---
kind: "section"
citation: "48 C.F.R. § 16.402-4"
title: "48"
number: "16.402-4"
heading: "Structuring multiple-incentive contracts."
url: "https://uscodex.org/cfr/48/16.402-4"
---

# §16.402-4. Structuring multiple-incentive contracts.


A properly structured multiple-incentive arrangement should—

- (a) Motivate the contractor to strive for outstanding results in all incentive areas; and
- (b) Compel trade-off decisions among the incentive areas, consistent with the Government's overall objectives for the acquisition. Because of the interdependency of the Government's cost, the technical performance, and the delivery goals, a contract that emphasizes only one of the goals may jeopardize control over the others. Because outstanding results may not be attainable for each of the incentive areas, all multiple-incentive contracts must include a cost incentive (or constraint) that operates to preclude rewarding a contractor for superior technical performance or delivery results when the cost of those results outweighs their value to the Government.

## Notes

### Authority

Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

### Source

Source: 48 FR 42219, Sept. 19, 1983, unless otherwise noted.