Construction Quality Assurance Act of 2009 - Requires each solicitation by an executive agency for the procurement of construction in excess of $1 million to require each bidder to submit the name, business location, and nature of work of each subcontractor with whom such bidder will subcontract for work in excess of $100,000. Deems to be non-responsive, and prohibits consideration of, any bidder that fails to list such subcontractors.
Prohibits a contractor from substituting another subcontractor for a listed subcontractor, permitting any subcontract to be voluntarily assigned or transferred, or subcontracting work for which the contractor listed itself, without the contracting officer's consent.
Sets forth: (1) examples of good cause and procedures required for substitution requests; and (2) penalties for violations of such prohibitions, including suspension or debarment from federal contracts for multiple violations.
Requires revisions to the Federal Acquisition Regulation to implement this Act.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3492 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3492
To assure quality and best value with respect to Federal construction
projects by prohibiting the practice known as bid shopping.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 31, 2009
Mr. Kanjorski introduced the following bill; which was referred to the
Committee on Oversight and Government Reform
_______________________________________________________________________
A BILL
To assure quality and best value with respect to Federal construction
projects by prohibiting the practice known as bid shopping.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Construction Quality Assurance Act
of 2009''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) In the construction industry, specialty subcontractors
now perform the majority of construction work, in certain cases
100 percent of the work, under the management of a prime
contractor, making the subcontractors' price and performance
the key determinant in the overall cost of construction
projects, including those performed for the Federal Government.
(2) Detrimental practices known as ``bid shopping'' and
``bid peddling'' exist in the construction industry, including
construction projects for the Federal Government.
(3) ``Bid shopping'' occurs when a contractor, after award
of a contract, contracts with subcontractors at a price less
than the quoted price of the subcontractor upon which the
contractor's fixed bid price was based, in order to increase
the contractor's profit on the project without any benefit to
the entity for which the contract is being performed.
(4) ``Bid peddling'' occurs when a subcontractor that is
not selected for inclusion in a contractor's team seeks to
induce the contractor, after award of the contract, to
substitute the subcontractor for another subcontractor whose
bid price was reflected in the successful bid of the contractor
by offering to reduce its price for performance of the
specified work, suggesting that the previous offer of the
subcontractor was padded or incorrect.
(5) Bid shopping and bid peddling--
(A) threaten the integrity of the competitive bid
system for construction that benefits the Federal
Government, the construction industry, and the economy
of the United States as a whole;
(B) compromise national security by promoting
uncertainty about which contractors actually perform
work on critical infrastructure projects;
(C) deprive taxpayers of the benefits of full and
open competition among prospective contractors and
subcontractors for the performance of Federal
construction projects;
(D) expose Federal construction projects to the
dangers of substandard performance, substitution of
lower quality materials, and other detrimental cost-
cutting practices by an unscrupulous substituted
subcontractor; and
(E) can be effectively deterred in Federal
construction by modifying the Federal Acquisition
Regulation to require bid listing, which is the
practice of requiring each offeror for a Federal
construction contract to list the subcontractors whose
performance is reflected in the bid price, procedures
for the substitution of listed subcontractors for good
cause, and other deterrents to abuse.
SEC. 3. DEFINITIONS.
In this Act:
(1) Contract.--The term ``contract'' means any contract
with the Federal Government, exceeding $1,000,000 in amount,
for the construction, alteration, or repair of any public
building or public work of the United States.
(2) Contractor.--The term ``contractor'' means an
individual or entity that has been awarded or is seeking to be
awarded a construction contract by the Federal Government.
(3) Subcontractor.--The term ``subcontractor'' means an
individual or entity that subcontracts with a contractor in an
amount in excess of $100,000 for work on a contract.
SEC. 4. REQUIREMENTS REGARDING SUBCONTRACTORS FOR FEDERAL CONTRACTORS
ON CONSTRUCTION PROJECTS.
(a) Requirement To List Subcontractors.--
(1) In general.--Each solicitation by an executive agency
for the procurement of construction in an amount in excess of
$1,000,000 shall require each bidder to submit as part of its
bid the name, location of the place of business, and nature of
the work of each subcontractor with whom the bidder, if awarded
the contract, will subcontract for work in an amount in excess
of $100,000 on the contract.
(2) Requirements for specific categories.--
(A) Except as provided in subparagraphs (B) and
(C), the bidder shall list only one subcontractor for
each category of work as defined by the bidder in its
bid or proposal.
(B) A bidder may list multiple subcontractors for a
category of work if each such subcontractor is listed
to perform a discrete portion of the work within a
category.
(C) A bidder may list itself for any portion of
work under the contract, which shall be deemed a
representation by the bidder that it is fully qualified
to perform that portion of the work itself and that the
bidder will perform that portion itself.
(3) Result of failure to list subcontractors.--An executive
agency shall consider any bidder that fails to list
subcontractors in accordance with this Act and the regulations
promulgated pursuant to section 7 of this Act to be non-
responsive and bids by such bidders shall not be considered.
