Definitions Edit

An incentive contract

provides for the vendor to get (1) a specified base fee and (2) the opportunity to earn additional fees (i.e., incentive or award fees) based upon its performance in meeting cost, schedule, or technical goals under the contract. They differ in the basis upon which the additional fee is determined and, in the case of incentive-fee contracts, the circumstances in which they can be used.
is a contract structured to emphasize a specific acquisition objective(s) by tying it to a financial reward.[1]

References Edit

  1. Defense Acquisition University, ACQuipedia, Incentive Contracting - Incentives, Award Fee, Award Term (full-text).

See also Edit

External resources Edit

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