Federal activity overview — Cost-Plus-Award-Fee
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Cost-Plus-Award-Fee Government Contracts & Federal Records
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Provides for a base fee (which may be zero) plus an award fee evaluated and determined by the government based on the contractor's performance against subjective criteria in the award fee plan.
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FAR 16.405-2
Used when it is neither feasible nor effective to devise predetermined objective incentive targets, but the government wants to motivate excellent contractor performance.
Advantages: Flexible performance incentive, motivates quality and schedule adherence. Disadvantages: Subjective fee evaluation, administrative burden of periodic evaluations, potential contractor disputes.
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Bureauify. (2026). Cost-Plus-Award-Fee — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/cost-plus-award-fee
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