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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19 sections with “incentive-fee contract”

  • 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 16.304 Cost-plus-incentive-fee contracts.
    A cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for an initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. Cost-plus-incentiv…
  • DFARS 216.405-1 Cost-plus-incentive-fee contracts.
    See PGI 216.405-1 for guidance on the use of cost-plus-incentive-fee contracts.
  • FAR 16.406 Contract clauses.
    … is prescribed in 16.307(a) for insertion 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 …
  • FAR 49.115 Settlement of terminated incentive contracts.
    …under the incentive provisions are included in the termination settlement. (b) Cost-plus-incentive-fee contracts. The TCO shall settle terminated cost-plus-incentive-fee contracts under the clause at 52.249-6, Termination (Cost-Reimburseme…
  • FAR 15.408 Solicitation provisions and contract clauses.
    … fixed-price incentive contract is contemplated; or (2) Its Alternate II, if a cost-plus-incentive-fee contract is contemplated. (b) Price Reduction for Defective Certified Cost or Pricing Data. The contracting officer shall, when contrac…
  • FAR 16.306 Cost-plus-fixed-fee contracts.
    …red is unknown; or (ii) The contract is for development and test, and using a cost-plus- incentive-fee contract is not practical. (2) A cost-plus-fixed-fee contract normally should not be used in development of major systems (see part 34)…
  • FAR 16.307 Contract clauses.
    …t the clause at 52.216-10, Incentive Fee, in solicitations and contracts when a cost-plus-incentive-fee contract is contemplated. (e)(1) The contracting officer shall insert the clause at 52.216-11, Cost Contract—No Fee, in solicitations a…
  • FAR 22.103-5 Contract clauses.
    … cost-reimbursement contract for operation of vessels is contemplated, or (b) a cost-plus-incentive-fee contract that will provide a swing from the target fee of at least plus or minus 3 percent and a contractor's share of at least 10 perce…
  • FAR 35.006 Contracting methods and contract type.
    … performance incentives is desirable and practicable, fixed-price incentive and cost-plus-incentive-fee contracts should be considered in that order of preference. (d) When levels of effort can be specified in advance, a short-duration fix…
  • DFARS 216.405-2 Cost-plus-award-fee contracts.
    … cost-plus-fixed-fee contracts apply; or (2) Developing objective targets so a cost-plus-incentive-fee contract can be used; or (B) For either engineering development or operational system development acquisitions that have specifications…
  • FAR 15.407-2 Make-or-buy programs.
    …est of the Government. If this situation occurs in any fixed-price incentive or cost-plus-incentive-fee contract, the contracting officer shall specify these items in the contract and state that they are subject to paragraph (d) of the clau…
  • FAR 42.1503 Procedures.
    … 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 award fee-contract perfo…
  • FAR 52.216-10 Incentive Fee.
    …in 16.307(d), insert the following clause in solicitations and contracts when a cost-plus-incentive-fee contract (other than a facilities contract) is contemplated: Incentive Fee (JUN 2011) (a) General. The Government shall pay the Contra…
  • DFARS 216.301-3 Limitations.
    …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 President of a national eme…
  • DFARS 216.401 General.
    …ng 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…
  • DFARS 216.401-71 Objective criteria.
    …ossible to measure contract performance. Objective criteria are associated with cost-plus-incentive-fee and fixed-price-incentive contracts. (2) When objective criteria exist but the contracting officer determines that it is in the best in…
  • FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper Activity.
    … 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 “fee floor” specified in t…
  • FAR 52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
    …ng: (i) The estimated cost of a cost-type contract. (ii) The target cost of a cost-plus-incentive-fee prime contract. (iii) The target cost and ceiling price of a fixed-price incentive prime contract. (iv) The price of a firm-fixed-pric…

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.