What is Cost Plus Incentive Fee Contract (CPIF)?

Think of a Cost Plus Incentive Fee (CPIF) contract as a deal that rewards efficiency and savings. It’s like hiring a builder to construct a house and telling them, “I’ll cover the costs, and if you manage to complete the project under budget or finish ahead of schedule, I’ll give you a bonus as a thank-you for saving us some money and time.” This contract motivates the contractor to work efficiently and economically, as they have a chance to earn additional incentives for doing a great job and being cost-effective.