Safeguard Data-Processing System: A Cost-Plus-Award-Fee Contract for a Large Software Development Program
Whiting Williams, J. E. Petersen · Bell System Technical Journal · 1975
This paper describes the Cost-Plus-Award-Fee (CPAF) contract that has been used to control a major software development effort, amounting to approximately $30 million annually. The amount of the award fee is determined periodically, based on a unilateral judgment of supplier performance. The lessons learned in handling a contract of this type and magnitude are summarized. The cpaf contract has proven to be a good means of ensuring the continued attention of supplier management that is necessary for obtaining high performance on time.