Which contract type provides a base fee plus an award amount based on contractor performance?

Which contract type provides a base fee plus an award amount based on contractor performance?

• A. Firm Fixed Price (FFP)
• B. Cost Plus Award Fee (CPAF)
• C. Cost Plus Incentive Fee (CPIF)
• D. Time and Materials (T&M)

Answer: (B)

In this contract type, the government reimburses allowable costs and also provides a fee that includes a baseline amount plus an additional award tied to performance. The award is determined by an evaluation against predefined criteria (such as quality, schedule, and cost targets) and is awarded at the discretion of the awarding agency, up to a maximum. This structure—cost reimbursement plus a performance-based award—is the hallmark of a Cost Plus Award Fee arrangement. This differs from fixed-price types, which do not provide an adjustable award based on performance, and from incentive-based cost-plus arrangements, where the additional fee is tied to a formal formula linked to cost and/or schedule performance rather than a discretionary award plan.

In this contract type, the government reimburses allowable costs and also provides a fee that includes a baseline amount plus an additional award tied to performance. The award is determined by an evaluation against predefined criteria (such as quality, schedule, and cost targets) and is awarded at the discretion of the awarding agency, up to a maximum. This structure—cost reimbursement plus a performance-based award—is the hallmark of a Cost Plus Award Fee arrangement.

This differs from fixed-price types, which do not provide an adjustable award based on performance, and from incentive-based cost-plus arrangements, where the additional fee is tied to a formal formula linked to cost and/or schedule performance rather than a discretionary award plan.