Incentivizing Fairness in Subcontracting Act

Mr. Speaker, I rise in support of H.R. 227, which amends the Small Business Act to specify what credit is given for certain subcontractors and to provide a dispute process for non-payment to subcontractors.

Mr. Speaker, it is of the utmost importance that we pass this legislation to ensure subcontractors receive the credit and payment for performance that they have earned.

Between 2010 and 2016, Texas' population grew at the second-greatest rate in the country, accompanied by increased demand for residential, retail and commercial space.

With this increased demand came an increase in small businesses and the need for subcontractors across the state.

This fact alone explains why H.R. 227 is so important not only to small businesses throughout the country but specifically the small businesses and subcontractors in Texas that deserve compensation for their performance in a timely manner.

The Houston Chapter of the American Subcontractors Association (ASA- HC) is a collective voice for a diverse membership that was created in order to ensure quality, safety and ethics in construction trades.

ASA-HC advocates for legislative reform and provides educational opportunities for the subcontracting community.

Since ASA-HC's founding in 1966, more than 2,500 member companies throughout the United States, and more than 160 members in Houston benefit from the advocacy ASA offers to its members.

These hard-working Americans deserve nothing less than our maximal support for this bill.

Not only do these Americans deserve our support for H.R. 227, they deserve our maximum efforts to end the government shutdown.

Thousands of subcontractors whose pay comes from federal contracts have little hope of recouping the pay they lost when the government is not operating.

Julie Burr, a single mom from Kansas City, struggles to support her family during this shutdown.

She has been out of work and cannot receive pay for the two weeks prior to the shutdown because there is no one to process her time sheet.

She has taken extra shifts in her side job as a seasonal employee at Barnes and Noble, but it only makes up 25 percent of what her normal pay would be and she has had to ask for an extension on her rent payment, which was due on the first of the month.

Ethan James, a 21 year old minimum-wage contractor can only realistically miss three to four days of work before his standard of living is compromised.

He now risks missing his rent payment because he is not receiving the checks he depends on to sustain himself.

These hardworking Americans deserve more, we cannot afford to drag our feet on such an important issue.

I urge my colleagues to join me in voting for H.R. 227 and standing true to our nation's commitment to supporting and protecting small businesses and subcontractors.

I include in the Record a new article entitled ``During Shutdown, Janitors, Security Guards and other Federal Contractors receive no back pay.''

[From ABC News, January 2, 2019]

During Shutdown, Janitors, Security Guards, and Other Federal

Contractors Receive No Back Pay

(By Stephanie Ebbs and Anne Flaherty)

While hundreds of thousands of federal workers will have to

wait for back pay after the government shutdown ends,

thousands more whose pay comes from federal contracts have

little hope of recouping the pay they lose when the

government isn't operating. Some contractors are turning to

other means to make up for the lost income, like taking extra

shifts at a second job.

Julie Burr, an administrative assistant for the Department

of Transportation in Kansas City, said she doesn't expect any

compensation for the time she's been out of work during the

shutdown and that she can't even get paid for the two weeks

before it started because there's no one to process her time

sheet.

``I'm just trying to take one day at a time honestly,''

Burr said in a phone interview. ``I keep turning on the news

and think maybe today's the day something will happen.''

She said she's taken extra shifts in her side job as a

seasonal employee at Barnes and Noble but it only makes up 25

percent of what her normal pay would be and she's had to ask

for an extension on her rent payment, which was due on the

first of the month.

Burr even set up a GoFundMe page to try and help with some

of the expenses and is concerned that even if she can set up

a payment plan it could hurt her credit score.

``I'm a single mom . . . we aren't a two income family or

anything. It's just me, and I'm kind of trying to make things

meet and if it comes to the point of selling items in the

house I'll do that,'' she said.

During previous government shutdowns, Congress has passed

resolutions approving back pay for most federal workers. But

contract workers like custodians and security officers, whose

hourly wages are funded by private companies, don't get paid

unless they work.

According to 32BJ SEIU, that means sudden unemployment with

no end in sight for the 370 Smithsonian security officers in

Washington D.C. protecting the popular museums--which house

everything from Judy Garland's ruby red slippers from ``The

Wizard of Oz'' to Charles Lindbergh's Spirit of St. Louis

airplane--as well as the 50 security officers who work for

Smithsonian museums in New York.

32BJ SEIU is a large property service workers' union that

estimates some 2,000 of its members are facing potential

paycheck disruptions as a result of the shutdown, including

some 70 custodians at the Agriculture Department alone.

