[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR37.602-4]

[Page 742]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 37_SERVICE CONTRACTING--Table of Contents
 
               Subpart 37.6_Performance-Based Contracting
 
Sec.  37.602-4  Contract type.

    Contract types most likely to motivate contractors to perform at 
optimal levels shall be chosen (see subpart 16.1 and, for research and 
development contracts, see 35.006). To the maximum extent practicable, 
performance incentives, either positive or negative or both, shall be 
incorporated into the contract to encourage contractors to increase 
efficiency and maximize performance (see subpart 16.4). These incentives 
shall correspond to the specific performance standards in the quality 
assurance surveillance plan and shall be capable of being measured 
objectively. Fixed-price contracts are generally appropriate for 
services that can be defined objectively and for which the risk of 
performance is manageable (see subpart 16.1).