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U.S. House Small Business Committee Holding Hearing on Change Orders

Friday, May 26, 2017  
  U.S. House Small Business Committee Holding Hearing on Change Orders 

The House Small Business Committee will hold a full committee hearing on the change orders provisions from the federal Construction Industry Procurement Coalition’s bill for 2017.

Representative Don Bacon (R-NE) introduced H.R. 2350, the Small Business Know-Before-You-Bid Construction Transparency Act, on May 4. The bill would require the federal contracting agencies to participate in the federal government’s System for Award Management (SAM) or have an agency website that contains information that all members of the construction team for any project should be able to access. Copies of all payment bonds and the date and amount of each payment made to the general contractor, and any amounts withheld, are among the information that must be posted. All the items required would be available now, and this provision will assist the overworked federal acquisition staff that currently have to respond hundreds of times to requests for this information. Regarding change orders, the bill would require the agencies to disclose upfront their practices in approving changes orders such that bidders could consider the timeliness of agency payments in preparing their bids.

Representative Brian Fitzpatrick (R-PA) introduced H.R. 2594, the Small Business Pay for Performance Act, yesterday. This bill contains the requirement from the Consensus Docs, which is in the Coalition bill. It would permit contractors to submit a request for an equitable adjustment (REA) when a federal agency issues a unilateral change order. The contractor may bill the agency for work completed under the change order while the REA is pending. Once the agency receives the REA, it must pay 50% of the billed costs immediately.

There still are some negotiations underway about addressing the change order issue. We might see a requirement in the legislation for a GAO study on the practices of the federal agencies. Also under consideration is whether the agencies should report progress on REAs under the SAM, as well as progress payments.

Colette Nelson, Chief Advocacy Officer for the American Subcontractors Association will testify tomorrow on behalf of the Coalition.

Members should visit Government Relations / General Info (Members) for more information.



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