Construction Legislative Week in Review
www.agc.org May 17, 2012
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On the Inside
TRANSPORTATION
Highway Bill Conference Continues
TAX
Ways and Means Committee Chair and House Speaker Talk Taxes and Debt Limit
LABOR
NLRB’s “Quickie Election” Rule Deemed Invalid for Lack of Quorum
Vote to Prohibit Government Mandated Project Labor Agreement Passes in House
BUDGET
House Committee Passes Cuts to Military and Veterans Affairs Construction Accounts
FEDERAL CONTRACTING
AGC Continues to Combat Legislation Limiting Federal Agency Participation at Conferences
House Panel Approves Measure Expanding U.S. Contractor Preference for Overseas Military Construction
Senate Committee Approves Bill Barring the Politicizing of Federal Contracts
Obama Procurement Chief Nominee Clears Senate Panel
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TRANSPORTATION
Highway Bill Conference Continues
 

As AGC reported last week, the House and Senate began official negotiations to reconcile their differences on a bill that will reauthorize federal highway and transit programs.  Members of the conference committee have not met formally as a group since their meeting last week but conferees and their staff has been working behind the scenes.

Chairman of the Senate Environment and Public Works Committee Barbara Boxer (D-Calif.) said that the talks have “passed the organizational stage” and that the committee is now getting into issues where there may be some disagreement including expediting project delivery and streamlining the environmental review process for transportation construction projects.   According to Senator Boxer, the conferees are “working on the substance of the bill.”    The biggest area of disagreement between the House and Senate, which is the inclusion of mandating the approval of the Keystone XL pipeline, is far from resolved.  However, there have been some indications from Senator Boxer and other conferees that a deal could be reached on Keystone to avoid a breakdown on the transportation negotiations.

In addition, the Department of Transportation submitted its first detailed views of the transportation bill to House and Senate conferees.  The letter can be found here and reveals the administration’s priorities on policy issues to be addressed in the conference report.  The letter reiterates the earlier White House veto threat on the Keystone XL pipeline provision and expresses strong disapproval of the House-passed environmental streamlining proposals.  It is unclear what/ if any impact the administration’s letter will have on the negotiations.

As AGC continues to meet with members of Congress serving on the conference committee and their staff, we urge all AGC members to contact their representative and senators to urge a quick resolution of the conference committee.  For more information please visit www.agc.org/roads.  

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

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TAX
Ways and Means Committee Chair and House Speaker Talk Taxes and Debt Limit
 

House Ways and Means Committee Chairman Dave Camp, (R-Mich.) joined the tax reform/extenders debate today, pledging to link the pending expiration of the 2001 and 2003 Bush-era tax cuts as leverage to force action on comprehensive tax reform in 2013. He followed an announcement Tuesday by Speaker John Boehner (R-Ohio), who laid out the need for spending cuts to accompany any increase in the debt limit.  It is believed that Congress will once again need to increase the debt limit in late 2012 or early 2013.  These two speeches have laid out major issues that many in congress had hoped to push off until after the election.

The announced plans include pre-election votes on the Bush tax cuts this summer and an initiation of discussions over potential budget cuts. Chairman Camp also reiterated his position that the extension of the current law tax cuts does not need to be offset with spending cuts. The tax reform debate will also include the consideration of more than 30 processes that might expedite the consideration of comprehensive tax reform.  

As background, every Republican member of the Ways and Means Committee signed a letter to the Budget Committee detailing important elements of comprehensive tax reforms and the House adopted this approach as part of this year’s budget resolution.  Important elements of the reforms include the following:

  • Collapse the six rates on the individual side to two rates of 10 and 25 percent
  • Reduce the corporate rate to 25 percent
  • Eliminate the Alternative Minimum Tax
  • Move from an outdated worldwide system of taxation to a more competitive territorial system. 

The path to comprehensive reform will start with tax extenders and then move to more comprehensive tax reform concepts.

For more information, please contact Jeff Shoaf at (202) 547-3350 or shoafj@agc.org. Return to Top

LABOR
NLRB’s “Quickie Election” Rule Deemed Invalid for Lack of Quorum
 

The National Labor Relations Board’s (NLRB or Board) new rule revising election procedures in union representation cases is invalid, the U.S. District Court for the District of Columbia ruled May 14.  The rule, often called the “quickie election” or “ambush election” rule because it expedites the election process to unions’ advantage, took effect on April 30.  The Board has suspended implementation of the rule and is expected to revert back to procedures in effect before April 30.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace (CDW), both of which AGC is a member, brought the lawsuit challenging the rule on several procedural and substantive counts.  The court ruled on only one of those counts, finding that the Board lacked the necessary quorum when it voted to adopt the final rule.  At the time, in December 2011, three members sat on the five-member Board:  Chairman Mark Pearce (D), Craig Becker (D), and Brian Hayes (R).  All three participated in earlier stages of the rulemaking process, including a Nov. 30 vote on a resolution to adopt a final rule addressing certain aspects of the proposed rule that did not specify the exact language of the final rule.  The vote was two to one, with Hayes voting against proceeding with the rule.  After, drafts of the rule were circulated to all Board members.  On Dec. 14, all three members voted on a procedural order related to publication of the rule, again with Hayes being the sole dissent.  A final draft of the rule was circulated on Dec. 16.  Pearce and Becker voted to adopt the rule.  Hayes did not vote and was not asked to record a final vote.  He later stated that he did not think that any further action was required of him.  Apparently, neither did Pearce, as the final draft was submitted for publication in the Federal Register as a final rule that same day, with the preamble noting that Hayes had “effectively indicated his opposition” in the Nov. 30 and Dec. 14 votes.

