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FAR and DFARS › FAR Part 16: Types of Contracts › Subpart 16.4

FAR 16.405-2 Cost-plus-award-fee contracts.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section defines a cost-plus-award-fee contract as a cost-reimbursement contract where the contractor receives a base fee (if set by the contracting officer) plus an award fee for performance in cost, schedule, and technical areas. It matters because it explains how this contract type works and points to additional requirements in 16.401(e).

Applies to: Cost-plus-award-fee contracts

Key terms: cost-plus-award-fee contract · cost-reimbursement contract · base amount · award amount · contracting officer

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

A cost-plus-award-fee contract is a cost-reimbursement contract that provides for a fee consisting of (1) a base amount fixed at inception of the contract, if applicable and at the discretion of the contracting officer, and (2) an award amount that the contractor may earn in whole or in part during performance and that is sufficient to provide motivation for excellence in the areas of cost, schedule, and technical performance. See 16.401(e) for the requirements relative to utilizing this contract type.

Sections it refers to

Sections that refer to it

← 16.405-1 Cost-plus-incentive-fee contracts. · 16.406 Contract clauses. →

Rule changes for FAR Part 16

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 16.405-2 Cost-plus-award-fee contracts · SpendQuery