H.R. 4754, Change Order Transparency for Federal Contractors Act

Floor Situation

On Tuesday, May 8, 2018, the House will consider H.R. 4754, the Change Order Transparency for Federal Contractors Act, under suspension of the rules. This bill was introduced on January 10, 2018 by Rep. Don Bacon (R-NE) and was referred to the House Committee on Small Business.

Summary              

H.R. 4754 would provide prospective federal construction contractors and subcontractors with the agency-specific change order information, which many contractors argue is needed to plan their operations prior to submitting a bid on a contract. This could enable contractors to better formulate their bid and prepare for delays in payment during the performance of the contract.  The bill also increases transparency in an attempt to encourage agencies to improve their change order process in order to attract the highest-quality contractors at competitive rates. 

Background

During the course over a government contract bidding process, the government may recognize that initial contract is lacking something that is critical to successful completion of the project. In order to ensure adequate quality the government will execute what is known as a “change order.” Contractors and subcontractors currently lack visibility into agencies’ change order processes prior to submitting a bid. This lack of transparency makes it difficult for federal contractors to prepare for the inevitable burden of change orders during the life cycle of the construction project. Federal construction contractors oftentimes have slow approval processes and lack of payment for change orders. While change orders wait to be made definite, contractors and subcontractors continue to incur expenses, while payments from the federal government are delayed.[1]

H.R. 4754 provides prospective federal construction contractors and subcontractors with the information needed to plan their operations prior to submitting a bid on a contract. This legislation would require the contracting agency to provide details on their change order procedures and their historical performance data with solicitations.[2]

According to the bill sponsor, “Small business contractors deserve to know all relevant information before entering into a contract with a federal agency. Currently, small businesses waste time and money while waiting for the approval of their change order requests. […] Many small contractors and subcontractors will now have the opportunity to compete on a level playing field and achieve greater financial health for their companies.”[3]

Cost

A Congressional Budget Office (CBO) estimate is not currently available.

Staff Contact

For questions or further information please contact Ryan Hofmann with the House Republican Policy Committee by email or at 2-6674.