Fixed-Price Incentive Contract

Understanding the Mechanics of Fixed-Price Incentive (Firm Target) (FPIF) Contracts

Format: Live webinar
Duration: Approx. 90 minutes
Trainer: Jeff Cuskey
NCMA Certifications: 1.5 CPEs
APTAC CPP Certification: 0.75 ATC
APTAC CPP BOK: C.18 Contract Types (Core)

Federal Acquisition Regulation (FAR) 16.403-1 provides the following description of an FPIF contract but does not offer insight to contractors on how to structure the FPIF pricing arrangement or how to alter the allocation of cost risk between the contractor and government.

An FPIF contract specifies a target cost, a target profit, a price ceiling (but not a profit ceiling or floor), and a profit adjustment formula. These elements are all negotiated at the outset.

This course provides insight into the mechanics of FPIF contracts and a framework to analyze proposed FPIF contract elements and pricing arrangements. Additionally, the presenter will explain and demonstrate how contractors can alter FPIF pricing arrangements to shift greater cost risk onto the government and improve their potential profitability.

Here is a summary of what you’ll learn:

* Factors affecting contract type selection.

* The major differences between fixed-price and cost reimbursement contracts and the degree and timing of risk assumed by a contractor under various contract types.

* The criteria for the use of FPIF contracts, regulatory limitations, contract elements, and typical applications in government contracts.

* The Contractor’s performance obligations under FPIF contracts.

* How FPIF profit adjustment formulas and cost-sharing ratios work.

* How to calculate and shift the FPIF’s Point of Total Assumption (PTA).

* How to calculate the final price and profit based on the FPIF pricing arrangement and the actual costs incurred under the contract.

* How to analyze proposed FPIF pricing arrangements.

* How a business can alter the FPIF contract elements to produce a more favorable pricing arrangement, shift more cost risk onto the government and increase their potential profits.

Who is the target audience?

* New and seasoned government contractors who may have developed new products or systems based upon a prototype and are concerned about the risk of performing initial and early production under a Firm-Fixed Price Contract.

* Government contractors and Procurement Technical Assistance Center (PTAC) counselors who want to better understand the mechanics of FPIF contracts and how to structure more favorable FPIF pricing arrangements.

Meet Your Trainer:

Jeff Cuskey

Jeff Cuskey is an acquisition and contracting advisor with over 30 years of experience in federal and defense contracting. Recently, he helped establish successful Procurement Technical Assistance Centers (PTACs) in Monterey, CA and Bozeman MT. In addition to providing independent government contracting consulting and educational services, he developed and taught defense-focused MBA acquisition, contracting, and program management courses for over 12 years at the Naval Postgraduate School (NPS), Graduate School of Business & Public Policy. Jeff is a retired U.S Navy Commander. During his 20 years of active naval service, he held various leadership, acquisition and contracting positions, including assignments as the Navy’s multibillion-dollar F/A-18 Program Chief Financial Officer and F/A-18 Super Hornet Deputy Contracting Officer.

Jeff holds a BA Degree in Political Science from the University of Delaware and an MS Degree in Acquisition and Contracting from the Naval Postgraduate School, Monterey, CA. Additionally, he has earned the Certified Professional Contracts (CPCM) and Certified Federal Contracts Manager (CFCM) professional designations from the National Contracts Management Association (NCMA), the Certified Schedules Contracts Manager (CSCM) professional designation from Centre Law & Consulting, and the Certified Procurement Professional (CPP) designation from the Association of Procurement Technical Assistance Centers (APTAC). Jeff enjoys sharing his extensive knowledge and insight into government contracting issues, regulations and processes, and helping businesses become successful government contractors.


Feb 23 2018


10:00 am - 11:30 am

Local Time

  • Timezone: America/New_York
  • Date: Feb 23 2018
  • Time: 10:00 - 11:30


Jeff Cuskey


Jeff Cuskey