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NOTE TO SPECIFICATION WRITER: This attachment shall be included in all specifications. The user must
add to this attachment the "Table of Sample Sizes" for both Normal and Minimum Sampling Levels, and the "Table
of Adjustment Factors for Random Sampling" from the NAVFAC MO-327.
The Government reserves the right to start surveillance using RSED at any time during the contract, to
discontinue the use of RSED, and to resume the use of RSED without notice to the Contractor. The Government
will use the attached tables entitled "Table of Sample Sizes for Normal Sampling Levels" and "Table of Sample
Sizes for Minimum Sampling Levels" to determine sample sizes for RSED. The "Table of Sample Sizes for
Minimum Sampling Levels" represents the minimum sample sizes the Government will use for extrapolation. The
Contracting Officer may increase the size of the samples to that of the "Table of Sample Sizes for Normal
Sampling Levels" or greater at his or her discretion.
2. The Maximum Allowable Defect Rate (MADR) is the defect rate specified for each work requirement in column
6 of the Performance Requirements Summary (PRS). A defect rate which exceeds the MADR is an indicator that
the Contractor's quality control program may be unsatisfactory. The MADR does not represent a threshold above
which payment deductions are taken. Deductions are taken for all defects (with credit for rework to the extent
appropriate) irrespective of whether the MADR was exceeded or not. When a defect rate exceeds the MADR, the
Contractor will be notified and appropriate administrative actions will be taken in addition to the payment
deductions discussed above. The MADR for each work requirement is shown in the PRS Table in Attachment J-E
3. The following example shows how to calculate the Contractor's payment when RSED is applied for
sureveillance. It is based on a contract requirement for services containing the following work requirements:
Timely Completion (weight 15%), Quality of Work (weight 75%), and Complete Documentation(weight 10%) with
a total price per service of $70.00 with 1,000 services required during the billing period. Actual work
requirements and weights are included in the PRS Table, Attachment J-E .

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