Final answer:
A performance work statement can include incentives such as efficiency targets and cost savings rewards to promote cost-effective work. Contractors may receive a bonus for completing work within budget or achieving cost reduction goals. Sharing cost savings with the contractor also incentivizes them to find innovative and efficient ways to perform the work.
Step-by-step explanation:
A performance work statement can include incentives to perform the work in a cost-effective manner by incorporating elements such as efficiency targets and rewards for achieving cost savings. For example, the statement can specify that the contractor will receive a bonus if they complete the work within a certain budget or achieve specific cost reduction goals. Additionally, the statement can include provisions for sharing the cost savings with the contractor, providing them with a financial incentive to find innovative ways to perform the work more efficiently.