Tuesday, January 16, 2018

Congressman Wants Agencies to Compile More Data

Are contractors (and subcontractors) harmed financially because the Government can't (or won't) definitize change orders in a reasonable amount of time? Are small business contractors more harmed than non-small businesses? That seems to be the case based on legislation recently introduced in the House by Congressman Bacon (Nebraska).

According to Bacon:
Time is money for all businesses, but even more so for small businesses. Requests for equitable adjustments to a contract, more commonly known as change orders, are abundant on federal construction projects. 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 are increasingly frustrated by the slow approval process and lack of payment for change orders. While change orders wait to be made definite, contractors and subcontractors must pay their own bills - payroll, material costs, and even taxes - while payments from the federal government are delayed.

Bacon's bill is intended to provide prospective federal construction contractors and subcontractors with the information needed to plan their operations prior to submitting a bid on a contract. It would require the contracting agency to provide details on their change order procedures and their historical performance data as part of the solicitation.

Specifically, the following information must accompany solicitations for construction contracts anticipated to be awarded to small businesses. It must cover the prior three-year period.

  • Information about the agency's policies or practices in complying with FAR requirements relating to the timely definitization of requests for an equitable adjustment and
  • Information about the agency's past performance in definitizing requests for equitable adjustments.

While we can empathize with the cash flow concerns of small businesses, we do not believe such information will have an impact on whether a small business contractor decides to bid or forgo a bid on a construction contract. Most companies do not enter into a contract with the expectation that equitable adjustments will naturally follow. And if something occurs that would necessitate an equitable adjustment, will a small business contractor forgo the opportunity just because an agency takes 90 days instead of 60, or 30?  We think not.

This will create more work for acquisition agencies to compile and keep current and seems contrary to the work of the Section 809 Panel.

No comments:

Post a Comment