Performance Incentive

Performance incentives may be agreed upon between the contractor and the ordering office on individual orders or in a BPA.

To the maximum extent practicable, ordering activities may consider establishing incentives when performance is critical to the agency’s mission and incentives are likely to motivate the contractor. Any incentive clause that the Schedule user includes should be:

For example, in a service contract, the Quality Assurance Surveillance Plan (QASP) might identify an Acceptable Quality Level (AQL) of 97 percent on-time performance. The order could also provide a priced incentive if the contractor performs on time 99 percent of the time.

The RFQ should identify any performance incentive clause that the ordering office intends to include in the resulting order or BPA.

The ordering office must establish a maximum performance incentive price for the services and/or total solutions on individual orders or a BPA utilizing performance incentives. Additionally, when an order is placed, incentive funding must appear on the order as a separate line item (e.g., “Incentive Fund Pool – not-to-exceed $10,000”).