Impact of Change Order Delays on Contractors
Yesterday, AGC members Ed DeLisle and Andy Brown testified at the House Small Business Committee hearing on change order delays and the impacts they can have on federal construction contractors. Members of Congress heard how federal agency delays in processing and paying change orders can disrupt cash flow, impact schedules, waste taxpayers’ money, and restrict opportunities for contractors to bid on additional projects. AGC called for greater transparency, oversight, and agency action to address delays in paying contractors for the work they do for the federal government.
AGC will continue to advocate for greater accountability among the different federal agencies in the change order process. In March, the House of Representatives’ Small Business Committee requested that the Government Accountability Office (GAO) conduct a review on the use of change orders on federal construction contracts. This bipartisan request was a direct result of AGC’s efforts with both parties in Congress to address the many issues associated with change orders.
Previously, AGC 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 (CO) to encourage greater CO accountability.
For more information, contact Jordan Howard at [email protected] or (703) 837-5368.

Requests Data Reporting to Encourage Accountability
At AGC’s urging, the House of Representative’s Small Business Committee requested that the Government Accountability Office (GAO) conduct a review of the use of change orders on federal construction contracts. The review will examine at least one major civilian and one major defense agency with significant volumes of federal construction contracts. This bipartisan request is a direct result of AGC’s efforts with both parties in Congress to address the many issues associated with change orders.
Among the inquiries, the Committee asks GAO to request from the agency:

• How long does it take, and should it take, for agencies to determine the cost impact of change orders and compensate the contractor?


• What guidelines do agencies have for issuing and paying for change orders on the prime and subcontract levels?


• What evidence exists of change order bundling?


• What is the purpose of agencies engaging in bundling change orders?


• How does change order bundling affect the ability of a contractor to obtain surety bonds?


• Is there evidence that agencies otherwise may be acting in bad faith in delaying the settlement of change order requests for equitable adjustment?

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 (CO) in an effort to encourage greater CO accountability.
For more information, contact Jordan Howard at [email protected] or (703) 837-5368.