Web Reference: Mar 13, 2026 · 16.405-1 Cost-plus-incentive-fee contracts. (a) Description. The cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. CPIF contracts are cost-reimbursement contracts in which the contractor receives a fee that changes with his or her performance. The change is determined by comparing actual allowable costs to the previously fixed target cost. Contractors are given a better fee if they control costs well, but if costs become higher than expected, the fee drops. Nov 8, 2023 · In this episode of Contracting Conversations, we explore the complex world of Cost-Plus-Incentive-Fee (CPIF) contracts with Dave Lewis, the Learning Asset Manager for CON 7620.
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