text: 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 subcontractors 
          now perform the majority of construction work, in certain cases 
          100 percent of the work, under the management of a prime 
          contractor, making 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 shopping'' 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 subcontractors at a price less 
          than the quoted price of the subcontractor 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 entity 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 another subcontractor whose 
          bid price was reflected in the successful bid of the contractor 
          by offering to reduce its price for performance of the 
          specified work, suggesting that the previous offer of the 
          subcontractor was padded or incorrect.
              (5) Bid shopping and bid peddling--
                      (A) threaten the integrity of the competitive bid 
                  system for construction that benefits the Federal 
                  Government, the construction industry, and the economy 
                  of the United States as a whole;
                      (B) compromise national security by promoting 
                  uncertainty about which contractors actually perform 
                  work on critical infrastructure projects;
                      (C) deprive taxpayers of the benefits of full and 
                  open competition among prospective contractors and 
                  subcontractors for the performance of Federal 
                  construction projects;
                      (D) expose Federal construction projects to the 
                  dangers of substandard performance, substitution of 
                  lower quality materials, and other detrimental cost-
                  cutting practices by an unscrupulous substituted 
                  subcontractor; and
                      (E) can be effectively deterred in Federal 
                  construction by modifying the Federal Acquisition 
                  Regulation to require bid listing, which is the 
                  practice of requiring each offeror for a Federal 
                  construction contract to list the subcontractors whose 
                  performance is reflected in 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, exceeding $1,000,000 in amount, 
          for the construction, alteration, 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 ``subcontractor'' means an 
          individual or entity that subcontracts 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 CONSTRUCTION PROJECTS.
  
      (a) Requirement To List Subcontractors.--
              (1) In general.--Each solicitation by an executive agency 
          for the procurement of construction in an amount in excess of 
          $1,000,000 shall require 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 categories.--
                      (A) Except as provided in subparagraphs (B) and 
                  (C), the bidder shall list only one subcontractor for 
                  each category of work as defined by the bidder in its 
                  bid or proposal.
                      (B) A bidder may list multiple subcontractors for a 
                  category of work if each such subcontractor 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 subcontractors.--An executive 
          agency shall consider any bidder that fails to list 
          subcontractors in accordance with this Act and the regulations 
          promulgated pursuant 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 
          contracting 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 contract 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 individual.
                      (D) Dissolution of the subcontractor, if the 
                  subcontractor is a corporation or partnership.
                      (E) Failure of a subcontractor to meet the surety 
                  bond requirements specified by the bidder as a 
                  condition of the subcontractor to perform on the 
                  contract, if awarded to the bidder.
                      (F) The subcontractor is ineligible to perform on 
                  the subcontract because the subcontractor is suspended, 
                  debarred, or otherwise ineligible to perform.
                      (G) A series of failures by the subcontractor to 
                  perform in accordance with the specification, terms, 
                  and conditions of its subcontract resulting in the 
                  withholding of amounts requested by the subcontractor 
                  in accordance with section 3905 of title 31, United 
                  States Code, and the regulations implementing such 
                  section.
                      (H) Failure of the subcontractor to comply with a 
                  requirement of law applicable to the subcontractor.
                      (I) Failure or refusal of the subcontractor to 
                  perform the subcontract.
              (3) Requests for substitution.--A request of a contractor 
          for a substitution of a listed subcontractor shall be submitted 
          in writing to the contracting officer and shall include the 
          reasons for the request. The contractor shall provide a copy of 
          its request for substitution to the listed subcontractor by any 
          means that provides written third-party verification of 
          delivery to the last known address of the subcontractor. A 
          subcontractor who has been so notified shall have five working 
          days within which to submit written objections to the 
          substitution to the contracting officer. Failure to file such 
          written objections shall constitute the consent of the listed 
          subcontractor to the substitution.
      (c) Limitation on Assignment, Transfer, or Substitution.--
              (1) Limitation on assignment or transfer.--No contractor 
          shall permit any subcontract to be voluntarily assigned or 
          transferred or to be performed by any entity other than the 
          subcontractor listed in the bid or proposal without the consent 
          of the contracting officer. Consent of the contracting officer 
          to a contractor for a substitution shall--
                      (A) be promptly made in writing; and
                      (B) be included in the contract file.
              (2) Limitation on substitution.--No contractor that listed 
          itself for a portion of the work under the contract shall 
          subcontract any portion of the work for which it listed itself, 
          unless authorized by the contracting officer to substitute one 
          or more subcontractors to perform such work.
  
  SEC. 5. PENALTIES.
  
      (a) In General.--
              (1) A contractor shall be subject to penalties if, without 
          obtaining the approval of the contracting officer, the 
          contractor--
                      (A) replaces a listed subcontractor for a contract 
                  with an executive agency; or
                      (B) awards a subcontract to a subcontractor to 
                  perform work which the contractor had identified as 
                  work to be performed directly by the contractor.
              (2) A subcontractor shall also be subject to penalties if 
          the subcontractor is determined to have knowingly participated 
          in the failure of the contractor to comply with the regulatory 
          provisions relating to the substitution of a listed 
          subcontractor.
      (b) Amount of Penalties To Be Imposed.--The amount of penalties 
  imposed under this section shall be equal to the greater of--
              (1) 10 percent of the amount of the bid by the listed 
          subcontractor;
              (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 subcontractor 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 business integrity or business honesty that seriously and directly 
  affects the present responsibility of a Government contractor within 
  the meaning of part 9.4 of the Federal Acquisition Regulation 
  (Debarment, Suspension, and Eligibility) (48 CFR 9.4).
  
  SEC. 7. IMPLEMENTATION THROUGH THE FEDERAL ACQUISITION 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 
  comment.
      (b) Final Regulations.--Final regulations shall be published not 
  less than 180 days after the date of the enactment of this Act and 
  shall be effective on the date that is 30 days after the date of 
  publication.
target: Construction Quality Assurance Act of 2009 - Requires each solicitation by an executive agency for the procurement of construction in excess of $1 million to require each bidder to submit the name, business location, and nature of work of each subcontractor with whom such bidder will subcontract for work in excess of $100,000. Deems to be non-responsive, and prohibits consideration of, any bidder that fails to list such subcontractors.
  
  Prohibits a contractor from substituting another subcontractor for a listed subcontractor, permitting any subcontract to be voluntarily assigned or transferred, or subcontracting work for which the contractor listed itself, without the contracting officer's consent. Sets forth: (1) examples of good cause and procedures required for substitution requests; and (2) penalties for violations of such prohibitions, including suspension or debarment from federal contracts for multiple violations. Requires revisions to the Federal Acquisition Regulation to implement this Act.
feat_title: To assure quality and best value with respect to Federal construction projects by prohibiting the practice known as bid shopping.