PROMOTING EFFICIENCY, ACCOUNTABILITY, AND PERFORMANCE IN FEDERAL CONTRACTING

Ah, the fixed-price mania. Again.

Well, if you've been in contracting long enough you've been through this before. I remember going through it at least twice, and the people in the business before me had been through it at least once.

The fixed-price mania has led to some noteworthy catastrophes in weapons development.

The issue now is services. The popularity of the T&M contract, the worst of all, is likely due to poor requirements analysis and specification. The cost-reimbursement contract is not quite as bad.

I believe more emphasis needs place on use of fixed price but not to the extreme in the EO with the designated levels of justification for non use. Each type has their appropriate place.

6 minutes ago, Vern Edwards said:

The popularity of the T&M contract, the worst of all, is likely due to poor requirements analysis and specification. The cost-reimbursement contract is not quite as bad.

This is so true.

It’s really important for the government to clearly articulate the required outcome to industry and provide comprehensive information behind the requirement before proposals are due. A common theme expressed back in the days of performance based acquisition is the more industry knows what the government wants, the better the proposals. So provide the data to industry to reduce fixed price performance risk.

I’ve done a lot of reviews of contracts and associated files across the government. The most frequent justification for use of T&M/LH is the program office can’t sufficiently specify needs in sufficient detail for fixed price. In most cases, it’s pretty clear that the program office just wants the flexibility to assign work to the contractor as if they were government employees. That’s easy to do when the contractor gets paid by the unit of time worked and the government just issues orders for what needs done. With a little thought on what was required by the contractor and specified, it could easily be fixed price.

19 hours ago, General.Zhukov said:

What is the strongest case for why this EO is a good idea?

Alignment with the RFO push to commercial product or service?

Seems like the EO also continues the RFO chaos! Why?

I have not quite worked out the effect of the EO on the current RFO but it seems that the EO creates one of the first needs to reword the RFO at Part 1 and 16.

RFO 1.506 Signatory Authority - It says when a D&F is required, the appropriate official according to agency regulations must sign it. Seems like there is going to be a RFO change per the EO that requires agency head signature?

And then at RFO 16.601-3 requires that a time-and-materials contract or order may be used only if-

"(a) The contracting officer prepares a determination and findings that no other contract type is suitable. The determination and findings must be-

(1) Signed by the contracting officer prior to the execution of the base period or any option periods of the contracts; and

(2) Approved by the head of the contracting activity" but now we have "agency head" per the RFO.

18 hours ago, formerfed said:

It’s really important for the government to clearly articulate the required outcome to industry and provide comprehensive information behind the requirement before proposals are due. A common theme expressed back in the days of performance based acquisition is the more industry knows what the government wants, the better the proposals. So provide the data to industry to reduce fixed price performance risk.

I’ve done a lot of reviews of contracts and associated files across the government. The most frequent justification for use of T&M/LH is the program office can’t sufficiently specify needs in sufficient detail for fixed price. In most cases, it’s pretty clear that the program office just wants the flexibility to assign work to the contractor as if they were government employees. That’s easy to do when the contractor gets paid by the unit of time worked and the government just issues orders for what needs done. With a little thought on what was required by the contractor and specified, it could easily be fixed price.

If we're talking about the $120 billion spent on consulting contracts (which I interpret as Advisory and Assistance Services), I think ex ante specification of results is somewhat of a fool's errand. In my experience, the Government needs staff and work specification is more ad hoc--not because of poor planning, but because of the nature of the work.

I think these contracts are best described as staffing contracts. As such, the Government should research what types of compensation arrangements are typically used in that industry and adapt to the market.

@Don Mansfield I don’t disagree. Researching the marketplace to identify typical compensation structures is sound advice. But what I found with many T&M/LH contracts is the government had historical data, including prior contracts, to reasonably forecast workload. Examples include facility operations, help desk support, responding to public inquires, and processing applications. These cases experience workload variations for a variety of reasons, but are largely predictable.

I saw an instance where an auditor questioned the use of LH staffing for contract specialist support. The auditor showed the HCO from the offices own reporting data that the workload was steady over the prior three years. There were expected major increase in the 4th quarter and a minor increase in the 1st quarter. The office agreed to provide industry that data with the next recompute and award a fixed price contract.

