# 48 CFR § 216.402-2: 216.402-2 Performance incentives

> Federal · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/ecfr-48-216.402-2

## Section

- **Citation:** 48 CFR § 216.402-2
- **Heading:** 216.402-2 Performance incentives
- **Jurisdiction:** Federal
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** September 22, 2026
- **Source:** Publisher's official text
- **Location:** Title 48—Federal Acquisition Regulations System > CHAPTER 2—DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE > SUBCHAPTER C—CONTRACTING METHODS AND CONTRACT TYPES > PART 216—TYPES OF CONTRACTS > Subpart 216.4—Incentive Contracts

## Text

(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).
[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]

## Nearby sections

- [48 CFR § 216.102 216.102 Policies.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.102.md)
- [48 CFR § 216.104 216.104 Factors in selecting contract type.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.104.md)
- [48 CFR § 216.104-70 216.104-70 Research and development.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.104-70.md)
- [48 CFR § 216.203-4 216.203-4 Contract clauses.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.203-4.md)
- [48 CFR § 216.203-4-70 216.203-4-70 Additional provisions and clauses.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.203-4-70.md)
- [48 CFR § 216.301-3 216.301-3 Limitations.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.301-3.md)
- [48 CFR § 216.306 216.306 Cost-plus-fixed-fee contracts.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.306.md)
- [48 CFR § 216.307 216.307 Contract clauses.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.307.md)
- [48 CFR § 216.401 216.401 General.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.401.md)
- [48 CFR § 216.401-71 216.401-71 Objective criteria.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.401-71.md)
- [48 CFR § 216.402-2 216.402-2 Performance incentives.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.402-2.md)
- [48 CFR § 216.403-1 216.403-1 Fixed-price incentive (firm target) contracts.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.403-1.md)
- [48 CFR § 216.403-2 216.403-2 Fixed-price incentive (successive targets) contracts.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.403-2.md)
- [48 CFR § 216.405-1 216.405-1 Cost-plus-incentive-fee contracts.](https://www.frixlaw.com/law-library/statutes/ecfr-48-216.405-1.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/ecfr-48-216.402-2. Check the current official text before relying on it. Not legal advice.