Construction Legislative Week in Review
www.agc.org March 13, 2014
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On the Inside
HARDHATS FOR HIGHWAYS
Your Members of Congress Are in Your District Next Week Set Up Meetings Now
FEDERAL CONTRACTING
House Panel Approves Bill Prohibiting Reverse Auctions for Construction
TRANSPORTATION
U.S. DOT Likely to Delay Reimbursements this Summer
AGC Address Risk in P3 Comments
LABOR
Obama Executive Order on Overtime Regulations Expected
ELECTIONS
David Jolly Wins Special Election
HARDHATS FOR HIGHWAYS
Your Members of Congress Are in Your District Next Week Set Up Meetings Now
Get Involved at www.HardhatsforHighways.org
 

With your Senators and Representatives working in their home states next week, it is the perfect opportunity to get involved in the Hardhats for Highways campaign. Contact your members of Congress today to set up meetings with each office and educate them on the connection between local jobs and federal highway and transit investment.

Hardhats for Highways has already distributed more than 4,000 hardhat decals to companies in the construction industry.  Request your decals, send an e-Hardhat letter to your members of Congress, and gather information for your district meetings next week at www.hardhatsforhighways.org.

For more information, please contact Brynn Huneke at (703) 837-5376 or brynn.huneke@agc.org Return to Top

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FEDERAL CONTRACTING
House Panel Approves Bill Prohibiting Reverse Auctions for Construction
Take Action: Urge Your U.S. Senators and Representative to Support H.R. 2751
 

On March 5, the U.S. House of Representatives Small Business Committee unanimously approved by voice vote the Common Sense Construction Contracting Act of 2013, H.R. 2751, introduced by Representative Richard Hanna (R-N.Y.).  This legislation would essentially prohibit federal agencies from procuring construction services through reverse auctions.  This is the first major hurdle the bill had to jump before coming law. However, more hurdles remain ahead in the legislative process. Please take action and urge your U.S. Senators and Representative to support H.R. 2751.

The bill was introduced shortly after AGC’s May 2013 testimony before the House Small Business Committee on the need for this legislation. AGC also testified before a joint House Veterans Affairs and House Small Business Committee hearing on the need to prohibit procurement of construction services through reverse auctions in December 2013.  Several agencies, including the Department of Veterans Affairs and Department of the Interior, are using reverse auctions to procure construction services for full-range construction projects, including million dollar building renovations, national park road construction, and material supply and delivery. In addition, the General Services Administration launched its own web-based reverse auction platform—which includes the option of procuring construction services—for federal agency use last year.

Again, please take action and urge your U.S. Senators and Representative to support H.R. 2751. For more information, please see AGC of America’s summary on this issue and bill here.

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

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TRANSPORTATION
U.S. DOT Likely to Delay Reimbursements this Summer
Administration to Send Reauthorization Plan to Congress in April
 

This week, committees in the Senate and the House heard from the U.S. Secretary of Transportation Anthony Foxx and other Department officials about their FY 2015 budget submission, MAP-21 reauthorization, and how they intend to administer highway and transit programs considering the pending insolvency of the Highway Trust Fund (HTF).

Acting Department of Transportation (DOT) Undersecretary for Policy Peter Rogoff warned the House Transportation and Infrastructure Committee that, in order to maintain a HTF balance of $4 billion for the highway account and $1 billion for the transit account as required by law, DOT will have to delay payments to state highway and transit programs at some point this summer.  The highway account is expected to dip below $4 billion as soon as July and the transit account is projected to fall below $1 billion in August.   At the hearing, Rogoff acknowledged the looming threat of insolvency could lead states to begin delaying construction projects this spring.  In order to prevent the possible slowdown in reimbursements from DOT this summer, Congress and the administration must provide the HTF at least $4 billion in order for obligation to be met through Sept. 30, 2014.  

Last week, President Obama’s FY 2015 budget submission recognized the fact that these emergency measures may have to be taken by DOT; however, the budget did not propose a long-term sustainable funding solution for the HTF.  Instead, the budget calls for a one-time infusion of $150 billion from “pro-growth” tax reform, $63 billion of the proposed $150 billion would be needed just to maintain current HTF spending.  Secretary Foxx defended DOT’s proposal this week at hearings in the House and Senate Appropriations Committees.  

Specifically, Foxx reinforced the administration’s plan to fund a 4-year $302 billion reauthorization of MAP-21 using revenue from tax reform.  He faced some criticism for offering a one-time revenue infusion and ignoring the need to provide the HTF with a long-term sustainable funding source.    There was recognition at both House and Senate hearings that finding a solution to the troubles facing the HTF in the short-term and long-term is going to require Congress and the administration to work together.

In addition, Secretary Foxx announced that the administration will send a MAP-21 reauthorization proposal to Congress in April.

