All glossary terms
Contract Types & Pricing

Fixed-Price-Incentive-Fee

Contract with target cost, target profit, ceiling price, and profit-adjustment formula.

Related terms

Basic Ordering Agreement
Written understanding between agency and contractor for future contract terms — not itself a contract.
Blanket Purchase Agreement
Simplified method for repetitive purchases from qualified sources — like a charge account.
Contract Line Item Number
Unique identifier for each separately priced item or service in a contract.
Cost Accounting Standards
Rules governing how contractors accumulate and report costs on government contracts.
Cost-Plus-Award-Fee
Cost-reimbursement contract with a base fee and an award fee earned based on performance.
Cost-Plus-Fixed-Fee
Cost-reimbursement contract: allowable costs reimbursed plus an agreed-upon fixed fee.
Cost-Plus-Incentive-Fee
Cost-reimbursement contract where fee adjusts based on actual costs vs. target costs.
Direct Cost
A cost specifically identified with a particular contract (e.g., labor, materials on that contract).
Earned Value Management
Methodology integrating scope, schedule, and cost data to measure project performance.
Firm-Fixed-Price
Contract providing a fixed price regardless of actual contractor costs. Greater risk on the contractor.
Fixed-Price-Incentive-Fee
Contract with target cost, target profit, ceiling price, and profit-adjustment formula.
Forward Pricing Rate Agreement
Negotiated agreement establishing billing rates for future contract pricing.