H.R. 4615: Small Business Payment for Performance Act of 2025 (119th Congress) Bill Summary

This bill, known as the Small Business Payment for Performance Act of 2025, aims to modify the Small Business Act to assist small business contractors who experience changes in the terms of their construction contracts due to directives from contracting agencies. Here’s a breakdown of the key provisions of the bill:

Equitable Adjustments to Construction Contracts

The bill allows small business contractors to request an equitable adjustment when there are changes to their construction contracts initiated by an agency without mutual agreement. The following points explain the process:

Request for Equitable Adjustment: A small business contractor can submit a request to the agency's contracting officer if a change is made to contract terms without the contractor's consent. The request must:
- Be made on time as specified in the contract.
- Include an estimate of the additional costs incurred due to the change.
Interim Partial Payments: When a request for equitable adjustment is received, the agency is required to provide interim partial payments. These payments must amount to at least 50% of the estimated additional costs submitted by the contractor.
Payment Flow-Down: If a small business contractor receives interim payments, they are obligated to share these payments with first-tier subcontractors based on their respective incurred costs due to the changes in the contract. This obligation extends down the subcontractor chain.

Implementation Timeline

The bill mandates that the Administrator of the Small Business Administration execute these provisions by either:

The first day of the first full fiscal year following the bill's enactment.
October 1, 2027, whichever comes first.

Purpose

The primary goal of this bill is to ensure that small business contractors have a mechanism for receiving prompt financial support when contract modifications occur, thereby enhancing financial stability and enabling continued performance of their contracts in the face of unforeseen changes.