Contract Target Price (CTP)
EVM Terms
Reviewed by forProject Technology - updated Sep 2026
Quick definition: Contract Target Price (CTP), for Government contracts, is the negotiated contract cost plus the target profit or fee.
CTP adds the contractor's target profit or fee on top of the Contract Target Cost, giving the price point used as the baseline for cost-sharing arrangements on incentive contracts. It's distinct from the final price actually paid, which can move up or down depending on actual cost performance.
Why it matters
On incentive-type contracts, CTP is the reference point used to determine how much of a cost overrun or underrun gets shared between the contractor and the Government. Without it, there'd be no agreed baseline for calculating that share.
Also known as
N/A
Used in
CTP = Contract Target Cost (CTC) + target profit or fee, primarily on incentive-type contracts
See also
FAQ
Is CTP the same as the final contract price?
Not necessarily — CTP is the negotiated target, while the final price on an incentive contract can move based on actual cost performance and the agreed cost-sharing formula.
Which contract types use a Contract Target Price?
It's mainly relevant to incentive-type contracts, such as Cost Plus Incentive Fee or Fixed Price Incentive Fee arrangements, where cost performance affects the final price or fee.
Definition maintained by forProject Technology.
© 2026 forProject Technology, Inc.
© 2026 forProject Technology, Inc.