(b) Procedures for Substitution of a Listed Subcontractor.--
(1) Consent and good cause required.--No contractor shall
substitute a subcontractor in place of the subcontractor listed
in the original bid or proposal, except with the consent of the
contracting officer for good cause.
(2) Examples of good cause.--Good cause under paragraph (1)
shall include the following:
(A) Failure of the subcontractor to execute a
written contract after a reasonable period if such
written contract, based upon the terms, conditions,
plans, and specifications of the contract and the terms
of the subcontractor's bid or proposal, is presented to
the subcontractor by the contractor.
(B) Bankruptcy of the subcontractor.
(C) The death or physical disability of the
subcontractor, if the subcontractor is an individual.
(D) Dissolution of the subcontractor, if the
subcontractor is a corporation or partnership.
(E) Failure of a subcontractor to meet the surety
bond requirements specified by the bidder as a
condition of the subcontractor to perform on the
contract, if awarded to the bidder.
(F) The subcontractor is ineligible to perform on
the subcontract because the subcontractor is suspended,
debarred, or otherwise ineligible to perform.
(G) A series of failures by the subcontractor to
perform in accordance with the specification, terms,
and conditions of its subcontract resulting in the
withholding of amounts requested by the subcontractor
in accordance with section 3905 of title 31, United
States Code, and the regulations implementing such
section.
(H) Failure of the subcontractor to comply with a
requirement of law applicable to the subcontractor.
(I) Failure or refusal of the subcontractor to
perform the subcontract.
(3) Requests for substitution.--A request of a contractor
for a substitution of a listed subcontractor shall be submitted
in writing to the contracting officer and shall include the
reasons for the request. The contractor shall provide a copy of
its request for substitution to the listed subcontractor by any
means that provides written third-party verification of
delivery to the last known address of the subcontractor. A
subcontractor who has been so notified shall have five working
days within which to submit written objections to the
substitution to the contracting officer. Failure to file such
written objections shall constitute the consent of the listed
subcontractor to the substitution.
(c) Limitation on Assignment, Transfer, or Substitution.--
(1) Limitation on assignment or transfer.--No contractor
shall permit any subcontract to be voluntarily assigned or
transferred or to be performed by any entity other than the
subcontractor listed in the bid or proposal without the consent
of the contracting officer. Consent of the contracting officer
to a contractor for a substitution shall--
(A) be promptly made in writing; and
(B) be included in the contract file.
(2) Limitation on substitution.--No contractor that listed
itself for a portion of the work under the contract shall
subcontract any portion of the work for which it listed itself,
unless authorized by the contracting officer to substitute one
or more subcontractors to perform such work.
SEC. 5. PENALTIES.
(a) In General.--
(1) A contractor shall be subject to penalties if, without
obtaining the approval of the contracting officer, the
contractor--
(A) replaces a listed subcontractor for a contract
with an executive agency; or
(B) awards a subcontract to a subcontractor to
perform work which the contractor had identified as
work to be performed directly by the contractor.
(2) A subcontractor shall also be subject to penalties if
the subcontractor is determined to have knowingly participated
in the failure of the contractor to comply with the regulatory
provisions relating to the substitution of a listed
subcontractor.
(b) Amount of Penalties To Be Imposed.--The amount of penalties
imposed under this section shall be equal to the greater of--
(1) 10 percent of the amount of the bid by the listed
subcontractor;
(2) the difference between the amount of the bid by the
listed subcontractor and the amount of the bid by the
substituted subcontractor; or
(3) the difference between the amount of the bid by a
substituted subcontractor and the dollar value specified by the
contractor for the work which the contractor had listed for its
own performance.
(c) Source of Funds for Penalties.--Penalties assessed pursuant to
this section shall be deducted from the remaining unpaid contract
balance and deposited into the fund from which the contract was
awarded.
SEC. 6. GROUNDS FOR SUSPENSION OR DEBARMENT.
The imposition of penalties on a contractor or subcontractor for
failure to comply with the procedures for the substitution of
subcontractors on 2 contracts within a 3-year period shall be deemed to
be adequate evidence of the commission of an offense indicating a lack
of business integrity or business honesty that seriously and directly
affects the present responsibility of a Government contractor within
the meaning of part 9.4 of the Federal Acquisition Regulation
(Debarment, Suspension, and Eligibility) (48 CFR 9.4).
SEC. 7. IMPLEMENTATION THROUGH THE FEDERAL ACQUISITION REGULATION.
(a) Proposed Revisions.--Proposed revisions to the Government-wide
Federal Acquisition Regulation to implement the provisions in this Act
shall be published not later than 120 days after the date of the
enactment of this Act and provide not less than 60 days for public
comment.
(b) Final Regulations.--Final regulations shall be published not
less than 180 days after the date of the enactment of this Act and
shall be effective on the date that is 30 days after the date of
publication.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Oversight and Government Reform.
Referred to the Subcommittee on Government Management, Organization, and Procurement.
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