President Donald J. Trump signed an executive order on April 30, 2026, directing federal agencies to maximize the use of fixed‑price and performance‑based contracts to promote timely and complete performance. The order requires agencies to review and, where practicable, modify their largest non‑fixed‑price contracts to incorporate fixed‑price and performance incentives. Agency heads must submit semi‑annual reports to the Office of Management and Budget (OMB) on non‑fixed‑price contracting, and the OMB and the Office of Federal Procurement Policy will issue guidance to enforce consistent implementation. The order also limits cost‑reimbursement contracting, noting that about $120 billion was obligated on such contracts in fiscal year 2024, and calls for exceptions only in emergencies and major‑system research and development. Trump’s order is part of a broader effort to streamline the Federal Acquisition Regulation and encourage private‑sector efficiencies.
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