[Code of Federal Regulations]
[Title 48, Volume 3]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR216.405-1]

[Page 110]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                    CHAPTER 2--DEPARTMENT OF DEFENSE
 
PART 216--TYPES OF CONTRACTS--Table of Contents
 
                   Subpart 216.4--Incentive Contracts
 
Sec. 216.405-1  Cost-plus-incentive-fee contracts.

    (b) Application.
    (3) Give appropriate weight to basic acquisition objectives in 
negotiating the range of fee and the fee adjustment formula. For 
example--
    (A) In an initial product development contract, it may be 
appropriate to provide for relatively small adjustments in fee tied to 
the cost incentive feature, but provide for significant adjustments if 
the contractor meets or surpasses performance targets.
    (B) In subsequent development and test contracts, it may be 
appropriate to negotiate an incentive formula tied primarily to the 
contractor's success in controlling costs.

[56 FR 36340, July 31, 1991. Redesignated at 63 FR 11529, Mar. 9, 1998]