3 hours ago, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

I researched this at great length back in 2020/2021. I believe it began with a couple of individual deviations in ~2006, which turned into a class deviation, which turned into GSAR 536.71 ~2020. We concluded we (different civilian agency) didn't have the regulatory authority to do it without a deviation at the time. We ended up doing something similar that approximated firm fixed price by establishing a ceiling price to construct at ~35% design and having a shared savings incentive if the contractor was able to beat that price once design was finalized.

One of the first things I thought of when RFO 16 was published was that we would no longer need a deviation if we wanted to try a true CMAR out. But, now I would have to justify an other than FFP contract to the agency head, and anything worth doing as CMAR would almost certainly exceed $10M, so would require Secretarial approval on top of the million other things that need to be approved.

GSA has been aware of the CMc (Construction Manager as Constructor) method, aka Construction Manager at Risk, since at least 1997, and they used it before they published "guidance" on its use in the GAS FAR Supplement. See the 105th Congress congressional hearing held in 1998. See: New Washington Convention Center : hearing before the Subcommittee on the District of Columbia of the Committee on Government Reform and Oversight, House of Representatives, One Hundred Fifth Congress, second session, July 15, 1998:

GSA recommended that the WCCA pursue an "at risk" construction manager as constructor (CMc) contract. Experience has shown that this method of contracting helps to minimize adversarial relationships between the parties, thus reducing claims and change orders.

The hearing is available at Google Books. Here is the GSA's testimony:

78.pdf

19 hours ago, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

Why "Ha Ha"? What did the naysayers say?

This thread began as discussion of the recent E.O. calling for approval of any contract other than fixed-price.

GSA can try all the methods of construction contracting it can think of, but they won't solve the problems of cost (and schedule) overruns on construction projects. Although that won't stop them from claiming success in that regard.

Government construction contracting is both the most competitive kind of government contracting and the most litigious, and it always will be. The problems are inherent in the nature of the work and in the nature of the owner-designer-constructor relationships. Conflict and litigation or its threat are common in all construction project markets worldwide. There is a HUGE literature about it.

There are no miracle cures.

Anyway, "price" ⸺ as used in connection with government contracts other than those for simple purchase transactions ⸺ is a mythical conception.

On 5/7/2026 at 8:42 AM, C Culham said:

As I follow the discussion I had this additional thought.

Maybe it is a good idea in the eyes of the ivory tower folks due to the shrinking Federal workforce and staffing for contract administration for other than FFP contracts. Adequate acquisition workforce staffing for contract administration specifically. Along with adequate staffing of the "other assigned duties" of program folks to perform as contracting officer representatives.

I suggest this without any data but would offer the failure in contract administration has a direct relation to additional cost for other than fixed price contracts. I would also suggest that the dire straits of the acquisition workforce will have direct negative cost impact on any type of contract in the contract administration phase..

You do have a point. Not to be rude, but DCMA no longer provides adequate contract admin and regularly declines contract admin. The services are own their own anymore for contract admin with no additional manpower.

On 5/24/2026 at 10:42 PM, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

Me, too.

5 hours ago, Mattt said:

their own anymore for contract admin with no additional manpower.

(On)?

If yes then that is my point.

It takes more "manpower" to administer other than FFP contracts no matter who provides it. The EO in my view is an attempt to solve an unfolding dilemma of a shrinking workforce that supports and conducts contract admin. Whether a CO, DCMA or those in the world "of other duties as assigned.".

On 5/26/2026 at 12:20 PM, joel hoffman said:

Thanks, Mike. Looks like GSA is using a form of FPI with Successive Targets for GMP construction or design-build construction projects. Ha Ha to the naysayers!

I see from an 8 year old thread where I WAS aware of the GSA method used for (“construction manager”) CM@Risk construction contracts, where GSA was providing and responsible for the design.

It uses a fixed-price incentive with successive targets FPI(ST) contract method, because the contractor doesn’t have control over the design development (maturity of the design) or design changes during design by the government.

