Finally, Some Transparency in Change Order Processing

Thanks to AGC legislative and regulatory victories, on October 28 federal construction agencies will begin publicly posting their change order policies and procedures as well as disclosing their change order data on small business construction contracts.

On September 23, the Federal Acquisition (FAR) Council released the final rule implementing an AGC-backed reform that will bring—for the first time ever—some transparency and accountability to federal agencies’ change order processes.  AGC successfully led the legislative effort to include these reforms in 2018 in the National Defense Authorization Act responsible for this final rule.

Effective on October 28, this regulation applies to any federal solicitation for small business construction contracts and will require agencies—among other things—to:

  • Publish their policies and procedures for processing change orders (REAs);
  • Begin to track the time it takes the agency to definitize change orders; and
  • Publish this data on those solicitations and on a public website.

The new regulation will bring transparency to an issue that has long been costing federal contractors time and money. Federal agencies will have to—for the first time in many cases—focus on creating coherent policies and procedures for processing change orders.

AGC successfully lobbied to include another change order reform bill—Small Business Payment for Performance Act—in the House version of this year’s National Defense Authorization Act (NDAA). If enacted into law, the bill will require agencies to pay upfront at least a portion of directed change orders.

The House NDAA passed (329 - 101) on July 15. The Senate has yet to bring its version of the NDAA to the floor to vote on amendments. Congress has passed the NDAA for about 60 consecutive years and it is considered must-pass legislation, which is why AGC is taking seriously any attempt to add harmful construction policy to it. AGC will continue to advocate for contractor priorities as the House and Senate work to a final NDAA.  

For more information, contact Jordan Howard at [email protected] or (703) 837-5368.

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