I 
111TH CONGRESS 
1ST SESSION H. R. 3492 
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 
JULY 31, 2009 
Mr. KANJORSKI introduced the following bill; which was referred to the 
Committee on Oversight and Government Reform 
A BILL 
To assure quality and best value with respect to Federal 
construction projects by prohibiting the practice known 
as bid shopping. 
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 Quality 
Assurance Act of 2009’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) In the construction industry, specialty sub-
contractors now perform the majority of construc-
tion work, in certain cases 100 percent of the work, 
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under the management of a prime contractor, mak-
ing the subcontractors’ price and performance the 
key determinant in the overall cost of construction 
projects, including those performed for the Federal 
Government. 
(2) Detrimental practices known as ‘‘bid shop-
ping’’ and ‘‘bid peddling’’ exist in the construction 
industry, including construction projects for the 
Federal Government. 
(3) ‘‘Bid shopping’’ occurs when a contractor, 
after award of a contract, contracts with subcontrac-
tors at a price less than the quoted price of the sub-
contractor upon which the contractor’s fixed bid 
price was based, in order to increase the contractor’s 
profit on the project without any benefit to the enti-
ty for which the contract is being performed. 
(4) ‘‘Bid peddling’’ occurs when a subcontractor 
that is not selected for inclusion in a contractor’s 
team seeks to induce the contractor, after award of 
the contract, to substitute the subcontractor for an-
other subcontractor whose bid price was reflected in 
the successful bid of the contractor by offering to re-
duce its price for performance of the specified work, 
suggesting that the previous offer of the subcon-
tractor was padded or incorrect. 
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(5) Bid shopping and bid peddling— 
(A) threaten the integrity of the competi-
tive bid system for construction that benefits 
the Federal Government, the construction in-
dustry, and the economy of the United States 
as a whole; 
(B) compromise national security by pro-
moting uncertainty about which contractors ac-
tually perform work on critical infrastructure 
projects; 
(C) deprive taxpayers of the benefits of full 
and open competition among prospective con-
tractors and subcontractors for the performance 
of Federal construction projects; 
(D) expose Federal construction projects to 
the dangers of substandard performance, sub-
stitution of lower quality materials, and other 
detrimental cost-cutting practices by an unscru-
pulous substituted subcontractor; and 
(E) can be effectively deterred in Federal 
construction by modifying the Federal Acquisi-
tion Regulation to require bid listing, which is 
the practice of requiring each offeror for a Fed-
eral construction contract to list the sub-
contractors whose performance is reflected in 
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the bid price, procedures for the substitution of 
listed subcontractors for good cause, and other 
deterrents to abuse. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) CONTRACT.—The term ‘‘contract’’ means 
any contract with the Federal Government, exceed-
ing $1,000,000 in amount, for the construction, al-
teration, or repair of any public building or public 
work of the United States. 
(2) 
CONTRACTOR.—The 
term 
‘‘contractor’’ 
means an individual or entity that has been awarded 
or is seeking to be awarded a construction contract 
by the Federal Government. 
(3) 
SUBCONTRACTOR.—The 
term 
‘‘subcon-
tractor’’ means an individual or entity that sub-
contracts with a contractor in an amount in excess 
of $100,000 for work on a contract. 
SEC. 4. REQUIREMENTS REGARDING SUBCONTRACTORS 
FOR FEDERAL CONTRACTORS ON CONSTRUC-
TION PROJECTS. 
(a) REQUIREMENT TO LIST SUBCONTRACTORS.— 
(1) IN GENERAL.—Each solicitation by an exec-
utive agency for the procurement of construction in 
an amount in excess of $1,000,000 shall require 
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each bidder to submit as part of its bid the name, 
location of the place of business, and nature of the 
work of each subcontractor with whom the bidder, if 
awarded the contract, will subcontract for work in 
an amount in excess of $100,000 on the contract. 
(2) 
REQUIREMENTS
FOR
SPECIFIC
CAT-
EGORIES.— 
(A) Except as provided in subparagraphs 
(B) and (C), the bidder shall list only one sub-
contractor for each category of work as defined 
by the bidder in its bid or proposal. 
(B) A bidder may list multiple subcontrac-
tors for a category of work if each such subcon-
tractor is listed to perform a discrete portion of 
the work within a category. 
(C) A bidder may list itself for any portion 
of work under the contract, which shall be 
deemed a representation by the bidder that it is 
fully qualified to perform that portion of the 
work itself and that the bidder will perform 
that portion itself. 
(3) RESULT OF FAILURE TO LIST SUBCONTRAC-
TORS.—An executive agency shall consider any bid-
der that fails to list subcontractors in accordance 
with this Act and the regulations promulgated pur-
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suant to section 7 of this Act to be non-responsive 
and bids by such bidders shall not be considered. 
(b) PROCEDURES FOR SUBSTITUTION OF A LISTED 
SUBCONTRACTOR.— 
(1) CONSENT AND GOOD CAUSE REQUIRED.— 
No contractor shall substitute a subcontractor in 
place of the subcontractor listed in the original bid 
or proposal, except with the consent of the con-
tracting officer for good cause. 
(2) EXAMPLES OF GOOD CAUSE.—Good cause 
under paragraph (1) shall include the following: 
(A) Failure of the subcontractor to execute 
a written contract after a reasonable period if 
such written contract, based upon the terms, 
conditions, plans, and specifications of the con-
tract and the terms of the subcontractor’s bid 
or proposal, is presented to the subcontractor 
by the contractor. 
(B) Bankruptcy of the subcontractor. 
(C) The death or physical disability of the 
subcontractor, if the subcontractor is an indi-
vidual. 
(D) Dissolution of the subcontractor, if the 
subcontractor is a corporation or partnership. 
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(2) the difference between the amount of the 
bid by the listed subcontractor and the amount of 
the bid by the substituted subcontractor; or 
(3) the difference between the amount of the 
bid by a substituted subcontractor and the dollar 
value specified by the contractor for the work which 
the contractor had listed for its own performance. 
(c) SOURCE OF FUNDS FOR PENALTIES.—Penalties 
assessed pursuant to this section shall be deducted from 
the remaining unpaid contract balance and deposited into 
the fund from which the contract was awarded. 
SEC. 6. GROUNDS FOR SUSPENSION OR DEBARMENT. 
The imposition of penalties on a contractor or sub-
contractor for failure to comply with the procedures for 
the substitution of subcontractors on 2 contracts within 
a 3-year period shall be deemed to be adequate evidence 
of the commission of an offense indicating a lack of busi-
ness integrity or business honesty that seriously and di-
rectly affects the present responsibility of a Government 
contractor within the meaning of part 9.4 of the Federal 
Acquisition Regulation (Debarment, Suspension, and Eli-
gibility) (48 CFR 9.4). 
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SEC. 7. IMPLEMENTATION THROUGH THE FEDERAL ACQUI-
SITION REGULATION. 
(a) PROPOSED REVISIONS.—Proposed revisions to 
the Government-wide Federal Acquisition Regulation to 
implement the provisions in 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 com-
ment. 
(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. 
Æ 
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