Construction Legislative Week in Review
www.agc.org April 9, 2015
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On the Inside
TRANSPORTATION
Comment Period Extended for Local Hire Preference Proposal
FEDERAL CONTRACTING
AGC-Supported Design-Build Reform Bill Introduced
AGC Comments on SBA Mentor-Protégé Proposed Rule
New Human Trafficking Rule Requires Contractor Compliance
AGC Comments on SBA Performance of Work Proposed Rule
AGC Opposes NAVFAC-Mandated PLA
HR & LABOR
AGC Submits Comments on Multiemployer Pension Plan Law
ENVIRONMENT
EPA Rule Redefining “Waters of the U.S.” Moves to Final Stage
2016 ELECTIONS
Rand Follows in Father’s Footsteps
EVENTS
Register for AGC Federal Contractors Conference
AGC Financial Issues Summer Meeting Early-Bird Ends Next Week
TRANSPORTATION
Comment Period Extended for Local Hire Preference Proposal
 

The U.S. Department of Transportation (DOT) announced on Monday, April 6 – the day comments were due on its proposed local hire pilot program – to extend the comment period an additional 30 days through May 6, 2015. The DOT proposal established a pilot program that will allow state and local governments to use geographic hiring preferences on their federal-aid highway and federal transit assisted contracts. The pilot program was made effective immediately and will last one year. DOT also issued a notice of proposed rulemaking to make these changes permanent by altering existing Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) regulations. Read the pilot program proposal here and the Notice of Proposed Rule Making here. While AGC has prepared extensive comments on the proposal, AGC requested the extension of time to allow more AGC members and chapters that would be impacted by the new program to comment.

If you have not yet done so you are encouraged to submit comments on this proposal. You can submit comments directly to DOT or use AGC’s Action Center.

For more information, please contact Brian Deery at deeryb@agc.org. Return to Top
FEDERAL CONTRACTING
AGC-Supported Design-Build Reform Bill Introduced
 

Recently, Representative Sam Graves (R-Mo.) introduced a bill that would reasonably limit federal agencies’ use of one-step design-build procurements and the shortlist for two-step design-build procurements. The Design-Build Efficiency and Jobs Act of 2015, H.R. 1666, 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.

AGC was able to successfully include a provision in the National Defense Authorization Act of 2015—which became law in December 2014—that requires Department of Defense contracting agencies to provide written justification and contracting head-level approval for short listing more than five teams for military construction contracts. AGC testified before the House Small Business Committee in February encouraging the introduction of such legislation, among other federal procurement reform initiatives.  

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top
AGC Comments on SBA Mentor-Protégé Proposed Rule
SBA Extends Comment Period to May 6
 

AGC submitted comments this week on the U.S. Small Business Administration’s (SBA) proposed rule that would expand mentor-protégé joint venturing opportunities to all small businesses, regardless of small business size or category. SBA proposed this rule in response to the passage of provisions in the 2010 Small Business Jobs Act and the National Defense Authorization Act of 2013. The public comment period has been extended to May 6. To comment, click here.

This expanded mentor-protégé program would be in addition to and modeled after the existing 8(a) mentor-protégé program. As such, a large business mentor joint venturing with a small business protégé would be considered a “small business” just like a stand-alone small business. As a result, the large and small business mentor-protégé joint venture would be able to compete on small business set aside work or be considered a small business for determination as to whether a contract should be set aside under the Rule of Two—which mandates that if two qualified small businesses would compete for the contract, it must be set aside for small business.

In its comments, AGC expressed its concerns about SBA requiring a small business protégé to self-perform 40 percent of the contract work, given that the SBA is simultaneously changing the performance of work rules. As a result, the definition of “work” and performance of work calculation is indeterminable at this time.  While AGC neither supports nor opposes the expansion of the mentor-protégé program, the association did express its concerns about the potential for this rule to dramatically alter the small business program and federal contracting in general.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top
New Human Trafficking Rule Requires Contractor Compliance
Impacts Direct-Federal Contractors Only
 

Earlier this year, the Federal Acquisition Regulation (FAR) Council issued a final rule—as a result of a presidential executive order—to help prevent human trafficking on direct federal government contracts. The rule applies to direct federal prime contracts or subcontracts—i.e., a contract directly with any federal agency or a subcontract through a prime contractor working for a federal agency—with an estimated value over $500,000 for supplies acquired outside the U.S., or services to be performed outside the U.S. It requires contractors on applicable contracts to certify both prior to award and annually post-award their human trafficking compliance efforts. For example, a subcontract under a USACE prime contract for $500,001 of building materials from China will require due diligence by the prime contractor to ensure the steel supplier does not engage in human trafficking. The rule does not apply to federally assisted contracts or grants—i.e., state department of transportation projects; it only applies to contracts governed under the FAR.

