Procurement Contract Types

Submitted by cplusplus on Sat, 02/20/2010 - 00:05

How to identify a cost reimbursable incentive fee contract and cost reimbursable award fee contracts.

 I know just one point if the scope is not thoroughly defined then it can be cost reimbursable, but how to make it a icentive fee or award fee.

Thank you all for the helpful information.,

 

 

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pkukilla

Sat, 02/20/2010 - 03:18

Cost Plus Incentive 

Buyer and seller share in savings based on predetermined % specified in the contract.For instance if there is a cost over run or under run the buyer and seller shares it based on the predetermined %. Please note that Buyer sets Ceiling limit  and beyond  Ceiling limit  Buyer wont share cost over run.

 Cost Plus Award Fee-- This is similar to CPIF  but here award amount is decided in advance for meeting performance objectives defined in the contract. But buyerr pays reward fee after conducing seller performace and it cannot be disputed by seller