The National Labor Relations Act provides that three members of the Board constitutes a quorum, and it was undisputed in the case that this quorum requirement applies to rulemaking.  The issue was whether Hayes should be counted toward establishing the quorum here.  The NLRB claimed that Hayes should be counted because of his participation in the Nov. 30 and Dec. 14 votes and because he was sufficiently “present” for the Dec. 16 final vote.  The court disagreed, stating:

  • The Dec. 16 decision to adopt the final rule, not the earlier votes, was the relevant agency action, concluded the court.  A quorum, accordingly, must have participated in that decision.  And although Hayes need not have voted in order to be counted toward the quorum, he may not be counted merely because he was a member of the Board at the time the rule was adopted.  More was required.

The court discussed what level of “participation” – short of voting – is required to be counted in a quorum.  Had Hayes “affirmatively expressed his intent to abstain or even acknowledged receipt of the notification,” or had “someone reached out to him to ask for a response…or had a substantial amount of time passed following the rule’s circulation,” it might have been sufficient.  “But none of that happened here,” stated the court.  Nor does it matter that Hayes issued a dissenting statement months later.

The court emphasized that its decision “need not necessarily spell the end of the final rule for all time.”  The court did not address the plaintiffs’ other procedural and substantive challenges to the rule, and explicitly commented that, had there been a proper quorum, the final rule might have been found to be lawful.  The court also acknowledged that a properly constituted quorum of the Board could vote now to adopt the rule. 

It remains to be seen whether the Board – which presently has five members (three democrats and two republicans) – will indeed hold a new vote on the rule.  However, this would likely spur new legal challenges, since the recess appointments of three current members are arguably invalid and already being challenged in separate litigation.  It also remains to be seen whether the Board will appeal the present decision.  Such an appeal seems likely, particularly given a recent statement by Pearce that the agency is “determined to move forward” in its efforts to revise representation-case procedures.  As the court noted, “In the meantime, though, representation elections will have to continue under the old procedures.”

This case represents a significant victory for AGC-supported CDW and is the second big victory against the NLRB in a month.  CDW and co-plaintiffs persuaded the U.S. Court of Appeals for the District of Columbia Circuit to issue an order on April 18 enjoining a rule issued by the Board to require employers to post certain notices of employee rights under the National Labor Relations Act. 

For more information, please contact Denise Gold at (703) 837-5326 or goldd@agc.org. Return to Top

Vote to Prohibit Government Mandated Project Labor Agreement Passes in House
 

Today, Rep. Roscoe Bartlett (R-Md.) offered an amendment to the National Defense Authorization Act (NDAA) for FY 2013 (H.R.4310) that would prohibit the federal government from mandating the use of a project labor agreement (PLA) or favoring a contractor because of the signing of a project labor agreement (PLA).  AGC sent a letter to the House today in support of the amendment. The vote passed (211-209) mostly along party lines with most republicans supporting it and all but one democrat opposing. 

While AGC neither supports nor opposes PLAs in general, AGC strongly opposes government mandates for PLAs on publically funded construction projects.  AGC is committed to free and open competition in all public construction markets and believes that publically funded contracts should be awarded without regard to the lawful labor relations policies and practices of the government contractor.  AGC will continue to work with congress on encouraging free and open competition on all federal contracts.

In addition, the House Appropriations Committee passed an amendment, by voice vote, to the FY 2013 Military Construction and Veterans Affairs Appropriations bill which was offered by Rep. Jeff Flake (R-Ariz.) and is similar to the passed Bartlett amendment. AGC sent a letter to the House Appropriations Committee, urging support for the amendment. The bill is expected to see a vote in the House in the next several weeks. An attempt to strip the Flake amendment during the debate is expected. 

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

BUDGET
House Committee Passes Cuts to Military and Veterans Affairs Construction Accounts
 

The House Appropriations Committee yesterday passed a funding bill that would cut military construction and Department of Veterans Affairs (VA) construction accounts. Military construction received $2.6 billion less than in the current fiscal year, largely due to already-planned reductions and pauses in construction. Meanwhile, the VA’s major projects construction account sees a $57 million decrease in FY2013 when compared to FY2012. However, on a more positive note, the bill increases the VA’s minor projects construction account by $125 million next fiscal year.

