HR5657-119

What This Bill Does

The Fair Pay for Federal Contractors Act of 2025 addresses contractor employees who lose pay during a lapse in federal appropriations. For federal agencies subject to the shutdown beginning around October 1, 2025, and any later fiscal year 2026 lapse, the bill appropriates and authorizes such sums as necessary through December 31, 2026 for contract price adjustments. Agencies must adjust contracts when work was suspended, delayed, interrupted, or stopped because of the lapse so contractors can cover reasonable costs to pay furloughed, laid-off, reduced-hour, or reduced-compensation employees at their standard rate or restore paid leave the contractor required or allowed employees to use. The weekly covered amount is capped at the lesser of actual weekly compensation or $1,442, prorated for part-time employees. Contractors must prove actual costs, agency heads consult the Office of Federal Procurement Policy on evidence standards, adjustments must be made as soon as practicable, and OFPP must publish a one-year report with totals, contract counts, covered employee counts, leave-use data, and compensation-cap data.

Who Benefits and How

Federal contractor service employees benefit because agencies must fund back compensation for shutdown-related furloughs, layoffs, reduced hours, or reduced pay. Federal contractor laborers and mechanics benefit because the bill includes workers covered by Davis-Bacon wage rules. Federal contractors benefit because contract prices can be adjusted even when the contract did not otherwise permit those costs. Congressional oversight committees benefit from a public OFPP report on contract adjustments, covered workers, and compensation limits.

Who Bears the Burden and How

Federal agency contracting officers must review contractor evidence, adjust contract prices, and pay eligible costs quickly. Office of Federal Procurement Policy staff must advise on evidence standards and publish the one-year public report. Contractor payroll administrators must document actual costs, restored leave, weekly compensation, and covered employees. Federal taxpayers fund the contract adjustments through such sums as necessary appropriations.

Key Provisions

• Appropriates such sums as necessary through December 31, 2026 for shutdown-related contract price adjustments.
• Requires agencies to compensate contractors for eligible back pay and paid-leave restoration costs.
• Limits covered weekly compensation to actual weekly pay or $1,442, prorated for part-time workers.
• Requires contractor evidence of actual costs and agency consultation with OFPP on evidence standards.
• Requires OFPP to publish a one-year report on adjustments, workers covered, leave use, and compensation-cap effects.