Use of award fees on lump-sum contracts

Most public projects are procured using lump-sum contracts after the project designs have been completed. Awarding the contracts to the lowest responsive, responsible bidder does not always result in best-value projects. Award fees may be used when the owner wishes to provide an incentive for improved contractor performance. This paper examines the award fee procedures used by the General Services Administration in the Pacific Northwest and the results that they have obtained by use of award fees.