GAO Report on Delayed Federal Contractor Payments Draws on Testimony from Edward DeLisle

Philadelphia, PA | September 9, 2019

The U.S. Government Accountability Office (GAO) recently published a report that draws upon testimony from Offit Kurman Government Contracting Practice Group Chair Edward DeLisle. The report, titled “Federal Construction: Army Corps of Engineers and GSA Need to Improve Data on Contract Changes,” addresses the delayed payments and other problems government contractors face when contracts change.

The report states that last year, “federal agencies spent more than $36 billion on construction contracts, with more than 45 percent going to small businesses.” GAO found that “some degree of change” is common among such projects, and that many federal contractors are concerned “that the government’s process for managing construction contract changes causes unnecessary delays in payments, creating cash flow issues and other challenges that can be particularly difficult for small businesses to manage.”

To compile the report, GAO surveyed construction contract changes among the U.S. Army Corps of Engineers and the General Services Administration (GSA). Results revealed that “neither agency regularly tracks how long it takes to process contract changes, which makes it more difficult for them to identify and respond to problems.” GAO recommended that both the GSA and Department of Defense develop strategies “to routinely collect information on and monitor time frames for construction contract changes at the headquarters level.”

Mr. DeLisle has testified before Congress about change order delays twice in recent years. In 2017, he appeared before the House Small Business Committee as FAR Committee Chairman of The Associated General Contractors of America (AGC), a leading association for the construction industry, representing more than 26,000 U.S. firms. Mr. DeLisle later testified before the Small Business Committee as an industry expert.

Based on this testimony, and others, along with information obtained from the Committee, GAO decided to perform its independent investigation. In large part, the findings and recommended changes echo Mr. DeLisle’s assertions.

“The government routinely fails to efficiently and effectively recognize work that falls outside of the contractual scope,” he said. “Too many contractors struggle to get paid for the additional work they perform. It’s a catch-22. A contractor can’t simply walk off a job or refuse to complete it, but if there’s a dispute, they have to fight for additional payment, which can take months or years. Especially for small companies, it can be devastating.”

At Offit Kurman, Mr. DeLisle concentrates his practice in the areas of federal contracting, construction law, construction litigation, and small business procurement and litigation. He has extensive experience representing construction contractors who perform work for the federal government, particularly contractors serving the Army Corps of Engineers and the Department of Veteran’s Affairs. He counsels clients in all aspects of small business procurement and has assisted clients in obtaining certification as small and small disadvantaged businesses at the municipal, state, and federal levels. Mr. DeLisle has participated in bid protests involving Service-Disabled, Veteran-Owned, HUBZone and 8(a) set-aside contracts and regularly assists with responding to best-value procurements at the state and federal level. He also assists companies, both foreign and domestic, in international disputes involving the U.S. government.

To access GAO’s report, “Federal Construction: Army Corps of Engineers and GSA Need to Improve Data on Contract Changes,” click here.

To learn more about Mr. DeLisle and to contact him, please visit his Offit Kurman attorney page. More information about Offit Kurman’s Government Contracting services can be found here.



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