President Trump signed Promoting Efficiency, Accountability, and Performance in Federal Contracting on April 30, 2026. The order makes fixed-price and performance-based contracts the default for federal procurement, requires written justification for any non-fixed-price award above set agency thresholds, and directs agencies to begin restructuring their existing portfolios. The administration's fact sheet points to roughly $120 billion obligated on cost-reimbursement consulting contracts in FY2024 as the policy target.
Within 90 days of the order, federal agency heads must have reviewed and started renegotiating their ten largest non-fixed-price contracts. That deadline is theirs, not yours. But if you hold a cost-reimbursement, time-and-materials, or labor-hour contract with a federal agency, the call is coming. The only question is whether you have an answer ready.
This affects nearly every services firm doing federal work. Here is what the order requires, who is exempt, and what to do this quarter.
What the order actually requires
Every deadline in the order runs from April 30, 2026, the date it was signed. The countdown is already running. The deadlines most contractors are focused on, the 90-day actions, are not the most important.
| Deadline (from April 30) | What happens |
|---|---|
| Within 45 days | OMB issues implementation guidance to agencies |
| Within 90 days | Agency heads review and begin to modify, restructure, or renegotiate their top 10 largest non-fixed-price contracts |
| Within 90 days | Agency heads submit their first semi-annual report showing their number of, value of, and written justifications for, any non-fixed-price contracts |
| Within 120 days | Federal Procurement Policy Administrator proposes FAR amendments and training program |
| Semi-annually thereafter | Agencies report to OMB on every non-fixed-price contract approval |
For new contracts, fixed-price is now the default. Anything else requires written justification to the agency head, with thresholds that vary by agency: $100 million at the Department of War, $35 million at NASA, $25 million at DHS, and $10 million everywhere else. Below those numbers, contracting officers still have discretion, but every approval gets reported up.
The 45-day OMB guidance is the deadline contractors should be watching most closely. That is when the operational rules get written: what justifications count, what exception language agencies can use, how the FAR clauses will read. Until that document lands, agencies are improvising.
Who is exempt and who is not
The order carves out two categories of work. Emergency response, major disaster, and contingency operations are exempt. So is research and development or pre-production work for major systems acquisition under FAR Parts 34 and 35. Everything else is in scope.
That includes the bulk of federal services work: cost-reimbursement consulting, T&M technology services, labor-hour IT support, professional services contracts written under FAR Part 16. The $120 billion figure the administration cited is consulting alone. The full population of non-fixed-price services contracts is significantly larger.
One nuance worth flagging. Even if your contract is not in your agency's top ten, do not assume you are insulated. The EO directs agencies to convert "to the maximum extent practicable," and agencies tend to apply review patterns broadly once they start. Top-ten renegotiations frequently cascade into pressure on secondary contracts.
If you hold an existing non-fixed-price contract
Four steps are worth taking before the OMB guidance drops.
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Pull your contract file. Know your contract type, period of performance, remaining ceiling, and modification history. If you are on a multi-year cost-reimbursement vehicle with two option years left, your renegotiation posture is different than if you are six months from recompete.
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Build a fixed-price proposal now. Do not wait for the contracting officer to call. Run the math on what your scope would cost as a firm-fixed-price or performance-based award using your historical actuals. Identify where you have margin to absorb risk and where you do not.
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Map your scope risk. Fixed-price shifts cost variance from the government to you. Document every category of work where requirements have historically shifted, where customer-furnished items have run late, or where third-party dependencies have driven rework. Those are the line items you need to either price defensively or carve out of any fixed-price conversion.
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Document past performance data. Fixed-price negotiation hinges on what the work has actually cost. Pull labor utilization, subcontractor draws, ODC patterns, and scope change history. The contractor who walks into the renegotiation with two years of clean actuals negotiates from a different position than the one who shows up empty-handed.
Remember that "to the maximum extent practicable" is not "all or nothing." Hybrid structures, where part of the scope is fixed-price and part remains cost-reimbursement or performance-tied, are on the table. If your contract has a defined steady-state component and a more variable surge or R&D component, propose splitting them.
If you are pursuing new federal work
Fixed-price contracting is not new, but the default has shifted. Three things change for capture and proposal teams.
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Assume fixed-price in your pricing model unless the agency has explicitly justified otherwise. Cost-plus pricing exercises and T&M rate cards will increasingly read as defaults you are pushing onto an agency that has incentive to push back.
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Treat performance-based contracting as a serious vehicle. The EO explicitly endorses tying profit to performance metrics. Capture teams that can construct outcome-based deliverables, with measurable acceptance criteria and defined fee-at-risk structures, will see a wider competitive lane.
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Expect agencies to avoid non-fixed-price RFPs altogether to dodge the approval friction. Solicitations that might have come out as cost-plus-fixed-fee will get rewritten as firm-fixed-price or performance-based before they hit SAM.gov. Ask your agency points of contact about pricing structure during pre-RFP engagement, before requirements lock.
What to watch for next
The OMB implementation guidance, due within 45 days of the order, is the document that turns this EO from policy direction into operational rules. Until it lands, agencies are working from the EO text alone, which leaves significant room for interpretation. Once it drops, expect:
- Standard exception language agencies can use for written justifications
- Reporting templates for the semi-annual OMB submissions
- Initial signals on FAR clause changes ahead of the 120-day FAR amendment deadline
- Agency-specific implementation memos cascading out within two to three weeks
FEDCON will publish a follow-up once the guidance is released.
The bottom line
Agencies are on the clock. Contractors who wait for the contracting officer to call will negotiate from weakness, against an agency that has internal pressure to deliver a renegotiated contract by a deadline. Contractors who walk in with a fixed-price proposal, clean past performance data, and a defensible scope-risk map will shape the terms.
If you want an experienced advisor in the room as you work through your renegotiation position, fixed-price proposal, or capture strategy under the new default, FEDCON consultants are available to engage. Our advisors track new orders, implementation timelines, and agency-by-agency procurement signals as they move. Call our Help Desk at 1-855-233-3266 or contact us online to talk through your contract portfolio.