Construction Legislative Week in Review
www.agc.org July 31, 2014
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On the Inside
TRANSPORTATION
Highway Extension Expected to Clear Senate for President's Signature
FEDERAL CONTRACTING
AGC-Supported Design-Build Reform Bill Introduced in Senate
New FAR Clauses Implement OFCCP Veterans & Disabled Affirmative Action Rules
HEALTHCARE
Bipartisan Legislation to Simplify Compliance with the ACA Introduced
LABOR
AGC Submits Comments on Proposed Minimum Wage for Federal Contractors
New Executive Order Requires Federal Contractors to Disclose Labor Law Violations
AGC Opposes USACE-Mandated Project Labor Agreement
TRANSPORTATION
Highway Extension Expected to Clear Senate for President's Signature
 

After weeks of back and forth between the House and Senate, a short-term extension of the current transportation authorization with a temporary funding patch for the Highway Trust Fund is expected to pass the Senate later this evening, before Congress leaves town for their August recess. The bill is then headed to the president’s desk for his signature.

The bill – H.R. 5021, the Highway and Transportation Funding Act of 2014 – will extend the authorization for federal highway and transit programs until May 31, 2014, and provide a nearly $11 billion general fund transfer to the Highway Trust Fund.  This transfer is necessary to ensure that the trust fund can meet its funding obligations for the duration of the extension. 

H.R. 5021 originally passed the House with an overwhelmingly bipartisan majority on June 15.  On Tuesday, the Senate voted to amend the House-passed bill to shorten the length of the extension from May 31, 2015, to Dec. 20, 2014, and cut the general fund transfer to the Highway Trust Fund from $11 billion to $8 billion.  The passage of the Senate amendment started a game of legislative ping-pong where the House voted to disagree to the Senate amendment by a vote of 271-149 with 226 Republicans and 45 Democrats voting for and 147 Democrats and two Republicans voting against.  Following House action, tonight the Senate is expected to pass the original House bill and send it to the president. 

Even with the funding in place and the authorization extended through May of next year, AGC remains committed to addressing a long-term funding solution for the Highway Trust Fund this year.  We encourage our members to continue working through Hardhats for Highways to pressure their Representative and Senators to act on fixing the Highway Trust Fund this year.

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

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FEDERAL CONTRACTING
AGC-Supported Design-Build Reform Bill Introduced in Senate
TAKE ACTION: Urge your Senators to Co-sponsor S. 2652
 

On July 24, Sen. Deb Fischer (R-Neb.) introduced S. 2652, a bill that would reasonably limit one-step design-build procurements and the shortlist for two-step design-build procurements. Please take action now and urge your senators to cosponsor and support S. 2652.

Specifically, the bill would mandate the use of the two-step design-build procurement process for projects valued at $750,000 or more. As a result, there would be no one-step design-build procurements above this threshold, though they would be allowed below that.  Additionally, the bill would require contracting officers to provide written justification for short listing more than five finalists in the two-step design build process.

Having more than five, ten and even twenty teams submit full technical proposals on design-build solicitations is incredibly costly and inherently risky. Federal agencies continued packing the short list or use of one-step design-build solicitations on mega-projects serves to drive away contractor and designer teams, thereby eliminating a substantial amount of competition.

AGC testified in support of a similar measure before a House committee late last year. The introduction of S. 2652 comes as a result of AGC’s coalition efforts pushing a host of procurement reforms, which also include prohibiting reverse auctions for construction services, and increasing the Small Business Administration’s (SBA) loan guarantee to allow more small businesses access to SBA loans.

Again, please take action now and urge your senators to cosponsor and support S. 2652.

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

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New FAR Clauses Implement OFCCP Veterans & Disabled Affirmative Action Rules
 

The Federal Acquisition Regulation (FAR) Council issued an interim rule—effective July 25, 2014—that amends the FAR in accordance with the Office of  Federal Contract Compliance Programs (OFCCP) recently-issued affirmative action rules for veterans and disabled employees and applicants. Those OFCCP rules went into effect this past March. Contractors who work directly for federal agencies should take note of the inclusion of the new FAR clauses—52.222-35 and 52.222-36—in contracts awarded after July 25.

To view more AGC information on the OFCCP rules, please click here.  

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

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HEALTHCARE
Bipartisan Legislation to Simplify Compliance with the ACA Introduced
 

The Affordable Care Act (ACA) has different definitions of what constitutes a seasonal employee or worker when determining the size of an employer and whether an employer must offer insurance to those employees. 

