[Congressional Record Volume 151, Number 124 (Thursday, September 29, 2005)]
[Extensions of Remarks]
[Pages E1987-E1988]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    INTRODUCTION OF LEGISLATION TO PROVIDE EQUITY FOR GRAND CANYON 
                             SUBCONTRACTORS

                                 ______
                                 

                            HON. RICK RENZI

                               of arizona

                    in the house of representatives

                      Thursday, September 29, 2005

  Mr. RENZI. Mr. Speaker, I rise today to introduce legislation, with 
Congressman Pastor and Congressman Hayworth, to authorize the National 
Park Service to pay for services performed by subcontractors under a 
contract issued for work completed at the Grand Canyon National Park.
  In fiscal years 2002 and 2003, the Grand Canyon National Park issued 
approximately 43 task orders to Pacific General, Inc. (PGI), under an 
Indefinite Deliver/Indefinite Quantity contract. The value of these 
task orders was more than $17 million for several construction projects 
throughout the Park.
  According to invoices sent to the Park, PGI certified that payments 
were being sent to subcontractors and suppliers. However, in January 
2004, complaints were received by numerous subcontractors that they had 
not received payment from PGI. The National Park Service paid more than 
$10 million to PGI. Of this amount, PGI did not pay $1.3 million to 
subcontractors who performed the work.
  The Washington Contracting and Procurement Office of the National 
Park Service performed an acquisition management review. In this 
review, the National Park Service it was discovered that the Park had 
failed to ensure that PGI obtained the necessary payment and 
performance bonds required by the National Park Service and required 
under the Miller Act (40 D.S.C. 270a).
  On February 6, 2004, the National Park Service suspended further 
payment to PGI and issued a suspension notice to cease activity by the 
contractor. PGI has ceased business and it is unlikely that the Federal 
Government will recover the $1.3 million issued to PGI.
  The subcontractors who were not paid by PGI fall into two categories. 
The first category consists of those subcontractors that performed work 
on various projects where the National Park Service had already paid 
PGI for the work. The second category of subcontractor is composed of 
subcontractors who performed work on various projects where the 
National Park Service had not paid PGI for the work. The National Park 
Service has withheld $906,335 in payment for this work that will be 
paid to the second category of subcontractors that performed work.
  The National Park Service has been unable to pay the first category 
of subcontractors who performed work in the Grand Canyon National Park 
because contract law prohibits payment directly to subcontractors due 
to the lack of a direct, contractual relationship between the parties.
  Mr. Speaker, this legislation authorizes the National Park Service to 
pay the $1.3 million to subcontractors who have performed work at Grand 
Canyon National Park and were not paid by PGI. This legislation only 
addresses this situation in the Grand Canyon National Park and the $1.3 
million that the Park paid to PGI for work performed by the 
subcontractors.
  Many small businesses in Arizona, Utah and Washington, have been 
affected by this unfortunate contract mismanagement. This legislation 
will fix a grave inequity for many of our

[[Page E1988]]

small businesses and ensure that these companies are paid for work 
already performed in the Grand Canyon National Park.
  Mr. Speaker, I urge my colleagues to support this important 
legislation.

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