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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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38 sections with “award or incentive fee contracts”

  • DFARS 216.405-2 Cost-plus-award-fee contracts.
    (1) Award-fee pool. The award-fee pool is the total available award fee for each evaluation period for the life of the contract. The contracting officer shall perform an analysis of appropriate fee distribution to ensure at least 40 percent…
  • FAR 16.305 Cost-plus-award-fee contracts.
    A cost-plus-award-fee contract is a cost-reimbursement contract that provides for a fee consisting of (a) a base amount (which may be zero) fixed at inception of the contract and (b) an award amount, based upon a judgmental evaluation by th…
  • FAR 16.404 Fixed-price contracts with award fees.
    Award-fee provisions may be used in fixed-price contracts when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively. Such contracts shall establish …
  • FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper Activity.
    …-plus-fixed-fee contracts, the amount of the fee specified in the contract at the time of award; (2) For cost-plus-incentive-fee conrtracts, the target fee specified in the contract at the time of award, notwithstanding any minimum fee or …
  • FAR 16.405-1 Cost-plus-incentive-fee contracts.
    …are cases, a negative fee. (c) Limitations. No cost-plus-incentive-fee contract shall be awarded unless all limitations in 16.301-3 are complied with.
  • FAR 52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
    … an actual or prospective offeror whose direct economic interest would be affected by the award of a subcontract or by the failure to award a subcontract. (b) The Contractor shall use its best efforts to give Indian organizations and India…
  • FAR 52.244-2 Subcontracts.
    …nd-materials, or labor-hour type; or (2) Is fixed-price and exceeds— (i) For a contract awarded by the Department of Defense, the Coast Guard, or the National Aeronautics and Space Administration, the greater of the simplified acquisition…
  • FAR 16.306 Cost-plus-fixed-fee contracts.
    …ance objectives and schedules. (c) Limitations. No cost-plus-fixed-fee contract shall be awarded unless the contracting officer complies with all limitations in 15.404-4(c)(4)(i) and 16.301-3. (d) Completion and term forms. A cost-plus-fi…
  • FAR 19.705-5 Awards involving subcontracting plans.
    (a) In making an award that requires a subcontracting plan, the contracting officer shall be responsible for the following: (1) Consider the contractor's compliance with the subcontracting plans submitted on previous contracts as a factor …
  • DFARS 207.106 Additional requirements for major systems.
    …ter software, and associated license rights, that were not acquired upon initial contract award; (iv) Address the potential for changes in the sustainment plan over the life cycle of the weapon system or subsystem; and (v) Apply to weapon…
  • FAR 12.207 Contract type.
    …he acquisition of commercial services when— (i) The service is acquired under a contract awarded using— (A) Competitive procedures (e.g., the procedures in 6.102, the set-aside procedures in Subpart 19.5, or competition conducted in accor…
  • FAR 15.408 Solicitation provisions and contract clauses.
    …t is anticipated that certified cost or pricing data will be required or for which any preaward or postaward cost determinations will be subject to part 31. (h) Facilities Capital Cost of Money. The contracting officer shall insert the pro…
  • FAR 16.401 General.
    …signed by the head of the contracting activity, shall be completed for all incentive- and award-fee contracts justifying that the use of this type of contract is in the best interest of the Government. This determination shall be documented…
  • FAR 16.406 Contract clauses.
    …ion in solicitations and contracts when a cost-plus-incentive-fee contract or a cost-plus-award-fee contract is contemplated. (d) The clause at 52.216-10, Incentive Fee, is prescribed in 16.307(d) for insertion in solicitations and contrac…
  • FAR 42.1503 Procedures.
    …t performance evaluation shall be entered into CPARS. (2) When the contract provides for award fee, the award fee-contract performance adjectival rating as described in 16.401(e)(3) shall be entered into CPARS. (d) Agency evaluations of c…
  • FAR 48.104-2 Sharing acquisition savings.
    …act savings are calculated, either through lump-sum payment or as each future contract is awarded. (i) When the instant contract is not an incentive contract, the contractor's share of net acquisition savings is calculated and paid each ti…
  • FAR 52.219-10 Incentive Subcontracting Program.
    …er subcontracts, the Contractor has committed itself in its subcontracting plan to try to award certain percentages to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, smal…
  • FAR 52.230-6 Administration of Cost Accounting Standards.
    …as been submitted for a change in cost accounting practice that is dependent on a contact award and that contract is subsequently awarded, notify the CFAO within 15 days after such award. (2) For any change in cost accounting practice not …
  • FAR 52.248-1 Value Engineering.
