Federal activity overview — Award Fee CLIN
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Award Fee CLIN Government Contracts & Federal Records
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A contract line item where a portion of the contractor's fee is determined by the government's subjective evaluation of performance against predetermined criteria. An Award Fee Determination Board periodically assesses contractor performance and recommends fee amounts within a range from zero to the maximum award fee. This provides a powerful incentive for excellence.
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Ask about AFIncludes a base fee (fixed minimum, typically 0-3% of estimated cost) and an award fee pool (the maximum additional fee available, typically 5-10%). The Award Fee Determination Board evaluates performance during each evaluation period and the Fee Determination Official (FDO) determines the earned fee. Unearned award fee is typically not rolled over.
Complex service contracts and major system programs where performance quality is critical and objectively measurable incentives are insufficient. Common in large defense programs, space systems, facilities management, and IT outsourcing where the government wants to incentivize innovation, responsiveness, and proactive problem-solving beyond minimum requirements.
FAR 16.405-2 — Cost-Plus-Award-Fee Contracts
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Bureauify. (2026). Award Fee CLIN — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/award-fee-clin
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