determination by the
Contracting Officer is not subject to the "Disputes" clause of the
contract.

**6.0 FEE REDUCTION FOR CATASTROPHIC LOSS**

**6.1** A fee reduction will be assessed in the event of loss of an
Orbiter and/or individuals associated with Space Flight Operations when
such loss is caused by the acts or omissions of the Contractor in
performance of effort under this contract.

**6.2** For purposes of this article, "loss" means the loss of life
which occurs because of an Orbiter mission or total loss, at any time,
of an Orbiter vehicle. "Orbiter Mission" commences with fueling of the
external tank through actual flight to safe return of the crew. "Total
loss" means that an Orbiter is permanently inoperable.

**6.3** In the event of "loss," the Contractor will forfeit all fee
earned or available during the six month award fee evaluation period in
which the loss occurs, as well as any performance fee related to that
mission earned or available in earlier or later evaluation periods.

**6.4** The Contracting Officer in conjunction with a Board of
Investigation shall make a determination as to the cause of the loss. If
the loss is determined to be caused by the acts or omissions of the
Contractor, the Contracting Officer shall notify the Contractor in
writing of such determination. Repayment of any fee, if required, shall
be made within 30 days of notification of a final determination by the
Contracting Officer.

**6.5** The Contracting Officer's determination is subject to the
"Disputes" clause of the contract.

1.  **VALUE ENGINEERING**

VECPs serve as a tool in reducing the overall projected cost to the
agency without impairing its essential functions. As identified in
Clause H.40, VALUE ENGINEERING, the Contractor is encouraged to develop,
prepare, and submit value engineering change proposals (VECPs)
voluntarily. The Contractor shall share in any net acquisition savings
reductions for each accepted VECP as identified below.

1.  **FLIGHT OPERATIONS REINVENTION**

Flight Operations Reinvention is a joint NASA and USA Space Shuttle
Program (SSP) initiative that will implement changes to flight
operations processes, tools, and work content. These changes will enable
the reduction of the flight operations flight production from 12 months
to approximately 7 months and will transform current legacy processes
into modern, production-oriented processes. The exact length of the
reduced template depends on resolution of all external template
constraints currently being addressed through the SSP Reinvention
Process Integration Team. Improving the flight operations processes and
reducing the flight operations flight production template are essential
in achieving increased flexibility, both for manifest decisions and
responsiveness to customer requirements.

The milestones and required completion dates are established in Table
7.1-1 for accomplishment of the Reinvention VECP and will be used as the
basis for establishing the Contractors share of the net acquisition cost
savings. Payment of the Contractor's share of net acquisition savings
will be accomplished in lump sum installments that become billable on
the noted installment dates.

Timely milestone completion may be impacted by events beyond the control
of the contractor. In such an instance, if it is determined by the
Government that the contractor is unable to demonstrate successful
completion of one of these identified milestones through no fault of its
own, but that the contractor's performance would have been expected to
have successfully met the milestones based on Government evaluation of
products and systems performance analysis, the criteria will be
considered to have been successfully met and the associated share amount
will be considered to have been earned by the Contractor. The acceptance
criteria for each milestone has been partnered and agreed to between the
Contractor and the Government and will be documented through the
issuance of a joint Memorandum of Understanding.

In the event a milestone that is totally within the control of the
contractor is not completed at the noted major milestone date, the
contractor shall forfeit amounts as set forth in Table 7.1-1. Fee
associated with each sub-task will be paid upon accomplishment of each
subtask. The Contractor shall receive the associated fee for each
subtask upon satisfactory completion of the task irrespective of the
date accomplished. In the event the contractor misses one or more
sub-task level milestone dates but is still able to meet the required
date for the major milestone, the overall technical performance portion
for that milestone, including sub-task milestone increments, shall be
considered earned.

The three major milestone dates are considered firm requirement dates.
In the event the major milestone date is missed, the overall technical
performance share amount shall be forfeited in its entirety. An
apportioned share (1/3) of the \$ 750,000 Overall Performance Fee has
been applied to each of the major milestone dates; this initial payment
is billable by the Contractor on the date the Supplemental Agreement is
signed. A contract modification shall be issued to remove each
apportioned share of the unearned overall performance fee amounts from
the contract, should a major milestone date be missed, and the
contractor shall reimburse the Government for that amount.

