48 CFR § 16.404 - 16.404 Fixed-price contracts with award fees.

---
identifier: "/us/cfr/t48/s16.404"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 16.404 - 16.404   Fixed-price contracts with award fees."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "16.404"
section_name: "16.404   Fixed-price contracts with award fees."
chapter_number: 1
chapter_name: "FEDERAL ACQUISITION REGULATION"
subchapter_number: "C"
subchapter_name: "CONTRACTING METHODS AND CONTRACT TYPES"
part_number: "16"
part_name: "TYPES OF CONTRACTS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113."
regulatory_source: "48 FR 42219, Sept. 19, 1983, unless otherwise noted."
cfr_part: "16"
---


# 16.404 16.404   Fixed-price contracts with award fees.

Award-fee provisions may be used in fixed-price contracts when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively. Such contracts shall establish a fixed price (including normal profit) for the effort. This price will be paid for satisfactory contract performance. Award fee earned (if any) will be paid in addition to that fixed price. See 16.401(e) for the requirements relative to utilizing this contract type.

[74 FR 52859, Oct. 14, 2009]