H.R. 4754, the Change Order Transparency for Federal Contractors

© Marzky Ragsac Jr. – Fotolia.com

Amends the Small Business Act to provide prospective construction contractors with information about an agency’s policies on the administration of change orders to allow such contractors to make informed business decisions regarding the pricing of bids or proposals. This legislation is meant “to help businesses plan by increasing transparency on federal construction projects.”

While this seems simple, be aware that since there’s a LOT of construction work done for the Federal Government, this bill really adds to the potential for success by small businesses.

A change order is a document signed by both contractor and customer, and is used to record an amendment to your original construction contract. It usually contains:

• A revised scope of work (usually an addition to the original agreement)
• Pricing for the new work
• Additional modifications, e.g., an extended delivery schedule to accommodate new scope of work

We know that change orders happen all the time, and we want to be sure that small businesses which may not be able to wait or retool, can also continue to work and be successful in this field.

“Many times, small contractors are already cash strapped, U.S. Rep. Steve Chabot (R-OH), chairman of the U.S. House Small Business Committee noted, so major construction changes that result in delayed payments can put them out of business. ‘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.” (Source)

We don’t write as often about construction projects in this blog; we write about services because that is what we know. But the reality is, a LOT of money is spent on construction so take heed, small businesses, this means YOU.


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