---
kind: "section"
citation: "48 C.F.R. § 216.402-2"
title: "48"
number: "216.402-2"
heading: "Performance incentives."
url: "https://uscodex.org/cfr/48/216.402-2"
---

# §216.402-2. Performance incentives.

- (1) See PGI 216.402-2 for guidance on establishing performance incentives.
- (2) Contracting officers shall ensure requirements about the payment of incentive fees or the imposition of penalties are included in the solicitation for a contract for the engineering and manufacturing development or production of a weapon system, including embedded software, if the program manager or comparable requiring activity official exercising program manager responsibilities includes—
  - (i) Provisions for the payment of incentive fees to the contractor, based on achievement of design specification requirements for reliability and maintainability of weapons systems under the contract; or
  - (ii) The imposition of penalties to be paid by the contractor to the Government for failure to achieve such design specification requirements ([10 U.S.C. 4328](/usc/10/4328.md)).

## Notes

### Amendments

[71 FR 39007, July 11, 2006, as amended at 84 FR 58333, Oct. 31, 2019; 87 FR 15818, Mar. 18, 2022; 87 FR 76992, Dec. 16, 2022]

### Authority

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

### Source

Source: 56 FR 36340, July 31, 1991, unless otherwise noted.

### Amendments

[71 FR 39007, July 11, 2006, as amended at 84 FR 58333, Oct. 31, 2019; 87 FR 15818, Mar. 18, 2022; 87 FR 76992, Dec. 16, 2022]