Which contract is described as fixed price with an award fee based on performance?

Which contract is described as fixed price with an award fee based on performance?

• A. Cost-Plus-Incentive-Fee (CPIF)
• B. Fixed Price Award Fee (FPAF) Contract
• C. Firm Fixed Price (FFP) Contract
• D. Cost-Plus-Award-Fee (CPAF) Contract

Answer: (A)

Fixed-Price Award Fee contracts combine a firm price for the work with a separate award-fee component that is earned based on performance. The base price is fixed, so the contractor knows what the price won’t exceed, but the contractor can receive an additional payment if they meet or exceed the performance criteria laid out in an award-fee plan. Evaluation of performance is done against predefined standards, and the amount of the award fee can vary depending on how well those standards are met. This fits the description of “fixed price with an award fee based on performance.” It differs from cost-based contracts (where reimbursement is tied to costs incurred) and from plain Fixed Price contracts (which have no award fee).

Fixed-Price Award Fee contracts combine a firm price for the work with a separate award-fee component that is earned based on performance. The base price is fixed, so the contractor knows what the price won’t exceed, but the contractor can receive an additional payment if they meet or exceed the performance criteria laid out in an award-fee plan. Evaluation of performance is done against predefined standards, and the amount of the award fee can vary depending on how well those standards are met.

This fits the description of “fixed price with an award fee based on performance.” It differs from cost-based contracts (where reimbursement is tied to costs incurred) and from plain Fixed Price contracts (which have no award fee).