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The House Votes on the FY24 NDAA

By a vote of 219-210, the House passed the FY24 National Defense Authorization Act (NDAA) with four Republicans, all members of the House Freedom Caucus (Reps. Buck, Biggs, Crane, and Massie) voting against the bill.  Four Democrats (Reps. Golden, Vazquez, Perez, Don Davis (N.C.)) voted for the bill.  During the House debate, several controversial conservative language provisions were agreed to including abortion, transgender care, diversity programs and book bans. The Senate is debating the legislation this week.

Unfortunately, Amendment 453 regarding change order reform was not included in the House version of the legislation; however, we are working for its inclusion in the Senate version of it.  As a reminder, this amendment (H.R. 2726) would do the following:

Small Business Payment for Performance Act of 2023, H.R. 2726

  • Background: Time is money for all businesses, but more so for small businesses. Equitable changes to the contract, more commonly known as change orders, are ubiquitous on construction projects. Yet contractors and subcontractors on federal construction projects increasingly are frustrated by the slow approval of and the resulting lack of payment for change orders. Indeed, some federal agencies routinely delay the review and approval of all change orders until the end of a project. In the meantime, contractors and subcontractors must pay their own bills—employees, suppliers and even taxes—while federal customers delay payment for work performed. This bill would require federal agencies to make interim partial payments to their construction prime contractors for unilateral changes in contract performance directed by the buying agencies.
  • Contractor Request for Payment for Agency’s Unilateral Change: When a federal agency unilaterally requires a prime construction contractor to perform a change to the contract, a small business prime construction contractor may request an equitable adjustment—an increase in fee—for the additional work. The request must be made in a timely manner and must specify the estimated amount it costs to perform the extra work required by the agency.
  • Interim Partial Payment for Unilateral Changes: Once it receives a request for an equitable adjustment from a small business construction contractor, a federal agency must make an interim partial payment of at least 50 percent for the additional work, within the time frame specified by the Prompt Payment Act (31 USC 39).
  • Partial Payment Does Not Signify Agreement: A federal agency’s interim partial payment to a small business construction contractor does not prejudice the rights of either party in definitizing the contractor’s request for an equitable adjustment during subsequent negotiation or failing to reach mutual agreement, any further resolution pursuant to the disputes clause in the Federal Acquisition Regulation.
  • Payment of Subcontractors and Suppliers: As under the existing Prompt Payment Act, a federal prime construction contractor must pay its subcontractors and suppliers within seven days of receipt of payment from the federal agency for work performed on the unilateral change to the prime contractor.
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