President Trump recently signed the EO “Promoting Efficiency, Accountability, and Performance in Federal Contracting,” mandating fixed-price or performance-based contracts as the default. Any non-fixed-price contract exceeding $100M (DoD) , $35M (NASA) , or $10M (Civilian) now requires a written justification signed personally by the Agency Head.
Why It Matters:
This is a seismic shift in risk allocation. Agencies have 90 days (until July 29, 2026) to identify and renegotiate their top 10 largest non-fixed-price contracts to convert them to fixed-price structures. Firms with heavy cost-plus or T&M backlogs face immediate revenue and risk-profile exposure.
This definitely shifts risk on paper, but I’m not convinced it delivers efficiency in practice, and I will tell you why. Pushing fixed‑price as the default assumes stable requirements and mature acquisition planning, which we rarely see at scale.
FFP only works when the requirements are 100% defined. I expect we’ll see a lot more pushback during Industry Days and the Q&A phase of RFPs. If the agency can’t define the ‘done’ state, contractors shouldn’t be forced to eat the risk of an ambiguous SOW.
FFP only works when the government can clearly articulate what “done” looks like. Without stable, testable requirements, fixed price just turns into undisclosed contingency pricing, or worse, delivery friction and contract mods.
