A cost-reimbursement contract type under which the Government reimburses the contractor for allowable, allocable, and reasonable costs incurred in performing the contract. In addition to recovering costs, the contractor may earn an award fee based on the Government’s evaluation of performance against predetermined criteria, such as technical quality, schedule, cost control, management, or customer satisfaction. The contract may also include a base fee, which can be zero. CPAF contracts are commonly used when performance quality cannot be measured solely by objective metrics, making them well suited to complex research, development, and defence programmes where contractor performance is assessed periodically throughout contract execution.
Cost-Plus-Award-Fee (CPAF)
A cost-reimbursement contract where the contractor recovers allowable costs plus an award fee based on evaluated performance.
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Related Glossary Terms
The official compilation of permanent U.S. federal laws, providing the statutory basis for many contracting requirements.
A global classification system used to categorize products and services for procurement and spend analysis.
A unique 12-character identifier assigned via SAM.gov to organizations doing business with the federal government, replacing the DUNS number.
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