and consume additional contractor and government resources. Effect on Government Operations The burden is not one-sided. Greater emphasis on cost data in fixed-price acquisitions diverts re - sources from high-risk cost-reim- bursement contracts, which effec- tively depletes analysis bandwidth, reduces oversight efficiency, and in - troduces unnecessary risk for cost- type procurements. Agencies must re- view massive cost datasets, consume limited acquisition resources, and extend award timelines—contrary to FAR 1.102(a), which seeks to mini- mize administrative costs and maxi - mize efficiency. Delayed awards mean delayed mission outcomes, and the abundance of cost data often spawns new bid protests. Smart compliance means cali- brating oversight to risk. The current FC recognizes that contract type is evaluated against the risks and com- plexity of a project, with a clear pref -
erence toward fixed-price contracts (FC 16.102). In such a fixed-price en - vironment, contractors bear the risk of cost overruns and are incentivized to minimize costs to ensure profitabil - ity. Modifications can be made with adequate consideration, but valid government concerns remain about avoiding unreasonable prices, exces - sive modifications, or increased per - formance risk. To address upfront pricing con- cerns, FAR 15.404-1(b) already allows contracting officers to scale price- analysis techniques to acquisition complexity. It prioritizes six alterna - tive (and preferred) techniques be- fore requesting data “other than cer- tified cost or pricing data” from the offeror. Contractors are expected to engage fully in this process to ensure provided data enable the contracting officer to make a fair and reasonable price determination. The government has many con- tract administration tools that can ensure effective and efficient contract performance and oversight that are
often more effective than pre-award cost data. For example, the govern - ment can leverage clear and tailored reporting requirements throughout the contract life cycle. By setting spe- cific goals and milestones, as well as reporting obligations on specified achievement metrics, the govern- ment can obtain documentation and information throughout the contract to ensure contract compliance and oversight. Accountability is achieved through regular contractor-to-govern- ment communication and compre- hensive past performance reviews. Accountability Through Outcomes Fixed-price contracting remains the government’s most powerful tool for incentivizing efficiency and cap - turing new pools of contractors other- wise wary of the government market but armed with commercial market innovation skills. The FAR’s guiding principles envision partnership be- tween government and industry— one rooted in trust, performance, and
JULY – AUGUST 2026 | DEFENSE ACQUISITION MAGAZINE 31
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