The rule will require direct-federal contractors to certify and take preventative actions to ensure that their subcontractors—at all tiers—are not engaged in human trafficking. Contractors must specifically certify that they have: (1) implemented an anti-human trafficking compliance plan and procedures to prevent human trafficking violations; and (2) performed due diligence on its agents and subcontractors and taken remedial actions, if necessary.

The rule took effect March 2 and applies to contracts awarded on or after that date as well as individual orders on indefinite delivery, indefinite quantity contracts awarded on or after March 2. AGC of America will host a free webinar for AGC members in several weeks to address this rule as well as a host of others coming down the pipe and impacting direct-federal contractors. Stay tuned for further details.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top
AGC Comments on SBA Performance of Work Proposed Rule
 

This week, AGCsubmitted comments on the U.S. Small Business Administration’s (SBA) proposed rule that would change the performance of work requirements small business general and specialty subcontractors must self-perform. The proposed rule would change the performance of work requirement to that of a limitation on subcontracting requirement—general small business contractors could not subcontract more than 85 percent of the amount paid on the contract; and specialty small business contractors could not subcontract more than 75 percent of the amount paid on the contract.  The calculation of how much work is subcontracted would be based on the amount the prime contractor pays to subcontractors from the contract.

In its comments, AGC noted, among others, its concerns that such a rule would be difficult to adhere to because federal agencies may require modifications throughout the duration of the project. Such modifications can cause a contractor to require a subcontractor to perform more work than initially anticipated and, as a result, cause their subcontracting dollar to exceed the limitation. Such a situation would be caused by the federal agency owner, not the prime contractor.

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

Recently, AGC sent a letter opposing the possible use of a project labor agreement (PLA) mandate posted by the Pacific Naval Facilities Engineering Command for the construction of a multi-story replacement clinic to provide primary medical and dental care at the Marine Corps Base in Honolulu, Hawaii.

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.

Visit AGC’s Legislative Action Center to write to your members of Congress urging their support of legislation that ensures that government agencies remain neutral in PLA decisions.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top
HR & LABOR
AGC Submits Comments on Multiemployer Pension Plan Law
 

The Department of Treasury and the Pension Benefit Guaranty Corporation (PBGC) recently issued separate “requests for information” to aid in their development of regulations to implement the Multiemployer Pension Reform Act (MPRA) and AGC joined with other construction industry stakeholders to submit detailed comments to Treasury and PBGC on April 6, 2015.

The Treasury request regarded the suspension of benefits under MPRA. The detailed comments highlight that the benefit suspensions under MPRA are designed to address the pressing needs of plans in critical and declining status to act expeditiously to avoid insolvency while saving the maximum amount of benefits possible. AGC believes the intent of the statute is clear, but that the approval process should include a review of the decision‐making process in designing the benefit suspensions and not a full reconsideration of the judgment of the plan trustees and their advisors, who themselves are entrusted by law to adhere to their fiduciary and professional standards. AGC asked that Treasury provide guidance that clearly sets expectations for the applications while not creating unnecessary burdens on plan trustees that could delay necessary action. Once guidance has been issued, Treasury should take care to act to review and approve applications for benefit suspensions as quickly as possible.

The PBGC request regarded partitions of eligible multiemployer plans and facilitated mergers under the MPRA. The AGC comments reiterated the comments to Treasury that the reviews should be done expeditiously and that partitions and facilitated mergers will usually occur concurrently with benefit suspensions; for that reason, it is important for PBGC and Treasury to communicate actively with each other throughout the approval process.

AGC will continue to monitor the implementation of MPRA and comment when appropriate. AGC is also advocating for additional legislative reforms to the multiemployer system, including the creation of new plan designs which would further help stabilize the system while limiting employer liability and providing lifetime retirement security to plan participants.

