Small Business Payment for Performance Act of 2025

This bill helps small businesses that do construction work for the federal government. If a government official in charge tells them to change the work and that raises their costs, they can ask for money to cover those extra costs. The agency must give an interim payment of at least 50% of the estimated extra amount right away, so the business isn’t stuck waiting while the final amount is worked out. This early payment does not settle the final claim; the full amount can still be decided later.

If a small business gets this interim payment, it must pass along the right share to its subcontractors, and those subcontractors must also pass along the right share to any lower-tier subs.

• Who is affected: Small businesses with federal construction contracts and their subcontractors.
• What changes: Agencies must pay at least 50% of the estimated added costs up front when they order a change; interim payments must flow down to subs; the interim payment doesn’t decide the final amount owed.
• When: These requirements must be in place by the earlier of the first day of the first full fiscal year after the law is enacted or October 1, 2027.