DISCUSSION DRAFT

As of: 20 Feb 17

115th Congress S. ____

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
agencys 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 SENATE

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
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agencys 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.

Be it enacted by the Senate and House of Representatives 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 Know-before-You Bid
Construction Transparency Act of 2017.

(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. Transparency in the administration of construction contracts.
Sec.4 Standards relating to the administration of change orders to
construction contracts.
Sec.5.Threshold applicable to the Miller Act.
Sec.6.Payment protections for construction subcontractors and suppliers
performing on a Public-Private Partnership.
Sec.7 Provide certainty regarding claims under Federal construction
contracts.
Sec.8 Prohibition on the use of a reverse auction for the award of a contract
for design or construction services.
Sec. 9 Improving the Federal Procurement of A-E Services.

Sec. 2. Congressional Findings.

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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
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
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their subcontractors and suppliers, if the buying agency were required to specify its
practices regarding the timely resolution of a contractors request for an Equitable
Adjustment.

(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) Federal procurement officials often adopt contracting

techniques from the private sector and have adapted those techniques to effectively
procure products and services.

(12) 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.

(13) 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.

(14) The current statutory framework for design-build contracting

procedures could benefit from legislative refinement.

Sec. 3. Transparency in the administration of construction contracts.

(a) In General. The Director of the Office of Management shall

provide for an electronic system through which each Federal agency
shall provide access to documents relating to each construction
contract, subject to FAR Part 36 (Construction and Architect-Engineer
Contacts), administered by the agency by expanding the System for
Award Management or such other means as the Director deems
appropriate.
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(b) Documents to be made available. Except as provided in subsection

(d), at minimum, the agency shall make available:
(i) the contract, as awarded;
(ii) a copy of the payment bond provided for the contract and any
modification to such bond or additional payment bonds required by the
agency;
(iii) each payment made to the prime contractor, including the date
of payment and the amount paid, specifying the work covered by the
payment and any amounts withheld from the amount requested by the
contractor and a general statement regarding the cause of the withheld
amount;
(iv) each contract modification, if any, including any unilateral
change order directed on behalf of the agency, the date of such direction, and
a copy of the direction, unless the direction was verbal;
(v) any request for a contract modification made by the contractor,
including any Request for an Equitable Adjustment in response to a
unilateral change order directed on behalf of the agency, the date of the
request and the status of the agencys response to the request;
(vi) any determination and finding relating to the contract.

(c) Timeliness of inclusion of information.

(i) Except as provided in paragraph (ii), each item of information
shall be promptly made available electronically after its inclusion in the
contract file, but in no event later than 15 days after the item of information
is available in the contract file.
(ii) The information required by subsection b (iii) shall be included
within seven days of the payment date.

(d) Exemptions from publication.

(i) if requested by the contractor, material may be redacted to
prevent publication of any material which would be exempt from release pursuant
to Section 552 (b)(4) of Title 5, United States Code; or
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(ii) if the contract would be exempt from release pursuant to

Section 552(b)(1) of Title 5, United States Code.

Sec. 4. Standards relating to the administration of change orders to

construction contracts.

(a) Solicitation notice regarding administration of change orders for

construction. Subpart 36.2 (Special Aspects of Contracting for Construction) of
the Government-wide Federal Acquisition Regulation shall be modified to provide
notice to prospective bidders or offerors, whether the buying agency has a specific
policy or practice in complying with FAR Part 43.204 (b)(1) (Definitization) of a
contractors request for an equitable adjustment of the contract price to reflect a
unilateral change order by the buying agency, within the following time periods
(i) 30 days or fewer;
(ii) 45 days or fewer;
(iii) 90 days or fewer;
(iv) 180 days or fewer; or
(v) greater than 365 days; or
(vi) after the completion of contract performance through a contract
modification addressing all undefinitized requests for an equitable
adjustment received during the term of the contract.

(b) Interim Partial Payment of Undefinitized Requests for an

Equitable Adjustment. FAR Subpart 43.2 (Change Orders) and the Changes
clause (FAR 52.243.1) shall be modified to provide for an interim partial payment
of a request for an equitable adjustment timely made by the contractor specifying a
sum certain to pay for specified additional costs resulting from the change in
contract performance unilaterally directed on behalf of the buying agency, at a rate
that is 50 percent of the amount requested. Such payment shall not be deemed a
definitization of any part of the request for an adjustment, binding upon either the
contractor or the Government, and may subject to further negotiation or become
subject to the FAR 52.233-1 (Disputes Clause).
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Sec. 5. Threshold applicable to the Miller Act. Section 1908 of Title 41,
United States Code, is amended by striking the period at the end of Section
1908(2)(C), inserting a semicolon, and adding the following new paragraph, as
follows:
(D) in Subchapter III of chapter 31 of title 41 (commonly referred to as the
Miller Act)..

Sec.6. 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 40 (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.

Sec.7. 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.8. Prohibition on the use of a reverse auction for the award of a contract
for design or construction services.

(a) Modification of the FARNot 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
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Acquisition Regulation to prohibit the use of reverse auctions for awarding

contracts for construction and design services exceeding $1 million.

(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;
or
(F) construction or alteration of public buildings or public works; and

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

agency,
(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.