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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14 sections with “incentive approach”

  • FAR 16.405-1 Cost-plus-incentive-fee contracts.
    (a) Description. The cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs…
  • FAR 19.708 Contract clauses.
    …n solicitations and contracts a clause substantially the same as the clause at 52.219-10, Incentive Subcontracting Program, when a subcontracting plan is required (see 19.702), and inclusion of a monetary incentive is, in the judgment of th…
  • DFARS 215.404-71-2 Performance risk.
    …) Standard. The standard designated range should apply to most contracts. (2) Technology incentive. For the technical factor only, contracting officers may use the technology incentive range for acquisitions that include development, produ…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    … treat a fixed-price contract with redetermination provisions as if it were a fixed-price incentive contract with below normal conditions. (4) Cost-plus contracts shall not receive the working capital adjustment. (5) These types of contra…
  • FAR 48.101 General.
    …, or support costs. (b) There are two value engineering approaches: (1) The first is an incentive approach in which contractor participation is voluntary and the contractor uses its own resources to develop and submit any value engineerin…
  • DFARS 212.7002 Policy.
    … 12.207, contracting officers shall use fixed-price type contracts, including fixed-price incentive contracts, for awards resulting from a CSO. When using a fixed-price incentive contract, see FAR 12.214 and subpart 16.4 for additional requ…
  • FAR 7.503 Policy.
    …; (iii) Approving any contractual documents, to include documents defining requirements, incentive plans, and evaluation criteria; (iv) Awarding contracts; (v) Administering contracts (including ordering changes in contract performance o…
  • FAR 15.203 Requests for proposals.
    …urce actions; (8) Proposal due date and time; and (9) Other relevant information; e.g., incentives, variations in delivery schedule, cost proposal support, and data requirements. (f) Oral RFPs are authorized when processing a written sol…
  • FAR 15.305 Proposal evaluation.
    …'s ability to perform the contract. Cost realism analyses may also be used on fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts (see 15.404-1(d)(3)). (See 37.115 for uncompensated over…
  • FAR 15.404-1 Proposal analysis techniques.
    … realism analysis. (3) Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully understood by com…
  • FAR 16.601 Time-and-materials contracts.
    …. (1) Government surveillance. A time-and-materials contract provides no positive profit incentive to the contractor for cost control or labor efficiency. Therefore, appropriate Government surveillance of contractor performance is required…
  • FAR 35.007 Solicitations.
    …g., unrealistically low cost estimates in proposals for cost-reimbursement or fixed-price incentive contracts). Although cost or price is not normally the controlling factor in selecting a contractor to perform R&D, it should not be disrega…
  • DFARS 207.106 Additional requirements for major systems.
    … embedded software. At a minimum the contracting officer shall— (i) Encourage the use of incentive fees and penalties as appropriate; and (ii) Allow the program manager or comparable requiring activity official exercising program manageme…
  • DFARS 209.104-1 General standards.
    (e) For cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, the prospective contractor's accounting system and related internal controls …

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.