The Department of Defense recently proposed a rule that would revise guidance for award-fee evaluations to require:
- The incorporation of award-fee plans into all DOD award-fee contracts,
- The use of objective criteria to the maximum extent possible to measure contract performance including, where appropriate, use of formula-based incentives rather than or in addition to an award fee,
- The elimination of provisional award-fee payments, i.e., payments made prior to evaluation of contractor performance, which have been allowed since 2003 in accordance with DFARS 216.405-2, and
- Reservation of at least 40% of the available award fee pool for payment after the final evaluation period.
75 Fed. Reg. 22728-29 (April 30, 2010).