§ 1816.404-273 - Award fee evaluations.

(a) Award fee evaluations are either interim or final. On service contracts where the contract deliverable is the performance of the service over any given time period, contractor performance is definitively measurable at each evaluation period. In these cases, all evaluations are final, and the contractor keeps the fee earned in any period regardless of the evaluations of subsequent periods. Unearned award fee in any given period in a service contract is lost and shall not be carried forward, or “rolled-over,” into subsequent periods.

(b) On other contracts such as study, design, or hardware, where the true quality of contractor performance cannot be measured until the end of the contract, only the last evaluation is final. At that point, the total contract award fee pool is available, and the contractor's total performance is evaluated against the award fee plan to determine total earned award fee. Interim evaluations are also done to monitor performance prior to contract completion and provide feedback to the contractor on the Government's assessment of the quality of its performance. Interim evaluations are also used to establish the basis for making professional award fee payments.

(c) Provisional award fee payments may be included in the contract and should be negotiated on a case-by-case basis. For service contracts, provisional payments may be made in amounts up to 80 percent of the current period's available amount. For other contracts, the amount of the provisional award fee payment is determined by applying the lesser of the interim evaluation score (see 1816.404-275) or 80 percent of the fee allocated to that period. The provisional award fee payments are superseded by the fee determination made in the final evaluation at contract completion. The Government will then pay the contractor, or the contractor will refund to the Government, the difference between the final award fee determination and the cumulative provisional fee payment.

(d) The Fee Determination Official's rating for both interim and final evaluations will be provided to the contractor within 45 calendar days of the end of the period being evaluated. Any fee, provisional or final, due the contractor will be paid no later than 60 calendar days after the end of the period being evaluated.