This week, the House introduced bipartisan legislation that will eliminate the seasonal worker exemption from the ACA regulations, and instead marry the “seasonal worker” and “seasonal employee” definitions into one, clear definition. It would also exclude workers from the “applicable large employer” calculation who work for less than six months, while also excluding them from the requirement to offer coverage. The bill would be helpful to certain construction employers that utilize seasonal workforces.

AGC joined over 100 employer associations in a letter supporting the legislation and will continue to monitor its progress.

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

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LABOR
AGC Submits Comments on Proposed Minimum Wage for Federal Contractors
 

AGC of America has submitted comments  to the U.S. Department of Labor’s Wage and Hour Division (WHD) asking the agency to clarify its proposed rule implementing Executive Order 13658 (EO), which establishes a minimum wage of $10.10 per hour for direct federal contractors and subcontractors.  The new minimum wage impacts covered contracts entered into on or after Jan. 1, 2015.  Federally-assisted contractors are not affected.  The order also mandates that the Secretary of Labor determine a new minimum wage for federal contractors in 2016, and each year thereafter, based on the annual percentage increase in the Consumer Price Index for urban wage and clerical workers.

The proposed regulations cover workers whose wages are governed by the Davis-Bacon Act and the Service Contract Act.  The rule would also cover other workers whose wages are governed by the Fair Labor Standards Act (FLSA) for all time spent directly supporting a covered contract.  This includes workers who are non-exempt under the FLSA, are not laborers or mechanics as defined by the Davis-Bacon Act, and may or may not work on the site of the covered project.  It includes a broad contract clause flow-down requirement and a broad debarment. 

AGC’s comments urge WHD to:

  • Provide additional clarification and examples of covered contracts and contract-like instruments, including explicit exclusion of subcontracts for materials supplied to construction contractors;
  • Provide additional clarification and examples of covered workers and covered work, including the application of a 20 percent de minimis rule for workers who are not covered by the Davis-Bacon Act;
  • Institute a safe harbor for compliant prime contractors and higher-tier subcontractors instead of holding such contractors responsible for all lower-tier subcontractor violations;
  • Freeze wage rate mandates for the duration of multi-year contracts, or, at the very least, include an adjustments clause in contracts for minimum wage increases;
  • Add outreach efforts to notify contractors of minimum wage increases to the passive notice methods proposed;
  • Clarify how the EO applies to “indefinite delivery, indefinite quantity” contracts; and
  • Restrict use of the debarment process to contractors that willfully or recklessly violate the law.

The EO instructs the Secretary of Labor to issue final regulations by Oct. 1, 2014.  AGC will continue to monitor any new developments and notify members once final regulations are issued.  

For more information, please contact Tamika Carter at 703-837-5382 or cartert@agc.org Return to Top

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New Executive Order Requires Federal Contractors to Disclose Labor Law Violations
 

On July 31, President Obama issued an executive order (EO) that will require prospective federal contractors to disclose labor law violations from the past three years before they can win a contract.

The EO text was not available at the time of publication. However, according to a fact sheet issued by the White House, the executive order will require federal contractors to disclose any violations of 14 related federal statutes and the equivalent state laws. The mandate will also require prime contractors to collect similar information from “many of their subcontractors.” In addition, the EO would encourage contracting officers to take into account “the most egregious violations” during source selection. Federal agencies will also have to designate a senior official as a labor compliance advisor to provide guidance on whether contractors’ actions rise to the level of a lack of integrity or business ethics. The General Services Administration is tasked with developing a single website for contractors to meet their reporting requirements. The White House explains that contractors will only have to provide information to one location, even if they hold multiple contracts across different agencies.

The EO would apply to new federal contracts over $500,000. When exactly the EO would apply to new contracts remains unclear. AGC will provide more information as it becomes available.

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org Return to Top
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AGC Opposes USACE-Mandated Project Labor Agreement
 

This week, AGC sent a letter opposing the possible use of a project labor agreement (PLA) mandate posted by the U.S. Army Corps of Engineers for a construction project at the Tripler Army Medical Center in Hawaii.

AGC has sent over 80 letters to federal agencies opposing PLA mandates and bid preferences during the Obama administration, most in response to agency announcements that a PLA mandate or preference was under consideration for a particular project or an anticipated set of projects in a particular area. Of those, only one PLA mandate has been issued to date.

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 efforts opposing government mandated PLAs, click here.

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

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