Construction Legislative Week in Review July 19, 2012
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On the Inside
Fiscal Cliff Update
House Appropriations Subcommittee Considers DOL/HHS Spending Bill, Recommends Policy Changes
AGC Urges House Panel to Move on DOD Report Counting Lower Tier Small Business Subcontractors
AGC Files Comments to Proposed SBA Rules on Multiple Award Contracts
USACE Revises Safety Manual Revision Schedule for More Contractor Comments
Register and Save Now for the 16th Annual AGC/CFMA Construction Financial Management Conference
Fiscal Cliff Update

With the nation hurtling towards the fiscal cliff, mounting federal debt, the 2001, 2003, and 2010 tax cuts set to expire, the imposition of sequestration and the prospect of hitting the federal debt limit early next year, there seems to be little area of common ground between Democrats and Republicans.

Federal Reserve Chairman Ben Bernanke addressed Congress saying, “The most effective way that the Congress could help to support the economy right now would be to work to address the nation’s fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery…Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence.”  In addition, Morgan Stanley said this week that concerns about the fiscal cliff are reaching new heights across a wide range of industries. It is already seeing reductions in business orders and hiring, among other areas. 

Republicans in the House and Senate have said that there is little chance of a grand compromise on taxes and long term debt this year. They recommend that Congress extend all expiring and expired tax provisions for one year to give time for tax reform and comprehensive deficit reduction to take place.

In the Senate, Democrats unveiled a tax bill that focuses on enacting much of President Obama’s campaign themes by raising rates on those earning more than $250,000 and increasing dividends and capital gains from 15 to 20 percent.  The dividend increase is actually lower than the 250 percent increase that the president mentioned in a speech earlier this month. The proposal will also increase the estate tax back to a top rate of 55 percent with a million dollar exemption.  In addition, fourth ranking Senate Democrat Patty Murray (D-Wash.) announced in a speech this week that Democrats would rather see the rates go up for everyone than cut a deal with Republicans that doesn’t include separating those making $250,000 and above from the rest of taxpayers.

Simpson Bowles, co-author Erskine Bowles, announced a new coalition –the “Campaign to Fix the Debt” – headed up by former Governor Ed Rendell (D-Pa.) and former New Hampshire Senator Judd Gregg (R-N.H.) that includes CEOs of big companies.  The coalition is working on a nationwide media campaign to build public support for the tough decisions that have to be made to deal with the nation’s debt.  The coalition is rewriting the Simpson-Bowles plan to include Medicare and Medicaid reform and other policy changes as a starting point for discussions.

AGC has urged Congress to extend all tax policies for one year and work in a bipartisan fashion to deal with comprehensive debt reduction. 

For more information, please contact Jeff Shoaf at (202) 547-3350 or Return to Top

House Appropriations Subcommittee Considers DOL/HHS Spending Bill, Recommends Policy Changes

On July 18, 2012 the U.S. House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies passed the FY 2013 Labor, Health and Human Services (LHHS) funding bill. The legislation includes funding for programs within the Department of Labor (DOL), the Department of Health and Human Services (HHS), the Department of Education, and other related agencies including the National Labor Relations Board (NLRB) and several important policy changes.

In total, the bill includes $150 billion in discretionary funding, which is a cut of $6.3 billion below last year’s level and $8.8 billion below the president’s budget request.  Many of the savings are a result of a prohibition on any new discretionary funding for the healthcare law.

In addition to spending cuts, the legislation contains several policy provisions that are of interest to the construction industry.  The bill includes provisions that would rein in the NLRB and DOL. The first would block the August 2011 decision in Specialty Healthcare, which opened the door to micro-unions.  Another provision would stop the NLRB’s final rule on “quickie elections,” which was struck down by a U.S. District Court on procedural grounds in May, but the NLRB has stated they hope to reissue the rule.  Finally, another provision would prohibit funds from being used to implements DOL’s “persuader” rulemaking.

Several safety and health provisions are in the bill, including a provision prohibiting the implementation of an expensive and inefficient one-size-fits-all injury and illness prevention program, which would eliminate costly burdens on businesses large or small.  Also included is a prohibition on funding for the Mine Safety and Health Administration to continue the development or the implementation of a coal mine dust regulation. The bill zeros out the Susan Harwood training grants. It is important to note that, through Susan Harwood grants, AGC has been able to develop and implement programs that provide free safety and health training nationwide on the focus four hazards in construction for thousands of construction workers. AGC hopes to see funding for this important program restored.

Among other policy provisions in the bill, it prevents DOL and HHS from requiring project labor agreements on projects funded by the bill and includes a provision prohibiting the implementation of new H-2B Program regulations to reduce unnecessary requirements and excessive costs to participating employers.

The spending bill is the last of 12 annual spending bills to move through the House and is expected to be considered by the full Appropriations committee next week. However, the Senate is not planning to consider any of the 12 annual appropriation bills before the end of the fiscal year, September 30.

