Sense of Congress on Ensuring Prompt Payment of Department of Transportation Disadvantaged Business Enterprisesby Representative Gwen Moore
Posted on 2015-12-08
in the house of representatives
Tuesday, December 8, 2015
Ms. MOORE. Mr. Speaker, small businesses owned by disadvantaged
minorities (DBEs) are significantly affected when they are not promptly
paid for the work that they do. Lack of prompt payment constitutes a
very real barrier to the ability of DBEs to compete in the marketplace.
Non-DBE small businesses are also affected by late payment problems.
That is the reason the Department issued its Prompt Payment regulation in the first place.
Under this regulation, ``Payment is required only for satisfactory completion of the subcontractor's work.'' So we are not talking about cases where the prime and subcontractor have a disagreement about the work that was done.
In a recent briefing to my office, the Department of Transportation Inspector General cited the case of a DBE from Florida that got certified as a DBE, bid and won work on an airport project, and satisfactorily completed the work. However, she didn't get paid in a timely manner and eventually was sued by her suppliers who she couldn't pay.
A prompt payment requirement for all subcontractors is a race-neutral measure that assists all subcontractors if they are complied with. However, the concern is that they are not and small disadvantaged businesses which have small margins already, are further squeezed when they aren't paid in a timely manner for work already performed.
In its recent report, the Department of Transportation's Inspector General reaffirmed that failure to promptly pay DBEs continues to be a major barrier and obstacle for these small businesses in the transportation arena.
[[Page E1736]] According to that report, ``for several firms we interviewed, payment delays caused cash flow problems, prevented them from paying subcontractors and suppliers, and subjected them to costly lawsuits.'' That report further noted oversight weaknesses of prompt payment issues raised by DBEs to the FAA. This is not just an FAA issue. Those same concerns are applicable across the Department.
Despite progress in this area, major barriers impede the success of new and existing disadvantaged firms. One of those is delayed payments. If these small businesses don't get paid on time, their likelihood of remaining a viable business drastically decreases.
That is why I am grateful for the inclusion of my amendment to H.R. 22 calling on the Department of Transportation to enforce its current rules better. With that bill now law, I urge the Department to make this a priority and to strengthen efforts to make sure that these small businesses get paid on time for doing the quality work they contracted to do.