A bipartisan bill recently introduced in the House seeks to protect construction contractors from unfair change orders by federal agencies during the procurement process.
The Small Business Payment for Performance Act – sponsored by U.S. Reps. Pete Stauber (R-MN), Marc Veasey (D-TX), Scott Peters (D-CA), and Brian Fitzpatrick (R-PA) – would allow small businesses to request an equitable adjustment to the contracting officer if the contracting officer places a change order without the agreement of the small business. Further, it would require the federal government to pay at least 50 percent of the cost occurred from the change order upon receipt of the equitable adjustment.
“Small businesses are the economic engines of our economy, and it’s important that the federal government does not place undue burdens on them while fulfilling government contracts,” Stauber said. “The Small Business Payment for Performance Act will hold the federal government accountable for any changes in contracts won by small businesses to make sure small contractors don’t have any unexpected financial burdens while completing contracts. This will result in more small businesses competing for federal contracts and more economic prosperity for our communities.”
Stauber and Peters are co-chairs of the Construction Procurement Caucus.
“Bidding for and maintaining federal contracts should not be an uphill battle for the small businesses in our communities,” Peters said. “This bill provides small construction contractors certainty, financial protection and ensures a level playing field once all parties agree to a contract. I appreciate my colleagues’ collaboration on this bill to account for any unexpected changes that would otherwise impose additional costs on small businesses.”
Several groups have endorsed the legislation, including the American Subcontractors Association and the Associated General Contractors of America.
“The Associated General Contractors of America (AGC) applauds Rep. Pete Stauber (R-MN), Scott Peters (D-CA), Brian Fitzpatrick (R-PA), and Rep. Marc Veasey (D-TX) for introducing bipartisan legislation—entitled the Small Business Payment for Performance Act—that will help small businesses who provide critical services for the federal government,” Jimmy Christianson, vice president of government relations at Associated General Contractors of America, said. “This bill will help ensure small business construction contractors receive timely payment for change orders. Construction firms of all sizes, but especially small businesses, have had to weather the effects of the pandemic and soaring construction materials costs. This commonsense and bipartisan bill will help ensure that our nation’s small business construction contractors do not go broke waiting to be paid for work the federal government ordered them to perform.”