DAU CON200

Questions:

Incentive contracts are designed to attain specific acquisition objectives by rewarding contractor achievements that exceed stated targets and withholding incentives when contractors fail to attain stated targets. Under these contracts, how is the profit/fee affected?

Options:

1. Profit/fee does not change regardless of the contractors performance under the contract.

2. Profit/fee increases when contract performance targets are surpassed.

3.Profit/fee incentives are tied only to the contractors achievement of subjective criteria.

4. Profit/fee decreases when contract performance targets are surpassed.