Most of those workers aren't eligible for back pay because

they are paid by private companies with government contracts

instead of being government employees.

It's a particularly ironic twist for federal workers caught

in the showdown between President Donald Trump and

congressional Democrats over funding for a border wall.

The union said that almost of all of its members are

African-American or Latino and many don't support Trump's

efforts to build a border wall.

``A true focus on America would mean support for the

hardworking men and women who keep our government safe, clean

and running every day while supporting their own families and

communities across the country,'' said Jaime Contreras, a

32BJ SEIU vice president, in a statement.

``I wish everybody would just sit down and come to a

compromise,'' she said.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 227) to amend the Small Business Act to specify what credit is given for certain subcontractors and to provide a dispute process for non-payment to subcontractors, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on the measure under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 227, the Incentivizing Fairness in Subcontracting Act.

In fiscal year 2017, the Federal Government purchased goods and services worth over $508 billion through over 22 million contract actions. Unfortunately, not all this money remained with the original prime contractor and, instead, trickled down to subcontractors.

Subcontractors are growing in importance as an avenue for small businesses to work with the government, so it is important that barriers to entry are reduced. Today's bill does just that by helping contractors get the credit they need to meet Federal requirements, while also creating a dispute process for nonpayment--a recurring problem for those working with the Federal Government.

By improving the tools that exist for small businesses to become subcontractors, today's measure will draw in more small businesses that are not regular government contractors. This is a critical step to expanding the industrial base and including more small firms.

Most importantly, it ensures more small contractors have just recourse through the Office of Small and Disadvantaged Business Utilization if payment is not received within 30 days of completion. Timely payment protects small contractors who do not have the overhead margins to continue operating without being paid.

Today's bill is endorsed by the U.S. Chamber of Commerce, the National Small Business Association, and the National Electrical Contractors Association.

Mr. Speaker, I urge Members to support this legislation, and I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I am pleased to introduce this piece of legislation which protects our small contractors by updating the subcontracting goaling regime through increased flexibility and accountability.

Establishing incentives to count low-tier subcontracting awards and a dispute process for subcontractors to utilize in the event of nonpayment ensures a healthy Federal procurement marketplace. Today's legislation spreads the economic power of Federal procurement to more companies and the communities where they are located.

I want to thank the gentleman from Mississippi (Mr. Kelly) for cosponsoring this critical legislation and for all his work on this issue while serving on the Small Business Committee, and I would like to also take this opportunity to thank the ranking member.

Mr. Speaker, I urge Members to support this bill, and I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 227, the Incentivizing Fairness in Subcontracting Act.

I, again, would like to thank Chairwoman Velazquez as well as the gentleman from Mississippi, Trent Kelly, for their leadership on this important bipartisan legislation.

As this committee has established time and again, small businesses play a vital role in the health and strength of the Federal marketplace. A vibrant small business community promotes innovation and competition, which results in better quality products and services provided at a lower cost to the taxpayer. Therefore, it is critically important that strong incentives exist to entice new small businesses to consider doing business in the Federal space.

One of the primary methods small businesses use to gain a foothold in Federal contracting is through subcontracting. As such, they rely on large prime contractors to make these opportunities available and to receive payment in a timely manner. This often creates an imbalance of power with the large prime contractor having the advantage.

This bill provides small businesses with more leverage by establishing a new measure of accountability on large prime contractors. Small subcontractors may seek redress with the Federal agency small business advocate to resolve any nonpayment issues stemming from the large prime contractor. Unresolved payment issues will reflect poorly on the prime contractor's record, which will impact the prime contractor's ability to win future contracts.

This bill establishes an important safeguard to discourage large prime contractors from taking advantage of their small subcontractors. The result will be a stronger and healthier industrial base, which is good for government. It is also, importantly, good for the taxpayer. I urge my colleagues to support this commonsense legislation.

Mr. Speaker, in closing, I want to thank the gentlewoman, again, for her leadership on this, as well as Mr. Kelly.

As we have discussed, this legislation provides an important safeguard to discourage large prime contractors from taking advantage of their small subcontractors. Given how important

small subcontractors are to the Federal procurement process, it is critical we ensure that they have an adequate system of redress should they have legitimate issues with the prime contractors. Once again, we are looking out for the little guy, which is what this committee does, and I think we all really appreciate that.

Mr. Speaker, I urge my colleagues to support this bipartisan legislation, and I yield back the balance of my time.