GUIDANCE FOR AWARD FEE CONTRACTING

Mandatory Reference for ADS 302

Office of Procurement
Policy Division
Washington, DC 20523

Overview

An award fee contract provides an additional profit or fee amount that may be awarded, in whole or in part, based upon periodic evaluations of ongoing contractor performance. An award fee arrangement does not include predetermined targets and automatic profit or fee adjustment formulas; instead, the award fee determination is a judgmental one, made unilaterally by the Government and, not, subject to conventional Disputes clause procedures.