Sending Office: Honorable Marc A. Veasey
Sent By:
Zahraa.Saheb@mail.house.gov
Support Rep. Stauber and Rep. Veasey’s Bipartisan Effort to Protect Small Business Construction Contractors
Endorsed by the American Subcontracting Association, National Electrical Contractors Association, National Defense Industrial Association, the Professional Services Council, and FCA International
Co-Sponsors: Rep. Fitzpatrick, Rep. Peters (Scott)
Dear Colleague,
Small businesses are critical for a healthy, competitive, and innovative federal contracting marketplace. Federal construction is one industry in which small businesses offer significant contributions. When agency conduct threatens the financial sustainability
of a small business, all parties suffer as a result.
Please join us in co-sponsoring the Small Business Payment for Performance Act of 2019, to require fair and ethical treatment of small construction contractors by federal agencies.
Small business contractors and subcontractors in the construction industry are challenged daily with the complexities of the bidding process and then receiving payment in a timely manner for work performed. Equitable changes to the contract, commonly known
as change orders, are ubiquitous on construction projects and slow approval of change orders can result in delayed payment. Small businesses typically do not have enough capital and resources to sustain long periods of nonpayment and are dependent on a stable
cash flow to stay afloat. Thus, small businesses are particularly vulnerable to any changes to the scope of work on a contract and corresponding delays in payments.
Changes to scope of work on a contract can be initiated, unilaterally, by one party; often, the federal agency. These unilateral changes to the requirements of the construction contract are made without the contractor’s consent. Nevertheless, small businesses
perform the unilaterally-ordered changed work, incurring out-of-pocket costs for labor, supplies, etc. to avoid putting the contract at risk.
The work that small businesses perform, at the behest of the agency, are done at great financial risk to the small business, hoping that they will eventually be paid on the extra work ordered unilaterally by the agency. Unfortunately, small businesses are
not being paid in a timely manner, or at all, for the changed work completed. The result is fewer small businesses competing for federal contracts, thus reducing competition resulting in increased costs, and reduces the pool of qualified small construction
contractors willing to do with the federal government which harms the health of the industrial base.
The Small Business Payment for Performance Act of 2019 forces agencies to be accountable for changed work they order by funding their own construction projects in a timely manner, instead of diverting that financial burden to the
small contractors. Mitigating the risks imposed on small construction contractors will encourage small business participation in the federal construction marketplace, driving competition and decreasing prices for the federal government.
For more information or to sign on, please contact Allie Esau in Rep. Stauber’s Office at
Allie.Esau@mail.house.gov
or 5-6211, or Zahraa Saheb in Rep. Veasey’s Office at
Zahraa.Saheb@mail.house.gov or 5-9897.
Respectfully,
Pete Stauber Marc Veasey
Member of Congress Member of Congress
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