< Back to H.R. 4171 (103rd Congress, 1993–1994)

Text of the Subcontractor Payment Protection Act

This bill was introduced on April 12, 1994, in a previous session of Congress, but was not enacted. The text of the bill below is as of Apr 12, 1994 (Introduced).

Source: GPO

HR 4171 IH

103d CONGRESS

2d Session

H. R. 4171

To require modification of the Federal Acquisition Regulation to provide for timely payment of subcontractors and suppliers performing on contracts awarded by the United States, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

April 12, 1994

Mr. MACHTLEY (for himself and Mrs. MEYERS of Kansas) introduced the following bill; which was referred to the Committee on Government Operations


A BILL

To require modification of the Federal Acquisition Regulation to provide for timely payment of subcontractors and suppliers performing on contracts awarded by the United States, and for other purposes.

    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 ‘Subcontractor Payment Protection Act’.

SEC. 2. PAYMENT PROTECTIONS FOR SUBCONTRACTORS.

    (a) MODIFICATIONS TO FAR- The Federal Acquisition Regulation issued under section 25(c)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) shall be modified to address the matters described in subsection (b).

    (b) MATTERS TO BE ADDRESSED- The modifications required by subsection (a) shall, with respect to contracts entered into with the United States, require--

      (1) a prime contractor (other than a construction contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) to include in the contractor’s contractual agreement with each of the contractor’s subcontractors (including suppliers) a payment provision which--

        (A) specifies a payment term pursuant to which the subcontractor may calculate a payment due date;

        (B) requires the prime contractor to give written notice to the subcontractor within 7 days of any event which will delay payment to the subcontractor in accordance with the subcontract payment term established pursuant to subparagraph (A);

        (C) requires the prime contractor to pay a subcontractor an interest penalty on the amounts due in the case of each payment not made in accordance with the payment term established pursuant to subparagraph (A)--

          (i) for the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and

          (ii) computed at the rate specified by section 3902(a) of title 31, United States Code;

      (2) a prime contractor (other than a construction contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) to submit, along with a request to the United States for payment--

        (A) in the case of a contractor which is a small business concern, a certification that, to the best of the contractor’s knowledge and belief, payments will be made to each subcontractor in accordance with the subcontract agreement from the proceeds of the payment covered by the certification and payments to subcontractors have been made from previous payments received from the United States; and

        (B) in the case of a contractor which is not a small business concern, a certification that, to the best of the contractor’s knowledge and belief, payments have been made to each subcontractor in accordance with the subcontract agreement prior to the submission of the contractor’s payment request to the United States which includes an amount for such subcontractor;

      (3) information to be furnished to a subcontractor, upon a written or oral request of the subcontractor, regarding payments made to the prime contractor by the United States, subject to the limitation of section 552(b)(1) of title 5, United States Code;

      (4) a contracting officer, upon receipt of a credible allegation, to make inquiries--

        (A) with respect to a construction contract, regarding whether the contractor has made payments to the subcontractor in conformity with chapter 39 of title 31, United States Code;

        (B) with respect to a contract other than a construction contract, regarding whether the contractor has made payments to the subcontractor in compliance with the terms of their subcontract; and

        (C) regarding the validity of the required certification regarding subcontractor payment accompanying the contractor’s payment request to the United States;

      (5) the contracting officer, upon determining that the prime contractor is not in compliance with a requirement referred to in subparagraph (A) or (B) of paragraph (4), to take action to--

        (A) encourage the contractor to make timely payment to the subcontractor;

        (B) provide for the disbursement of amounts which the contractor has certified as being due to such subcontractor directly to the United States or through a federally insured bank acting as an escrow agent;

        (C) reduce or suspend progress payments with respect to amounts due the prime contractor; or

        (D) any combination of the measures described in subparagraphs (A), (B), and (C), and such other remedial measures as the contracting officer deems appropriate to encourage the contractor to comply with the contractor’s obligations regarding timely payment of subcontractors; and

      (6) the contracting officer, upon determining that the contractor is not in compliance with certification requirement referred to in paragraph (2), to initiate appropriate administrative remedial action (including suspension procedures pursuant to section 9.4 of the Federal Acquisition Regulation).

    (c) DEADLINE- Proposed regulations containing the modifications to the Federal Acquisition Regulation required under this Act shall be issued not later than 180 days after the date of the enactment of this Act. Final regulations containing the modifications to the Federal Acquisition Regulation required under this Act shall be issued not later than 270 days after the date of the enactment of this Act.