1. Careers
You can opt-out at any time. Please refer to our privacy policy for contact information.

Discuss in my forum

incentive type contract

By

Definition: (DOD) A contract that may be of either a fixed price or cost reimbursement nature, with a special provision for adjustment of the fixed price or fee. It provides for a tentative target price and a maximum price or maximum fee, with price or fee adjustment after completion of the contract for the purpose of establishing a final price or fee based on the contractor's actual costs plus a sliding scale of profit or fee that varies inversely with the cost but which in no event shall permit the final price or fee to exceed the maximum price or fee stated in the contract.

See also cost contract; fixed price type contract.

©2014 About.com. All rights reserved.