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6-520 Formal Performance Evaluation. Formal performance evaluations of
the contractor are required by the NAVFACENGCOM Contracting Manual (P-68).
Performance evaluations are prepared at the midpoint of the contract term
for facility support contracts in excess of $100,000. Evaluations are also
prepared at the midpoint of subsequent contract option periods and in cases
where the contract is terminated for default or for the convenience of the
The performance evaluation is no longer considered a task to be performed at
the end of the contract but is now used as an administrative tool and
provides a basis for deciding whether or not to exercise an option to renew
the contract or to terminate for default Formal performance evaluations,
in addition to those required by the Contracting Manual P-68, may be
prepared at any time and are recommended whenever the contractor's
performance is poor. These evaluations are referred to as special
performance evaluations (see 6-750). A copy of the evaluation form,
(NAVFAC 11300/11), is shown in Appendix H.
6-610 General.  Calculating deductions to the contract price for
nonperformed or unsatisfactory work can be a difficult task for the QAE and
is often a source of disputes with the contractor. The key to minimizing
problems is a properly prepared performance requirements summary (PRS),
schedule of deductions, and schedule of indefinite quantity work.
Deductions to the contract price for nonperformed or unsatisfactory work are
taken in accordance with contract Clause E__, "Consequences of the
Contractor's Failure to perform Required Services." In addition, liquidated
damages are assessed to compensate the Government for administrative costs
and other expenses incurred by the Government as a result of defects in the
work.  The maximum allowable defect rate is not used in establishing a
threshold above which deductions are taken. Deductions are taken even when
the MADR is not exceeded.
6-611 Defects.  Deductions are based on the results of the QAEs field
inspection.  Performance of each work requirement is assessed as being
either "Satisfactory" or "Unsatisfactory." If the work requirement is rated
unsatisfactory, it is counted as a "defect".  If the work requirement is not
performed at all (nonperformed), it counts as a "defect." If a defect is,
reworked by the contractor, a credit is given for the rework as discussed at
6-630.  If a defect is reworked by Government personnel or by another
contractor the deduction to the price is calculated as discussed at 6-640.
6-612 Unit Prices. The price of a work requirement is determined by
reference to the weight given to the work requirement as a percentage of the
associated contract requirement in the PRS.
If the contract requirement is included in the firm fixed price portion of
the contract, the total price of the contract requirement is shown in the
schedule of deductions.  The unit price of the contract requirement is
obtained by dividing the total price by the number of occurrences


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