Promoting Efficiency, Accountability, and Performance in Federal Contracting
Requires Federal Agencies to Prefer Fixed-Price Contracts and Link Profit to Performance
What it does
Agencies must make fixed-price, performance-based contracts the default and justify or get approval for non-fixed-price contracts.
Real-world impact
- Shifts many government contracts away from cost-reimbursement toward fixed-price models.
- Requires agency review and renegotiation of top ten non-fixed-price contracts.
- High-value non-fixed-price contracts need written agency head approval above set thresholds.
Topics
Summary
This order makes fixed-price, performance-based contracts the default for federal procurement to control costs and reward contractor performance. Agencies must justify any non-fixed-price contracts in writing and obtain senior approval for large exceptions.
Agency heads must review their ten largest non-fixed-price contracts within 90 days and report semi-annually to the budget office on approved exceptions. The order also directs the budget office to issue guidance within 45 days and requires changes to procurement rules and new training for contracting staff.
Questions, answered
Ask questions about this executive order and its implications. Try:
- “What agencies are affected by this order?”
- “How does this order change existing policy?”
- “What are the practical implications of this order?”