Peraton at the ASBCA: Fixed Fee, Level-of-Effort, and the Risk of Underutilization

The ASBCA’s Peraton decision clarifies how fixed fee is paid under CPFF level-of-effort service task orders: fee is earned per hour actually performed unless the CO modifies the LOE. Negligent-estimate theories don’t rescue contractors under IDIQ cost-reimbursement awards. Key takeaways for service providers: ask questions, avoid unilateral fee changes, and plan for under-utilization.