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The Complete Guide to Government Contract Types by Kenneth R. Segel

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CHAPTER 11

Fixed-Price-Award-Fee Contract

The fixed-price-award-fee (FPAF) contract is a viable contractual vehicle when the government seeks to incentivize a contractor’s performance and an FFP contract is inappropriate for the effort. The government must consider the following factors when deciding whether to enter into an FPAF contract: cost to administer, contract complexity, program criticality, and the availability of government personnel to monitor and evaluate performance. If, after careful deliberation, the anticipated benefits outweigh the time and cost needed to administer the effort, an FPAF contract may be an excellent tool to motivate a contractor to perform above and beyond its usual standards.

Aside from the cost-plus-a-percentage-of-cost ...

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