Section 27-2406. INCENTIVE CONTRACTS

 

2406.1The contracting officer may use an incentive contract when a firm-fixed-price contract is not appropriate and the required goods or services can be procured at lower costs and, in certain instances, with improved delivery or technical performance, by relating the amount of profit or fee payable under the contract to the contractor's performance.

 

2406.2The contracting officer may use an incentive contract when it is necessary to establish reasonable and attainable targets that are clearly understandable by the contractor, and to provide appropriate incentive arrangements designed to motivate contractor efforts and discourage contractor inefficiency and waste.

 

2406.3When predetermined formula-type incentives on technical performance or delivery are included, increases in profit or fee shall be provided only for achievement that surpasses the targets, and decreases shall be provided for to the extent that targets are not met.

 

2406.4The contracting officer shall apply incentive increases or decreases to performance targets rather than minimum performance requirements.

 

2406.5Incentive contracts may be fixed-price incentive contracts or cost-reimbursement incentive contracts.

 

2406.6Cost-reimbursement incentive contracts shall be subject to the provisions of §§2405.1, 2405.2, and 2405.3.

 

source

Final Rulemaking published at 35 DCR 1560 (February 26, 1988).