Structuring multiple-incentive contracts.

Federal Acquisition Regulations System 1 2023-10-01 2023-10-01 false Structuring multiple-incentive contracts. 16.402-4 Section 16.402-4 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION CONTRACTING METHODS AND CONTRACT TYPES TYPES OF CONTRACTS Incentive Contracts 16.402–4 Structuring multiple-incentive contracts. A properly structured multiple-incentive arrangement should— (a) Motivate the contractor to strive for outstanding results in all incentive areas; and (b) Compel trade-off decisions among the incentive areas, consistent with the Government's overall objectives for the acquisition. Because of the interdependency of the Government's cost, the technical performance, and the delivery goals, a contract that emphasizes only one of the goals may jeopardize control over the others. Because outstanding results may not be attainable for each of the incentive areas, all multiple-incentive contracts must include a cost incentive (or constraint) that operates to preclude rewarding a contractor for superior technical performance or delivery results when the cost of those results outweighs their value to the Government.