Detailed Meeting Notes: Work Share Projections, Contract Modifications, and Taproot Integration Strategy

Comprehensive Status of BDR Lines and Taproot PSI Integration

• Projected Transitions and Deal Structures: The meeting began with a discussion regarding the numerous BDR lines connected to significant organizational changes. A primary focus is the customer's intent to proceed with the Taproot PSI deal. The Taproot personnel are slated to return to Tria and will be transitioned to the BAM contract. It was noted that these Taproot individuals will be brought on as subcontractors directly to Trio.
• Work Share Imbalances: Participants characterized the Taproot transition as a "lopsided trade." Specifically, if Taproot people are taken on FSC dev, it becomes impossible to provide them with their expected work share. Tim, Larry, and Chris are scheduled for a larger strategic discussion next week to address these imbalances, as the direction of the deal reportedly changes during every meeting. Tim's current direction is to not take any more Taproot people since one has already been assimilated, and the billets from FSC dev will not be used to replace the $10$ to $11$ people returning to Tria.
• PSI Deal Status: The PSI Taproot situation is currently considered a $100\%$ internal matter. There are two specific BDR roles the customer is eliminating, which necessitates complex work share discussions. A specific spreadsheet provided by Dawn was utilized to drive the conversation regarding these costs and role distributions.

Detailed Work Share Metrics and Financial Analysis

• Cost-Based Work Share Methodology: It was explicitly stated that work share percentages are calculated based on cost ($Total\,Cost\,for\,Tria$ plus $Direct\,Cost\,for\,Subs$) rather than revenue. Dawn and Devin reviewed a file containing bill rates and total Estimated at Completion ($EAC$) with cost to determine accurate percentages.
• Current and Projected Percentages: The group reviewed the work share status for various subcontractors under the "Auctioneer 1" plan (Option Year 1), which has not yet been executed. The metrics are as follows:
  • BDR: Standing at $19\%$ before the Taproot move, though the contractually mandated target is $20\%$. This reflects a loss of approximately $1,700,000$ to $1,800,000$ in annual revenue.
  • Plan Systems (PSI): Currently at $27\%$ in the execution phase but projected at approximately $25\%$ for the upcoming year.
  • Micro Health: Standing at $18\%$.
  • Intellect Faces: Contributing almost $2\%$ to the share.
  • SB-one: Also noted as being below target in the projected Option Year 1 figures.
• Staffing hours: Current projections for Option Year 1 assume that most personnel are set at $1912\,hours$.

Personnel Transitions and Salesforce Staffing Challenges

• Natalie (PSI): Natalie is departing because her husband accepted a position in Germany. PSI was initially told not to backfill until work share was clarified, but with her departure, PSI's work share would fall below $25\%$. Consequently, Sarah (PSI) will be instructed to proceed with a backfill to maintain their $25\%$ share.
• Salesforce Team Performance: Devin noted that BDR historically performed poorly in providing Salesforce personnel, stating that every person provided for those roles failed to meet customer expectations. As a result, Salesforce roles were transitioned to Intellect Faces, who have performed excellently (with one exception). Effectively, a billet was taken from BDR and not backfilled by them due to non-performance.
• Abby and Brandon: Abby is being removed from her role. Her position as an FAE 2 will be replaced using a future billet, possibly from Scott's upcoming allocations. Brandon will be removed, but BDR will be permitted to backfill his specific role.
• Current Staffing Actions:
  • Anoop: A senior Taproot developer originally under BDR, but now part of the wider Taproot transition.
  • Rashid: His role was originally an FAE 1 vs. FAE 2 discussion to provide more "cushion." He is being replaced by Eric Main.
  • Eric Main: Hired as an FAE 2 in CLIN 6; his start date is confirmed for $07/20$. Support for his mod was requested by Tommy, but the team determined they cannot fund subcontractors for the option year until their own contract mod is fully executed.
  • Carl: An FAE 2 for whom the group wants an "expert" level replacement. Denise indicated a need for experts, meaning the team must request updated Labor Categories ($LCATs$) from the customer, as current $LCATs$ may not support the necessary salary or expertise level.

Option Year 1 (OY1) Contract Modification and Funding

• Mod Receipt and Execution: Tom confirmed receipt of the Option Year 1 contract modification. While project controls (Kathleen) had not yet processed it into the system, Tom has it for execution. The Option Year officially begins on July 10 (Sunday).
• Pricing and Discounts: The government applied an Item Discount to the base contract, including Firm Fixed Price ($FFP$) items. There was a discount of approximately $14,000$ to $15,000$ on CLIN 2 and CLIN 3. The team had requested that Time and Materials ($T\&M$) rates escalate at $1\%$ instead of the proposed $2\%$ year-over-year increment.
• CLIN 7 / iFams Funding: The modification includes the partial exercise of CLIN 7 (iFams support). The government funded $765,000$ for iFams. The total contract ceiling is $10,000,000$, with a remaining 12-month ceiling of $9,000,000$. This is seen as positive news, as it likely incorporates unspent funds from the base period.
• Plan for CLIN 7 Funds: The group plans to hire three new personnel to support the robotics/iFams initiative. These roles will be categorized as Data Analytics 2 (DAS 2) with a maximum salary of $130,000$ each. Jarrett was cited as an example of a previous DAS 2 hire.

Strategic Coordination and Next Steps

• Subcontractor Agreement Revisions: Because the prime contract's rates were discounted/adjusted, the subcontractor agreements ($sub\,k$) must be updated to reflect only a $1\%$ increase in rates to match the prime's escalation. Ceilings for subcontractors will need to be decreased accordingly.
• Monday Internal Meeting: A critical internal meeting is scheduled for Monday (sent by Victoria/Vic) to finalize the Taproot strategy and investigate the work share rework for BDR. This meeting is considered the "pivotal point" for future decision-making.
• Action Items:
  • Tom: To reach out regarding the documentation of the new rates for Option Year 1, as the mod currently only shows funding.
  • Kathleen: To add CLIN 7 to the customer files and update staffing spreadsheets.
  • Devin: To check in with Linda regarding Eric Main's start date and communicate with Tanisha regarding subcontractor modifications.
  • Kimberly: The team aims to "grab" her to discuss the necessity for new, higher-level $LCATs$ to meet the "expert" requirement requested by Denise.