@formerfed @Don Mansfield

Congress and executive branch procurement policy-makers have never been good at rigorously thinking things through. Their ideas (which are mostly just notions) about competition, contract, contract type and price date back to the 19th century, are not grounded in present realities, are half-baked, or are fundamentally unsound .

Consider, for example, their notions about the effect of "full and open competition' and "contract type" on what the government ultimately pays under contracts that are complex and dynamic relations rather than simple transactions. When contracting for complex and dynamic requirements there can be no such thing as a "firm-fixed" price, and "full and open" competition produces only useless busy-work, needless delay, and costly litigation.

Congress, the policy-makers, and much of the workforce are remarkably incurious and unwilling to question and reconsider their most cherished and deeply-held beliefs, and thus again and again prescribe and carry out policies and procedures that are poorly suited to the needs and objectives of the present day.

There is no near-term solution to that problem, if any. It is inherent in the politics, structure, and operation of our federal government.

On 5/5/2026 at 1:13 PM, formerfed said:

Examples include facility operations, help desk support, responding to public inquires, and processing applications. These cases experience workload variations for a variety of reasons, but are largely predictable.

I saw an instance where an auditor questioned the use of LH staffing for contract specialist support. The auditor showed the HCO from the offices own reporting data that the workload was steady over the prior three years. There were expected major increase in the 4th quarter and a minor increase in the 1st quarter. The office agreed to provide industry that data with the next recompute and award a fixed price contract.

In these cases, as in most cases of LH usage I've observed, the agency is typically using LH not because it cannot accurately estimate the extent or duration of work, but for purposes of billing accuracy. Right or wrong, many requirements offices and 1102s believe it's easier to get an accurate invoice for support services when the contractor charges by the hour. In fact, some think there's nothing the government can do under a FFP support contract if the contractor shorts the Government on hours in a given month.

Putting aside whether this use of LH is proper under regulation (it's not), I see little cost risk where the agency dictates the number of hours it wants and then allows the contractor to work up to that ceiling. There is, however, performance risk in having the contractor work on a best-effort basis. But most in government are either unaware of this risk or ignore it, as they've been operating this way without issue for years.

1 hour ago, FrankJon said:

In these cases, as in most cases of LH usage I've observed, the agency is typically using LH not because it cannot accurately estimate the extent or duration of work, but for purposes of billing accuracy. Right or wrong, many requirements offices and 1102s believe it's easier to get an accurate invoice for support services when the contractor charges by the hour. In fact, some think there's nothing the government can do under a FFP support contract if the contractor shorts the Government on hours in a given month.

So is this a fixed-price level of effort contract type being treated as if it’s a labor hour type for billing purposes?

1 hour ago, formerfed said:

So is this a fixed-price level of effort contract type being treated as if it’s a labor hour type for billing purposes?

Similar idea, except that with FP-LOE the contractor would be paid upon performing the requisite number of hours and the agency accepting the deliverable, whereas with LH the contractor would simply be paid for hours worked regardless of whether it’s met the monthly target. If any FTEs aren’t working out, the agency instructs the contractor to remove or replace them. For this reason there are rarely lingering quality concerns.

On a related note, I’ve been told that the military services commonly use CPFF Term contracts for their support services, including for services that would typically be considered commercial. In those situations the contractor is paid a monthly fee upon performing a requisite number of hours.

"Support services" tasks in a lot of territory. The term describes a wide variety of requirements, including both constant and occasional. It includes blue collar and white collar work. I'd be careful about generalizations.

4 hours ago, Vern Edwards said:

"Support services" tasks in a lot of territory. The term describes a wide variety of requirements, including both constant and occasional. It includes blue collar and white collar work. I'd be careful about generalizations.

Thank you, Vern. I’m referring to professional and administrative, severable contracts here.

The other use of LH I see often is for optional “surge” work. Here, though, the agency is often tightly controlling the number of hours the contractor may work. The Government is very often seeking hours of effort, not an identifiable objective.

Bottom line: I’d be willing to bet that the overuse of LH contracts this EO refers to carries much lower cost risk than implied. In practice, LH has evolved into something far different than what regulation intended.

On 5/4/2026 at 9:25 AM, General.Zhukov said:

What is the strongest case for why this EO is a good idea?

As I follow the discussion I had this additional thought.

