In today’s federal contracting landscape, cost pressures, personnel turnover, and acquisition reform are coming together in powerful ways. Many contractors are finding themselves in conversations about shifting project directions, decreasing budgets, and how to move forward when an existing plan no longer works. What may begin as a complex internal challenge, such as reassessing the cost, scope, or delivery method of a funded project, can quickly become an opportunity for innovation when approached with strategic clarity.
Here are four key takeaways based on recent advisory work we supported, offering lessons for any contractor working under cooperative agreements or other non-traditional mechanisms.
- Evolving Scope Doesn’t Require Starting Over
When the method of performance changes, contractors must navigate how to preserve the original purpose while adapting to new realities. This might look like shifting from new facility construction to retrofitting existing space, transitioning from in-house R&D to partnerships with third-party labs, migrating on-premise data systems to the cloud, or adapting in-person training programs into virtual formats. In each case, the core objectives remain, but the delivery model evolves. Such pivots are permitted under cooperative agreements, provided both parties agree and the underlying public purpose is maintained.
This allows for faster approvals, reduced administrative burden, and uninterrupted funding, but only when the contractor clearly presents the change as aligned with the mission and supported by strong justification.
- Be Prepared to Translate Scope into Outcomes
Agencies are increasingly favoring fixed-price structures, even under cooperative agreements or other transactions. To support this shift, contractors need to be ready to:
- Define discrete, milestone-based deliverables
- Quantify their value-in-kind or cost-share contributions
- Offer alternate performance plans that maintain transparency without excessive oversight
This isn’t about taking on more risk blindly. It’s about offering clarity and structure in a way that meets government expectations while still aligning with your business goals.
- Know That Not Everyone at the Table Has the Same Knowledge
In many cases, especially given the current political environment, federal agencies are dealing with contracting staff turnover, budget reprogramming pressures, and consolidation of procurement operations. As a result, the contracting officer or program manager you are working with today may not fully understand the original intent of your award or be aware of the regulatory tools available to support a course correction.
Be the informed party. Come to the table ready to explain your options (e.g., scope modification or partial termination vs. termination and new award), cite the relevant regulations, and propose solutions that are low-friction for both sides.
- Termination Isn’t Always the Streamlined Option It Seems to Be
When a project goes off-script, some agencies may instinctively lean toward termination, but termination is often a blunt tool for a situation that needs surgical strategy. It can introduce delays, sever valuable momentum, and create administrative headaches, especially when funding deadlines or asset disposition rules apply.
Contractors who understand the flexibility available within their current award instrument, such as cooperative agreements or other transactions, are often better positioned to propose creative solutions that realign scope, maintain continuity, and keep the public mission on track without restarting from scratch.
What Contractors Can Do Now
To navigate these changes effectively, contractors should consider the following best practices:
- Frame your pivots strategically: If you’re changing how a project will be delivered, connect the dots clearly for the government, especially how it still meets the original mission.
- Stay grounded in the regulations: Know what flexibility your agreement type allows and cite the specific provisions that support your path forward.
- Anticipate the education gap: Not all federal partners will have deep experience with non-FAR agreements or flexibilities. Lead with clarity and documentation.
- Avoid termination if possible: In most cases, it’s more efficient to restructure under an existing award than to start from scratch.
In an acquisition environment where speed, cost control, and public value are paramount, strategic adaptability is your competitive edge. Whether you’re navigating a scope change, budget decrease, or contract type shift, knowing your options and how to present them can make the difference between a stalled project and a successful pivot.
