Fixed Price Incentive Fee Notes: Definitions & Explanations PDF | Download eBooks
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Fixed Price Incentive Fee Definition:
Fixed price incentive Fee (FPIF) contract gives the buyer and seller some flexibility in that it allows for deviation from performance, with financial incentives tied to achieving agreed-upon metrics.
A Guide to the Project Management Body of Knowledge by Project Management Institute
Fixed Price Incentive Fee Notes:
A legal document that lists the terms and conditions of working, agreed by two parties is called a contract. Contracts can be classified into two categories; fixed price contracts and cost-reimbursement contracts. These categories have an impact on procurement and management process. One of the type of fixed price contract is fixed price incentive fee contract. Fixed price incentive fee (FPIF) contract involves a fixed amount of money paid by the buyer to the seller. However, the seller can earn additional money by fulfilling the performance criteria defined by the buyer. The additional amount of money is called incentive. This type of contract provides flexibility in the performance, however, the incurred costs more than the set amount is paid by the seller.
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