Maybe it is a good idea in the eyes of the ivory tower folks due to the shrinking Federal workforce and staffing for contract administration for other than FFP contracts. Adequate acquisition workforce staffing for contract administration specifically. Along with adequate staffing of the "other assigned duties" of program folks to perform as contracting officer representatives.

I suggest this without any data but would offer the failure in contract administration has a direct relation to additional cost for other than fixed price contracts. I would also suggest that the dire straits of the acquisition workforce will have direct negative cost impact on any type of contract in the contract administration phase..

23 hours ago, FrankJon said:

I see little cost risk where the agency dictates the number of hours it wants and then allows the contractor to work up to that ceiling. There is, however, performance risk

Agree with FrankJon generally here from my view down in the trenches.

Anecdote:

I just had a talk this week with an office the has a LH technical support desk contract that will be soon converted to FP (this conversion pre-dates the EO). Their two initial concerns were that they couldn't estimate accurately enough the workload of the help desk to convert to FP, and that FP just means more expensive in exchange for nothing. I think they would argue that the performance risk is the government's and can't be transferred- customers don't know and don't care about the employer of the help desk rep. They see their cost risk as lower under LH, since their expressed cost risk was having to spend more money on their help desk. FP means either price is too high - they spend more for the same thing - or the price is too low, contractor will cut corners to save money and that will reflect poorly on their office, not the contractor and that will also lead to higher prices later on. So either way they will lose.

For what it's worth, I think they are wrong on all accounts, but that's what I heard.

Also - "Government in Fiscal Year 2024 identified approximately $120 billion obligated on cost-reimbursement consulting contracts alone. " I looked this up with FPDS, and I don't see how this number is possible. Non-FP contracts for all services - not just cost and not just consulting - is $189 billion. I see no way to slice the data to get to their result from public data using standard definitions.

I am an old mossback who has been involved with this stuff since the 1970s. This reminds me of the ASPR days when we had to write D&Fs for a lot if things. Back then you had to use what was known as formal advertising (sealed bidding today). For DoD, there were 17 exceptions to the use of formal advertising. To use one of those exceptions you had to write a D&F citing the exception and why it applied. In addition, if you wanted to use a cost reimbursement contract, you had to write another D&F. If you wanted t write a facilities contract (which no longer exists) you had to write another D&F. Some of these D&F's required secretarial approval. I don't remember which required such approval, but do remember, not having problems getting them approved fairly quickly. Thus, while a pain in the neck, to me, the key is going to be who gets delegated authority to grant these approvals. It may be a deputy assistant assistant deputy secretary who get the joy of doing so and does nothing but grant approvals. My question is who s behind this and why? This nonsense was done away with by statute 40 years ago.

The E.O. is what I call "political performative reform". It will produce nothing but wasted time and paper.

That is not to say it isn't a reaction to a real problem. It says only that it will not solve the problem.

Most acquisition reform, like the RFO, has been performative reform.

The last great era of performative reform was the Clinton-Gore "Reinventing Government" campaign of the 1990s. It gave us "performance-based contracting" among other things. Some of you may have been around long enough to remember it.

On 5/8/2026 at 12:07 PM, Retreadfed said:

My question is who s behind this and why?

RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

Seven months later...

EO: Use of any non-fixed-price contract...must be justified in writing by the contracting officer to the agency head.

Who - well, probably not the RFO team. and also probably not someone familiar with how governments actually work, unlike these two:

Jennifer Pahlka, whose work I admire: The response to every failure is a new layer of oversight and approval.
James Q Wilson, whom everyone should admire: The response to any scandal or failure is to add another layer of oversight.

On 5/11/2026 at 5:28 PM, General.Zhukov said:

RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

Seven months later...

EO: Use of any non-fixed-price contract...must be justified in writing by the contracting officer to the agency head.

Who - well, probably not the RFO team. and also probably not someone familiar with how governments actually work, unlike these two:

Jennifer Pahlka, whose work I admire: The response to every failure is a new layer of oversight and approval.
James Q Wilson, whom everyone should admire: The response to any scandal or failure is to add another layer of oversight.

I understand your point, but note that RFO part 16 and the EO are not diametrically opposed. The RFO indeed moved from a restrictive framework ("Contract types not described in this regulation shall not be used") to a permissive framework ("contract types...not described in this regulation, are permitted").

