English to German Bus/Financial Law: Contract(s)

Fixed Price Award Fee (FPAF) (FAR 16.404)

Award-fee provisions may be used in fixed-price contracts when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively. Such contracts shall establish a fixed price (including normal profit) for the effort. This price will be paid for satisfactory contract performance. Award fee earned (if any) will be paid in addition to that fixed price. Fixed price award fee (FPAF) contracts provide for periodic evaluation of the contractor's performance against an award-fee plan.