Today, U.S. Congressman Scott Peters (CA-52) introduced a bill to help ensure that the federal government gets what it pays for on federal construction contracts. The Stop Unfair Bid Shopping Act (SUBS Act) would require general or lead contractors on projects valued at $1.5 million or more to list those subcontractors proposed to perform work valued at more than $100,000 as part of their original bid.  If modifications are made to that original list after the contract is awarded, the lead contractor must notify the federal government of the modifications and disclose whether the change results in a change in project cost. This bill does not impede businesses from changing subcontractors after they are awarded a federal construction contract, but if the cost decreases as a result of that change, it enables the federal government to collect the savings.

“Like any well-run business, the federal government needs to enforce our contracts and agreements. We also need to ensure taxpayer dollars are used responsibly. Private contractors should not be pocketing taxpayer dollars from a federal construction contract and increased transparency will help us be more accountable to San Diegans and Americans,” said Rep. Peters.

Bid shopping happens when a business is awarded a federal construction contract based on a negotiated price that covers the labor and materials. However, after winning the contract, some businesses have swapped out to cheaper subcontractors and pocketed the difference. The bill ensures companies honor their contract with the federal government and don’t misuse taxpayer dollars. The bill does not apply to contracts awarded within the Department of Defense, but does include the Army Corps of Engineers. It is supported by the Sheet Metal and Air Conditioning Contractors National Association (SMACNA), National Electrical Contractors Association (NECA), and Mechanical Contractors Association of America (MCAA).

“The officers and members of SMACNA of San Diego are proud to be the first local subcontractors association to support Congressman Scott Peters’ ‘Stop Unfair Bid Shopping Act of 2018, the ‘SUBS Act.’’ We believe it is time for Congress to take action to ensure fairness in the federal construction procurement bidding process. Many states, including California, have already taken similar steps to improve government-funded construction project procurement and SMACNA of San Diego is pleased to strongly support Rep. Peters’ SUBS Act,” said Linda Jennings, Executive Vice President of SMACNA of San Diego.

“The Mechanical Contractors Association of America (MCAA) commends Congressman Peters for his discerning stewardship of government contracting resources - prudent private sector construction project owners have long been cognizant that guarding against prevalent abuses in prime contractor and major subcontractor selection procedures pay big dividends on their construction program investments. Minimum controls against bid shopping, bid chopping, and bid peddling are long overdue,  and prudent ways to ensure top-quality project delivery, while staunching one of the prominent causes for ongoing projects disputes, claims, and delays - with consequent detriment to the Federal agency construction program mission,” said John McNerney, General Counsel for MCAA.

“On behalf of the 4,000 member companies of the National Electrical Contractors Association (NECA), we are pleased to offer our strong support for Rep. Peters’ legislation, ‘Stop Unfair Bid Shopping Act (SUBS ACT).’ The legislation aims at addressing an abhorrent and unfair practice that is known all too well by our contractors, bid shopping. The reforms offered in this legislation are realistic, achievable, and fair to both the federal government and to specialty contractors. They do so while remaining equitable and reasonable to those acting in good faith. I commend Rep. Peters for his leadership and support on this issue and look forward to swift enactment of the legislation in the coming months,” said John Grau, Chief Executive Officer of NECA.