Construction Legislative Week in Review
www.agc.org September 30, 2010
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On the Inside
MEETINGS
AGC Chapter Leaders Visit D.C., Call On Congress to Address Unfinished Business
FEDERAL
Congress Passes Continuing Resolution to Keep Federal Programs Running
President Obama Signs Small Business Bill, Enacts Numerous Contracting Provisions
LABOR
New Immigration Bill Introduced
House Passes 9/11 Bill
HIGHWAY
OMB Reporting Requirements Do Not Extend to FHWA-Funded Contracts
MEETINGS
AGC Chapter Leaders Visit D.C., Call On Congress to Address Unfinished Business
 

AGC president Ted Aadland addresses meeting attendees at the opening session.

This week, AGC held its annual National & Chapter Leadership Conference in Washington, D.C., which brought chapter leaders together to discuss best practices and meet with Members of Congress to address AGC's top legislative issues.

During the meeting Polly Trottenberg, Assistant Secretary for Transportation Policy at the U.S. Department of Transportation, thanked AGC and all of its members for their public support of the infrastructure spending in the American Recovery and Reinvestment Act.  Assistant Secretary Trottenberg provided some details on President Obama’s recent request for $50 billion, explaining that the funding would be added to the early years of a six-year surface transportation reauthorization bill in order to have a more immediate positive impact on construction employment. She also provided a glimpse of the administration’s priorities for surface transportation reauthorization, which will be released in more detail next year.  These priorities include integration of high-speed rail on an equal footing into the surface transportation program; streamlining, modernizing and prioritizing surface transportation investments; consolidating more than 100 different programs; focusing on using performance measurement and race-to-the-top-style competitive pressures to drive investment toward better policy outcomes; and expanding investments in areas like safety, environmental sustainability, economic competitiveness and livability.

Senator Mike Johanns (R-Neb.) talked about his efforts to roll back the health care bill, oppose Democratic leaders’ cap and trade scheme for greenhouse emissions, and repeal the 1099 reporting requirement in the massive health care bill. Johanns was the lead sponsor of repeal of the reporting requirement and made several references to the cost and burden on small employers if the provision remained.

Congressman John Kline (R-Minn.), the Ranking Member of the Education and Labor Committee, which has jurisdiction over many labor laws, health care, OSHA and pension issues, also addressed the group. Kline addressed his opposition to the so-called Employee Free Choice Act (Card Check) and the need for OSHA to work with employers to create safer worksites rather than just punishing them. Congressman Kline also talked about how Congress will have to address some of the problems facing multiemployer pension plans in the next Congress.

During the meeting, AGC members from across the country visited with nearly 150 Members of Congress and urged them to repeal three percent withholding, extend the expiring tax cuts and repeal the 1099 reporting requirement while explaining the need for a multi-year highway reauthorization bill.

For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org. Return to Top

FEDERAL
Congress Passes Continuing Resolution to Keep Federal Programs Running
Senate Amendment to Cut Discretionary Spending Fails
 

The House and Senate passed a Continuing Resolution (CR) to provide funds to continue the operation of the federal government until December 3.  The CR is necessary because Congress has failed to enact any of the 12 appropriations bills for FY 2011. Under the terms of the CR most government programs will continue to be funded at FY 2010 levels. 

One federal program monitored by AGC will see a decrease in funding levels; the Department of Defense Base Closure and Realignment (BRAC) will see a decrease in the amount available from over $7 billion in FY 2010 to a rate equal to $2.35 billion, the FY 2011 administration budget request.  Congress intends to wrap up the 12 unfinished appropriations bills in a large omnibus during the lame-duck session after the November 2 elections, which is tentatively scheduled to start in mid-November.

As Congress continues to look at ways to cut spending, their focus is likely to turn to limiting discretionary spending in the federal budget.  An example of this approach occurred during Senate debate of the CR through an amendment offered by Senator John Thune (R-S.D.). The Thune amendment proposed a 5 percent across-the-board cut in discretionary spending, excluding defense, homeland security and veterans’ programs. The amendment – which required 60 votes to pass – failed by a vote of 51-48, with eight Democrats voting yes.  AGC is continuing to push for full spending bills.

For more information, contact Sean O’Neill at (202) 547-8892 or oneills@agc.org. Return to Top

President Obama Signs Small Business Bill, Enacts Numerous Contracting Provisions
 

On September 27, President Obama signed the Small Business Jobs & Credit Act of 2010, enacting numerous tax breaks for small businesses and several significant contracting reform provisions that will have a wide-reaching impact on federal contractors.

