According to the FAR, are delivery or performance incentives authorized on a firm-fixed-price contract?

Delivery or performance incentives are indeed authorized on firm-fixed-price contracts as per the Federal Acquisition Regulation (FAR). This means that contractors can be encouraged to deliver goods and services more efficiently and effectively by offering them additional compensation for exceeding performance standards or for delivering earlier than scheduled.

The rationale behind allowing these incentives is to align the contractor’s objectives with those of the government, promoting a shared interest in timely and high-quality performance. This can also drive innovation and improve outcomes in contracts.

While the implementation of such incentives should be carefully considered within the context of the overall contract structure, the flexibility to include them is clearly outlined in the regulations. Therefore, stating that delivery or performance incentives are authorized aligns accurately with the stipulations set forth in the FAR.

The other potential responses may imply conditional allowances or restrictions that do not align with the FAR's position on this matter. Hence, the affirmative answer indicates the broader acceptance of using incentives as a tool for improving contract performance in firm-fixed-price scenarios.