[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR16.402-4]

[Page 304]
 
            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 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.