The Handoff Tax: Continuing Non-Native Trajectories in LLM Agents

Coding agents perform long-running tasks spanning dozens of model calls, tool uses, and code edits. As these runs unfold, users face a practical cost-quality trade-off: escalating to a stronger model when a cheaper one struggles, or downshifting once the hard reasoning is complete. Each switch requires the receiver to continue a non-native trajectory produced by another model. We study how this handoff affects quality and cost, and how varying the trajectory information inherited by the receiver changes the outcome. Using pairs of low-cost, low-capability (LC) and high-cost, high-capability (HC) models from the Claude and GPT families, we vary handoff direction, timing, and interface, comparing full-trajectory transfer, compaction, and trajectory removal while preserving the repository state. Across both model families, full-trajectory escalation recovers less than half of the LC-to-HC quality gap while incurring a substantial cost premium. We term this cost-quality penalty the handoff tax. By contrast, downshift offers a favorable cost-quality point. Interestingly, the preferred interface also reverses with direction: reducing LC-model trajectory information improves escalation quality, whereas removing the HC-model trajectory reduces downshift quality.

TRACE-ROUTER: Task-Consistent and Adaptive Online Routing for Agentic AI

Routing to select large language models (LLMs) with different cost-quality trade-offs has become a fundamental deployment feature of enterprise AI. Existing routers, primarily make independent routing decisions for each LLM call. However, agentic applications execute as long-horizon workflows whose quality is determined only by a delayed, task-level outcome. This mismatch prevents per-call routers from correctly attributing feedback to individual routing decisions. Towards mitigating this, we present TRACE-Router, a task-level routing framework that aligns routing with the unit of supervision. TRACE-Router assigns each task to a model once at admission using a contextual bandit, pins all subsequent LLM calls to the selected backend, and updates its policy using the task's terminal reward, jointly accounting for accuracy and latency. By leveraging delayed task feedback, TRACE-Router learns routing policies that adapt to the workload while avoiding explicit task-complexity estimation. Across three agentic benchmarks, TRACE-Router consistently improves the accuracy-latency trade-off, achieving non-dominated Pareto frontier points. On tau2-Bench, it outperforms latency-matched interpolation between individual models by 7-8 accuracy points, while on Terminal-Bench it achieves 7.1 higher accuracy points than the strongest single model baseline with 36% lower latency.

Agentic Routing: The Harness-Native Data Flywheel

Large language model agents are increasingly executed not by a single model call, but by an execution harness that manages observation, context, control, action, state, and verification. At the same time, frontier and open models are becoming structurally specialized: a model that is strong at code editing, long-context recovery, tool use, mathematical reasoning, or low-latency response may not dominate on the other axes. This makes model selection inside an agent a core systems problem rather than a per-query serving trick. Existing routing methods mostly optimize single-turn cost-quality trade-offs and therefore miss the execution state, intermediate failures, and feedback loops that make agents different from chat completion. We propose Harness-Native agentic routing, a step-level routing paradigm that selects either a single best-fit model for cost-effective execution or multiple complementary models for ensemble-style accuracy improvement, conditioned on the full harness state. The key insight is that every routing decision naturally produces a structured data record -- consisting of the query, harness state, model choice or model set, execution trace, outcome, and cost -- whose labels are supplied by the environment rather than by the router itself. These records form a harness-native data flywheel: execution traces train better routers and harness-native models, which improve cost-quality trade-offs and generate more traces under the same budget. We instantiate this idea in OpenSquilla with a four-layer routing stack, an open LightGBM cold-start ranker, and a staged router-model path that turns logged arena records into progressively stronger routing policies. The report studies singleton and multi-model routing on agentic benchmarks including DRACO and PinchBench, and argues that agentic routing is not merely cost control, but a data engine for agent-native training.