Sheet Metal & Air Conditioning Contractors’ National Association

SMACNA Urges House to Support Change Order Reform (H.R. 2344)


In a recent letter to the House, SMACNA expressed its enthusiastic support for H.R. 2344, the Small Business Payment for Performance Act of 2019, bipartisan legislation introduced by Representative Marc Veasey (D-TX) and cosponsored by Representative Pete Stauber (R-MN). This important bill, introduced April 18th, was referred to the Small Business Committee and awaits consideration. H.R 2344 would make long overdue reforms advocated by small business federal contractors to more quickly and fairly resolve change order payment disputes. In the 115th Congress this bipartisan legislation (Fitzpatrick/Murphy) was reported to the floor as H.R. 2594 on June 15, 2017 by an 18-3 vote of the Small Business Committee but did not receive an expected floor vote.

SMACNA strongly agrees with the language and intent of the sponsors in introducing H.R. 2344. This vitally important legislation 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. 2344 would 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.

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