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107TH CONGRESS

1ST SESSION H. R. 1859

To assure quality and best value with respect to Federal construction projects

by prohibiting the practice known as bid shopping.

IN THE HOUSE OF REPRESENTATIVES

MAY 16, 2001

Mr. KANJORSKI (for himself, Mr. HORN, Mrs. MALONEY of New York, Mr.

SANDERS, Mr. KUCINICH, Mr. HINCHEY, Mr. PALLONE, and Mr. ANDREWS) introduced the following bill; which was referred to the Committee on Government Reform

A BILL

To assure quality and best value with respect to Federal

construction projects by prohibiting the practice known

as bid shopping.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Construction Quality

5 Assurance Act of 2001’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:

8 (1) Certain unfair and undesirable practices,

9 known as bid shopping, have arisen between contrac-
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1 tors and subcontractors from time to time in con2 struction work for the Federal Government.

3 (2) Bid shopping threatens the integrity of the

4 competitive bid system, which well serves the con5 struction industry and the economy.

6 (3) Bid shopping deprives taxpayers of the full

7 benefits of fair competition among contractors and

8 subcontractors, and often results in poor quality of

9 material and workmanship to the detriment of the

10 public.

11 (4) Because when bid shopping occurs the cost

12 savings gained are not passed on to the Federal

13 Government, while the simultaneous reduction in

14 quality and value are passed on, the procurement

15 practices of the Federal Government should be modi16 fied to prohibit bid shopping.

17 SEC. 3. DEFINITIONS.

18 In this Act:

19 (1) CONTRACT.—The term ‘‘contract’’ means

20 any contract with the Federal Government, exceed21 ing $1,000,000 in amount, for the construction, al22 teration, or repair of any public building or public

23 work of the United States.

24 (2) BID SHOPPING.—The term ‘‘bid shopping’’

25 means the practice of a contractor asking, requiring,
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1 or otherwise pressuring a subcontractor to lower

2 bids for subcontracts, or accepting lower bids from

3 subcontractors, after submitting a bid without pass4 ing the savings from the lower bids back to the Fed5 eral Government.

6 (3) CONTRACTOR.—The term ‘‘contractor’’

7 means an individual or entity that has been awarded

8 a contract by the Federal Government.

9 (4) SUBCONTRACTOR.—The term ‘‘subcon10 tractor’’ means an individual or entity with whom a

11 bidder on a contract proposes to enter into a sub12 contract for manufacturing, supplying, fabricating,

13 installing, or otherwise performing with respect to

14 the contract, whether the work is to be performed by

15 the subcontractor at the construction site or off the

16 site.

17 SEC. 4. PROHIBITION AGAINST BID SHOPPING.

18 (a) IN GENERAL.—No contractor or subcontractor

19 shall participate in the practice of bid shopping with re20 spect to a contract.

21 (b) NOTICE REQUIREMENT.—Any invitation to bid or

22 request for proposal issued by the Federal Government

23 with respect to a contract shall include a clause explicitly

24 prohibiting the practice of bid shopping and specifying the
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1 penalties for violating the prohibition against bid shop2 ping.

3 SEC. 5. PENALTIES.

4 (a) IN GENERAL.—A contracting officer who becomes

5 aware of a violation of the prohibition described in section

6 4(a) shall exercise the option of—

7 (1) canceling the contract; or

8 (2) imposing liquidated damages, the amount of

9 which shall be 3 times the difference between the

10 subcontractor’s final bid before the award of the

11 contract and the ultimate price of the subcontracted

12 work.

13 (b) GROUNDS FOR SUSPENSION OR DEBARMENT.—

14 The imposition of liquidated damages on a contractor with

15 respect to 2 contracts within a 5-year period shall be

16 deemed to be adequate evidence of the commission of an

17 offense indicating a lack of business integrity or business

18 honesty that seriously and directly affects the present re19 sponsibility of a Government contractor within the mean20 ing of part 9.4 of the Federal Acquisition Regulation (De21 barment, Suspension, and Eligibility) (49 CFR 9.4).

22 SEC. 6. IMPLEMENTATION THROUGH THE FEDERAL ACQUI23 SITION REGULATION.

24 The Federal Acquisition Regulation shall be modified

25 to provide appropriate solicitation provisions, contract
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1 clauses, and investigatory procedures to implement this

2 Act.

3 SEC. 7. EFFECTIVE DATE.

4 This Act shall apply with respect to contracts award5 ed on or after the date of the beginning of the first fiscal

6 quarter beginning more than 90 days after the date of

7 the enactment of this Act.

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