Federal glossary · Contract type
Cost Plus Award Fee (CPAF, FAR 16.405-2) reimburses allowable costs plus a base fee and an award fee determined by subjective evaluation of contractor performance. The Award Fee Determination Official (AFDO) rates performance against criteria in the Award Fee Plan. Award fee is not subject to the Disputes clause — the AFDO's decision is final.
Example: A 5-year IDIQ with task orders or a GSA Schedule purchase.
Reference record · Sources: Federal Acquisition Regulation · Verified Jul 2, 2026 · Covers definition, governing source
Also known as
Cost Plus Award Fee (CPAF, FAR 16.405-2) reimburses allowable costs plus a base fee and an award fee determined by subjective evaluation of contractor performance. The Award Fee Determination Official (AFDO) rates performance against criteria in the Award Fee Plan. Award fee is not subject to the Disputes clause — the AFDO's decision is final.
is a contract type concept federal contractors and grant writers run into across solicitations, regulations, and award filings
Cost Plus Award Fee describes a specific contract structure that the federal government uses. For example: Example: A 5-year IDIQ with task orders or a GSA Schedule purchase. The contract type controls risk allocation, payment timing, reporting cadence, and how performance is measured — all of which affect whether the work is profitable and whether it fits a contractor's capability profile. Knowing whether a solicitation is structured as a Cost Plus Award Fee versus another vehicle is one of the first signals of how the government expects the work to be executed and what kind of contractor they're trying to attract. Misreading the contract type can mean either over-pricing risk you don't actually carry or under-pricing risk you do. The related terms above name the adjacent vehicles Cost Plus Award Fee most commonly competes with or rolls up under.
Example: A 5-year IDIQ with task orders or a GSA Schedule purchase.
Meaning in practice
Cost Plus Award Fee describes how the government structures the work, price, and risk.
Where you’ll see it
You will see it in solicitations, CLIN schedules, pricing tables, and award summaries. Example: Example: A 5-year IDIQ with task orders or a GSA Schedule purchase..
Common confusion
People often confuse a contract type with a vehicle, a task order, or a program name.
What to do next
Check payment timing, scope, and risk allocation before you bid or price the work.
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