Table 7.1-1

+----------------------------------------------------+-------+---------+
| **Overall Performance**                            | **D   | **Share |
|                                                    | ate** | A       |
|                                                    |       | mount** |
|                                                    | 11    |         |
|                                                    | /1/00 | \$      |
|                                                    |       | 750,000 |
+----------------------------------------------------+-------+---------+
| **Milestone #1 CPC SAIL System SW Qualification    |       |         |
| Testing Complete**                                 |       |         |
+----------------------------------------------------+-------+---------+
| -   Subtask #1 - CPC SAIL System SW Development    | 2/    | \$      |
|     Testing Complete                               | 28/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #2 - CPC SAIL System SW Design Review  | 5/    | \$      |
|     Complete                                       | 31/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #3 - CPC SAIL System SW Integrated     | 7/    | \$      |
|     Testing Complete                               | 31/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #4 - CPC SAIL System SW Qual. Test     | 8/    | \$      |
|     Load Delivered                                 | 31/01 | 106,718 |
+----------------------------------------------------+-------+---------+
| Subtotal - Milestone sub-tasks                     | \-    | \$      |
|                                                    |       | 426,875 |
+----------------------------------------------------+-------+---------+
| **Overall Technical Performance**                  | **    | *       |
|                                                    | 12/31 | *\$676, |
|                                                    | /01** | 875\*** |
+----------------------------------------------------+-------+---------+
| Total for Milestone #1                             | \-    | \$1,    |
|                                                    |       | 103,750 |
+----------------------------------------------------+-------+---------+
| # Milestone                                        |       |         |
|  #2 JITFD ORR {#milestone-2-jitfd-orr .unnumbered} |       |         |
+----------------------------------------------------+-------+---------+
| -   Subtask #1 -- I-Load Design DCR                | 2/    | \$      |
|                                                    | 28/01 | 213,437 |
+----------------------------------------------------+-------+---------+
| -   Subtask #2 -- Production DCR                   | 9/    | \$      |
|                                                    | 30/01 | 213,437 |
+----------------------------------------------------+-------+---------+
| -   Subtask #3 - I-Load Design ORR                 | 2/    | \$      |
|                                                    | 28/02 | 213,438 |
+----------------------------------------------------+-------+---------+
| -   Subtask #4 -- Production ORR                   | 7/    | \$      |
|                                                    | 31/02 | 213,438 |
+----------------------------------------------------+-------+---------+
| Subtotal - Milestone sub-tasks                     | \-    | \$      |
|                                                    |       | 853,750 |
+----------------------------------------------------+-------+---------+
| **Overall Technical Performance**                  | *     | **\     |
|                                                    | *7/31 | $1,103, |
|                                                    | /02** | 750\*** |
+----------------------------------------------------+-------+---------+
| Total for Milestone #2                             | \-    | \$1,    |
|                                                    |       | 957,500 |
+----------------------------------------------------+-------+---------+
| **Milestone #3 POST ORR**                          |       |         |
+----------------------------------------------------+-------+---------+
| -   Subtask #1 - POST Process Document Published   | 1/    | \$      |
|                                                    | 31/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #2 - POST Tools Rel. 1 Delivered       | 4/    | \$      |
|                                                    | 30/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #3 - POST Tools Rel. 2 Delivered       | 9/    | \$      |
|                                                    | 30/01 | 106,719 |
+----------------------------------------------------+-------+---------+
| -   Subtask #4 - POST Tools Rel. 3 Delivered       | 1/    | \$      |
|                                                    | 31/02 | 106,718 |
+----------------------------------------------------+-------+---------+
| Subtotal - Milestone sub-tasks                     | \-    | \$      |
|                                                    |       | 426,875 |
+----------------------------------------------------+-------+---------+
| **Overall Technical Performance**                  | *     | *       |
|                                                    | *7/31 | *\$676, |
|                                                    | /02** | 875\*** |
+----------------------------------------------------+-------+---------+
| Total for Milestone #3                             | \-    | \$1,    |
|                                                    |       | 103,750 |
+----------------------------------------------------+-------+---------+

