A new survey shows that agencies ratcheted up their use of cost-reimbursement contracts, which critics argue give contractors no incentive to control costs.

Contractors reported getting 45 percent of their federal revenues from these types of contracts last year, up from 40 percent the year before and up from 28 percent three years ago, according to Grant Thornton's 14th Annual Government Contractor Survey. The company surveyed 120 companies for the report, released Monday.

President Barack Obama and congressional Democrats have criticized these contracts, under which agencies pay vendors for costs incurred on a contract up to a ceiling. Vendors are usually eligible to receive additional bonuses for good performance and conservative spending, but auditors have found they are frequently given regardless of how contractors perform.

Last year, Congress directed agencies to rely less on these contracts. Obama pledged to do the same.

The Grant Thornton report notes that contracting in the private sector "normally uses fixed-price or time-and-materials contracts while the government continues to maximize the use of cost-reimbursable contracts."

"It is difficult to equate the high use of cost-reimbursable contracts with the notion that the government is attempting to use more commercial process to streamline federal procurement," the report said.

Government contractors gained 35 percent of revenues through time-and-materials contracts, a type of cost-reimbursement contract that does not offer a performance bonus to control costs.

Only 20 percent of revenues were brought in through fixed-price contracts last year. Under these contracts, agencies reimburse a contractor at a negotiated price, regardless of actual costs. Obama and Congress prefer agencies used fixed-price contracts.

The contractors reported that 90 percent of their revenues came from federal business, the same percentage reported last year but up from 79 percent four years ago.

"It is evident from this trend that as the federal budget increases, government contractors are devoting their time and energy to maximizing business from that market rather than applying resources to expand commercial business," the report said.

Of contractors' total commercial and federal revenues, the Defense Department accounted for 65 percent in 2008, up from 60 percent in 2007. Civilian agencies accounted for only 25 percent, down from 30 percent in the previous year, according to the survey.

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