be essential to ensuring that proj- ects remain both fscally sound and operationally successful. Looking ahead, it will be critical to monitor the real-world impacts of this policy shift. Agencies should track metrics such as design qual- ity, contractor participation, project timelines, and cost performance to evaluate whether the new ceiling is achieving its intended outcomes. Feedback from the acquisition work- force and industry partners also will be vital in refining implementation practices and identifying areas for further improvement Ultimately, this change is a step to- ward strengthening the foundation of our defense infrastructure—one that depends on smart policy, skilled pro- fessionals, and a shared commitment to excellence in design and execution. FASKO is a professor of Contract Management at DAU’s Midwest Region and a former con- tracting professional with both the Depart- ment of the Army and the Veterans Health Administration. He is currently the learning asset manager for Architect-Engineer at DAU. He holds a D.H.A from Central Michigan Uni- versity, an MBA from St. Ambrose University, and a B.S. in Health Care Management and M.S. in Quality Engineering and Management
not a standard. However, many A-E firms have come to treat it as the norm. Despite this perception, the government is still obligated to per- form a thorough cost and risk analysis to determine what constitutes a fair and reasonable fee. In some cases, neither the 6 percent nor the newer 10 percent rate may be defensible. This disconnect can lead to tough ne- gotiations and strained relationships with contractors. Controlling costs under the new 10 percent fee limitation presents addi- tional challenges. Any modifcations to design, plans, drawings, or speci- fcations in existing contracts could have a compounding fnancial impact at the higher rate. Proposed changes must be carefully reviewed to ensure that they remain within budget. Pro- gram managers should account for this during acquisition planning, rec- ognizing that cost increases under a 10 percent fee structure will be signif- cantly more pronounced than under the previous 6 percent cap. Training the acquisition workforce on implementing the 10 percent fee limitation involves several challenges and key considerations. Many person- nel are still accustomed to the long- standing 6 percent fee limitation, so adopting the higher cap requires a shift in mindset. It’s essential to em- phasize that the 10 percent rate is not automatically justifed—it must be supported by a thorough cost and
risk analysis tailored to each con- tract. Training should focus on how to assess fee reasonableness under diferent conditions and prepare ac- quisition professionals for increased scrutiny and more complex negotia- tions. To support this transition, DAU following the 2024 announcement integrated the updated fee guidance into all courses within the A-E Cre- dential program. DoD acquisition pro- fessionals working on A-E projects are encouraged to complete the creden- tial to fully understand how these fee changes afect project planning and execution. Stronger Foundations for Defense Infrastructure The increase in the statutory fee limitation for A-E services marks more than just a policy update—it represents a strategic investment in the future of defense infrastructure. By enabling fairer compensation for high-quality design work, the DoD is better positioned to deliver resilient, efficient, and technologically ad- vanced facilities that meet the evolv- ing demands of national security. For acquisition professionals, this change is both an opportunity and a responsibility. It calls for a renewed commitment to rigorous cost analysis, thoughtful acquisition planning, and continuous professional development. Understanding how to apply the 10 percent fee limitation efectively will
from Southern Illinois University. The author can be contacted at steven.fasko@dau.edu .
The views expressed in this article are those of the author alone and not the Department of Defense. Reproduction or reposting of articles from Defense Acquisition magazine should credit the authors and the magazine.
DAU Resources • CCON 012 - Architect-Engineering Contracting Credential • CON 2420V - Architect-Engineer Indirect Rates • CON 2430V - Architect-Engineer Contracting • CON 7150 - Sole Source Technical Analysis
38 | DEFENSE ACQUISITION | September-October 2025
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