**\* Includes \$250,000 initial performance installment payment**.

**ATTACHMENT I**

**Table A - Operations**

+---------+-----------+---------+------------+-----------+-----------+
| **EVA   | **START** | **END** | **A        | **        | **        |
| LUATION |           |         | VAILABLE** | DOLLARS** | DOLLARS** |
| P       | **DATE**  | *       |            |           |           |
| ERIOD** |           | *DATE** | **AWARD    | *         | **NOT**   |
|         |           |         | FEE**      | *EARNED** |           |
|         |           |         |            |           | *         |
|         |           |         | *          |           | *EARNED** |
|         |           |         | *DOLLARS** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 1       | 10/1/96   | 3/31/97 | \$         | \$1       | \$        |
|         |           |         | 23,200,000 | 9,488,000 | 3,712,000 |
+---------+-----------+---------+------------+-----------+-----------+
| 2       | 4/1/97    | 9/30/97 | \$         | \$2       | \$        |
|         |           |         | 26,661,483 | 2,928,875 | 3,732,608 |
+---------+-----------+---------+------------+-----------+-----------+
| 3       | 10/1/97   | 3/31/98 | \$         | \$1       | \$        |
|         |           |         | 23,788,065 | 9,268,333 | 4,519,732 |
+---------+-----------+---------+------------+-----------+-----------+
| 4       | 4/1/98    | 9/30/98 | \$         | \$2       | \$        |
|         |           |         | 26,425,761 | 2,197,639 | 4,228,122 |
+---------+-----------+---------+------------+-----------+-----------+
| 5       | 10/1/98   | 3/31/99 | \$         | \$2       | \$        |
|         |           |         | 30,303,402 | 5,757,894 | 4,545,508 |
+---------+-----------+---------+------------+-----------+-----------+
| 6       | 4/1/99    | 9/30/99 | \$         | > \$2     | > \$      |
|         |           |         | 30,971,263 | 6,325,576 | 4,645,687 |
+---------+-----------+---------+------------+-----------+-----------+
| 7       | 10/1/99   | 3/31/00 | \$         | \$2       | \$        |
|         |           |         | 33,052,574 | 7,433,636 | 5,618,938 |
+---------+-----------+---------+------------+-----------+-----------+
| 8       | 4/1/00    | 9/30/00 | \$         | \$2       | \$        |
|         |           |         | 34,327,255 | 7,461,804 | 6,865,451 |
+---------+-----------+---------+------------+-----------+-----------+
| 9       | 10/1/00   | 3/31/01 | \$         | \$2       | \$        |
|         |           |         | 26,917,106 | 3,415,781 | 3,498,910 |
+---------+-----------+---------+------------+-----------+-----------+
| 10      | 4/1/01    | 9/30/01 | \$         | \$2       | \$        |
|         |           |         | 30,915,116 | 7,205,302 | 3,709,814 |
+---------+-----------+---------+------------+-----------+-----------+
| 11      | 10/1/01   | 3/30/02 | \$         | \$2       | \$        |
|         |           |         | 31,366,792 | 7,602,777 | 3,764,015 |
+---------+-----------+---------+------------+-----------+-----------+
| 12      | 4/1/02    | 9/30/02 | \$         | \$2       | \$        |
|         |           |         | 31,071,372 | 8,274,949 | 2,796,423 |
+---------+-----------+---------+------------+-----------+-----------+
| 13      | 10/1/02   | 3/31/03 | **\$41     |           |           |
|         |           |         | ,927,394** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 14      | 4/1/03    | 9/30/03 | **\$42     |           |           |
|         |           |         | ,098,586** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 15      | 10/1/03   | 3/30/04 | **\$41     |           |           |
|         |           |         | ,826,802** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 16      | 4/1/04    | 9/30/04 | **\$48     |           |           |
|         |           |         | ,602,350** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 17      | 10/1/04   | 3/30/05 | **\        |           |           |
|         |           |         | $550,365** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 18      | 4/1/05    | 9/30/05 | **\        |           |           |
|         |           |         | $438,159** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 19      | 10/1/05   | 3/30/06 | **\        |           |           |
|         |           |         | $386,510** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 20      | 4/1/06    | 9/30/06 | **\        |           |           |
|         |           |         | $367,207** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 21      | 10/1/06   | 3/30/07 | **\        |           |           |
|         |           |         | $348,238** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 22      | 4/1/07    | 9/30/07 | **\        |           |           |
|         |           |         | $343,043** |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 23      |           |         | **7,967**  |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 24      |           |         |            |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 25      |           |         |            |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 26      |           |         |            |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 27      |           |         |            |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| 28      |           |         |            |           |           |
+---------+-----------+---------+------------+-----------+-----------+
| TOTAL   |           |         | **\$525    | \$20      | \$5       |
|         |           |         | ,896,810** | 7,360,566 | 1,637,208 |
+---------+-----------+---------+------------+-----------+-----------+

