What Every Congressional Staffer Should Know
about the Construction Industry
Potential frequently asked questions businesses may ask congressional offices who want to pursue federal government contracts for design and construction services.
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Getting Contracts
I’m a business owner who would like to bid on federal contracts. How do I find out what’savailable for bidding?
The federal government has a Web site, generally referred to as FedBiz or FedBizOpps, whichlists federal contracting opportunities. See https://www.fbo.gov/.
I’ve heard that a business has to register with the federal government to bid on federalcontracts. How and where do I do that?
A business that wants to do business with the federal government must complete a System for Award Management Registration, commonly known as a SAM registration, in order to work as a federal contractor and, frequently, as a federal subcontractor. Registration is free. [Note: There are private firms that charge a fee to register businesses with SAM.]
You have to complete the form completely and accurately.
Another source of more information is the “SAM Guide,” which is available on the Web at https://www.sam.gov/sam/SAM_Guide/SAM_User_Guide.htm.
You have to complete the form completely and accurately.
- The SAM Registration requires your company to provide a Dun & Bradstreet or D-U-N-S number. This is a unique nine-digit identification number for each physical location of your business. SBA provides a Web site with details on how you can get this number: https://www.sba.gov/contracting/getting-started-contractor/get-d-u-n-s-number .
- The Sam Registration also requires your company to report its North American Industry Classification System (NAICS) Code. This code classifies business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy. SBA provides a Web site with details on how you can determine your NAICS code: https://www.sba.gov/contracting/getting-started-contractor/determine-your-naics-code.
Another source of more information is the “SAM Guide,” which is available on the Web at https://www.sam.gov/sam/SAM_Guide/SAM_User_Guide.htm.
I’m a prime construction contractor. Why do I have to provide a surety bond when I bidon a federal construction project?
The federal Miller Act requires contractors securing a federal construction contract exceeding$150,000 provide performance and payment bonds. On federal construction contracts, sureties listed on the U.S. Treasury’s Circular 570 (aka the T-list) are authorized to issue bonds to those construction companies who qualify to receive surety credit. Before issuing a bond, the surety makes a determination when evaluating the contractor that, in the surety's estimation, the contractor is capable of performing the work and paying all the subcontractors, suppliers and workers on the job. The performance bond assures the public entity that the construction contract will be completed. Subcontractors, suppliers and workers on the job rely on the payment bond in case the prime contractor does not or cannot pay them.
I’m a prime construction contractor or architect [engineer] and I want to get involved in thefederal construction market. How do I go about getting bonded?
The surety industry supports bonding at all levels and there is a great deal of capacity in the market and bonds are available for contractors that meet the surety underwriting criteria even for the design and construction portion of public-private partnerships (P3) projects. However, for those small and emerging contractors who tend to lack the performance and financial track record of success and may not qualify for surety credit in the standard market, there is a federal program known as the Small Business Administration’s (SBA) Surety Bond Guarantee Program. This Program has been in existence for over 40 years and was created to assist small and emerging contractors with obtaining bonds for construction and other type of service contracts.
Getting Assistance
I’ve heard that the federal government provides counseling for small businesses like mine who want to bid on federal contracts. Do you have information on how I can access theseresources?
Several agencies provide assistance to small businesses who want to do business with the federal government. The U.S. Small Business Administration has several entities that provide specialized help, including Small Business Development Centers, SCORE Business Mentors, Women’s Business Centers, and Veterans Business Outreach Centers. In addition, the Department of Defense provides help through Procurement Technical Assistance Centers. You can find one of the resources closest to you simply by entering your zip code on the SBA Website: https://www.sba.gov/tools/local-assistance
I’ve heard that there are preference or set-aside programs that help small and minority construction firms win federal contracts. Can you give me more information?
The federal government has seven principal small business preference programs that apply to direct federal government contracts. The programs are:
- The Small Business (SB) program allows federal agencies to set aside contracting opportunities for small businesses when market research concludes that small businesses are available and able to perform the work or provide the products being procured by the government. For more information, see the SBA Web site at: https://www.sba.gov/contracting/government-contracting-programs/what-small-business-set-aside.
- The Women-Owned Small Business (WOSB) Program authorizes federal agencies to set aside certain federal contracts for eligible women-owned small businesses. For more information, see the SBA Web site at: https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses.
- The Small Disadvantaged Business (SDB) program allows firms to self-register as SDBs to obtain certain advantages in federal business opportunities. For more information, see theSBA Web site at: https://www.sba.gov/contracting/government-contracting-programs/small-disadvantaged-businesses.
- The Historically Underutilized Business Zone (HUBZone) Program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. For more information, see the SBA Web site at:https://www.sba.gov/contracting/government-contracting-programs/hubzone-program.
