Defense Procurement Changes Reflect Obama's Fixed Price Contracting Preference

The Senate Armed Services Committee today unanimously approved Senate Bill 454, which seeks to put a stop to weapons system cost overruns by imposing severe restrictions on the use of cost plus contracting. While weapons research, development and engineering may be thought to be more complex than construction of government buildings, the unanimous committee action sending S. 454 to the Senate floor reflects the new administration's preference for fixed price contracting over more innovative modern forms of procuring government construction projects. Like the fixed price contracting requirements in the American Recovery and Reinvestment Act, this legislation demonstrates the direction the Obama administration is taking towards all government contracting, and should be an omen for those of us in the construction industry who are involved in bidding on these jobs.