# ATTACHMENT I

#### Table B -- Upgrades

+-----------+--------+--------+-------------+-----------+-----------+
| **E       | **S    | *      | **          | **        | **        |
| VALUATION | TART** | *END** | AVAILABLE** | DOLLARS** | DOLLARS** |
| PERIOD**  |        |        |             |           |           |
|           | **     | **     | **AWARD     | *         | **NOT**   |
|           | DATE** | DATE** | FEE**       | *EARNED** |           |
|           |        |        |             |           | *         |
|           |        |        | **DOLLARS** |           | *EARNED** |
+-----------+--------+--------+-------------+-----------+-----------+
| 9         | 10     | 03     |             |           |           |
|           | /01/00 | /31/01 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 10        | 04     | 09     | \$6,360,951 | \$        | \$954,143 |
|           | /01/01 | /30/01 |             | 5,406,808 |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 11        | 10     | 03     | \$6,548,410 | \$        | \$        |
|           | /01/01 | /30/02 |             | 4,911,307 | 1,637,103 |
+-----------+--------+--------+-------------+-----------+-----------+
| 12        | 04     | 09     | \$4,377,914 | \$        | 572,908   |
|           | /01/02 | /30/02 |             | 3,765,006 |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 13        | 10     | 03     | \$4,341,453 |           |           |
|           | /01/02 | /30/03 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 14        | 04     | 09     | \$4,009,633 |           |           |
|           | /01/03 | /30/03 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 15        | 10     | 03     | \$3,497,207 |           |           |
|           | /01/03 | /30/04 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 16        | 04     | 09     | \$1,917,896 |           |           |
|           | /01/04 | /30/04 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 17        | 10     | 03     | \$3,495,425 |           |           |
|           | /01/04 | /30/05 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 18        | 04     | 09     | \$810,018   |           |           |
|           | /01/05 | /30/05 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 19        | 10     | 03     | \$334,963   |           |           |
|           | /01/05 | /30/06 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 20        | 04     | 09     | \$263,472   |           |           |
|           | /01/06 | /30/06 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 21        | 10     | 03     | \$191,372   |           |           |
|           | /01/08 | /30/07 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 22        | 04     | 09     | \$189,945   |           |           |
|           | /01/07 | /30/08 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 23        | 10     | 03     | \$85,961    |           |           |
|           | /01/07 | /30/08 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 24        | 04     | 09     | \$85,962    |           |           |
|           | /01/08 | /30/08 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 25        | 10     | 03     |             |           |           |
|           | /01/08 | /30/09 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 26        | 04     | 09     |             |           |           |
|           | /01/09 | /30/09 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 27        | 10     | 03     |             |           |           |
|           | /01/09 | /30/10 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| 28        | 04     | 09     |             |           |           |
|           | /01/10 | /30/10 |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
|           |        |        |             |           |           |
+-----------+--------+--------+-------------+-----------+-----------+
| TOTAL     |        |        | \           | \$1       | \$        |
|           |        |        | $36,510,582 | 4,083,121 | 3,164,154 |
+-----------+--------+--------+-------------+-----------+-----------+

**ATTACHMENT II**

+-------------+-----------+-------------------------------------------+
| **ADJECTIVE | **RANGE   | **DESCRIPTION**                           |
| RATING**    | OF        |                                           |
|             | POINTS**  |                                           |
+-------------+-----------+-------------------------------------------+
| Excellent   | 100 - 91  | Of exceptional merit; exemplary           |
|             |           | performance in a timely, efficient        |
|             |           | manner; performance meets or exceeds      |
|             |           | contract requirements (e.g., contract     |
|             |           | standards) ; very minor (if any)          |
|             |           | deficiencies with no adverse effect on    |
|             |           | overall performance                       |
+-------------+-----------+-------------------------------------------+
| Very Good   | 90 - 81   | Effective performance; requirements       |
|             |           | accomplished in a timely, efficient       |
|             |           | manner for the most part; substantially   |
|             |           | exceeds minimum contract requirements     |
|             |           | (e.g., Maximum Error Rates) with only     |
|             |           | minor deficiencies.                       |
+-------------+-----------+-------------------------------------------+
| Good        | 80 - 71   | Effective performance; exceeds minimum    |
|             |           | contract requirements (e.g., Maximum      |
|             |           | Error Rates); reportable deficiencies,    |
|             |           | but with little identifiable effect on    |
|             |           | overall performance.                      |
+-------------+-----------+-------------------------------------------+
| S           | 70 - 61   | Performance which meets minimum contract  |
| atisfactory |           | requirements (e.g., Maximum Error Rates); |
|             |           | reportable deficiencies with              |
|             |           | identifiable, but not substantial,        |
|             |           | effects on overall performance.           |
+-------------+-----------+-------------------------------------------+
| Poor/       | 60 - 0    | Overall performance does not meet minimum |
|             |           | contract requirements (e.g., Maximum      |
| Uns         |           | Error Rates); remedial action required in |
| atisfactory |           | one or more areas; numerous deficiencies  |
|             |           | which adversely affect performance.       |
+-------------+-----------+-------------------------------------------+

