48 CFR · Federal Acquisition Regulation and Defense supplement

FAR and DFARS navigator

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.

Ask the FAR

Try: · · ·

Clear

14 sections with “incentive fees”

  • 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…
  • DFARS 216.402-2 Performance incentives.
    (1) See PGI 216.402-2 for guidance on establishing performance incentives. (2) Contracting officers shall ensure requirements about the payment of incentive fees or the imposition of penalties are included in the solicitation for a contrac…
  • FAR 16.401 General.
    (a) Incentive contracts as described in this subpart are appropriate when a firm-fixed-price contract is not appropriate and the required supplies or services can be acquired at lower costs and, in certain instances, with improved delivery …
  • FAR 42.1503 Procedures.
    …itions in the tables 42-1 or 42-2 of this section. (c)(1) When the contract provides for incentive fees, the incentive-fee contract performance evaluation shall be entered into CPARS. (2) When the contract provides for award fee, the awar…
  • FAR 52.230-6 Administration of Cost Accounting Standards.
    …al costs of labor or material, described at 16.203-1(a)(2)), and 16.207; (2) Fixed-price incentive contracts and subcontracts where the price is not adjusted based on actual costs incurred (FAR Subpart 16.4); (3) Orders issued under indef…
  • 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 16.404 Fixed-price contracts with award fees.
    …ed 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 a fixed price (including norma…
  • FAR 30.604 Processing changes to disclosed or established cost accounting practices.
    …by Executive agency, including any impact the change may have on contract and subcontract incentives, fees, and profits, for each of the following groups: (A) Fixed-price contracts and subcontracts. (B) Flexibly-priced contracts and subco…
  • FAR 30.605 Processing noncompliances.
    …utive agency, including any impact the noncompliance may have on contract and subcontract incentives, fees, and profits, for each of the following groups: (A) Fixed-price contracts and subcontracts. (B) Flexibly-priced contracts and subco…
  • 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…
  • FAR 3.1101 Definitions.
    …oping or approving any contractual documents, to include documents defining requirements, incentive plans, and evaluation criteria. (4) Evaluating contract proposals. (5) Awarding Government contracts. (6) Administering contracts (includ…
  • 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 42.1500 Scope of subpart.
    … 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 and the pa…
  • FAR 52.203-16 Preventing Personal Conflicts of Interest.
    …oping or approving any contractual documents, to include documents defining requirements, incentive plans, and evaluation criteria. (4) Evaluating contract proposals. (5) Awarding Government contracts. (6) Administering contracts (includ…

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.