The House measure is now ready to move to the floor, whereas the Senate Appropriations Committee has not approved its version of the bill to date. AGC continues to press for investment in America’s military structures and veteran’s facilities to ensure the continued safety and health of our nation’s heroes.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

FEDERAL CONTRACTING
AGC Continues to Combat Legislation Limiting Federal Agency Participation at Conferences
 

AGC and the American Society of Association Executives (ASAE) met this week with House Leadership staff to discuss legislation that would severely restrict federal agency participation in conferences hosted by private organizations.  Aside from ASAE, AGC was the only other organization there to fight for continued open discussion with federal agency representatives at private industry conferences and meetings.

The reason for this discussion came as a result of legislation—H.R. 2146 and S. 1789—which passed separately, with minimal debate, in both the House and Senate last week as a response to the recent General Services Administration training conference scandal.  Though not enacted into law and still facing additional legislative action, if enacted, this legislation would bar more than one meeting with a federal agency per year, per organization. A reasonable reading is that, for example, if employees from the U.S. Army Corps of Engineers (USACE) attend a construction conference sponsored by one AGC chapter, no other USACE employees could attend any other conference or meeting sponsored by an AGC-affiliated organization until the next fiscal year.

More than 2,100 organizations signed on ASAE’s letter to Congress protesting this measure, including AGC of America and ten chapters.  AGC will continue to work closely with ASAE to redress this provision to ensure its contractors can convey their messages face-to-face to federal regulators who impact their businesses.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

House Panel Approves Measure Expanding U.S. Contractor Preference for Overseas Military Construction
 

The House Appropriations Committee yesterday approved a provision expanding opportunities for U.S. contractors bidding on international military construction projects within the U.S. Central Command Area of Responsibility. Included in the House Military Construction and Veterans Affairs appropriations bill, the provision championed by Rep. Jim Moran (D-Va.) specifically expands the American Preference Policy to Afghanistan, Bahrain, Egypt, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkmenistan, the U.A.E., Uzbekistan and Yemen. As it stands, Turkish and Chinese construction firms receive a majority of U.S. military construction awards in the aforementioned countries.

In 1984, Congress enacted the American Preference Policy to increase opportunities for U.S. contractors bidding on projects in the American territories of the Pacific and on Kwajalein Island.  This law allowed a 20 percent bid evaluation preference on projects that exceeded $1 million between the bids of U.S. contractors and foreign contractors before the foreign contractor’s price would be treated favorably.  The American Preference Policy was expanded 14 years later in response to similar concerns in the face of declining American bidders on U.S. government-funded projects bordering the Persian Gulf and the Arabian Sea.

Action now moves to the Senate, where this provision faces stiff resistance from Sen. Tim Johnson (D-S.D.), chairman of the Senate Military Construction and Veterans Affairs Appropriations Subcommittee. AGC will continue to strongly advocate in favor of this provision’s enactment.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

Senate Committee Approves Bill Barring the Politicizing of Federal Contracts
 

The Senate Homeland Security and Governmental Affairs Committee yesterday approved legislation with bipartisan support to prohibit the collection of political contribution information from bidders for government contracts. The bill, S. 1100, Keeping Politics out of Federal Contracting, is cosponsored by 22 senators.

This measure responds to a draft executive order that was leaked from the White House last year, which would have required federal contractors to disclose political contributions. Last month, 39 Democrats sent the president a letter asking him to finalize the draft executive order.  The House version of S. 1100—H.R. 2008—passed the Oversight & Government Reform Committee on a voice vote two weeks ago.

AGC will continue to advocate for passage of these bills as they move the respective chamber floors for consideration and to protect the integrity of the federal contracting process from the White House draft executive order.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org. Return to Top

Obama Procurement Chief Nominee Clears Senate Panel
 

The Senate Homeland Security and Governmental Affairs Committee on Wednesday approved President Obama’s choice to be administrator of the White House Office of Federal Procurement Policy.

Committee members unanimously approved nominee Joseph Jordan, senior advisor to Office of Management and Budget, a position he has held since December 2011. Between 2009 and 2011, Mr. Jordan served as Associate Administrator for Government Contracting and Business Development at the Small Business Administration (SBA). Prior to joining SBA, Mr. Jordan was an engagement manager with McKinsey & Company, a global management consulting firm.

Ranking member Susan Collins, R-Maine, said she was backing Jordan despite some questions as to whether he “will stand up to efforts by the Obama administration to introduce politics to the contracting process,” a reference to a draft executive order from the president that would require contracting companies to disclose campaign contributions. The draft executive order would have sent a message to contracting officials that campaign contributions should be a factor in their contracting decisions.

AGC has long opposed efforts to paint all contractors, politicians or government contracting officials with a broad brush as suspect, and we have proactively supported procurement reform to improve delivery of federal construction services. AGC last year testified against the draft executive order noted above before the House Oversight & Government Reform and Small Business Committees.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org.
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