First and foremost, the legislation puts an end to the uncertainty over parity in the small business program by re-establishing equality among each of the small business subcategories that competes for government contracts. The legislation now states that a contracting officer “may” – instead of “shall” – award contracts based on limited competition to HUBZone small businesses as a first option. Numerous Government Accountability Office and the U.S. Court of Federal Claims decisions in recent years determined that using “shall” unambiguously established a preference for HUBZone firms. AGC argued that in order to preserve the concept of free and open competition, even within the small business program, there must be parity within the program.

There are other provisions in the legislation designed to improve the contracting process, including:

  • Directions for SBA to establish a mentor-protégé program to assist small businesses owned by women, service-disabled veterans and those operating in HUBZones. The initiative would be modeled after the 8(a) mentor-protégé program.
  • Requiring OMB's Office of Federal Procurement Policy to establish a government-wide policy for contract bundling -- a process in which several small contracts are consolidated and awarded to one firm, often out of the reach of small businesses. Prior to bundling a contract, procurement officials would be required to conduct market research and to have a senior acquisition official sign off on the decision. The rationale for bundling then would be publicly disclosed.
  • Requiring small businesses to recertify their size status annually. The law also establishes a government-wide policy for prosecuting companies that fraudulently proclaim themselves to be a small business.

Finally, there are two provisions that could make substantial changes to the prime-subcontractor relationship. One provision requires a prime to "make a good faith effort to acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from the small business concerns used in preparing and submitting to the contracting agency the bid or proposal, in the same amount and quality used in preparing and submitting the bid or proposal," and "provide to the contracting officer a written explanation if the offeror or bidder fails to acquire articles, equipment, supplies, services, or materials or obtain the performance of construction work as described in clause.” A second provision governing payment to subcontractors could put prime contractors at undue risk for a poor performance evaluation if there is a dispute over timing or amount of payment to a subcontractor. AGC is greatly concerned that these provisions could lead to a form of bid listing and is pushing Congress to explain in more detail their intent of this provision.

AGC also will be deeply involved in the regulatory process as the rules are promulgated to implement this legislation.

For more information, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org. Return to Top

LABOR
New Immigration Bill Introduced
 

Late Wednesday, a new comprehensive immigration bill was introduced by Senator Menendez (D-N.J.) and Senator Leahy (D-Vt.).  AGC is currently reviewing this bill, but we are troubled by several items, including a proposal to make it easier to find employers in violation even if they did not “know” they had hired unauthorized workers. It also lacks a workable future visa program and includes language that would provide an incentive for unauthorized workers to file employment claims by offering a temporary work authorization.  

AGC supports a comprehensive approach to immigration reform and continues to talk with lawmakers about the needs of the construction industry in this debate.   This new bill is not expected to get much traction in the lame duck session; however the Senators who introduced the bill hope that it serves as a placeholder for the debate in 2011.

For more information, contact Kelly Knott at (202) 547-4685 or knottk@agc.org. Return to Top

House Passes 9/11 Bill
 

On the last working day before the elections, the House passed an AGC-supported measure that would provide health benefits for 9/11 workers.  Included in this bill (H.R. 847, the James Zadroga 9/11 Health and Compensation Act) is language that would limit the liability of contractors that worked at the site of the terrorist attack in New York City.

These contractors responded in the immediate aftermath of the collapse of the Twin Towers and continued working for over a month without contracts while at the direction of federal, state and city officials.  These contractors continue to face an enormous amount of liability from lawsuits from those who developed health problems in the aftermath of the attacks. 

A hearing on this legislation has been held in the Senate and supporters of the bill hope to see Senate action during the lame duck session.

For more information, contact Kelly Knott at (202) 547-4685 or knottk@agc.org. Return to Top

HIGHWAY
OMB Reporting Requirements Do Not Extend to FHWA-Funded Contracts
 

The Office of Management and Budget (OMB) recently released new reporting requirements for recipients of federal financial assistance, including grants and loans, in compliance with the Federal Funding Accountability and Transparency Act.

Included in the rules is a requirement that recipients report the total compensation of its five most highly compensated individuals. AGC contacted the Federal Highway Administration (FHWA) to clarify that this requirement does not apply to contractors working on contracts funded through the federal-aid highway program. FHWA’s General Counsel has verified that these requirements do not apply. 

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org. Return to Top

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