Should the
incentive fee serve as a valid signal for good managers, we would expect funds with
incentive fee provisions in 2004 to show, on average, a superior ability over the following two-year period.
Invariably, programs should embrace an
incentive fee strategy that achieves and sustains maximum contractor performance with a measurable value to the government.
OFPP issued a checklist for handling
incentive fee contracts.
(20)
Incentive fee contacts fared better; still, half of the twenty-seven contracts reviewed failed to meet the target price, a key component of mission success.
Collectively, the Department of Defense (DOD) gives its contractors the opportunity to earn billions of dollars through monetary incentives--known as award fees and
incentive fees. These fees are intended to motivate excellent contractor performance in areas deemed critical to an acquisition program's success, with award fees being appropriate when contracting and program officials cannot devise objective
incentive fee targets related to cost, technical performance, or schedule.
Bondholders would be paid a cash amount of EUR132,273.61 per bond, which includes an
incentive fee of 0.30%.
Ackermann, McEnally, and Ravenscraft [1] study the relation between
incentive fee and risk-adjusted performance using Sharpe ratio as the proxy.
Advent Partner creates efficiencies in the complex partnership accounting process by automating its most difficult facets -- the reallocation of profit for the performance
incentive fee, and the allocation of realized gains and losses for tax purposes.
Unlike fixed fee,
incentive fee is neither constant nor predetermined.
This multiple-award, cost-plus
incentive fee contract is valued at $53.8 million over 3.5 years, assuming all options are exercised.
Certain contracts may also include a onetime
incentive fee payable upon the achievement of a gross revenue or expense target.
In connection with the transaction, Crescent Cap Advisors has agreed to establish a fee structure and amend its current investment management agreement with Crescent BDC to take effect immediately after the closing of the transaction.The fee structure includes annual base management fee rate reduced from 1.50% to 1.25%; six quarters of base management fee waivers, so that only 0.75% will be charged for such time period; annualized
incentive fee hurdle increased from 6% to 7% while maintaining a 17.5% income
incentive fee and six quarters of full waivers of the income-based portion of the
incentive fee.