Stauber Reintroduces Small Business Payment for Performance Act

WASHINGTON, D.C. – This week, Congressman Pete Stauber (MN-08) reintroduced the Small Business Payment for Performance Act, which will require fair treatment of small construction contractors by federal agencies during the procurement process. 

Of this legislation, Congressman Stauber stated, “Small businesses on Main Street America are the economic engine of our economy, and it's important that the federal government supports their ability to succeed when fulfilling government contracts. I’m proud to reintroduce the Small Business Payment for Performance Act, which will hold the federal government accountable for any changes to contracts awarded to small businesses. This important legislation will protect small businesses from unexpected financial burdens, incentivizing more small businesses to compete for federal contracts that will drive economic growth in their respective communities.”

A variety of stakeholder groups endorsed the Small Business Payment for Performance Act, some of which provided statements of support. 

“The American Subcontractors Association applauds Rep. Stauber in advancing this important legislation, which will effectuate change order reform for all construction contractors by ensuring they receive timely payments for their completed work.” - American Subcontractors Association

“Contracting with the Federal government comes with a lot of uncertainty and change orders further drive-up risk and costs that the construction company is often forced to absorb. The Small Business Payment for Performance Act will help ensure small business construction contractors do not shoulder the financial burden of unilateral agency changes to a contract.” - Associated General Contractors of America

“Every SMACNA contractor in Minnesota and across the nation bidding and building federal projects greatly appreciates Rep. Pete Stauber for sponsoring the Small Business Payment for Performance Act. At a time of rising project material costs and frequent change orders, we view Rep. Stauber’s bill as our highest priority. Without passage of the Small Business Payment for Performance legislation, the payment problems for contractors can only grow worse and the economic health of contractors small, medium and large will suffer greater harm.” - Stan Kolbe, Executive Director of Government and Political Affairs, Sheet Metal and Air ConditioningContractors National Association

“The National Association of Surety Bond Producers commends Representative Pete Stauber for the introduction of the Small Business Payment for Performance Act of 2025. This critical legislation lessens the considerable financing burden placed on small construction businesses when federal project owners make unilateral changes to construction contracts. By requiring federal project owners to make interim partial payments on owner-directed change orders, small construction businesses receive necessary and timely cash flow for performance. As the construction industry continues to face uncertain and variable market conditions, including supply disruptions and increasing materials prices, all construction businesses, but particularly small construction businesses, need federal payment practices that are not unfairly burdensome. Passage of this legislation will ensure that small construction businesses performing on federal contracts have confidence that equitable payment practices exist for owner-directed change orders. Thank you to Rep. Stauber for recognizing this significant issue and introducing this important procurement reform.” - National Association of Surety Bond Producers

BACKGROUND: 

Changes to a contract, commonly known as “change orders,” inevitably occur on construction projects. The government may issue change orders without the contractor’s consent and often fails to abide by change order rules, like formalizing change orders in writing.

Specifically, this legislation will do the following: 

• Allow small businesses to request an equitable adjustment to the contracting officer if the contracting officer places a change order without the agreement of the small business.
• Require the federal government to pay at least 50% of the cost from the change order upon receipt of the equitable adjustment.