Federal activity overview — Fixed-Price Incentive (Successive Targets)
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Specifies an initial target cost, initial target profit, initial profit adjustment formula, production point at which firm targets will be negotiated, and a ceiling price. Firm targets are established later in the contract period.
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FAR 16.403-2
Appropriate when available cost or pricing data is not sufficient to permit realistic negotiation of firm targets at inception, but adequate data will become available early in performance.
Advantages: Allows targets to be refined as cost data improves. Disadvantages: Requires two rounds of target negotiation, complex contract administration.
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Bureauify. (2026). Fixed-Price Incentive (Successive Targets) — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/fixed-price-incentive-successive-targets
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