**ATTACHMENT III**

+-------------+--------------------------------------------------------+
| **E         | **APPLICABLE TARGET FEE DOLLARS**                      |
| VALUATION** |                                                        |
|             | **TARGET FEE SUBJECT TO SECTION 3.3.3**                |
| **PERIOD**  |                                                        |
+-------------+--------------------------------------------------------+
| 1           | \$9,198,632                                            |
+-------------+--------------------------------------------------------+
| 2           | \$9,184,301                                            |
+-------------+--------------------------------------------------------+
| 3           | \$8,859,021                                            |
+-------------+--------------------------------------------------------+
| 4           | \$10,027,593                                           |
+-------------+--------------------------------------------------------+
| 5           | \$11,570,722                                           |
+-------------+--------------------------------------------------------+
| 6           | \$11,440,895                                           |
+-------------+--------------------------------------------------------+
| 7           | \$11,475,748                                           |
+-------------+--------------------------------------------------------+
| 8           | \$11,495,540                                           |
+-------------+--------------------------------------------------------+
| 9           | \$12,121,305                                           |
+-------------+--------------------------------------------------------+
| 10          | \$12,034,555                                           |
+-------------+--------------------------------------------------------+
| 11          | \$11,981,699                                           |
+-------------+--------------------------------------------------------+
| 12          | \$11,814,773                                           |
+-------------+--------------------------------------------------------+
| 13          | \$11,476,235                                           |
+-------------+--------------------------------------------------------+
| 14          | \$11,457,954                                           |
+-------------+--------------------------------------------------------+
| 15          | \$11,981,047                                           |
+-------------+--------------------------------------------------------+
| 16          | \$11,980,694                                           |
+-------------+--------------------------------------------------------+
| 17          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| 18          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| 19          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| 20          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| 21          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| 22          | \$ 14,000                                              |
+-------------+--------------------------------------------------------+
| **TOTAL**   | \$178,184,714                                          |
+-------------+--------------------------------------------------------+

##### ATTACHMENT IV

  ---------------- --------------------- ---------------- ----------------
  SHUTTLE          AVAILABLE             DOLLARS          DOLLARS

