[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.

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