AGC continues to educate members of the Congress about the impacts of the pending HTF insolvency on the construction industry and the need to reauthorize MAP-21 and encourages you to do the same.  Participate in the “Hardhats for Highways” campaign, launched last week by the AGC co-chaired Transportation Construction Coalition, to educate your representatives and senators about the impact the pending HTF insolvency will have on your company and job.

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

AGC Address Risk in P3 Comments
 

AGC submitted comments to the Federal Highway Administration (FHWA) on a Draft Core Toll Concessions Public Private Partnership Model Contract Guide for P3 concessions using tolling as the revenue source. The Guide was prepared by FHWA in response to a requirement in MAP-21 that the agency develop model transaction documents for P3s. It is the first of several Guides that FHWA intends to produce dealing with P3 arrangements. AGC’s comments were favorable about the Guide pointing out that FHWA did a good job of balancing the desire for not mandating specific contract language with the equally strong desire to make P3s more uniform from a risk allocation point of view. AGC participated in a Listening Session that DOT held seeking suggestions on how to implement this MAP-21 directive and also previously submitted written comments and suggested at those sessions that FHWA not develop any mandatory contract language.

In this set of comments, AGC suggested that the Guide go further in its recommendations for appropriate risk allocation by making suggestions about the relationship between the developer/concessionaire and the design-build firm that will perform the construction. The Guide is directed at the concessionaire and addresses such construction risks as right of way acquisition, unknown underground conditions, environmental issues, permitting and others suggesting how the public owner should handle these risks as they impact the developer/concessionaire. AGC pointed out that these risks flow down from the developer/concessionaire to the design-build firm and that how these issues are resolved will impact the project’s ultimate cost. AGC also suggested that the document address the appropriate sharing of the cost of putting together a proposal, particularly in light of the political factors that can influence whether a project will ultimately move forward.

AGC highlighted the fact that once FHWA finishes all of the documents associated with this MAP-21 directive, the challenge will be to get the Guide used. Risk allocation significantly impacts the P3 market for transportation projects because unbalanced risk will discourage construction contractors from participating on these projects thereby limiting competition.

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

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LABOR
Obama Executive Order on Overtime Regulations Expected
 

This week, the Obama Administration announced its plans to issue an Executive Order requiring the Department of Labor (DOL) to make changes to the regulations governing which employees are entitled to overtime under the Fair Labor Standards Act (FLSA).  While the details of the Executive Order have not been released, it is expected to increase the minimum pay employees must receive to qualify as exempt from $455 per week to $984 per week. In addition to the minimum pay requirements, employees must also perform certain types of work to qualify for the exemption.  The primary duties test, the evaluation typically used to determine whether the type of work an employee is performing qualifies for the exemption, is also expected to change. Both changes are expected to have an impact on the construction industry. 

It is expected that the DOL will begin the rulemaking process later this year, which will include an opportunity for public comments.  AGC will continue to evaluate the Executive Order and will comment appropriately when given the opportunity.   

For information on the FLSA as it exists currently, visit the DOL website  or  the Labor and HR Topical Resources section of the AGC website.  The primary category is “compensation” and the secondary category is “Fair Labor Standards Act.”

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

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ELECTIONS
David Jolly Wins Special Election
 

In a stunning final special election result from Florida on Tuesday, AGC PAC-supported candidate David Jolly (R), upset favored candidate Alex Sink (D). The campaign's conclusion carries national implications.  Mr. Jolly won the race 48.5 - 46.6 percent, with 4.8 percent going to Libertarian Party nominee Lucas Overby. The Republican victory margin was 3,456 votes from a huge total of 183,627 ballots cast. The seat was vacant due to the death of 43-year congressional veteran Bill Young (R) who passed away last October, just days after announcing that he would not seek re-election in 2014.

The Affordable Care Act was front and center throughout the contest, with Jolly touting his opposition to the program and Sink relying on a catch phrase of "keeping what's right [with the healthcare program] and fixing what's wrong". Her argument, before a Sunshine State congressional district with the sixth largest segmentation of people (in Florida) over 65 years of age (22.8 percent), apparently fell upon largely disbelieving ears.

By all accounts, this is a damaging loss for the Democrats. Though Sink and her outside allies tried to swing the discussion to Medicare and Social Security, they failed to do so and Obamacare became the campaign's determinative issue. Failing to win in a district that is trending Democratic with their best possible candidate could lend credence to a Republican argument that this outcome is a harbinger of election results to come later in the year.

With the Jolly victory, the House now stands at 233 Republicans and 199 Democrats with three vacancies, two of which were previously Democratic. The Democrats missed a critical conversion opportunity that would have lowered the net number of seats needed to secure the majority to sixteen. The result underscores that the Republicans are better positioned to gain seats in the 2014 regular election than are their Democratic counterparts.

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

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