# FAR Council Proposes Fixed-Price Default

A proposed FAR rule published September 18, 2026, would revise Parts 16, 17, and 35 and move fixed-price contracting toward the federal default. Under the proposal, agencies may need written justification for non-fixed-price arrangements and agency-head approval above specified thresholds. For contractors—particularly small and midsize firms—the shift could increase exposure to cost overruns when prices are fixed, making contract-level labor tracking, regular cost reviews, complete overhead pricing, and disciplined timekeeping important to estimating and performance.

- Contractors can evaluate whether their labor tracking, timekeeping, and overhead allocation practices provide reliable contract-level cost visibility before pursuing fixed-price work.
- Agencies and acquisition teams may need to account for the proposed justification and approval steps when selecting contract types; the rule is proposed, not stated as a finalized requirement.
- The proposal’s revisions to FAR Parts 16, 17, and 35 make contract-type selection and cost-estimating practices central considerations for acquisition planning.

**Jurisdictions:** federal
**Topics:** Policy
**Published:** November 03, 2026

### Government Entities
- Federal Acquisition Regulatory Council (FAR Council)
- Office of Management and Budget (OMB)
- Defense Contract Audit Agency (DCAA)
- Department of Defense (DoD)

### Sources
- [
        Fixed-price is the new default. Do government contractors know what their contracts cost? - Federal News Network](https://federalnewsnetwork.com/commentary/2026/11/fixed-price-is-the-new-default-do-government-contractors-know-what-their-contracts-cost) - Federal News Network