Term -Cost-plus-award-fee contract

Cost-plus-award-fee contract is a cost-reimbursement contract that provides for a fee
consisting of:
   (1) a base amount fixed at inception of
the contract and
   (2) an award amount that the contractor
may earn in whole or in part during performance and that is sufficient
to provide motivation for excellence in such areas as quality,
timeliness, technical ingenuity, and cost-effective management. The
amount of the award fee to be paid is determined by the Government’s
judgmental evaluation of the contractor’s performance in terms of the
criteria stated in the contract. This determination and the methodology
for determining the award fee are unilateral decisions made solely at
the discretion of the Government.

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