In a recent letter to the House, SMACNA expressed its enthusiastic support for H.R. 2594, the Small Business Payment for Performance Act of 2017, bipartisan legislation introduced by Representative Brian Fitzpatrick (R-PA) and cosponsored by Representative Stephanie Murphy (D-FL), Representative Stephen Knight (R-CA) and others. This important bill, recently reported from the Small Business Committee as amended, would make long overdue reforms advocated by small business federal contractors to more quickly and fairly resolve change order payment disputes.
SMACNA strongly agrees with the comments of H.R. 2594’s sponsor, Rep. Fitzpatrick, “For small businesses, federal contracts can lead to good jobs, but can also result in many headaches. While businesses regularly deal with change orders in the private sector, contractors and subcontractors on federal construction projects are often forced to bear a financial burden by the slow process of approval. Some federal agencies routinely delay the approval process until the end of the project. That isn’t fair”. For these reasons and many more we endorse the sponsor’s intent of H.R. 2594, legislation that would allow contractors to submit a request for equitable adjustment (REA) or project contract fee adjustment to an agency that had approved a performed change order to a project’s original design or scope. H.R. 2594 will ensure small business federal contractors get paid sooner for completed change order as directed by agency officials. Specifically, the legislation allows contractors to submit a request for equitable adjustment (REA) - or an increase in fee - to the agency. The contractor may then bill the agency for any actual change order work completed while the REA is pending. Once the agency receives the REA, it must pay 50% of the billed change order work amount in a timely manner to offset extra costs. While this legislation is not the entire solution to the millions of dollars in change order inequities SMACNA contractors face every year, it is a very significant first step most worthy of passage.