The Administration’s New Procurement Default and a Contractor’s Playbook

On April 30, 2026, President Donald Trump signed Promoting Efficiency, Accountability, and Performance in Federal Contracting, an executive order (EO) that rewires the default of federal procurement. Going forward, fixed-price contracting is the default. Cost-reimbursement, time-and-material (T&M), and labor-hour vehicles still exist, but contracting officers must justify them in writing, and agency-head approval kicks in at dollar thresholds that bite hardest outside the Department of War.

The political framing is familiar: “bloated overhead” and runaway consulting spend (the EO pegs FY 2024 cost-reimbursement consulting obligations at roughly $120 billion). The legal architecture is more interesting than the rhetoric. For contractors carrying significant cost-type, T&M, or labor-hour backlog, the day-one impact is real and asymmetric.