Construction Subcontractors Payment Protection Enhancement Act of 1998

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Construction Subcontractors Payment 
Protection Enhancement Act of 1998''.

SEC. 2. ADDITIONAL RESPONSIBILITIES OF THE ADMINISTRATOR FOR FEDERAL 
              PROCUREMENT POLICY.

    Section 6(d) of the Office of Federal Procurement Policy Act (41 
U.S.C. 405(d)) is amended--
            (1) by redesignating paragraphs (9), (10), (11), (12), and 
        (13), as paragraphs (10), (11), (12), (13), and (14), 
        respectively; and
            (2) by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) establishing appropriate Government-wide policies and 
        assuring Government-wide implementation through the Federal 
        Acquisition Regulation of statutes and policies assuring the 
        timely payment of contractors, subcontractors, and suppliers, 
        including chapter 39 of title 31, United States Code (commonly 
        known as the ``Prompt Payment Act''), the Miller Act (40 U.S.C. 
        270a-270d-1), and section 2091 of the Federal Acquisition 
        Streamlining Act of 1994 (Pub. Law 103-355; 108 Stat. 3306);''.

SEC. 3. IMPLEMENTATION THROUGH THE GOVERNMENT-WIDE PROCUREMENT 
              REGULATIONS.

    (a) Proposed Regulations.--Proposed revisions to the Government-
wide Federal Acquisition Regulation to implement the amendments made by 
this Act shall be published not later than 120 days after the date of 
the enactment of this Act and provide not less than 60 days for public 
comment.
    (b) Final Regulations.--Final regulations shall be published not 
less than 180 days after the date of the enactment of this Act and 
shall be effective on the date that is 30 days after the date of 
publication.

SEC. 4. RELATED AMENDMENTS TO THE MILLER ACT.

    (a) Improvement of Payment Bond Protection.--Subsection (a)(2) of 
the first section of the Miller Act (40 U.S.C. 270a(2)) is amended by 
striking the second, third, and fourth sentences and inserting in lieu 
thereof the following new sentence: ``The amount of the payment bond 
shall be equal to the amount of the performance bond.''.
    (b) Payment Bond Protection for Progress Payments.--Section 2(a) of 
the Miller Act (40 U.S.C. 270b(a)) is amended in the first sentence by 
striking ``who has not been paid in full therefor'' and inserting in 
lieu thereof the following: ``(1) who has not been paid in full for a 
progress payment before the expiration of a period of seven days after 
the due date of the progress payment, or (2) who has not been paid in 
full for the labor or material''.
    (c) Extension of Payment Bond Protection to All Subcontractors and 
Suppliers.--Section 2(a) of the Miller Act (40 U.S.C. 270b(a)) is 
further amended--
            (1) by striking ``performed by him'' and inserting 
        ``performed by the person'';
            (2) by striking ``supplied by him'' and inserting in lieu 
        thereof ``supplied by the person''; and
            (3) by striking ``him: Provided, however,'' and all that 
        follows through ``within ninety days from'' and inserting in 
        lieu thereof ``the person. Any person who institutes such a 
        suit shall give notice of such suit to the contractor who 
        furnished such payment bond not later than 90 days after''.
    (d) Preservation of Payment Bond Protection.--The first section of 
the Miller Act (40 U.S.C. 270a) is further amended by adding at the end 
the following new subsection:
    ``(e) No waiver of any protection afforded to a person by a payment 
bond required by this Act shall be valid unless the waiver is in 
writing and is made after the date such person may institute a suit 
under section 2 with respect to such bond.''.
    (e) Modernization of Service of Payment Bond Claims.--Section 2(a) 
of the Miller Act (40 U.S.C. 270b(a)) is further amended in the 
sentence beginning with ``Such notice'' by striking ``by mailing'' and 
all that follows through ``or his residence'' and inserting in lieu 
thereof ``to the contractor at any place the contractor conducts 
business through any delivery service that provides proof of receipt, 
including the United States Postal Service, a private express delivery 
service, or delivery by any form of electronic means,''.
    (f) Elimination of Delays in Payment Bond Protection.--Section 2 of 
the Miller Act (40 U.S.C. 270b) is further amended--
            (1) in the second paragraph, by inserting ``(b)'' before 
        ``Every suit instituted''; and
            (2) by adding at the end the following new subsection:
    ``(c) A suit instituted under this section shall not be dismissed 
on the grounds that it was filed before the expiration of a period of 
ninety days after the date on which the last of the labor was done or 
performed or material was furnished or supplied if the person who 
instituted the suit has received from the contractor who furnished the 
bond a denial in writing that payment is due, in whole or in part.''.
    (g) Discouragement of Frivolous Payment Bond Litigation.--Section 2 
of the Miller Act is further amended by adding at the end the following 
new subsection:
    ``(d)(1) A court may award the prevailing party in a suit 
instituted under this section court costs, attorneys' fees, and 
interest, if the court determines that such an award is appropriate and 
that--
            ``(A) the suit is frivolous or a defense that is asserted 
        in the suit is groundless; or
            ``(B) such an award is needed to preserve the protections 
        of this Act with respect to a small claim, in an amount not 
        exceeding the simplified acquisition threshold (as defined in 
        section 4(11) of the Office of Federal Procurement Policy Act; 
        41 U.S.C. 403(11)).''.
    ``(2) Interest awarded under this subsection shall be calculated 
for the period beginning on the date the claim is made and ending on 
the date of payment, using the interest rates applicable to late 
payment interest penalties pursuant to section 3902 of title 31, United 
States Code (commonly referred to as the ``Prompt Payment Act'').''.
    (h) Accountability of Contracting Officers.--The first section of 
the Miller Act (40 U.S.C. 270a) is further amended by adding at the end 
the following new subsection:
    ``(f)(1) The contracting officer for a contract shall be 
responsible for--
            ``(A) obtaining from the contractor the payment bond 
        required under subsection (a); and
            ``(B) ensuring that the payment bond remains in effect 
        during the administration of the contract.
    ``(2) In any case in which a person brings suit pursuant to section 
2 and the court determines that the required payment bond is not in 
effect because the contracting officer has failed to perform the 
responsibilities required by paragraph (1), upon petition of the person 
who brought the suit the court may authorize such person to bring suit 
against the United States for the amount that the person would have 
sued for under section 2.''.

Summary: Construction Subcontractors Payment Protection Enhancement Act of 1998 - Amends the Office of Federal Procurement Policy Act to provide for the establishment of policies assuring the timely payment of contractors, subcontractors, and suppliers. Amends the Miller Act to revise provisions concerning payment bonds.