For more information, please contact Jim Young at youngj@agc.org Return to Top
ENVIRONMENT
EPA Rule Redefining “Waters of the U.S.” Moves to Final Stage
 

The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers’ (Corps) joint rulemaking redefining which waters are jurisdictional under federal Clean Water Act standards has left the agency and moved to the Office of Management and Budget’s (OMB) Office of information and Regulatory Affairs (OIRA). This is the last stage in the federal rulemaking process where OIRA runs the final rule through interagency review one last time before allowing the rule to be published as final.

In a practical sense, this means the final rule’s publication is due soon. Now that the rule has moved to OIRA, OMB staff are able to meet officially with industry representatives on the topic of the rulemaking, which AGC and its industry allies in the Waters Advocacy Coalition plan to do in the near future. This comes also as OIRA is in the midst of its review of the final Water Quality Standards rule which AGC and others warned OMB about recently.

AGC will continue to work with industry allies to educate the appropriate officials, work to block the issuance of the rule legislatively, remain watchful for publication of the final rule, and educate its members when the rule is finalized.

For more information, please contact Scott Berry at berrys@agc.org or Leah Pilconis at pilconisl@agc.org. Return to Top
2016 ELECTIONS
Rand Follows in Father’s Footsteps
 

Sen. Rand Paul (R-Ky.) officially announced his 2016 presidential campaign on Tuesday in front of a raucous crowd of supporters in Louisville.  He also confirmed that he intends to seek re-election to the Senate. 

However, while Sen. Paul’s presidential prospects top his priority list during this period, opinions vary as to whether he has a legitimate chance of winning the nomination and the presidency itself. 

The Real Clear Politics Average, an aggregation of the major national polls, lists Paul in fourth place with 9.2 percent of GOP primary voters supporting his campaign behind former Governor Jeb Bush (R-Fla.), Governor Scott Walker (R-Wis.) and Sen. Ted Cruz (R-Texas), who received 17 percent, 15.8 percent and 9.2 percent respectively.  In a general election matchup with Hillary Clinton, the former Secretary of State bests Sen. Paul  49 to 42.2 percent.
 
With the Republican national campaign in a major state of fluidity, and no candidate in the clear favorite’s position, it is conceivable that several contenders within what could be a huge field of fourteen candidates or more could cobble together a winning coalition. 
 
Of all the participants, Sen. Paul may be the most unique.  Coming from the libertarian wing of the Republican electorate, following in his father, former presidential candidate and Congressman Ron Paul’s, footsteps the Paul coalition has staying power, particularly within a very crowded field of candidates. 
  
The Paul announcement means that there are now two official Republican presidential candidates, he and Sen. Cruz.  Next Monday, Sen. Marco Rubio (R-Fla.) is poised to join them.

For more information, please contact David Ashinoff at (202) 547-5013 or ashinoffd@agc.org. Return to Top
EVENTS
Register for AGC Federal Contractors Conference
Limited Space Still Available!
 

The latest project forecasts, expert insight on upcoming regulatory hurdles, and ample networking opportunities with agency decision makers are critical to being competitive in the federal construction market. Join construction industry leaders and their federal agency counterparts at the Federal Contractors Conference on May 12 -14 at the Mayflower Hotel in Washington, D.C., to take advantage of such essential information and the many networking opportunities. Register today.

Top agency headquarters’ representatives scheduled to attend include those from the:

U.S. Army Corps of Engineers (Military Construction & Civil Works Programs)
Naval Facilities Engineering Command
Air Force Civil Engineer Center
General Services Administration
Architect of the Capitol
The Smithsonian Institute
Department of State
National Nuclear Security Administration
Gulf Coast Ecosystem Restoration Council
Natural Resources Conservation Service
Bureau of Reclamation

For more information, please visit meetings.agc.org/fedcon. Return to Top
AGC Financial Issues Summer Meeting Early-Bird Ends Next Week
June 8-9, 2015 | Colorado Springs, Colo.
 

The AGC Financial Issues Committee (FIC) Summer Meeting will be held June 8-9, 2015, at The Broadmoor in Colorado Springs, Colo. The link to the meeting’s registration page is here. Early-bird registration ends Monday,April 13. Meetings center around discussions with FASB reps, congressional representatives, practitioners, and financial officer breakout groups on topics including internal controls, project performance reviews and using technology like Box.com in operations or accounting functions. Attendees also have an opportunity to network and discuss a wide variety of topics, including: audit issues faced by construction companies; congressional action on tax policy; and an economic outlook for the industry.

For more information, please contact Brian Lenihan at lenihanb@agc.org or (202) 547-4733. Return to Top

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