To your point, I imagine on balance the policies will result in a loss of efficiency, but there are still flexibilities to be found in the RFO that weren't there before.

Thanks, @General Zhukov.

Hmm, a “guaranteed maximum price” GMP contract, using a variation or form of fixed price incentive with S.T. or F.T., like the approach that I debated several of you a few years ago in the Forum should now be “RFO FAR” allowable.

It’s a common design-build construction delivery approach in industry.

It would be suitable for large, complex projects where time is of the essence.

It does require active government contract administration by personnel who are qualified in REAL management and oversight, not just inspectors and paper pushers.

That level of “project controls”* approach and government team interaction with contractors’ design teams and design-build construction management personnel is crucial , especially so when fast track design-build is used, but is rare in my opinion and years of experience..

There are college majors for professional construction management but, to my knowledge, little or no professional recognition or Civil Service professional job series , unless they finally implemented it in the past decade. The engineer career field appeared to me to see it as a threat…

I provided a paper to the Design-build Institute of America (DBIA) Government Programs advocate in the early to mid 2010’s, describing and outlining the method, which would be similar to their commercial GMP methodology.

I think NAVFAC may have experimented with it around the time that I proposed it as a viable contract approach.

*”project controls” is an industry term for managing and tracking costs, performance, quality control, design and construction schedules, acquisition of materials and subcontractors, etc.

On 5/6/2026 at 2:02 AM, Vern Edwards said:

@formerfed @Don Mansfield

Congress and executive branch procurement policy-makers have never been good at rigorously thinking things through. Their ideas (which are mostly just notions) about competition, contract, contract type and price date back to the 19th century, are not grounded in present realities, are half-baked, or are fundamentally unsound .

Consider, for example, their notions about the effect of "full and open competition' and "contract type" on what the government ultimately pays under contracts that are complex and dynamic relations rather than simple transactions. When contracting for complex and dynamic requirements there can be no such thing as a "firm-fixed" price, and "full and open" competition produces only useless busy-work, needless delay, and costly litigation.

Congress, the policy-makers, and much of the workforce are remarkably incurious and unwilling to question and reconsider their most cherished and deeply-held beliefs, and thus again and again prescribe and carry out policies and procedures that are poorly suited to the needs and objectives of the present day.

There is no near-term solution to that problem, if any. It is inherent in the politics, structure, and operation of our federal government.

Vern, come on, we’re not supposed to think anymore. Just follow the Practitioner’s Album and reference the FAR Companion and then head to DPCAP for the R-DFARS, which still references the DFARS, or ask AI, since that has all the answers. But seriously, they are trying to force construction to use OTs for everything, even 100% design projects; does it sound like anyone cares about thinking? It’s a really dark time in contracting; the difference between FFP mania then and now is that leadership refuses to acknowledge mistakes or failures.

On 5/13/2026 at 9:43 AM, FrankJon said:

I understand your point, but note that RFO part 16 and the EO are not diametrically opposed. The RFO indeed moved from a restrictive framework ("Contract types not described in this regulation shall not be used") to a permissive framework ("contract types...not described in this regulation, are permitted").

To your point, I imagine on balance the policies will result in a loss of efficiency, but there are still flexibilities to be found in the RFO that weren't there before.

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

6 hours ago, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions?

Discretion via rules and "flexibilities" (overhaul-speak) cannot improve the quality of acquisitions. Only the workforce can improve the quality of acquisitions.

Discretion is only as effective as the persons exercising it.

On 5/21/2026 at 10:13 AM, joel hoffman said:

Thanks, @General Zhukov.

Hmm, a “guaranteed maximum price” GMP contract, using a variation or form of fixed price incentive with M.T. or F.T., like the approach that I debated several of you a few years ago in the Forum should now be “RFO FAR” allowable.

Joel, are you familiar with GSA PBS's use of GMP contracting, which we've termed "Construction Manager as Constructor" (CMc) (as opposed to the common industry term, Construction Manager at Risk). https://www.acquisition.gov/gsam/part-536#GSAM_Subpart_536_71

GSA PBS has been doing variations of CMc for 20+ years - the link above is to the current process, but I don't know how much it will (or won't) change with the RFO re-write - that part of the GSAR is still being worked on.

