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Project Management & Agile · Advanced

Cost Plus Award Fee Contract (CPAF)

Cost-reimbursable contract in which the fee is based on a subjective evaluation of performance by the buyer.

Definition

The award fee is determined solely by the buyer based on criteria in the contract and is usually not subject to appeal.

Example

The buyer awards 85% of the available fee based on quarterly reviews.

Exam tip

Award fee is subjective; incentive fee is formula-based.

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