[Congressional Record Volume 164, Number 74 (Tuesday, May 8, 2018)]
[House]
[Pages H3800-H3801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CHANGE ORDER TRANSPARENCY FOR FEDERAL CONTRACTORS ACT
Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4754) to amend the Small Business Act to provide prospective
construction contractors with information about an agency's policies on
the administration of change orders to allow such contractors to make
informed business decisions regarding the pricing of bids or proposals,
and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4754
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Change Order Transparency
for Federal Contractors Act''.
SEC. 2. CONSTRUCTION CONTRACT ADMINISTRATION.
Section 15 of the Small Business Act (15 U.S.C. 644) is
amended by adding at the end the following new subsection:
``(w) Solicitation Notice Regarding Administration of
Change Orders for Construction.--
``(1) In general.--With respect to any solicitation for the
award of a contract for construction anticipated to be
awarded to a small business concern, the agency administering
such contract shall provide a notice along with the
solicitation to prospective bidders and offerors that
includes--
``(A) information about the agency's policies or practices
in complying with the requirements of the Federal Acquisition
Regulation relating to the timely definitization of requests
for an equitable adjustment; and
``(B) information about the agency's past performance in
definitizing requests for equitable adjustments in accordance
with paragraph (2).
``(2) Requirements for agencies.--An agency shall provide
the past performance information described under paragraph
(1)(B) as follows:
``(A) For the 3-year period preceding the issuance of the
notice, to the extent such information is available.
``(B) With respect to an agency that, on the date of the
enactment of this subsection, has not compiled the
information described under paragraph (1)(B)--
``(i) beginning 1 year after the date of the enactment of
this subsection, for the 1-year period preceding the issuance
of the notice;
``(ii) beginning 2 years after the date of the enactment of
this subsection, for the 2-year period preceding the issuance
of the notice; and
``(iii) beginning 3 years after the date of the enactment
of this subsection and each year thereafter, for the 3-year
period preceding the issuance of the notice.
``(3) Format of past performance information.--In the
notice required under paragraph (1), the agency shall ensure
that the past performance information described under
paragraph (1)(B) is set forth separately for each
definitization action that was completed during the following
periods:
``(A) Not more than 30 days after receipt of a request for
an equitable adjustment.
``(B) Not more than 60 days after receipt of a request for
an equitable adjustment.
``(C) Not more than 90 days after receipt of a request for
an equitable adjustment.
``(D) Not more than 180 days after receipt of a request for
an equitable adjustment.
``(E) More than 365 days after receipt of a request for an
equitable adjustment.
``(F) After the completion of the performance of the
contract through a contract modification addressing all
undefinitized requests for an equitable adjustment received
during the term of the contract.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
I thank Mr. Bacon for introducing this good government legislation.
It is a protransparency bill, and it addresses an often overlooked
problem facing small Federal construction contractors. He has been a
leader on this issue, and we appreciate that very much because it is an
important bill.
Our Federal Government spends billions of dollars on construction
annually, an industry that is critical to rebuilding our Nation's aging
infrastructure. Small businesses are the lifeblood of construction,
performing in various roles across the entire supply chain.
Unfortunately, no construction project is immune to change. Contract
modifications or change orders are prevalent in construction
contracts--in fact, in virtually all construction contracts. The issue
arises when the Federal agency delays executing a change order or
issuing payment for the work completed. This leaves the small
contractor responsible for financing the work out-of-pocket while also
paying for overhead costs.
Extended delays in payment can result in severe financial
consequences, sometimes including bankruptcy for small contractors.
Agencies currently do not publish information regarding their contract
modification processes or payment records, leaving contractors
basically in the dark.
Without this information, small prime contractors and subcontractors
take an enormous risk every time they submit an offer with an agency
that may be acting in less than good faith. Furthermore, small
contractors are often unable to develop accurate bid prices if they
choose to risk working with the agency.
To offset the risk of delayed or nonpayment, contractors may inflate
the cost of their bids, passing on these costs to the taxpayer. Due to
the lack of transparency promoting a high-risk, high-stakes
environment, working with the Federal Government becomes less
appealing. Small contractors are leaving the marketplace in favor of
private sector projects, which reduces competition.
This bill, Mr. Bacon's bill, takes a critical step forward by
requiring the contracting agency to disclose, in their solicitations,
the details of their change order procedures, as well as a historical
record showing whether change orders are resolved in a timely manner.
{time} 1400
Contractors can use this information to decide, first and foremost,
if they want to bid; and if so, they can formulate more realistic cost
estimates and better prepare for delays in payment.
This bill, Mr. Bacon's bill, should also encourage agencies to
improve their own internal change order processes, making the Federal
construction marketplace attractive again. Ultimately, this legislation
will result in expanding the industrial base, improving transparency
and government accountability, and ensuring that high-quality
structures are built at a reasonable cost.
Mr. Speaker, I urge my colleagues to support this bipartisan
legislation, and I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of H.R. 4754, the Change Order
Transparency for Federal Contractors Act.
As this body seeks ways to foster small business growth and
expansion, we must always carefully consider what is being done to
maximize entrepreneurs' participation in the Federal marketplace.
As we all know, when small companies are awarded Federal contracts,
the result is a win-win. Small businesses provide quality goods and
services at affordable prices, meaning a better deal for the government
and the taxpayer. At the same time, it can mean significant growth
opportunity for small businesses and even the need for new employees.
Yet one longstanding barrier remains to small business participation
in the Federal marketplace. The practice of contract modifications
drastically delays the payment to contractors
[[Page H3801]]
while increasing the risk they take on, and processing change orders
slows down other parts of the project, jeopardizing the ability of
contractors to meet their obligations.
