How to prepare for fixed-price pressure
What the April 2026 order says
The order directs agencies to use fixed-price contracts and performance-based metrics as the default and preferred procurement method where practicable. It also requires written justification and, above certain thresholds, agency-head approval for non-fixed-price contract types such as cost-reimbursement, time-and-material, and labor-hour contracts.
It separately directs agencies to review their largest non-fixed-price contracts and look for ways to restructure or renegotiate toward fixed-price and performance-based concepts, subject to listed exceptions.
Why GSA service contractors should care
Many Schedule service quotes still rely on labor categories and hourly rates. That does not go away, but buyers may ask for clearer outcomes, tighter assumptions, and more price certainty.
The best response is not to force every service into a brittle fixed-price box. The better response is to write work packages that are easier to define, manage, and evaluate.
Fixed price rewards a better scope
A fixed-price service offer needs a clean boundary: deliverables, acceptance, schedule, dependencies, government-furnished information, meetings, change control, and optional work. Without those pieces, the price carries hidden risk.
Contractors who can explain scope and price together will be better positioned when buyers ask for more performance discipline.
What this looks like in practice
Service exampleTurn vague support into a priced work package
Instead of quoting 'program management support' as an open labor bucket, a contractor can define onboarding, recurring meeting cadence, report schedule, dashboard deliverables, review cycles, and optional surge tasks.
That makes a fixed-price quote more credible because the buyer can see what is included and what would trigger a change.
Frequently asked questions
Does this mean labor-hour and T&M contracts are gone?
No. The order allows exceptions, but non-fixed-price approaches receive more justification and approval attention.
What should a service contractor improve first?
Improve scope definition: outcomes, assumptions, exclusions, dependencies, and change controls. That is the foundation for credible fixed-price work.