AGC-Backed Change Order and Past Performance Reforms Become Law

President Signs the National Defense Authorization Act
On August 13, President Trump signed into law the FY2019 National Defense Authorization Act (NDAA).  The law includes an AGC-backed bipartisan provision that will require federal construction agencies to publish their change order policies and procedures on any small business federal construction contract (see Sec. 855).  The provision will help provides prospective federal construction contractors with information they need to factor into their bids and offers to the federal government the risk and resulting cost of delayed payment for change.  Also included in the 2019 NDAA is the AGC-backed provision on past performance reporting for individual joint venture partners (see Sec. 823), which allows for past performance ratings for each partner of a joint venture.
AGC of America’s CEO Steve Sandherr stated that “[t]he 2019 NDAA, like previous NDAAs, contain a host of laws related to the construction industry.  AGC will monitor each NDAA and continue to advocate for reforms that will benefit the construction industry as a whole.”
Some other notable provisions in the FY2019 NDAA that are important to AGC members include:

  • Sec. 880 - Use of lowest price technically acceptable source selection process.  This section further limits federal agencies from using LPTAs and requires agencies to adequately describe the minimum requirements for what amounts to “technically acceptable” in the procurement.

  • Sec. 878 - Procurement administrative lead time definition and plan.  Requires a government wide definition Procurement Administrative Lead Time (PALT) and requires federal agencies to work with the Department of Defense and the General Services Administration to develop a plan for measuring and reporting on PALT.

  • Sec. 933, 934, 936 – Expediting the backlog of Security Clearances.  These provisions are designed to expediate the backlog of nearly 700,000 background investigations and security clearances for agency and contract personnel.  It will also require regular and transparent reports on the progress of these investigations.

Before many of these provisions are added to new federal construction contracts, they must first go through the rulemaking process to be implemented. It could be some time before that regulatory process is completed.
The above mentioned change order provision is a product of a congressional hearing where AGC members testified at the House Small Business Committee on change order delays and the impacts they have on federal construction contractors.  AGC continues to be at the forefront in advocating for greater accountability of the change order process among the various federal agencies.  AGC has previously called on the Federal Acquisition Regulation Council to improve the data federal agencies collect regarding the administration of change orders in response to the Council’s information request. AGC’s recommendations would require federal agencies to collect a range of data regarding the timeliness of action by the contracting officer to encourage greater accountability.
For more information, contact Jordan Howard at [email protected].

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