116th Congress H.R.

____
1st Session

To amend the Government-wide Federal Acquisition Regulation to foster greater

transparency in the administration of construction contracts, to provide
prospective construction contractors with information regarding a buying
agency’s policies with respect to the administration of change orders so as to
be able to make informed business decisions regarding the pricing of bids or
proposals, to establish standards relating to the administration of
construction contracts, to improve the payment protections available to
construction contractors, subcontractors, and suppliers for work performed,
to prohibit the use of reverse auctions for design and construction services
procurements and for other purposes.

____________________________

IN THE HOUSE

Mr/Ms (name) (for himself/herself and [include list of Original Cosponsors]

introduced the following bill; which was read twice and referred to
____________________________

A BILL
To amend the Government-wide Federal Acquisition Regulation to foster greater
transparency in the administration of construction contracts, to provide
prospective construction contractors with information regarding a buying
agency’s policies with respect to the administration of change orders so as to
be able to make informed business decisions regarding the pricing of bids or
proposals, to establish standards relating to the administration of
construction contracts, to improve the payment protections available to
construction contractors, subcontractors, and suppliers for work performed,
 [2]

to prohibit the use of reverse auctions for design and construction services
procurements, and for other purposes.

Be it enacted by the House of Representatives and Senate of the United

States of America in Congress assembled,

Section 1. Short Title and Table of Contents.

(a) Short Title. – This Act may be cited as the “Construction Industry
Transparency Act of 2019”.

(b) Table of Contents. – The table of contents for this Act is as follows:

Sec.1. Short title; table of contents.

Sec.2. Congressional findings.
Sec.3. Standards relating to the administration of change orders to
construction contracts.
Sec.4. Threshold applicable to the Miller Act.
Sec.5. Payment protections for construction subcontractors and suppliers
performing on a Public-Private Partnership.
Sec.6. Provide certainty regarding claims under Federal construction
contracts.
Sec.7. Prohibition on the use of a reverse auction for the award of a contract
for design or construction services.
Sec.8. Pre-Bid Transparency of Federal Construction Services.

Sec. 2. Congressional Findings.

The Congress finds that:

(1) The acquisition of design and construction services are

fundamentally different than the acquisition of products or other forms of services

Construction Industry Procurement Coalition

 [3]

and that distinction has been consistently recognized in the statutory and regulatory
systems prescribing Federal procurement.

(2) Access to fundamental information relating to a federal

construction project is needed by all private-sector providers, including
contractors, subcontractors, and suppliers, but has not been consistently provided
through readily accessible means.

(3) Government now possesses the means to provide such

fundamental information through electronic means and statutory direction would
provide for prompt implementation with clear standards.

(4) Unilateral Government-directed modifications to Federal

construction contracts are an inherent part of the Federal construction process,
changing the work to be performed by the contractor and the time available for
performance.

(5) Unilateral Government change orders most commonly result in

the contractor incurring additional costs for which the contractor applies to the
buying agency for additional funds, referred to as an Equitable Adjustment.

(6) The Government-wide Federal Acquisition Regulation (FAR)

defines the process and specifies a mandatory Changes Clause to be included in
each construction contract.

(7) The process for the administration of Government-directed

changes and the timely payment of the contractor for such work is not specified in
the FAR leaving the contractor with great financial uncertainty regarding when
payment will be received for work already performed pursuant to the unilateral
direction of the buying agency.

(8) Construction projects costs to the taxpayers would benefit by

reducing uncertainties and corresponding risk to prospective prime contractors and
their subcontractors and suppliers, if the buying agency were required to specify its
practices regarding the timely resolution of a contractor’s request for an Equitable
Adjustment.

Construction Industry Procurement Coalition

 [4]

(9) For more than eight decades, the Miller Act has provided
essential payment protection of last resort to subcontractors and suppliers of
Federal construction projects.

(10) Public-Private Partnerships are becoming increasingly common

to finance and construct public needs, but the protections of the Miller Act have
not been uniformly made available to construction subcontractors and suppliers
working on such public-private projects.

(11) Reverse auctions are another procurement technique adopted

from the private sector and used successfully to award contracts of products that
are commercially equivalent to commodities.

(12) Despite their success in other contexts, reverse auctions are

inappropriate for procurement of design and construction services, given the
unique nature of each such project.

Sec. 3. Equitable Adjustments to Construction Contracts. —

The Small Business Act (15 U.S.C. 631 et seq.) is amended by inserting
after section 15 the following new section:
“SEC. 15A. EQUITABLE ADJUSTMENTS TO CONSTRUCTION CONTRACTS.

