Small Business Payment for Performance Act of 2026

This Act may be cited as the “Small Business Payment for Performance Act of 2026”.

(a) In general.— Section 15 of the Small Business Act (15 U.S.C. 644) is amended—

(1) by redesignating subsections (x) and (y) as subsections (y) and (z), respectively; and

(2) by inserting after subsection (w) the following new subsection:

“(x) Interim partial payments for equitable adjustments to construction contracts.—

(1) Request for an equitable adjustment.— A small business concern that was awarded a contract for construction by an agency may submit a request for an equitable adjustment to the contracting officer of such agency, in accordance with the procedures of such agency and the procedures applicable to such contract, if the contracting officer directs a change in the terms of the contract performance without the agreement of the small business concern. Such request shall—

(A) be timely made pursuant to the terms of the contract; and

(B) specify the estimated amount required to cover additional costs resulting from such change in the terms.

(2) Amount.— Upon receipt of a request under paragraph (1), the agency shall provide to such concern an interim partial payment in an amount equal to not less than 50 percent of the estimated amount under paragraph (1)(B).

(3) Limitation.— Any interim partial payment made under this section may not be deemed to be an action to definitize the request for an equitable adjustment.

(4) Flow-down of interim partial payment amounts.— A small business concern that receives an interim partial payment under this subsection shall pay to a first tier subcontractor of such concern the portion of each interim partial payment received that is attributable to the increased costs of performance incurred by such subcontractor due to the change in the terms of the contract performance described in paragraph (1). A first tier subcontractor that receives a portion of an interim partial payment under this paragraph shall pay to a subcontractor (at any tier) the appropriate portion of such payment.”.

(b) Implementation.— Not later than 90 days after the date of the enactment of this Act, the Administrator of the Small Business Administration shall issue rules in accordance with the provisions of subchanpter II of chapter 5 of title 5, United States Code, (commonly referred to as the Administrative Procedures Act) to implement the requirements of this section.

(c) Conforming amendment.— Paragraph (2) of section 15(y) of the Small Business Act, as redesignated by subsection (a), is amended by striking “(as defined in subsection (y))” and inserting “(as defined in subsection (z))”.