National Association of Government Contractors

Proposal Ends Pay Delay for Small Contractors

The House Small Business Committee has approved five bills that would amend the Small Business Act and the Small Business Investment Act, including provisions that would allow federal contractors to get paid sooner for change orders.

The Small Business Payment for Performance Act of 2017 (H.R. 2594), introduced by Rep. Brian Fitzpatrick (R-PA), allows contractors to submit a request for equitable adjustment (REA) – or an increase in fee – to the agency. The contractor may then bill the agency for any actual change order work completed while the REA is pending. Once the agency receives the REA, it must pay 50 percent of the billed change order work amount in a timely manner to offset extra costs.

"Some federal agencies routinely delay the approval process until the end of the project," Fitzpatrick said. "That isn't fair. 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."

There were several other bills approved by the committee, including the Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017 (H.R. 2763), sponsored by Rep. Steve Knight (R-CA).

The bill would update the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to require that the SBA give a comprehensive annual report of these programs to Congress as well as hold the Department of Defense (DOD) accountable to stimulate technological innovation.

Another bill introduced by Knight -- the Small Business Investment Opportunity Act of 2017 (H.R. 2333) -- was also approved by the committee. The legislation would increase the amount of leverage made available to small business investment companies.


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