[Code of Federal Regulations]

[Title 48, Volume 7]

[Revised as of October 1, 2005]

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

[CITE: 48CFR2937.602]



[Page 44]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                     CHAPTER 29--DEPARTMENT OF LABOR

 

PART 2937_SERVICE CONTRACTING--Table of Contents

 

    Subpart 2937.6_Preference for Performance-Based Contracting (PBC)

 

Sec. 2937.602  Elements of performance-based contracting.





    (a) Performance-based contracting is defined in FAR 37.101 and 

discussed in FAR 37.6. Although FAR Part 37 primarily addresses services 

contracts, PBC is not limited to these contracts. PBC is the preferred 

way of contracting for services. (See exceptions listed in FAR 37.102.) 

Generally, when contract performance risk under a PBC specification can 

be shifted to the contractor to allow for the operation of objective 

incentives, a contract type with objectively measurable incentives 

(e.g., Firm-Fixed-Price, Fixed-Price-Incentive-Fee, or Cost-Plus-

Incentive-Fee) is appropriate. However, when contractor performance 

(e.g., cost control, schedule, or quality/technical) is best evaluated 

subjectively using qualitative measures, a Cost-Plus-Award-Fee contract 

may be used.

    (b) A labor hour level-of-effort contract is not considered a PBC.



                       PARTS 2938-2941 [RESERVED]



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