The advantages of cost plus award fee contracts

A Cost Plus Award Fee contract is the best procurement vehicle for the high-tech, one-of-a-kind, development projects that constitute most of NASA'S projects. The use of this type of contract requires more government and contractor effort than any other forms of contracts. An award fee contract is described as an arrangement whereby the government periodically awards a fee consistent with the cost, schedule and technical performance that is achieved by a contractor during a preset period with preset award fee pools. It's the only contracting method where both the government and contractor goals are closely linked. It also has a built-in mechanism to conveniently alter and emphasize program events in order to current external and internal situations. The award fee process also demands good communication between government and contractor participants.