Stimulus law requires fixed-price contracts

Congress included language in the stimulus law (H.R. 1) that requires the government to spend money from the new law under fixed-price contracts as much as possible. A fixed-price contract has a price that isn't subject to adjustment.

The provision is another step in a congressional crackdown on contracts that give companies rewards for their work. The fiscal 2009 National Defense Authorization Act, which became law in October, includes provisions that restrict the use of cost-reimbursement contracts and incentive-based contracts.

The House Appropriations Committee included the fixed-price provision in its version of the stimulus bill, but the Senate had no such language. As representatives from the House and Senate worked out the details of the final bill, they added the short provision.

Meanwhile, the provision has upset some.

“When are they going to stop telling me how to do my job?” a contracting officer said after hearing about the provision. The officer, who requested anonymity because the officer isn't authorized to discuss the legislation, said those officers thoroughly understand the procurement process, more so than any member of Congress. Legislators shouldn’t limit contracting officers from entering contracts that may more appropriately suit the circumstances, the officer said.

The provision also includes another oversight requirement. Contracts without a fixed price and awarded without competition for the work must be posted in a special section of Recovery.gov, according to the law signed by President Barack Obama today. Recovery.gov is a portal to key information on how the government is spending the stimulus money.

“This is your money. You have a right to know where it’s going and how it’s being spent,” the site states. The Web site has no special section for the contracts.

Congress passed the stimulus bill Feb. 13.

The exact language of the law reads, "To the maximum extent possible, contracts funded under this act shall be awarded as fixed-price contracts through the use of competitive procedures. A summary of any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the Web site established in section 1526."

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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