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                            16.402-4 Structuring multiple-incentive contracts.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart16.016.116.216.316.416.516.616.7
Section16.40116.40216.40316.40416.40516.406
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16.402-4 Structuring multiple-incentive contracts.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.    **Parent topic:**  16.402 Application of predetermined, formula-type incentives.
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