  MISSION          PERFORMANCE           EARNED           NOT

                                                          EARNED

  STS 80           \$6,000,000           \$5,000,000      \$1,000,000

  STS 81           \$6,000,000           \$6,000,000      \$0

  STS 82           \$6,000,000           \$6,000,000      \$0

  STS 83           \$6,000,000           \$6,000,000      \$0

  STS 84           \$6,000,000           \$6,000,000      \$0

  STS 85           \$6,000,000           \$6,000,000      \$0

  STS 94           \$6,000,000           \$6,000,000      \$0

  STS 86           \$6,000,000           \$6,000,000      \$0

  STS 87           \$6,000,000           \$6,000,000      \$0

  STS 89           \$6,000,000           \$6,000,000      \$0

  STS 90           \$6,000,000           \$6,000,000      \$0

  STS 91           \$6,000,000           \$6,000,000      \$0

  STS 95           \$6,895,000           \$6,895,000      \$0

  STS 88           \$6,895,000           \$6,895,000      \$0

  STS 96           \$6,895,000           \$6,895,000      \$0

  STS 93           \$6,895,000           \$6,895,000      \$0

  STS-103          \$6,895,000           \$4,025,000      \$2,870,000

  STS-99           \$6,895,000           \$4,025,000      \$2,870,000

  STS-101          \$6,895,000           \$4,025,000      \$2,870,000

  STS-106          \$6,895,000           \$6,895,000      \$0

  STS-92           \$6,895,000           \$5,895,000      \$1,000,000

  STS-97           \$6,895,000           \$6,895,000      \$0

  STS-98           \$6,895,000           \$6,895,000      \$0

  STS-102          \$6,895,000           \$6,895,000      \$0

  STS-100          \$6,895,000           \$6,895,000      \$0

  STS-104          \$6,895,000           \$6,895,000      \$0

  STS-105          \$6,895,000           \$6,895,000      \$0

  STS-108          \$6,895,000           \$6,895,000      \$0

  STS-109          \$6,895,000           \$5,460,000      \$1,435,000

  STS-110          \$6,895,000           \$6,895,000      \$0

  STS-111          \$6,895,000           \$6,895,000      \$0

  STS-112          \$6,895,000           \$6,895,000      \$0
  ---------------- --------------------- ---------------- ----------------

##  

###### ATTACHMENT V

+------+-------------------------------+----------+----------+-------+
| ITEM | Criteria for                  | Required | A        | E     |
|      |                               |          | vailable | arned |
|      | Successful Accomplishment     | Date     | I        |       |
|      |                               |          | ncentive | (Y/N) |
+------+-------------------------------+----------+----------+-------+
| 1a   | AIT (Application Integration  | 06       | \        | Yes   |
|      | Test) and IVT (Independent    | /01/2000 | $500,000 |       |
|      | Verification Test) complete   |          |          |       |
|      | on Delivery 3 content         |          |          |       |
+------+-------------------------------+----------+----------+-------+
| 1b   | AIT and IVT complete on       | 11       | \        | Yes   |
|      | Delivery 4 content            | /01/2000 | $500,000 |       |
+------+-------------------------------+----------+----------+-------+
| 1c   | AIT and IVT complete on       | 07       | \        | Yes   |
|      | Delivery 5 content            | /02/2001 | $500,000 |       |
+------+-------------------------------+----------+----------+-------+
| 1d   | Full TSUP content delivered   | 10       | \        | Yes   |
|      | for operational testing and   | /01/2001 | $500,000 |       |
|      | final certification           |          |          |       |
+------+-------------------------------+----------+----------+-------+
| 1e   | Achieve demonstrated full     | 04       | \$1      | Yes   |
| \*   | capability through "flight    | /30/2002 | ,000,000 |       |
|      | following"                    |          |          |       |
+------+-------------------------------+----------+----------+-------+
| 1f   | Utilize TSUP as prime system  | 09       | \$2      | Yes   |
| \*   | for flight support before     | /30/2002 | ,000,000 |       |
|      | mainframe decommission        |          |          |       |
+------+-------------------------------+----------+----------+-------+
| 2\*  | Completion of the following   | 03       | \$1      | Yes   |
|      | modifications in the          | /27/2002 | ,000,000 |       |
|      | processing flow:              |          |          |       |
|      |                               |          |          |       |
|      | 18509 Water Condensation      |          |          |       |
|      | Collection                    |          |          |       |
|      |                               |          |          |       |
|      | 19029 DDU R&R                 |          |          |       |
|      |                               |          |          |       |
|      | 19033 Orbiter ET/UMB Plate    |          |          |       |
|      | Gap, Delta P                  |          |          |       |
|      |                               |          |          |       |
|      | 19400 MMU Upgrade             |          |          |       |
|      |                               |          |          |       |
|      | 19484 Cargo PC Wiring         |          |          |       |
|      |                               |          |          |       |
|      | 19518 APU R/R Coupling        |          |          |       |
|      | Installation                  |          |          |       |
|      |                               |          |          |       |
|      | 19527 Critical Wire           |          |          |       |
|      | Separation                    |          |          |       |
|      |                               |          |          |       |
|      | 19533 Monoball Production     |          |          |       |
|      | Break                         |          |          |       |
|      |                               |          |          |       |
|      | 19563 Install Micro           |          |          |       |
|      | TAU\'s/SGU\'s                 |          |          |       |
|      |                               |          |          |       |
|      | 19596 AC Bus Separation       |          |          |       |
+------+-------------------------------+----------+----------+-------+

\* It is understood that changes in the manifest may preclude the
contractor from successfully completing this identified program plus fee
objective. In such an instance, if it is determined by the Government
that the contractor is unable to demonstrate successful completion of
this identified program plus fee objective through no fault of its own,
but that the contractor\'s performance would have been expected to have
successfully met the milestones based on Government evaluation of the
completion to date, the criteria will be considered to have been
successfully met and the associated program plus fee will be considered
to have been earned.