Volume 44, Issue 11 - November 2009

Legislation&Legal


Construction Bill Aims to End Bid Shopping

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 already is adopted in some form in nine states.

“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 in September, 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. Members of the BEC Division approved a motion to offer their support of the bill by contact congressional representatives.

“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 … urging our members to support it.”

As of press time, the bill had been referred to the House Committee on Oversight and Government Reform.







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