Quality Assurance Bill Would Aim to Eliminate Bid Shopping
September 14, 2009
The proposed "Construction Quality Assurance Act of 2009,"
which was submitted to the U.S. House of Representatives on July
31, would end "bid shopping" and "bid peddling"
on federal projects, practices that it says not only "threaten
the competitive bid system" but also "compromise national
security by promoting uncertainty about which contractors actually
perform work on critical infrastructure projects."
Rep. Paul Kanjorski (D - Pa.) introduced the bill, HR 3492, "to
assure quality and best value with respect to Federal construction
projects by prohibiting the practice known as bid shopping."
The bill defines bid shopping by stating: "'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."
The bill further states that "'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."
If approved, the bill would require general contractors bidding
on federal projects exceeding $1,000,000 to submit, as part of their
bids, 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. The bidder shall list only one subcontractor
for each category of work unless each such subcontractor is listed
to perform a discrete portion of the work within a category.
No general contractor will be allowed to substitute a subcontractor
in place of the subcontractor listed in the original bid or proposal,
except with the consent of the contracting officer. Several causes
for change are provided by the bill, including the subcontractor's
bankruptcy or failure to meet surety bond requirements.
According to information from the American Subcontractors Association
(ASA), bid listing is already adopted in some form in nine states.
A 2007 survey conducted by ASA showed that more than 73 percent
of the specialty contractors surveyed deemed bid shopping a serious
issue facing the construction industry.
"The main thing folks can do to support this legislation is
reach out to their representatives and ask them to co-sponsor H.R.
3492," says Emily Yunker, ASA, manager of government relations.
During the Glass Association of North America's Fall Conference,
which took place earlier this month, the Building Envelope Contractors
(BEC) Division's Technical Committee heard a presentation from George
Petzen of LinEl Signature in Mooresville, Ind., advocating support
from glazing contractors for the proposed bill. Following Petzen's
description of the bill, members of the BEC Division approved a
motion to offer their support of the bill and contact congressional
representatives for their support.
"We think it's a well-written bill and it will benefit our
members," says BEC Technical Committee chair Doug Penn of United
Glass Corp. "We will be sending out copies of that bill on
GANA letterhead urging our members to support it."
As of press time, the bill had been referred to the House Committee
on Oversight and Government Reform.
HERE to offer your comments on this pending legislation.
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