48 CFR § 216.403-1 - 216.403-1 Fixed-price incentive (firm target) contracts.
---
identifier: "/us/cfr/t48/s216.403-1"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 216.403-1 - 216.403-1 Fixed-price incentive (firm target) contracts."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "216.403-1"
section_name: "216.403-1 Fixed-price incentive (firm target) contracts."
chapter_number: 2
chapter_name: "DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE"
subchapter_number: "C"
subchapter_name: "CONTRACTING METHODS AND CONTRACT TYPES"
part_number: "216"
part_name: "TYPES OF CONTRACTS"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "41 U.S.C. 1303 and 48 CFR chapter 1."
regulatory_source: "56 FR 36340, July 31, 1991, unless otherwise noted."
cfr_part: "216"
---
# 216.403-1 216.403-1 Fixed-price incentive (firm target) contracts.
(b) *Application.*
(1) The contracting officer shall give particular consideration to the use of fixed-price incentive (firm target) contracts, especially for acquisitions moving from development to production.
(2) The contracting officer shall pay particular attention to share lines and ceiling prices for fixed-price incentive (firm target) contracts, with a 120 percent ceiling and a 50/50 share ratio as the point of departure for establishing the incentive arrangement.
(3) See PGI 216.403-1 for guidance on the use of fixed-price incentive (firm target) contracts.
[76 FR 57679, Sept. 16, 2011]