A 2026 federal executive order reshapes federal procurement policy by directing agencies to use fixed-price contracts as the default under FAR Part 16, while requiring written justification and higher-level approval for cost-reimbursement, time-and-material, and labor-hour contracts. The order also establishes agency approval thresholds, carve-outs for R&D and contingency work, and a phased implementation schedule through OMB guidance and FAR Council rulemaking. For government contractors, the change affects how agencies structure acquisitions, allocate risk, and modify existing and future contracts, with significant implications for federal procurement strategy and compliance in 2026.