On April 30, 2026, the Trump Administration released Executive Order 14402 – Promoting Efficiency, Accountability, and Performance in Federal Contracting. The executive order establishes that fixed-price contracts with performance-based considerations should serve as the default procurement method, while acknowledging that cost reimbursement contracts are appropriate in certain circumstances. It asserts that fixed-price contracts will encourage contractors to manage costs and meet delivery schedules to maximize profit potential.  

Moving forward, the use of any non-fixed-price contract must be justified in writing by the contracting officer to the agency head. Further, if the value of a non-fixed-price contract, or a non-fixed-price portion of a contract, exceeds thresholds defined in the order, then the agency head must approve the contract in writing. Agency heads must also review and, to the maximum extent practicable, modify, restructure, or renegotiate their 10 largest non-fixed-price contracts within 90 days of this order.  

In addition to the above requirements, semi-annual reports from each agency head must be provided to the Office of Management and Budget (OMB) Director, with the first report due within 90 days of the order date. Each report must state the number, dollar value, and written justifications for any non-fixed-price contracts. The order also requires the OMB Director to issue guidance to agencies within 45 days and the Administrator for Federal Procurement Policy to propose FAR amendments within 120 days. 

The April 30 executive order can be found here. 

To discuss this topic further or to explore its implications for your organization, please contact Tom Reynolds, Partner, tomreynolds@hka.com.

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HKA’s Government Contracting Group