FAR and DFARS › DFARS Part 216: Types of Contracts › Subpart 216.4
DFARS 216.401 General.
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 DFARS section addresses general rules for incentive-fee and award-fee contracts. It says that a determination and findings justifying the use of such a contract may be signed by the head of the contracting activity or a designee at specified levels. It also requires that award-fee plans be incorporated into all award-fee type contracts.
Applies to: Contracting activities using incentive-fee or award-fee contracts
What it requires
- Incorporate award-fee plans required in FAR 16.401(e) into all award-fee type contracts.
- Follow the procedures at PGI 216.401(e) when planning to award an award-fee contract.
Key terms: award-fee contract · incentive-fee contract · determination and findings · head of contracting activity · award-fee plan
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(c) See PGI 216.401(c) for information on the Defense Acquisition University Award and Incentive Fees Community of Practice.
(d) The determination and findings justifying that the use of an incentive- or award-fee contract is in the best interest of the Government, may be signed by the head of contracting activity or a designee—
(i) No lower than one level below the head of the contracting activity for award-fee contracts; or
(ii) One level above the contracting officer for incentive-fee contracts.
(e) Award-fee plans required in FAR 16.401(e) shall be incorporated into all award-fee type contracts. Follow the procedures at PGI 216.401(e) when planning to award an award-fee contract.
Sections it refers to
- 16.401 General.
Sections that refer to it
- 216.401-71 Objective criteria.
← 216.307 Contract clauses. · 216.401-71 Objective criteria. →
Rule changes for DFARS Part 216
- Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2024-D002) ↗ · final rule 2025-08-25 · effective 2025-10-01
- Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2024-D002) ↗ · proposed 2025-01-17 · comments due 2025-03-18
- Defense Federal Acquisition Regulation Supplement: Task Order and Delivery Order Contracting for Architectural and Engineering Services (DFARS Case 2023-D007) ↗ · final rule 2024-12-18 · effective 2024-12-18
- Defense Federal Acquisition Regulation Supplement: Task Order and Delivery Order Contracting for Architectural and Engineering Services (DFARS Case 2023-D007) ↗ · proposed 2024-07-29 · comments due 2024-09-27
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.