Change Order Payment Reform Bill Returns to Congress, Drawing Strong Industry Support
“With steel, aluminum, copper and equipment tariffs driving up contract material costs, especially on existing federal infrastructure projects, we urge Congress to expedite passage," SMACNA Lobbyist says
FEDERAL: SMACNA and other federal contractors site delayed payments on change orders as a significant challenge in performing federal work. (Courtesy of the Architect of the Capitol)
Small business contractors are backing a new push in Congress to solve one of their most stubborn headaches: getting paid on time for change orders on federal construction projects.
The Small Business Payment for Performance Act of 2025 (H.R. 4615), introduced by Rep. Pete Stauber (R-MN) with bipartisan support, aims to ensure that contractors are compensated more quickly when federal agencies order changes to the original scope of a project. Late or unpredictable payments for these changes – known as “change orders” – have long squeezed the cash flow of contractors, especially small businesses, and become more painful as material costs soar.
“From extensive experience working on federal projects, we fully concur with Rep. Stauber’s intent in sponsoring the Payment for Performance Act and give it our highest rating for advocacy and support,” said Stanley E. Kolbe, Jr., executive director of government and political affairs at the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA). “With steel, aluminum, copper and equipment tariffs driving up contract material costs, especially on existing federal infrastructure projects, we urge Congress to expedite passage of this long overdue and vitally necessary Stauber legislation.”
The bill would allow federal contractors to submit a request for equitable adjustment (REA) or contract fee adjustment after performing a change order approved by an agency. Under the new rules, agencies would be required to pay 50% of the billed change order work amount promptly after receiving the REA – helping contractors offset costs while the full adjustment is still pending.
Supporters say the measure is a long-overdue fix for what Kolbe calls “the millions of dollars in change order inequities SMACNA contractors and other federal contractors face every year.” While similar bills have passed the House in previous years, none have cleared the Senate. With a new wave of federal infrastructure spending on the horizon, industry advocates hope this time will be different.
“Without passage of the Small Business Payment for Performance legislation, the escalating material costs and subsequent payment problems for contractors can only grow more severe and damage the economic health of contractors small, medium and large,” Kolbe said.
Stauber’s bill has garnered bipartisan support, with Reps. Brian Fitzpatrick (R-PA), Marc Veasey (D-TX), and Donald Norcross (D-NJ) signing on as co-sponsors. Industry groups like SMACNA are now calling on lawmakers to move quickly before more contractors feel the pinch.
“This essential legislation will make a significant difference and is a long overdue step most worthy of passage,” Kolbe added.
If enacted, H.R. 4615 would mark a significant win for thousands of small businesses performing crucial public work across the nation – and could bring long-awaited stability to the way the government pays its builders when plans change.
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