WASHINGTON, D.C. – Representatives Brian Fitzpatrick (PA-08), Stephanie Murphy (FL-07) and Steve Knight (CA-25) introduced legislation Tuesday to ensure small business federal contractors get paid in a timely manner for change orders. The Small Business Payment for Performance Act [H.R. 2594] allows contractors to send an invoice once the change order is completed and request that they get paid 50% of the bill immediately to offset the extra costs. Currently, small businesses contract without this protection.

“For small businesses, federal contracts can lead to good jobs, but can also result in many headaches. While businesses regularly deal with change orders in the private sector, contractors and subcontractors on federal construction projects are often forced to bear a financial burden by the slow process of approval. Some federal agencies routinely delay the approval process until the end of the project. That isn’t fair,” said Fitzpatrick. “The Small Business Payment for Performance Act stands up for small businesses by requiring federal agencies to make interim partial payments to contractors, allowing them to pay their own bills without being delayed until the end of the project. It’s common sense.”

“When federal agencies request unexpected work, it often puts the burden of financing the change orders on the small business – including paying their employees, buying supplies and even paying taxes. We need to ensure small business owners won’t be shackled with extra financial burdens while completing a project, and I appreciate Rep. Fitzpatrick’s leadership on this very important legislation,” said House Small Business Committee Chairman Steve Chabot.

“Small businesses are expected to meet deadlines whenever they work with the government, and they deserve the same courtesy from federal agencies,” said Murphy. “Too often, this slow approval process for change orders has resulted in small businesses having to bear significant financial burdens.  Our bipartisan bill is a commonsense solution to address this problem by ensuring that small businesses are paid in a fair and timely manner so they can meet their obligations without compromising their financial future.”

“NECA thanks Representatives Fitzpatrick, Knight, and Murphy for their bipartisan efforts to help small firms in the construction industry. We are proud to offer our strong support for the Small Business Payment for Performance Act of 2017 and are pleased to see its introduction in the House of Representatives. This commonsense bill to address payment issues in federal construction will help small businesses recover an interim partial payment of at least 50 percent for additional change order work performed,” said Marco A. Giamberardino, Executive Director, Government Affairs, for the National Electrical Contractors Association (NECA). “The benefits of this legislation are clear: transparency in federal construction contracting and providing contractors with a predictable flow of funds from the federal government to contractors for the work they perform. This legislation will help meet this goal.”

In addition to the National Electrical Contractors Association, the Small Business Payment for Performance Act of 2017 is supported by the American Council of Engineering Companies, American Institute of Architects, American Society of Civil Engineers, American Subcontractors Association, Associated General Contractors of America, Construction Management Association of America, Council on Federal Procurement of Architectural and Engineering Services, Design-Build Institute of America, Independent Electrical Contractors, Management Association for Private Photogrammetric Surveyors, National Association of Surety Bond Producers, National Society of Professional Surveyors, Sheet Metal and Air Conditioning Contractors National Association, and the Surety and Fidelity Association of America.