Federal Acquisition Regulation
Fixed-price incentive contracts
FAR 16.204
A fixed-price incentive contract is a fixed-price contract that provides for adjusting profit and establishing the final contract price by a formula based on the relationship of final negotiated total cost to total target cost. Fixed-price incentive contracts are covered in subpart Incentive Contracts (FAR 16.4) , Incentive Contracts. See Fixed-price incentive contracts (FAR 16.403) for more complete descriptions, application, and limitations for these contracts. Prescribed clauses are found at Contract clauses (FAR 16.406) .
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