Construction Legislative Week in Review
www.agc.org November 8, 2012
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On the Inside
2012 ELECTIONS
Voters Opt for the Status Quo
First Take on Ballot Initiatives Success
AGC Provides Post Election Analysis on Website and Conference Call
FEDERAL CONTRACTING
AGC Opposes NAVFAC Project Labor Agreement Inquiry
AGC Comments on Past Performance Evaluation Proposed Rule
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2012 ELECTIONS
Voters Opt for the Status Quo
 

In Tuesday’s elections, voters opted for the status quo where the balance of power will remain shared among President Barack Obama, Senate Democrats and House Republicans.  Unlike the past three elections, which resulted in significant changes in incumbents and party control, the federal government essentially remains unchanged despite a reported $6 billion in advertising spending. Much of the change that did occur in congressional races was a result of the once-in-a-decade redistricting as a result of reapportionment.

Heading into Election Day, history was on the side of the president. Since World War II, only three presidents were denied a second term by voters – Ford, Carter and Bush ’41. Incumbency is a powerful factor and it certainly benefited President Obama. When Republicans were enduring a rancorous primary, his campaign was able to build a massive Get-Out-the-Vote (GOTV) ground effort which would eventually drive his supporters to the polls in key battleground states.

Obama also benefited from an improving economy. The unemployment rate is down to 7.9 percent from 9.1 percent in January. The number unemployed is down by three million workers over the last two years. Consumer confidence is up 30 points from one year ago. Although the economy still has a long recovery process ahead, voters believe that it is improving and better days are once again within reach.

As we saw in the results, much of the president’s coalition remained intact. While votes in Florida are still being counted, Obama carried all the states that backed him in 2008 with the exception of Indiana and North Carolina, as well as Nebraska’s second congressional district. As it stands today, Obama received 303 electoral votes to Romney’s 206. Though the difference in votes is stark, the margin of victory within the battleground states was close.

In many of the competitive Senate races where there was no distinct demographic or partisan advantage, the deciding factor was the quality of the candidate. Simply put, the better candidate who ran the better campaign won. This was the case in 2010 when Republicans fielded exceptional candidates (i.e. Ayotte, Portman and Rubio) and is still the case in 2012.

At the same time, there were several races where the strongest possible Republican candidate was on the ballot with Heather Wilson (N.M.), Linda Lingle (Hawaii), Linda McMahon (Conn.) and Sen. Scott Brown (Mass.). Maybe in a non-presidential election, the results could have been different, but all fell to their challengers in the four Democratic-leaning states.

The Senate will become slightly more Democratic when it convenes in January with 53 Democrats, 45 Republicans and two Independents (expected to caucus with Democrats) and will include 12 new members (8 Democrats, 3 Republicans and 1 Independent).

Following redistricting, neither party could claim an outright victory in the number of House seats gained by the redrawing of district boundary lines. However, there was significant change resulting from the new lines at the district-by-district level. A large number of incumbents decided not to run for re-election largely because they faced too steep of a re-election fight, as their district had become more favorable towards the challenging party.

A significant shift also occurred in the number of competitive districts that could possibly change hands. Many districts that were once competitive were made much safer for one party or the other. With Republicans in control of the redistricting process in more states than Democrats, the result was that more Republican seats were moved into safer territory. This resulted in Republicans having to defend fewer seats – especially many from the large 2010 freshman class – than they would have if the maps had not changed.  As a result, there is only an expected net gain of +6 seats for Democrats – a far cry from the 25 needed to regain control of the chamber. As it stands now, voters elected 233 Republicans and 193 Democrats in the House. Nine races are still undecided. The freshmen class will include at least 82 Representatives (35 Republicans and 45 Democrats).

Republicans certainly will look at the 2012 election as an election of missed opportunities. They could have done better, but Democrats benefited from a slow, but improving, economy and a better set of candidates in key senate races.

