SMACNA supports Congressman Pete Stauber’s NDAA Amendment #365, which would make essential reforms to federal contracting practices to resolve change order disputes that threaten the economic health of federal contractors working on government projects; this critical proposal passed the House in the 117th Congress. It continues to receive bipartisan support from more than two dozen leading congressional infrastructure advocates in this Congress. Further, it has broad business support from leading union and non-union federal construction contracting organizations responsible for the vast majority of federal building on military and non-defense priority projects nationwide.
Under current federal procurement practices, builders like ours are too often not paid for change orders until after the entire federal project is finished, months or years later. This is not a small financial matter. The federal government can add millions of dollars to the cost of a project via a change order for individual contractors. It can take months or years of waiting to recoup those costs at considerable harm to favored federal contractors, often small and medium sized businesses. Meanwhile, contractors must absorb these financing costs, keep paying their workforce, suppliers, and other subcontractors performing related project work. More and more often this deters the most qualified contractors with a skilled workforce away from federal work and incentivizes bidders to increase their overall pricing to compensate for the lag in payment.
The Stauber Amendment (#365) would address this problem by requiring the federal government to pay 50% of the cost of a change order once those additional changes are completed, approved and certified by federal contracting officials. The remaining 50% would be paid no later than after the entire federal project is complete. Simply put: this legislation would help contractors get paid sooner for mid-project change orders they perform at the government’s request. Promptly paid, quality-driven federal contractors will continue to bid on Defense and other federal projects rather than shift their skilled workforces to private projects where invoices and change orders are far more promptly resolved and payment made on time.
