Overview
- The executive order, issued April 30, 2026, directs agencies to use fixed-price, performance-based contracts as the first choice for federal purchasing.
- Fixed-price deals set a firm total for defined work and put cost risk on the contractor, unlike cost-reimbursement contracts that repay allowable costs plus a fee.
- OMB must issue implementation guidance within 45 days and the procurement policy chief must propose FAR rule changes and training within 120 days, with agencies using FAR deviations in the interim.
- Agencies must, within 90 days, review their ten largest non‑fixed‑price contracts and start reporting approved exceptions to OMB every six months.
- Using other than fixed-price now requires written justification, agency-head approval above set dollar limits ($100 million War, $35 million NASA, $25 million DHS, $10 million others), and fits limited exceptions for emergencies and certain R&D.