1 hour ago, Mike_wolff said:

Joel, are you familiar with GSA PBS's use of GMP contracting, which we've termed "Construction Manager as Constructor" (CMc) (as opposed to the common industry term, Construction Manager at Risk). https://www.acquisition.gov/gsam/part-536#GSAM_Subpart_536_71

GSA PBS has been doing variations of CMc for 20+ years - the link above is to the current process, but I don't know how much it will (or won't) change with the RFO re-write - that part of the GSAR is still being worked on.

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

On 5/25/2026 at 1:42 AM, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

Less Flexibility:

• Probably the biggest new RFO tool being de facto prohibited, and the post-RFO environment being more restrictive than the old FAR---well, that was quite the rug pull.

• In past 12 months, mandates have added on around five brand-new >HCA approvals.

• The most draconian mandate is yet to be issued (OFPP-designated required use contracts). A very broadly scoped set of required-use contracts would be like the introduction of smallpox into the New World of agency contracts, or effectively resurrecting EO 14240 (All to GSA), or [chose your own comically overdramatic metaphor], so the parties involved have wisely not rushed this one.

More:

• The second tier BPAs are a great tool for a niche use case. (They sure look plainly illegal to me - all contractors awarded such contracts shall be provided a fair opportunity to be considered- but I am not a lawyer) Super useful when you have a multiple-award IDIQ as a potential source, but competing every new requirement is too much competition, and a single order (with lots of options) is too little competition.

• Off/on ramps are great.

• The clause clean up isn't exactly a flexibility, but it very welcome and is probably much more useful to contractors than to workforce.

• Since <5% of contract actions are FAR 15 outside of DoD, I am skipping that part since its mostly irrelevant (I'm joking, sort of).

This is what comes to mind. Probably more, right?

3 hours ago, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

I researched this at great length back in 2020/2021. I believe it began with a couple of individual deviations in ~2006, which turned into a class deviation, which turned into GSAR 536.71 ~2020. We concluded we (different civilian agency) didn't have the regulatory authority to do it without a deviation at the time. We ended up doing something similar that approximated firm fixed price by establishing a ceiling price to construct at ~35% design and having a shared savings incentive if the contractor was able to beat that price once design was finalized.

One of the first things I thought of when RFO 16 was published was that we would no longer need a deviation if we wanted to try a true CMAR out. But, now I would have to justify an other than FFP contract to the agency head, and anything worth doing as CMAR would almost certainly exceed $10M, so would require Secretarial approval on top of the million other things that need to be approved.

GSA has been aware of the CMc (Construction Manager as Constructor) method, aka Construction Manager at Risk, since at least 1997, and they used it before they published "guidance" on its use in the GAS FAR Supplement. See the 105th Congress congressional hearing held in 1998. See: New Washington Convention Center : hearing before the Subcommittee on the District of Columbia of the Committee on Government Reform and Oversight, House of Representatives, One Hundred Fifth Congress, second session, July 15, 1998:

GSA recommended that the WCCA pursue an "at risk" construction manager as constructor (CMc) contract. Experience has shown that this method of contracting helps to minimize adversarial relationships between the parties, thus reducing claims and change orders.

The hearing is available at Google Books. Here is the GSA's testimony:

78.pdf

19 hours ago, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

Why "Ha Ha"? What did the naysayers say?

This thread began as discussion of the recent E.O. calling for approval of any contract other than fixed-price.

GSA can try all the methods of construction contracting it can think of, but they won't solve the problems of cost (and schedule) overruns on construction projects. Although that won't stop them from claiming success in that regard.

Government construction contracting is both the most competitive kind of government contracting and the most litigious, and it always will be. The problems are inherent in the nature of the work and in the nature of the owner-designer-constructor relationships. Conflict and litigation or its threat are common in all construction project markets worldwide. There is a HUGE literature about it.

There are no miracle cures.

Anyway, "price" ⸺ as used in connection with government contracts other than those for simple purchase transactions ⸺ is a mythical conception.

On 5/7/2026 at 8:42 AM, C Culham said:

As I follow the discussion I had this additional thought.

Maybe it is a good idea in the eyes of the ivory tower folks due to the shrinking Federal workforce and staffing for contract administration for other than FFP contracts. Adequate acquisition workforce staffing for contract administration specifically. Along with adequate staffing of the "other assigned duties" of program folks to perform as contracting officer representatives.

