The Small Business Payment for Performance Act of 2025 requires federal agencies to make interim partial payments to small business contractors when the government changes the terms of a construction contract without the contractor's agreement. Specifically, when a small business requests an equitable adjustment (additional compensation) due to a contract change, the agency must pay at least 50 percent of the estimated additional costs while the full adjustment is still being reviewed. This payment is designed to help small businesses cover the immediate financial burden of unexpected contract changes without waiting for final settlement. The bill also requires small businesses to pass down their interim payments to subcontractors who incurred the extra costs. The Small Business Administration must implement these requirements by October 1, 2027, or the first full fiscal year after the law is enacted, whichever comes first.
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