I
105TH CONGRESS
1ST SESSION
H. R. 3032
To amend the Office of Federal Procurement Policy Act and related acts
to enhance the payments protections for subcontractors and suppliers
on Federal construction projects, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 12, 1997
Mrs. MALONEY of New York introduced the following bill; which was referred
to the Committee on the Judiciary, and in addition to the Committee on
Government Reform and Oversight, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Office of Federal Procurement Policy Act
and related acts to enhance the payments protections
for subcontractors and suppliers on Federal construction
projects, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Construction Sub-
contractors Payment Protection Enhancement Act of
1998’’.
SEC. 2. ADDITIONAL RESPONSIBILITIES OF THE ADMINIS-
TRATOR FOR FEDERAL PROCUREMENT POL-
ICY.
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 follow-
ing new paragraph:
‘‘(9) establishing appropriate Government-wide
policies and assuring Government-wide implementa-
tion 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 (com-
monly 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 pub-
lished not later than 120 days after the date of the enact-
ment 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 en-
actment 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 PROTEC-
TION.—Subsection (a)(2) of the first section of the Miller
Act (40 U.S.C. 270a(2)) is amended by striking the sec-
ond, 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 per-
formance 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 mate-
rial’’.
(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 insert-
ing ‘‘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 PROTEC-
TION.—The first section of the Miller Act (40 U.S.C.
270a) is further amended by adding at the end the follow-
ing new subsection:
‘‘(e) No waiver of any protection afforded to a person
by a payment bond required by this Act shall be valid un-
less the waiver is in writing and is made after the date
such person may institute a suit under section 2 with re-
spect 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 con-
ducts business through any delivery service that provides
proof of receipt, including the United States Postal Serv-
ice, 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 sub-
section:
‘‘(c) A suit instituted under this section shall not be
dismissed on the grounds that it was filed before the expi-
ration 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 sub-
section:
‘‘(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 acquisi-
tion threshold (as defined in section 4(11) of the Of-
fice 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 pursu-
ant to section 2 and the court determines that the required
payment bond is not in effect because the contracting offi-
cer 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.’’.
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