“(a) Request for an Equitable Adjustment.—A small business concern

performing a construction contract that was awarded by an agency may submit a
request for an equitable adjustment to the contracting officer of such agency if the
contracting officer directs a change in the terms of the contract performance
without the agreement of the small business concern. Such request shall—

“(1) be timely made pursuant to the terms of the contract; and

“(2) specify the estimated amount required to cover additional costs resulting
from such change in the terms of the contract performance.

“(b) Amount.—Upon receipt of a request for equitable adjustment under

subsection (a), the agency shall provide to the small business concern an interim

Construction Industry Procurement Coalition

 [5]

partial payment of an amount that is at least 50 percent of the estimated amount

under subsection (a)(2).

“(c) Limitation. —Any interim partial payment made under this section shall
not be deemed to be an action to definitize the request for an equitable adjustment.

“(d) Flow-Down of Interim Partial Payment Amounts. —A small business

concern that requests an equitable adjustment under this section shall pay to a first
tier subcontractor or supplier the portion of each interim partial payment received
that is attributable to the increased costs of performance incurred by the first tier
subcontractor or supplier due to the change in the terms of the contract
performance. A first tier subcontractor or supplier that receives a portion of an
interim partial payment under this section shall pay to a subcontractor or supplier
at any tier the appropriate portion of such payment.”.

(e) Effective Date. – The changes made by this section shall be implemented
no later than 1 year after the date of enactment of this legislation.

Sec. 4. Threshold applicable to the Miller Act. — SUBPARAGH (B) of Section

1908(b)(2) of Title 41, United States Code, is amended by inserting “3131 to
3134,” after “sections”.

Sec. 5. Payment Protections for construction subcontractors and suppliers

performing on a Public-Private Partnership. — Any construction
preformed under a public-private partnership agreement being built upon real
property owned by the Federal Government shall be deemed to be construction of a
public building or a public work of the Federal Government for purposes of
subchapter III of chapter 31 of title 41 (commonly referred to as the Miller Act).
In such instance, $150,000 shall be the dollar threshold for determining when a
performance bond and a payment bond are required, under section 3131 of such
title, and when alternatives to payment bonds as payment protections for suppliers
of labor and materials are permitted under section 3132 of such title.

Construction Industry Procurement Coalition

 [6]

Sec. 6. Provide certainty regarding claims under Federal construction

contracts.—The Government-wide Federal Acquisition Regulation shall be
modified in Subpart 33.2 (Disputes and Appeals)(48 CFR Part 33.2) and the
Disputes Clause appearing at FAR Part 52.233.1 (48 CFR Part 52.233-1) to make
explicit that the 6-year limitation for claims either by the contractor against the
Government or by the Government against the contractor with respect to a contract
for construction is determined from the date of final payment of the contractor by
the Government, unless a longer period is expressly provided in a warranty
provided by the contractor.

Sec. 7. Prohibition on the use of a reverse auction for the award of a contract
for design or construction services.—

(a) Modification of the FAR—Not later than 180 days after the date of the
enactment of this Act, the Federal Acquisition Regulatory Council, in consultation
with the Administrator for Federal Procurement Policy, shall amend the Federal
Acquisition Regulation to prohibit the use of reverse auctions for awarding
contracts for construction and design services.

(b) Definitions.—For purposes of this section—

(1) the term ‘‘design and construction services’’ means—

(A) site planning and landscape design;
(B) architectural and engineering services (including surveying and
mapping, defined in section 1101 of title 40, United States Code);
(C) interior design;
(D) performance of construction work for facility, infrastructure, and
environmental restoration projects;
(D) delivery and supply of construction materials to construction sites;
(F) construction or alteration of public buildings or public works; or
(G) construction management services

(2) the term ‘‘reverse auction’’ means, with respect to a procurement by an

agency,—

Construction Industry Procurement Coalition

 [7]

(A) a real-time auction conducted through an electronic medium

among offerors who compete by submitting bids for a supply or service
contract with the ability to submit revised lower bids at any time before the
closing of the auction; and
(B) the award of the contract, delivery order, task order, or purchase
order to the offer or, in whole or in part, based on the price obtained through
an auction process.

Sec. 8. Pre-Bid Transparency of Federal Construction Services—

(a) Modification of the FAR—Not later than 180 days after the date of
the enactment of this Act, the Federal Acquisition Regulatory Council, in
consultation with the Administrator for Federal Procurement Policy, shall
amend the Federal Acquisition Regulation to list key federal contract
personnel anticipated on any contract solicitations or any task orders
solicitations exceeding $1 million, including but not limited to —
1. Administrative Contracting Officer;
2. Authority Having Jurisdiction;
3. Contacting Officer;
4. Contract Specialist;
5. Contracting Officer’s Representative;
6. Contracting Officer Technical Representative;
7. Engineering Technician; and
8. Project Manager.

Construction Industry Procurement Coalition