Trump Order Makes Fixed-Price Contracts the Federal Default

Overview

• The Executive Order signed April 30, 2026 makes fixed-price and performance-based contracts the default for all executive agencies.
• Any cost-reimbursement, time-and-materials, or labor-hour award now requires a written justification, with agency-head approval above $100 million for the Department of War, $35 million for NASA, $25 million for DHS, and $10 million for other agencies, and that authority may be delegated only to a non‑career official.
• OMB guidance is due within 45 days, proposed Federal Acquisition Regulation changes and workforce training are due within 120 days, and agencies must send OMB semiannual tallies and justifications for any approved non‑fixed‑price awards.
• Each agency must review its ten largest non‑fixed‑price contracts within 90 days and seek to modify, restructure, or renegotiate them to add fixed prices or performance incentives where practicable.
• The order preserves exceptions for research and development, pre‑production work on major systems, and contracts tied to emergency, disaster, or contingency response, and it does not create a private right of action.