I suggest this without any data but would offer the failure in contract administration has a direct relation to additional cost for other than fixed price contracts. I would also suggest that the dire straits of the acquisition workforce will have direct negative cost impact on any type of contract in the contract administration phase..

You do have a point. Not to be rude, but DCMA no longer provides adequate contract admin and regularly declines contract admin. The services are own their own anymore for contract admin with no additional manpower.

On 5/24/2026 at 10:42 PM, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

Me, too.

5 hours ago, Mattt said:

their own anymore for contract admin with no additional manpower.

(On)?

If yes then that is my point.

It takes more "manpower" to administer other than FFP contracts no matter who provides it. The EO in my view is an attempt to solve an unfolding dilemma of a shrinking workforce that supports and conducts contract admin. Whether a CO, DCMA or those in the world "of other duties as assigned.".

On 5/26/2026 at 12:20 PM, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

I see from an 8 year old thread where I WAS aware of the GSA method used for (“construction manager”) CM@Risk construction contracts, where GSA was providing and responsible for the design.

It uses a fixed-price incentive with successive targets FPI(ST) contract method, because the contractor doesn’t have control over the design development (maturity of the design) or design changes during design by the government.

The “target price” equals the “ceiling price” as the guaranteed maximum price (GMP).

For design-build projects, the contractor isn’t a construction manager at risk. The design-builder has sole responsibility for both design and construction. It is responsible to develop the design and responsible for the adequacy of the design. Therefore government provides and is responsible for the scope and design criteria.

Therefore, it could be feasible for design-build to use FPI with Fixed Target rather than successive targets. The GMP is based upon the Target price equaling the Ceiling price.

_____________________________

To answer Verns question above about what the naysayers said, I found the eight year old thread about the debate. I doubt that many or anyone would read it through. But I can summarize a couple of objections raised about using the method.

• For other than GSA’s CM@Risk procedures, the FPI method had never used a GMP based upon the target price.

• The typical FPI contracts were extremely over complicated.

/threads/4346-must-a-fixed-price-incentive-contract-include-separate-target-and-ceiling-prices

I don’t want to keep debating plus am no longer involved in the Design-Build Institute of America (DBIA) quest to implement GMP for federal design-build contracts under the regulations without seeking statutory revisions.

General Zhukov said: “RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

I meant to express pleasure that the RFO rewrite appeared to loosen restrictions on using contract types and methods other than those specific procedures described in the legacy FAR part 16.

4 hours ago, joel hoffman said:

General Zhukov said: “RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

Don't give the RFO so much credit. The old FAR wasn't that restrictive. Contracting officers have long been able to come up with novel contractual arrangements.

• Think of the award fee incentive, which the Navy invented in 1962, long before it was expressly authorized in the ASPR. The Navy also invented the FPI(F) incentive arrangement.

• Think of the award fee contract with rollover.

• Think of the CPIF contract with negative fee.

• Think of the award term incentive.

• Think of task order contracts, which I used for R&D in an Air Force weapon system program office long before the Federal Acquisition Streamlining Act (FASA).

Almost all contract types other than FFP and CPFF were field experiments before they were officially recognized.

Acquisition practitioners should study the history of their field. For a wide-ranging history of experiment and development in contract types and pricing during and after World War II see Miller, Pricing of Military Procurements, Yale University Press, 1949. (Out of print, but available in some university libraires and at the Library of Congress. I bought a used copy years ago.) If you really want to understand today's policies and the recent Executive Order, read Government War Contracts by J. Franklin Crowell, Oxford University Press (1920), about what happened during WWI. (Out of print, but available used at Amazon.com.)

If all you know about government contract types is what you've read in FAR Part 16, then your education has been limited and underfed. The literature about them is massive. For those who would like to be in charge of policy one day, you gotta read more or you'll just produce more stupid policies.

"Full and open" competition? One of the costliest policies ever imposed in terms of both lead time and litigation. And I have not seen any evidence that it reduces costs and improves quality.

Thanks, Vern. The basic problem in our discussion eight years ago was the result of certain government organizations not accepting a contract type (or any for that matter) that wasn’t specifically described in FAR part 16.

As it turns out, my proposed Guaranteed Maximum Price (GMP) contracting method was already being used by GSA more than eight years ago for certain Construction Manager at Risk (CM@risk) programs .

For GSA, the government would provide and be responsible for the design, which would be developed and finalized after hiring the CM@risk.

