House Passes Change Order Transparency for Federal Contractors Act

May 11, 2018

The House of Representatives passed the Change Order Transparency for Federal Contractors Act, which seeks to provide more information and greater transparency for businesses on federal construction projects.

Introduced last January by Representative Don Bacon of Nebraska, H.R. 4754 would amend the Small Business Act to provide prospective construction contractors with information about a federal agency’s policies on the administration of change orders to allow them to make informed business decisions regarding the pricing of bids or proposals.

H.R. 4754 would also require federal contracting agencies to provide details on their change order procedures and their historical performance data with solicitations.

Bacon noted the lack of transparency on how the contracting agency handles change orders has been problematic for federal contractors when trying to prepare for the life cycle of a construction project.

Representative Steve Chabot said small business contractors who want to do federal construction need to “fully know what they’re getting into before they bid on a project.” Smaller contractors can find change orders on a federal job result in delayed payments due to the contracting agency's approval and payment procedures. Without the more flexible cash flow available to larger contractors, smaller companies face more risk if they do a slow pay federal project.

“H.R. 4754 safeguards these contractors and requires agencies to publish their change order process up front, in their solicitations, so they have all of the information they need that can affect their bottom line,” he said.

“We must ensure the federal government pays its bills on time and is accountable for its actions,” Rep. Bacon said. “H.R. 4754 does this by promoting greater transparency for small businesses.”

The House-approved H.R. 4754 was sent to the Senate May 9.