All of this results in significant financial burdens on contractors,
often ending in bankruptcy. This is particularly true when liquidity is
slim and the burden of insurance and licensures is high.
H.R. 4754 provides much-needed certainty to prospective Federal
construction contractors and subcontractors so they can appropriately
plan their operations before submitting their bid for Federal work.
This level of transparency is vital to securing the survival of small
construction contractors.
Mr. Speaker, I urge all of the Members to support this legislation,
and I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, before I yield to the principal sponsor of
this legislation, Mr. Bacon, I would like to thank my colleague Steve
Knight from California for working on this as well; and also Al Lawson
from Florida, and also Stephanie Murphy from Florida. So we have two
Republicans and two Democrats again working together on this on behalf
of small businesses all across the country, and I want to thank all
four of those Members for their leadership on this on both sides of the
aisle.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Nebraska (Mr. Bacon).
Mr. BACON. Mr. Speaker, I thank Chairman Chabot for his leadership
for the part of our country that is the engine of our economy, small
businesses, of which 47 percent of our American workers are a part. So
we appreciate his leadership.
I also want to thank the ranking member for her support of this bill.
I appreciate the bipartisan effort to get this bill done. In fact, they
both summarized the benefits of this bill very well.
Mr. Speaker, I urge my colleagues to support H.R. 4754, the Change
Order Transparency for Federal Contractors Act.
This bill is a commonsense, preventative measure designed to protect
small businesses from loss by providing them with critical information
up front, prior to submitting a bid on a Federal construction project.
Ultimately, and this is the bottom line, this legislation is about the
Federal Government paying its bills on time.
Currently, small businesses are flying blind. Before they bid, they
have no knowledge of an agency's change order process or history of
payment. Construction is an inherently complex industry that inevitably
requires changes to the original plan. Construction contractors must
deal with this inevitability, but without knowledge of their customer's
business practices, they cannot formulate accurate offers or
sufficiently plan their operations prior to bidding. As a result, they
may unknowingly place their business in jeopardy by working with an
agency with a poor track record of timely payment.
This is not a hypothetical problem. In our committee, we have heard
businesses over and over again go through this problem. We have to
address it. Actual businesses should not have to worry about being paid
by the Federal Government on time.
While large contractors may have the resources and capital to absorb
some of the loss, small businesses struggle to stay afloat as they wait
for payment. In addition to financing the cost of the changed work,
small businesses are forced to pay their own bills while waiting for
the agency to act. This includes payroll, material costs, and even
taxes. This problem is compounded and made even worse for small
subcontractors, who are often the last in line to receive payment.
H.R. 4754 will provide prospective Federal construction contractors
and subcontractors with the information they need prior to submitting a
bid. Agencies would be required to publish, as part of their
solicitation, detailed information about their change order processes
and timely payment data. This information could preserve the role of
small contractors as part of our industrial base by making Federal
contracts more attractive to small businesses and make the process more
competitive. A more competitive bidding process for Federal contractors
would benefit both small businesses and taxpayers.
Mr. Speaker, I urge my colleagues to support this commonsense
legislation.
Ms. VELAZQUEZ. Mr. Speaker, I yield 3 minutes to the gentleman from
Florida (Mr. Lawson), who is the lead cosponsor of the bill.
Mr. LAWSON of Florida. Mr. Speaker, I rise in support of H.R. 4754,
the Change Order Transparency for Federal Contractors Act. This is an
important piece of legislation that guarantees that small businesses
have the necessary information regarding change order policies from
Federal agencies.
The work of the Federal Government relies heavily on the support of
our Nation's small businesses. For everything from construction of
important military infrastructure to guaranteeing the proper design for
Federal facilities, small businesses are at the center of
infrastructure for the Federal workplace.
When taking on Federal contracts, small businesses are also taking a
great risk. With Federal funds not always guaranteed in a timely
fashion, change orders make the work that small businesses perform for
the Federal Government complicated and unpredictable.
H.R. 4754 requires agencies to outline in a clear and defined manner
the policies they have regarding change orders. This will make it
easier for small businesses to compete for and understand the contracts
which they are awarded.
It is vital for small-business owners to not only get a seat at the
table, but to also have the same vantage point when competing for
Federal contracts. This legislation will alleviate red tape and open
more doors for opportunity.
Mr. Speaker, I am proud to work with my colleague Don Bacon on this
bipartisan piece of legislation, and I encourage my colleagues to
support this bill.
Mr. CHABOT. Mr. Speaker, I have no further speakers on the bill at
this time, so I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time.
In closing, it is obvious that we must take this historic step in
providing transparency in the contract modification process. As we
contemplate ways to bolster our infrastructure with the goal of
employing millions, H.R. 4754 provides certainty to the many small
firms potentially involved in that process.
By requiring Federal agencies to prospectively notify contractors of
the agency processes they would be subject to if awarded a contract,
the Federal marketplace is once again attainable to small construction
contractors.
It is critical that this Congress work to remove barriers preventing
small firms from successfully performing Federal work and getting paid
for all of the work they perform.
Mr. Speaker, I urge Members to support this bill, and I yield back
the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
In closing, this legislation provides a level of certainty for small
businesses who contract with the Federal Government. It is a
commonsense, bipartisan bill that benefits small firms and ought to
improve efficiency within the Federal contracting arena.
Mr. Speaker, I again thank Ms. Velazquez for her work in a bipartisan
manner on this legislation.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
The SPEAKER pro tempore (Mr. Mitchell). The question is on the motion
offered by the gentleman from Ohio (Mr. Chabot) that the House suspend
the rules and pass the bill, H.R. 4754.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________