The “target price” equals the “ceiling price” as the guaranteed maximum price (GMP).

For design-build projects, the contractor isn’t a construction manager at risk. The design-builder has sole responsibility for both design and construction. It is responsible to develop the design and responsible for the adequacy of the design. Therefore government provides and is responsible for the scope and design criteria.

Therefore, it could be feasible for design-build to use FPI with Fixed Target rather than successive targets. The GMP is based upon the Target price equaling the Ceiling price.

_____________________________

To answer Verns question above about what the naysayers said, I found the eight year old thread about the debate. I doubt that many or anyone would read it through. But I can summarize a couple of objections raised about using the method.

• For other than GSA’s CM@Risk procedures, the FPI method had never used a GMP based upon the target price.

• The typical FPI contracts were extremely over complicated.

https://www.wifcon.com/discussion/index.php?/forums/topic/4083-must-a-fixed-price-incentive-contract-include-separate-target-and-ceiling-prices/page/3/

I don’t want to keep debating plus am no longer involved in the Design-Build Institute of America (DBIA) quest to implement GMP for federal design-build contracts under the regulations without seeking statutory revisions.

General Zhukov said: “RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

I meant to express pleasure that the RFO rewrite appeared to loosen restrictions on using contract types and methods other than those specific procedures described in the legacy FAR part 16.

4 hours ago, joel hoffman said:

General Zhukov said: “RFO :This update [to FAR Part 16] represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures ..."

Don't give the RFO so much credit. The old FAR wasn't that restrictive. Contracting officers have long been able to come up with novel contractual arrangements.

• Think of the award fee incentive, which the Navy invented in 1962, long before it was expressly authorized in the ASPR. The Navy also invented the FPI(F) incentive arrangement.

• Think of the award fee contract with rollover.

• Think of the CPIF contract with negative fee.

• Think of the award term incentive.

• Think of task order contracts, which I used for R&D in an Air Force weapon system program office long before the Federal Acquisition Streamlining Act (FASA).

Almost all contract types other than FFP and CPFF were field experiments before they were officially recognized.

Acquisition practitioners should study the history of their field. For a wide-ranging history of experiment and development in contract types and pricing during and after World War II see Miller, Pricing of Military Procurements, Yale University Press, 1949. (Out of print, but available in some university libraires and at the Library of Congress. I bought a used copy years ago.) If you really want to understand today's policies and the recent Executive Order, read Government War Contracts by J. Franklin Crowell, Oxford University Press (1920), about what happened during WWI. (Out of print, but available used at Amazon.com.)

If all you know about government contract types is what you've read in FAR Part 16, then your education has been limited and underfed. The literature about them is massive. For those who would like to be in charge of policy one day, you gotta read more or you'll just produce more stupid policies.

"Full and open" competition? One of the costliest policies ever imposed in terms of both lead time and litigation. And I have not seen any evidence that it reduces costs and improves quality.

Thanks, Vern. The basic problem in our discussion eight years ago was the result of certain government organizations not accepting a contract type (or any for that matter) that wasn’t specifically described in FAR part 16.

As it turns out, my proposed Guaranteed Maximum Price (GMP) contracting method was already being used by GSA more than eight years ago for certain Construction Manager at Risk (CM@risk) programs .

For GSA, the government would provide and be responsible for the design, which would be developed and finalized after hiring the CM@risk.

In my scenario, for Design-build programs, the design-build contractor provides and is responsible for the design of the project after award.

The GMP contracting method that I described is essentially the same as one approach that the Design-Build industry uses for many non-government programs and is promoted by the DBIA.

The DBIA asked me, as a member of the DBIA’s Government Design-Build Programs Committee, to show how GMP could be used in appropriate circumstances for federal government design-build contracting.

Here is how the American Institute of Architects (AIA) describes the Guaranteed Maximum Price contract:

What is a Guaranteed Maximum Price (GMP) Contract?

