Amendment on the Miller Act Not Included in Final NDAA Report

Amendment on the Miller Act Not Included in Final NDAA Report

The final conference report on the FY 2019 National Defense Authorization Act (NDAA) does not contain the amendment that SFAA and NASBP sought to exempt the federal Miller Act bond threshold from indexing for inflation. Our bill, H.R. 4486, was included in the House version of the NDAA, but was not in the Senate version when the NDAA went to conference. The Department of Defense (DOD) expressed concern about our amendment. Assuming continuing inflation, the DOD noted that over time a $150,000 contract will have less value than it does today. Hence, the DOD would be required to bond projects that are worth less than they are now at the $150,000 bond threshold. The DOD concluded that the risk of default/loss at these lower dollar values does not warrant the protection of bonds.

This June, the DOD, GSA, and NASA published a notice they will release a proposed regulation in December 2018 that would amend the Federal Acquisition Regulation (FAR) to make inflation adjustments of statutory acquisition-related thresholds that are due for consideration in 2020. The $150,000 Miller Act performance bond threshold is one of the thresholds to be considered in 2020. If the Miller Act bond threshold were increased from $150,000 to $200,000 in 2020, according to SFAA?s data, the federal government?s exposure to loss would increase $300 million annually.

The change order bill that the federal Construction Industry Procurement Coalition supported was included in the NDAA report, which will go to the President for signature soon. H.R. 4754 requires that for every solicitation for a contract to be awarded to a small business, the prospective bidders must be provided with the agency?s policies or practices for compliance with the FAR on Requests for an Equitable Adjustment (REAs) when a change order is issued. The FAR already requires the agencies to respond to REAs in ?the shortest practicable time.? If an agency does not have a policy or information on its past practices regarding on REAs, H.R. 4754 would require the agency to start collecting that information for a three-year period. The agency must collect data on whether they responded to a REA within 30, 60, 90, 180, or 360 days from receipt of the REA or whether the agency responds to REAs after the completion of the contract. This is a first step to gather information on the agency practices and to address compliance with the FAR. H.R. 4754 was included in the House NDAA but not in the Senate version. The bill also passed the House as a standalone bill on the suspension calendar.

The House plans to vote on the conference report soon. The Senate vote will be shortly thereafter.

Members should visit Advocacy / General Info (Members) for more information.