- The Service-Disabled Veterans-Owned Business (SDVOB) Program authorizes federal agencies to set acquisitions aside for exclusive competition among service-disabled veteran-owned small business concerns. For more information, see the SBA Web site at: https://www.sba.gov/contracting/government-contracting-programs/service-disabled-veteran-owned-businesses.
- The 8(a) Business Development Program helps small, disadvantaged businesses compete in the federal marketplace. For more information, see the SBA Web site at: https://www.sba.gov/contracting/government-contracting-programs/8a-business-development-program.
- The All Small Mentor-Protégé Program helps develop strong protégé firms through mentor- provided business development assistance, and to help protégés successfully compete for government contracts. For more information, see at: https://www.sba.gov/contracting/government-contracting-programs/all-small-mentor- protege-program.
- The U.S. government also has a Disadvantaged Business Enterprise (DBE) program for federally-funded contracts—that is, contracts awarded by a state or local agency that are funded, in whole or in part, by the federal government. The DBE Program does not apply to direct federal government contracts. A DBE is a small business concern owned and controlled by socially and economically disadvantaged individual(s). These include businesses owned and controlled by individuals who:
- Are women, African Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, or other minorities found to be disadvantaged by the U.S. Small Business Administration.
- Have a personal net worth that does not exceed $1.32 million.
Prompt Payment
I’m a construction contractor with a federal contract on which the government isn’t payingme timely. What are my rights? What can I do?
The Federal Prompt Payment Act passed in 1982 gives contractors certain rights regarding payment from the Federal Government.
- Progress payments must be paid by the federal agency who owns the contract within 14 days of receipt of a proper invoice.
- The Federal government must make final payment no later than 30 days following receipt of a proper invoice. A prime contractor is entitled to interest from the federal government in the event of a delayed payment.
I’m a subcontractor [supplier] on a federal construction project. My client isn’t paying me timely. What are my rights? What can I do?
If the contractor is a subcontractor, they are legally obligated to receive pay from the general contractor within 7 days of the prime contractor receiving pay from the federal government. If a subcontractor believes they are not being paid promptly they have the right to demand documentation from the federal government to determine the validity of the claim. They also have the right to petition the federal government to investigate claims of nonpayment. A general contractor may be held liable for interest penalties in the event of a delayed payment. This interest penalty in some cases can be charged by both the subcontractor and the Federal Government.
I’ve just Won a subcontract on a federal construction project. I want to get a copy of thepayment bond that the prime contractor had to provide the government. How can I get that?
The Miller Act, Title 40, Section 3133(a) permits persons furnishing labor and materials to obtain a copy of the payment bond from the contracting agency that issued the contract. Interested parties must send with its request an affidavit attesting to the work or materials supplied/performed on the contract.
I’m a subcontractor on a federal construction project on which the prime contractor has defaulted and I still haven’t been paid. I know the prime contractor had to provide a payment bond. What are my rights? What can I do?
The general contractor’s default on a federal project can be an unpleasant turn of events that leaves subcontractors unpaid for work completed on the job. If the job is over $150,000, the federal Miller Act requires that a payment bond be in place to assure that subcontractors, suppliers and workers will be paid. Subcontractors can file a claim against the general contractor’s payment bond. If a copy of the payment bond was not requested at the beginning of the project, the unpaid subcontractor should obtain a copy from the project owner and follow the guidelines regarding how to file a claim on a timely basis, ad receive fair compensation from the surety.
Federal Acquisition Regulation (FAR)
wHAT IS THE fEDERAL aCQUISITION rEGULATION (far)?
The is the primary regulation for use by which executive agencies of the United States federal government acquire supplies and services with appropriated funds.
When does the FAR apply/not apply?
In general, the FAR applies whenever the government purchases or leases any goods or services by contract.
I’m a construction contractor [or subcontractor] with a federal construction contract. I know I have to pay Davis-Bacon or prevailing wage rates. How does the governmentestablish those rates? How do I know what to pay?
The U.S. Department of Labor conducts regular surveys to determine a local prevailing wage for paying prevailing wages on federal projects, as required by the federal Davis-Bacon Act. https://www.wdol.gov/dba.aspx
What are the relevant FAR SectionS?
- Part 19 – Small Business Programs
- Part 22- Application of Labor Laws to Government Acquisition
- Part 28 – Bonds and Insurance
- Part 36 - Construction and Architect -- Engineer Contracts
- Part 52 – Solicitation Provisions and Contract Clauses
What is the DFAR?
A supplement to the FAR that provides DoD-specific acquisition regulations that DoD government acquisition officials – and those contractors doing business with DoD – must follow in the procurement process for goods and services.