A Guaranteed Maximum Price (GMP) contract is a construction contract in which the contractor agrees to complete the project for a set price, with the maximum price being the agreed-upon cap. The owner is only required to pay up to this cap, regardless of how much the project actually costs the contractor. This creates a defined cost for the owner but also puts the onus of any cost overruns on the contractor.

Now, what else might we call that arrangement?

Learn - ACD Operations

Guaranteed Maximum Price (GMP) Contracts: A Complete Guid...

Everything you need to know about Guaranteed Maximum Price (GMP) contracts—how they work, owner and contractor risks, savings provisions, and relevant AIA documents.

In the attached article from The Nash & Cibinic Report, published in 2018, I said:

Over the course of the last 20 years, Government agencies and their contractors have developed contractual instruments that do not fit neatly into the standard, traditional categories described in the FAR.

For centuries, contracting parties have fought over who must pay for what? What we call "contract types" are the products of those conflicts.

CONTRACT TYPES There Are More Things In Heaven And Earth Judge Than Are Dreamt Of In The FAR.pdf

On 5/25/2026 at 1:42 AM, opsyscons said:

I would love an example of these flexibilities that didn’t exist before and actually improve the quality of our acquisitions? I need the morale boost.

20 hours ago, Don Mansfield said:

Me, too.

Well, I was talking about acquisition efficiency, not quality. And I had in mind a very specific example when I wrote that -- my agency was in the process of seeking a class deviation for contract type when we moved from OldFAR to NewFAR. Now we don't need a deviation.

With that stated, I wouldn't die on this hill defending NewFAR. I think NewFAR is more or less a net neutral from an efficiency perspective. In fact, but for the dubious process OMB took to implement it (which Don has called out), I'd say the most remarkable part of NewFAR is the lack of impact it will have on most agencies and practitioners.

13 minutes ago, FrankJon said:

Well, I was talking about acquisition efficiency, not quality. And I had in mind a very specific example when I wrote that -- my agency was in the process of seeking a class deviation for contract type when we moved from OldFAR to NewFAR. Now we don't need a deviation.

With that stated, I wouldn't die on this hill defending NewFAR. I think NewFAR is more or less a net neutral from an efficiency perspective. In fact, but for the dubious process OMB took to implement it (which Don has called out), I'd say the most remarkable part of NewFAR is the lack of impact it will have on most agencies and practitioners.

I'd be interested to know whether new 1102s are able to comprehend NewFAR better than OldFAR. If nothing else, it should be easier to read, right??

11 minutes ago, FrankJon said:

I'd be interested to know whether new 1102s are able to comprehend NewFAR better than OldFAR.

No. Not to comprehend in depth.

Not only new 1102s, but many contracting officers, as well.

Regulations (and government contracts based on them) are a species of legal writing that one must have proper education to properly interpret and fully understand. The government does not give its 1102s that kind of education. They must seek it on their own by reading books and cases. Even then, they may need the help of well-trained attorneys. But regulatory interpretation can be learned.

See, e.g., Inside Regulatory Interpretation by Christopher J. Walker, attached. And see Administrative Law, 7th ed., by Funk and Seamon, 7B, Interpretation of Rules.

Inside Regulatory Interpretation.pdf

I often repeat myself. What the EO overshadows and the continuing discussion points to in my view is that neither the EO, nor the RFO fulfills "Promoting Efficiency, Accountability, and Performance in Federal Contracting". What will is lazer focus on maintaining a quality and adequately staffed acquistion workforce.

My conclusion is supported in part by the discussion of GMP contracts. While they can be successful they can and do result in litigation. Vern mentioned this of sorts in noting the history of construction contracts as a whole. A great GMP contract is only as good as the negotiation and resulting administration of it.

New statutes, legislation and regulation will do nothing to enhance Federal contracting unless it deals directly with the eroding acquisition workforce.