incentive type contract

incentive type contract

A contract that may be of either a fixed price or cost reimbursement nature, with a special provision for adjustment of the fixed price or fee. It provides for a tentative target price and a maximum price or maximum fee, with price or fee adjustment after completion of the contract for the purpose of establishing a final price or fee based on the contractor's actual costs plus a sliding scale of profit or fee that varies inversely with the cost but which in no event shall permit the final price or fee to exceed the maximum price or fee stated in the contract. See also cost contract; fixed price type contract.
References in periodicals archive ?
It also provides guidance on determining whether to use an award or incentive type contract.
This approach allows us to accurately track subcontracting accomplishments, which has been useful in our incentive type contracts and also in assessing contract performance in the CPARS (Contractor Performance Assessment Reporting System).
A Services Acquisition Reform Act would focus on longer contract terms and shorter procurement lead-times, and would emphasize performance-based, incentive type contracts.