Federal activity overview — Cost-Plus-Incentive-Fee
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Provides for an initially negotiated fee adjusted by a formula based on the relationship of total allowable costs to total target costs. The fee adjustment formula includes a minimum and maximum fee.
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Ask about CPIFCost-Reimbursement
FAR 16.405-1
Used when a cost-reimbursement contract is appropriate and there is enough cost history or data to set meaningful target costs and fee adjustment formulas.
Advantages: Incentivizes cost control while limiting contractor risk, fee can increase with good performance. Disadvantages: Requires accurate cost targets, more complex to administer than CPFF.
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Bureauify. (2026). Cost-Plus-Incentive-Fee — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/cost-plus-incentive-fee
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