What are the main types of cost‑plus contracts?

Some  variations are common:

Cost-plus incentive fee (CPIF): Performance-based incentive fee on performance parameters such as cost reduction, schedule performance, etc.

Cost‑plus award fee (CPAF): Award fee based on meeting particular quality or performance standards.

Cost-plus percentage of cost: Contractor is paid a fee that increases with increased costs, in Japan this method is popular in government contracting but in the United States it is only used in limited cases on the basis of incentives to cause cost overruns .

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