    … used in this clause, means savings resulting from the application of a VECP to contracts awarded by the same contracting office or its successor for essentially the same unit. Acquisition savings include— (1) Instant contract savings, whi…
  • DFARS 216.401 General.
    (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 i…
  • FAR 15.407-2 Make-or-buy programs.
    …posed make-or-buy programs as soon as practicable after their receipt and before contract award. (1) When the program is to be incorporated in the contract and the design status of the product being acquired does not permit accurate precon…
  • FAR 16.103 Negotiating contract type.
    …rsonnel shall discuss— (A) How the Government identified the additional risks (e.g., pre-award survey, or past performance information); (B) The nature of the additional risks (e.g., inadequate contractor's accounting system, weaknesses i…
  • FAR 16.402-1 Cost incentives.
    …other incentives without also providing a cost incentive (or constraint). (b) Except for award-fee contracts (see 16.404 and 16.401 (e)), incentive contracts include a target cost, a target profit or fee, and a profit or fee adjustment for…
  • FAR 30.604 Processing changes to disclosed or established cost accounting practices.
    … in cost accounting practice on affected CAS-covered contracts and subcontracts that were awarded based on the previous cost accounting practice; (2) Assists the CFAO in determining whether individual contract price or cost adjustments are…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    …tantive portion of the work; (ii) Is not necessarily the period of time between contract award and final delivery (or final payment), as periods of minimal effort should be excluded; (iii) Should not include periods of performance contain…
  • DFARS 216.401-71 Objective criteria.
    …type is a multiple-incentive contract containing both objective incentives and subjective award-fee criteria (i.e., cost-plus-incentive-fee/award-fee or fixed-price-incentive/award-fee). (3) See PGI 216.401(e) for guidance on the use of aw…
  • DFARS 216.601 Time-and-materials contracts.
    …-delivery contracts) and orders for other than commercial products or commercial services awarded to contractors with adequate accounting systems, a cost-plus-fixed-fee term contract type shall be preferred over a time-and-materials or labo…
  • FAR 15.404-1 Proposal analysis techniques.
    …competitive range and in making the source selection decision; and (ii) Consider whether award of the contract will result in paying unreasonably high prices for contract performance. (3) An offer may be rejected if the contracting office…
  • FAR 19.708 Contract clauses.
    …rom a fully quantified schedule of payments based on actual subcontract achievement to an award-fee approach employing subjective evaluation criteria (see paragraph (c)(3) of this section). The incentive should not reward the contractor for…
  • FAR 42.1500 Scope of subpart.
    …ion. This subpart does not apply to procedures used by agencies in determining fees under award or incentive fee contracts. See subpart 16.4. However, the fee amount paid to contractors should be reflective of the contractor's performance a…
  • FAR 52.203-16 Preventing Personal Conflicts of Interest.
    …ments, incentive plans, and evaluation criteria. (4) Evaluating contract proposals. (5) Awarding Government contracts. (6) Administering contracts (including ordering changes or giving technical direction in contract performance or contr…
  • FAR 3.1101 Definitions.
    …ments, incentive plans, and evaluation criteria. (4) Evaluating contract proposals. (5) Awarding Government contracts. (6) Administering contracts (including ordering changes or giving technical direction in contract performance or contr…
  • FAR 7.503 Policy.
    … include documents defining requirements, incentive plans, and evaluation criteria; (iv) Awarding contracts; (v) Administering contracts (including ordering changes in contract performance or contract quantities, taking action based on ev…
  • FAR 19.705-1 General.
    …viding monetary incentives such as payments based on actual subcontracting achievement or award-fee contracting (see the clause at 52.219-10, Incentive Subcontracting Program, and 19.708(c)). When using any contractual incentive provision b…
  • FAR 48.102 Policies.
    …r program phases, or during other recent comparable production contracts. (ii) Which are awarded on the basis of competition. (e) Value engineering incentive payments do not constitute profit or fee within the limitations imposed by 10 U.…
  • FAR 52.248-3 Value Engineering—Construction.
    … effort. (3) Any VECP may be accepted, in whole or in part, by the Contracting Officer's award of a modification to this contract citing this clause. The Contracting Officer may accept the VECP, even though an agreement on price reduction …
  • DFARS 216.301-3 Limitations.
    …family housing project, contracting officers shall not use cost-plus-fixed-fee, cost-plus-award-fee, or cost-plus-incentive-fee contract types (10 U.S.C. 3323). This applies notwithstanding a declaration of war or the declaration by the Pre…
  • DFARS 242.7502 Policy.
    …ng a contract (reopener) clause that provides for adjustment of the contract amount after award. (3) The contracting officer who incorporates a reopener clause into the contract is responsible for negotiating price adjustments required by …

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.