For more information, please contact David Ashinoff at (202) 547-5013 or ashinoffd@agc.org. Return to Top

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First Take on Ballot Initiatives Success
 

Voters in this election approved more than 380 ballot initiatives totaling more than $30 billion in state, local, and school bond measures. With municipal bond yields at some of the lowest rates since the ‘60s, many cities and states decided that this was the year to go for big infrastructure projects. States and municipalities were asking for $37 billion, so their success rate was over 80 percent, higher even than the average success rate for presidential election years (since 1948), which is 76.3 percent. Yet the $37 billion in approval sought was significantly less than the $67 billion sought in 2008. Many states and municipalities are still reeling from the impact of the Great Recession, with collected revenues down from 2008 levels. With this decrease in revenue, many states had to make up large budget deficits due to balanced budget amendments, and are reluctant to take on new debt.

Still, there were several big winners across many different infrastructure categories. School construction won big in San Diego, Houston and Miami. New Jersey approved $750 million for research facilities, university buildings, county colleges, and even smaller private institutions. Arkansas levied a half percent temporary sales tax to ultimately raise $1.3 billion for highway construction and Alaska will issue nearly half a billion dollars in general obligation bonds for transportation projects. Maine will issue a general fund bond of $8 million to allow the state to secure nearly $40 million in federal grants. Dallas had the largest borrowing for consideration for a city with two propositions for street and sewer/stormwater system improvements together totaling $587 million. Both measures passed resoundingly, with more than 80 percent voting in favor. AGC will continue to monitor trends in state and local infrastructure funding and work with our network of chapters to ensure they have the tools they need to protect members’ markets.

For more information, please contact Scott Berry at (703) 837-5321 or berrys@agc.org. Return to Top

AGC Provides Post Election Analysis on Website and Conference Call
 

Today, AGC held a post-election conference call that reviewed the election results and the impact they will have on the construction industry during the upcoming lame duck session and 113th Congress.  While the agenda for the next two years will be significantly impacted by what is and what is not accomplished in the lame duck, it will also depend heavily on the mood of Congress and whether they are ready, willing and able to do what needs to be done in order to create an environment that promotes the long-term economic growth our industry needs to prosper. This site includes our best estimate of what Congress will likely address over the next two years.

AGC’s election website contains information on the impact of the election on the industry, as well as materials to help you navigate the changing political environment. The site also contains an audio recording of today’s conference call hosted by AGC’s chief executive officer, Steve Sandherr. Return to Top

FEDERAL CONTRACTING
AGC Opposes NAVFAC Project Labor Agreement Inquiry
 

On Nov. 6, AGC sent a letter opposing a government-mandated project labor (PLA) inquiry posted by the Naval Facilities Engineering Command (NAVFAC). NAVFAC Southwest sought industry comments on a possible PLA for a project at the Naval Medical Center in San Diego, Calif. The job is for the design and repair of the medical center’s HVAC and ductwork systems valued at approximately $65 million.

AGC neither supports nor opposes contractors’ voluntary use of PLAs on government projects, but strongly opposes any government mandate for contractors’ use of PLAs. AGC is committed to free and open competition for publicly funded work, and believes that the lawful labor relations policies and practices of private construction contractors should not be a factor in a government agency’s selection process.  

To view AGC’s letter, please click here.

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

AGC Comments on Past Performance Evaluation Proposed Rule
 

On Nov. 2, AGC submitted comments on the Federal Acquisition Regulation (FAR) Council’s recently proposed rule concerning past performance evaluation (PPE) standardization. The draft comments are based on a wealth of AGC member feedback on the proposed rule. In its comments, AGC noted that:

  • PPE appeal language in the FAR should not be removed. The administrative appeals process provides contractors with a necessary check to contracting officers and helps avoid litigation;
  • Contracting officers must be held accountable for producing fair and timely PPEs;
  • PPE ratings consistency must occur both within and across federal agencies; and
  • The PPE and past performance questionnaire processes should be better integrated and standardized across all federal agencies.

To view the comments, click here.

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

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