Contract Surety

Small Contractors: Relief From Undue Burdens?



Bipartisan support in Congress may result in legislation requiring federal agencies to demonstrate fair and ethical treatment of small construction contractors during the procurement process. Specifically, the Small Business Payment for Performance Act would add protections for small contractors impacted by changes to contracts.


Small Business Payment for Performance Act

Change orders pose particular headaches for hometown contractors seeking public work—slow approvals and delayed payments are a notorious challenge to business operations. Recognizing the importance of small businesses to communities across the country, a bipartisan group of Congressional leaders is working to reduce the unexpected burdens small contractors confront while striving to execute federal contracts:


“Small businesses are the economic engines of our economy, and it’s important that the federal government does not place undue burdens on them while fulfilling government contracts,” said Congressman Pete Stauber. “The Small Business Payment for Performance Act will hold the federal government accountable for any changes in contracts won by small businesses to make sure small contractors don’t have any unexpected financial burdens while completing contracts. This will result in more small businesses competing for federal contracts, and more economic prosperity for our communities.”


“Small businesses are the backbone of our economy and play a critical role in a competitive federal contracting marketplace,” said Representative Marc Veasey. “…This legislation will ensure small businesses have adequate and prompt compensation for additional work for a federal agency…It helps small businesses…to ensure they can do everything from paying their workers to competing in a competitive ecosystem.”


Specifically, the Small Business Payment for Performance Act would:


  • Allow small businesses to request an equitable adjustment to the contracting officer if the contracting officer places a change order without the agreement of the small business.
  • Require the federal government to pay at least 50% of cost occurred from the change order upon receipt of the equitable adjustment.


Colonial Surety helps small contractors too via The Partnership Account®. In addition to a surety line of credit—in writing, The Partnership Account®  gives qualified construction companies of all sizes:


  • Control of bidding and bonding, online and in real time.
    • Powers of attorney to seal and issue their own bid bonds—in minutes.
    • Fast, direct, confidential bid bonds—no middleman.
    • Direct access to performance and payment bonds on a customized dashboard.
    • Real time tracking of bids and work on hand.
    • Immediate access to Colonials lead underwriter as new opportunities emerge.
    • A private Owners Dashboard to view surety lines, adjust work and analyze bids.

Learn more and pre-qualify for a Partnership Account® now!


Protecting Hometown Contractors

As a spokesperson for the Associated General Contractors of America explains, a requirement for federal agencies to issue timely approvals—and payments— on change orders would ensure small construction contractors “do not go broke waiting to be paid for work the federal government ordered them to perform.” Given the current market fluctuations, inflation, and continued supply chain disruptions, construction industry leaders view the pending legislation as especially critical to lessen the financial burden on construction businesses—especially small ones—that result from changes made on construction contracts by the government. Leaders say the proposed legislation is long overdue and will help contractors “by requiring federal project owners to make interim partial payments on owner-directed change orders, small construction businesses receive necessary and timely cash flow for performance.” The Sheet Metal and Air Conditioning Contractors National Association is optimistic that the bill will bring about necessary change—and relief, noting: “The Small Business Payment for Performance Act would ensure small business federal contractors get paid sooner for completed and approved change orders as directed by agency officials.”


Looking to win the bid on a public build that matters in your home region? Builders everywhere in the country are getting an edge on civil works by securing a surety line of credit—in writing—via The Partnership Account for Contractors® from Colonial Surety. As a direct underwriter of bonds based on the strength of financial statements, we give builders power of attorney to issue their own bid bonds. Plus, our complimentary services give builders direct access to performance and payment bonds on a customized dashboard, real time tracking of bids and work on hand, and, immediate access to Colonial’s lead underwriter as new opportunities emerge. Complete the brief pre-qualification for your written surety-line of credit and The Partnership Account® services today—and receive, for free, Dun & Bradstreet scores. Pre-Qualify and Get Free Scores Here.


Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.