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Promoting Efficiency, Accountability, and Performance in Federal Contracting

President Donald J. Trump’s order makes fixed-price contracts the default approach for federal purchasing, directing agencies to use contracts with clear deliverables, predictable costs, and performance-based incentives whenever possible. It requires written justification for using other contract types, such as cost-reimbursement or time-and-materials contracts, and sets senior-level approval thresholds for higher-value exceptions, with limited carveouts for emergencies and certain research and development work. The order also tells agencies to review their 10 largest non-fixed-price contracts within 90 days and try to renegotiate or restructure them toward fixed-price terms where practical. It was issued to curb cost overruns, reduce overhead, strengthen contractor accountability, and better protect taxpayer dollars.