[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR16.402-4]



[Page 313-314]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 16_TYPES OF CONTRACTS--Table of Contents

 

                    Subpart 16.4_Incentive Contracts

 

Sec. 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



[[Page 314]]



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.