In my scenario, for Design-build programs, the design-build contractor provides and is responsible for the design of the project after award.

The GMP contracting method that I described is essentially the same as one approach that the Design-Build industry uses for many non-government programs and is promoted by the DBIA.

The DBIA asked me, as a member of the DBIA’s Government Design-Build Programs Committee, to show how GMP could be used in appropriate circumstances for federal government design-build contracting.

Here is how the American Institute of Architects (AIA) describes the Guaranteed Maximum Price contract:

What is a Guaranteed Maximum Price (GMP) Contract?

A Guaranteed Maximum Price (GMP) contract is a construction contract in which the contractor agrees to complete the project for a set price, with the maximum price being the agreed-upon cap. The owner is only required to pay up to this cap, regardless of how much the project actually costs the contractor. This creates a defined cost for the owner but also puts the onus of any cost overruns on the contractor.

Now, what else might we call that arrangement?

Learn - ACD Operations

Guaranteed Maximum Price (GMP) Contracts: A Complete Guid...

Everything you need to know about Guaranteed Maximum Price (GMP) contracts—how they work, owner and contractor risks, savings provisions, and relevant AIA documents.

In the attached article from The Nash & Cibinic Report, published in 2018, I said:

Over the course of the last 20 years, Government agencies and their contractors have developed contractual instruments that do not fit neatly into the standard, traditional categories described in the FAR.

For centuries, contracting parties have fought over who must pay for what? What we call "contract types" are the products of those conflicts.

CONTRACT TYPES There Are More Things In Heaven And Earth Judge Than Are Dreamt Of In The FAR.pdf

On 5/25/2026 at 1:42 AM, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

20 hours ago, Don Mansfield said:

Me, too.

Well, I was talking about acquisition efficiency, not quality. And I had in mind a very specific example when I wrote that -- my agency was in the process of seeking a class deviation for contract type when we moved from OldFAR to NewFAR. Now we don't need a deviation.

With that stated, I wouldn't die on this hill defending NewFAR. I think NewFAR is more or less a net neutral from an efficiency perspective. In fact, but for the dubious process OMB took to implement it (which Don has called out), I'd say the most remarkable part of NewFAR is the lack of impact it will have on most agencies and practitioners.

13 minutes ago, FrankJon said:

Well, I was talking about acquisition efficiency, not quality. And I had in mind a very specific example when I wrote that -- my agency was in the process of seeking a class deviation for contract type when we moved from OldFAR to NewFAR. Now we don't need a deviation.

With that stated, I wouldn't die on this hill defending NewFAR. I think NewFAR is more or less a net neutral from an efficiency perspective. In fact, but for the dubious process OMB took to implement it (which Don has called out), I'd say the most remarkable part of NewFAR is the lack of impact it will have on most agencies and practitioners.

I'd be interested to know whether new 1102s are able to comprehend NewFAR better than OldFAR. If nothing else, it should be easier to read, right??

11 minutes ago, FrankJon said:

I'd be interested to know whether new 1102s are able to comprehend NewFAR better than OldFAR.

No. Not to comprehend in depth.

Not only new 1102s, but many contracting officers, as well.

Regulations (and government contracts based on them) are a species of legal writing that one must have proper education to properly interpret and fully understand. The government does not give its 1102s that kind of education. They must seek it on their own by reading books and cases. Even then, they may need the help of well-trained attorneys. But regulatory interpretation can be learned.

See, e.g., Inside Regulatory Interpretation by Christopher J. Walker, attached. And see Administrative Law, 7th ed., by Funk and Seamon, 7B, Interpretation of Rules.

Inside Regulatory Interpretation.pdf

I often repeat myself. What the EO overshadows and the continuing discussion points to in my view is that neither the EO, nor the RFO fulfills "Promoting Efficiency, Accountability, and Performance in Federal Contracting". What will is lazer focus on maintaining a quality and adequately staffed acquistion workforce.

My conclusion is supported in part by the discussion of GMP contracts. While they can be successful they can and do result in litigation. Vern mentioned this of sorts in noting the history of construction contracts as a whole. A great GMP contract is only as good as the negotiation and resulting administration of it.

New statutes, legislation and regulation will do nothing to enhance Federal contracting unless it deals directly with the eroding acquisition workforce.