Your Next Federal Bid Will Probably Be Fixed-Price
Executive Order 14402 makes fixed-price contracts the federal default. Here's what that means for a first-time bidder, and how to price for it.
Your next federal bid will probably be fixed-price. Price it that way.
Executive Order 14402, signed April 30, makes fixed-price contracts the default and preferred way federal agencies buy. Cost-reimbursement, time-and-materials and labor-hour contracts now need a written justification, and larger ones need agency-head approval. The FAR Council and the Department of War have already written it into their contracting guidance.
For a first-time bidder, that puts the cost risk on you. If you underestimate the work, the overrun comes out of your margin, not the government's budget.
Before you bid
- Build your price from a real estimate of labor, materials and overhead.
- Read the scope line by line, and ask about anything vague during Q&A.
- Plan your cash flow for the stretch between doing the work and getting paid.
The upside
Most commercial service firms already quote firm prices for clear deliverables. That habit now carries straight into federal work.
Decades on the contractor side taught me that on a fixed-price job, the bid is where you win or lose the money.
Pricing your first fixed-price bid? Book a free fit conversation and we'll talk it through.
Hat tip to Unanet's Chris Crowder, via Executive Mosaic, for flagging this.
Sources: Executive Order 14402 (White House, Apr 30, 2026) · Federal Register, 91 FR 24325 (May 5, 2026) · FAR Council implementation memo (Jun 25, 2026) · FAR Overhaul Parts 16 and 52 (Jul 1, 2026) · RFO FAR Part 16 · WarU RFO announcements