41 USC 4711 – Linking of award and incentive fees to acquisition outcomes
(a)
Terms Used In 41 USC 4711
- Contract: A legal written agreement that becomes binding when signed.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
(b)
(c)
(1) ensure that all new contracts using award fees link the fees to acquisition outcomes (which shall be defined in terms of program cost, schedule, and performance);
(2) establish standards for identifying the appropriate level of officials authorized to approve the use of award and incentive fees in new contracts;
(3) provide guidance on the circumstances in which contractor performance may be judged to be “excellent” or “superior” and the percentage of the available award fee which contractors should be paid for the performance;
(4) establish standards for determining the percentage of the available award fee, if any, which contractors should be paid for performance that is judged to be “acceptable”, “average”, “expected”, “good”, or “satisfactory”;
(5) ensure that no award fee may be paid for contractor performance that is judged to be below satisfactory performance or performance that does not meet the basic requirements of the contract;
(6) provide specific direction on the circumstances, if any, in which it may be appropriate to roll over award fees that are not earned in one award fee period to a subsequent award fee period or periods;
(7) ensure consistent use of guidelines and definitions relating to award and incentive fees across the Federal Government;
(8) ensure that each executive agency—
(A) collects relevant data on award and incentive fees paid to contractors; and
(B) has mechanisms in place to evaluate the data on a regular basis;
(9) include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes; and
(10) provide mechanisms for sharing proven incentive strategies for the acquisition of different types of products and services among contracting and program management officials.
(d)