For more information, please contact Jim Young at (202) 547-0133 or Return to Top

AGC Urges House Panel to Move on DOD Report Counting Lower Tier Small Business Subcontractors

On July 16, AGC sent a letter to the House Armed Services Committee Chairman Buck McKeon (R-Calif.) and Ranking Democrat Adam Smith (D-Wash.) urging them to encourage the Department of Defense (DOD) to issue its report on counting small business participation at all tiers. With AGC encouragement, HASC mandated in the National Defense Authorization Act For Fiscal Year 2012 Committee Report that DOD develop procedures for fully accounting for small business contracting participation at all tiers on a DOD contract. The committee requested this information by March 30, 2012, but has not received a written report from DOD to date.

To improve federal contracting opportunities for small businesses, understanding the full extent of small business participation is essential. Under the current system, if an “other-than small business” is included as a first-tier subcontractor, the prime contractor cannot report the flow of dollars to small businesses hired below the first-tier subcontractor for small business procurement goal purposes. Counting all small business lower tier subcontractors will help identify areas where small businesses are being underrepresented.

AGC strongly holds that the goal of federal small business contracting programs must be measured by the full counting of small business subcontracting at all tiers. This will more accurately show how the construction industry supports and is dependent upon small businesses.

For more information contact Jimmy Christianson at 703-837-5325 or Return to Top

AGC Files Comments to Proposed SBA Rules on Multiple Award Contracts

On July 16, AGC filed comments on proposed Small Business Administration (SBA) rules on multiple award contracts (MAC), bundling and consolidation. If finalized, the proposed rules would further streamline and clarify SBA regulations on the books regarding MACs and small business set-asides. Although generally supportive of the proposed rules, AGC made the following points:

Contracting officers should not be provided with authority to create discrete categories within a contract and to assign individualized North American Industry Classification System (NAICS) codes to each category;

In the mentor/protégé context, size recertification requirements should not extend to large business mentors;

Waiver of the limitations on subcontracting requirement under 8(a) contracts is currently limited to 8(a) Business Development Participants. This waiver should be extended to all programs to provide the same flexibility and additional business development opportunities to all small business concerns; and  

The inclusion of a good faith evaluation for a small business when a contracting officer documents whether that business met or did not meet the applicable limitation on subcontracting.

To view AGC’s comments, click here.

For more information, please contact Jimmy Christianson at 703-837-5325 or Return to Top

USACE Revises Safety Manual Revision Schedule for More Contractor Comments

The U.S. Army Corps of Engineers (USACE) recently revised the schedule for its safety manual revision—called EM 385-1-1, 2008—to allow for more time for comments from industry stakeholders. AGC will work to provide opportunities for contractors to meet via conference call and/or face-to-face with the USACE on this revision at given points throughout the process. To make a comments on the first draft, click here.

The revised schedule is as follows:

  • SEPTEMBER 1, 2012: First Draft Comments due to USACE-SO;
  • NOVEMBER 5, 2012: Draft #2 published on internet for review;
  • JANUARY 11, 2013: Draft #2 comments due to USACE-SO (Any unresolved and/or outstanding issues will be worked on with appropriate stakeholders at this point for resolution.);
  • MARCH 4, 2013: Final Draft published on internet;
  • MAY 1, 2013: Final Draft comments due to USACE-SO (Comments addressed at this point should not be major issues.);
  • JUNE 1, 2013: Prepare for edit, publish, print;
  • SEPTEMBER 1, 2013: Estimated print.

For more information, contact Jimmy Christianson at 703-837-5325 or or contact Kevin Cannon at 703-837-5410 or Return to Top

Register and Save Now for the 16th Annual AGC/CFMA Construction Financial Management Conference
October 24-26, 2012 | Las Vegas, Nev.

Jointly sponsored by AGC and the Construction Financial Management Association (CFMA), the 15th Annual AGC/CFMA Construction Financial Management Conference offers programs and workshops designed specifically for financial professionals in the construction industry. 

Register by Friday, Sept. 7, 2012, for special “Early Bird” discounts.  Additional discounts are available for subsequent registrations from the same firm.  Register now and save up to $210 – or 25 percent – off the standard registration fee.

The three-day conference features 36 interactive sessions covering the latest industry issues and their financial implications.  Participants may earn up to 19 continuing professional education (CPE) credits.  This year’s sessions include:

  • Fraud
  • Ethics
  • Cloud Computing
  • Risk Management
  • Construction Taxes
  • IT Strategic Planning
  • Construction Market Trends
  • Financial Accounting Standards
  • Business Real Estate Management
  • Strategies for Economic Conditions
  • Change Order and Claims Management

Owners, chief financial officers, controllers, treasurers, certified public accountants, auditors, consultants, bankers, sureties, and others interested in the construction financial management will greatly benefit from this conference.

For more information, and to register online, visit Return to Top

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