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ASA Hails Proposed Legislation Targeting Construction ’Bid Shopping’

Fri May 24, 2013 - National Edition
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The American Subcontractors Association hailed legislation introduced by Rep. Carolyn Maloney, D-N.Y., on May 9, 2013, as a significant step to improve the management of the federal government’s construction projects.

By requiring contractors to use the subcontractors identified in the contractors’ bids, the Construction Quality Assurance Act of 2013 (H.R. 1942) would promote open competition among subcontractors and ethical bidding practices and ensure that the highest quality subcontractors bid and work on projects paid for with federal taxpayer dollars.

"As the federal government continues to tighten its belt, taxpayers deserve to get absolutely the best construction projects for their tax dollars," said ASA Chief Advocacy Officer E. Colette Nelson. "Under the current acquisition system, federal contracting officers must accept prime contractor bids without any assurance of which subcontractors will actually perform the work. This lack of oversight diminishes the quality of and threatens the security of federal construction. Taxpayers deserve better, and mandatory bid listing is the responsible solution."

Rep. Maloney’s bid listing legislation would require prime contractors that bid on federal construction projects over $1 million to list each subcontractor they plan to use for $100,000 or more work. After the contract award, if a prime contractor replaced a listed subcontractor without the permission of the contracting officer, the prime contractor would be subject to penalties in an amount equal to the greater of: 10 percent of the amount of the subcontractor’s bid; the difference between the amount of the list subcontractor’s bid and the replacement subcontractor’s bid; or the difference between the amount of the bid by a substituted subcontractor and the dollar value specified by the contractor to self-perform the work. A subcontractor that knowingly participates in the prime contractor’s failure to comply with the bid listing requirements also would be subject to penalties.

"The bid-listing requirement would eliminate post-award price negotiations between contractors and subcontractors that can lead to corner cutting and wasteful spending, and can drive quality contractors and subcontractors out of federal construction markets," Nelson said. "And, by requiring contractors bidding on federal agencies’ construction projects to inform agencies of the major subcontractors they would use on projects and the types of work that those subcontractors would perform, the bill would add a welcome measure of protection to the nation’s infrastructure."