Utilization of Award Fee Contracts at Navy Regional Contracting Centers

The use of the award fee contract is a unique incentive structure that provides the Government a method of subjective, after-the-fact evaluation of contractor performance. It also affords the Government the additional flexibility to reward and motivate the contractor for above-average performance. Use of cost-plus-award-fee and fixed-price-award-fee contracts has many applications at the Navy Field Contracting Activity Level. The use of award fee contracts has many benefits and costs not associated with the other types of incentive contracts. To better facilitate its use, barriers that are preventing more applications at the field level need to be recognized, and something must be done to overcome them.