Construction Legislative Week in Review
www.agc.org May 28, 2015
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On the Inside
ENVIRONMENT
EPA, Corps Issue Final Waters of the U.S. Rule
TRANSPORTATION
Highway/Transit Funding Extended 60 Days
FEDERAL CONTRACTING
Blacklisting Executive Order Proposed Rule & Guidance Released
Denver VA Hospital Project Narrowly Averts Work Shutdown
Army Rule Would Remove 400 US Army Corps of Engineers Contracting Officers
2016 ELECTIONS
More Candidates Enter the Presidential Fray
AGC EVENTS
Complimentary Webinar: Surviving the Federal Construction Regulatory Onslaught
Still Time to Register for the AGC Financial Issues Summer Meeting
ENVIRONMENT
EPA, Corps Issue Final Waters of the U.S. Rule
While Rule Includes AGC-Backed Revisions, We Are Working with Congress to Restart the Rulemaking Process to Address Many Other of the Measure’s Flaws
 

The U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers on May 27 released their final rule, which attempts to clarify which water features are subject to federal jurisdiction, a controversial effort that is intended to make permitting decisions easier and bring regulations up-to-date with U.S. Supreme Court opinions.  While the new rule includes a number of significant changes AGC proposed, the final measure is still problematic and we are working with Congress to enact legislation requiring the EPA to restart the rule making process.

On its face, the final “Waters of the United States” rule maintains the structure and framework of the proposed rule, defining which rivers, streams, lakes and marshes fall under federal jurisdiction. The rule gives the federal government control over work in traditional navigable waters, interstate waters/wetlands, territorial seas, impoundments, and tributaries that have physical signs of flowing water (even if they don’t flow all year round), and ditches that “look and act” like tributaries. In addition, the final rule automatically applies jurisdiction to adjacent waters/wetlands. Importantly, waters that are jurisdictional are subject to the multiple regulatory requirements of the Clean Water Act: water quality standards, total maximum daily load programs, discharge limitations, stormwater and dredge-and fill permits, water quality certifications, spill protection, and enforcement – which make this rule extremely important to the business of construction.  General contractors will now need to know whether the CWA applies before proceeding with construction work in any area in or near a potential WOTUS. 

The final rule reflects important changes AGC pushed for in the multiple sets of comments it submitted and in several meetings with agency and White House representatives. Those changes include first-time exclusions for certain types of ditches that fall outside the “tributary” definition; some limits on when a stream or wetland should be jurisdictional because it is near or “adjacent” to other jurisdictional waters; limits on the area where waters would have to face a “significant nexus” test on a case-by-case review; clarification on stormwater control features and unique water features like prairie potholes; express exclusion for groundwater and shallow sub-surface drainage connections; provisions to address the validity of existing jurisdictional determinations, and further explanation of what the WOTUS rule means for municipal separate storm sewer systems (MS4s). 

While AGC is still examining the details of the rule, we are concerned the broad tributary definition allows for jurisdiction over many ditches as “waters of the U.S.”  The ditch exclusions are still narrow and it will be onerous for applicants to prove (through topographic maps, historic photographs, aerial photography, etc.) that their ditch meets the exclusion criteria.

AGC is also concerned that the rule will jeopardize many projects on Day 1 of implementation because the Clean Water Act allows citizen suits. The uncertainty and ambiguity of the rule will breed third-party litigation and citizen suits, even where the agencies decline to assert jurisdiction over particular activities and features on a site.

AGC has been actively speaking out about the substantial flaws in the economic, scientific and administrative rulemaking process upon which the “waters of the U.S.” definition is based -- including that EPA and the Corps failed to adequately consult with states and small-business stakeholders in crafting the proposal, leading to a flawed policy. Overall, because of these flaws inherent in the process, and the problematic broadness of the rule despite important narrowing, AGC remains committed to working with Congress to pass legislation that would restart the rulemaking process with state/local and small business consultation and more robust economic and scientific analysis.

A more extensive analysis of the differences between the proposed rule and final rule and how those differences affect the construction industry will be posted here shortly.

For more information, contact Leah Pilconis at pilconisl@agc.org or Scott Berry at berrys@agc.org. Return to Top

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TRANSPORTATION
Highway/Transit Funding Extended 60 Days
AGC Pushing For Swift Action on Long-Term, Fully-Funded Measure
 

One of the last steps the Senate took before leaving for its Memorial Day recess was to approve a House-passed bill extending the federal highway program until July 31, 2015.  The new expiration date coincides with when the Highway Trust Fund is expected to approach a zero balance. If Congress can’t identify more federal transportation funds by the end of July, the Department of Transportation will be forced to cut reimbursement funding to states for ongoing projects. Congress settled on the two month extension after failing to find money to keep the Highway Trust Fund solvent through the end of the calendar year. U.S. Transportation Secretary Anthony Foxx said the president will sign the bill but urged Congress to take action on a long-term authorization and funding bill.

Finding the revenue necessary to support a long-term authorization remains the stumbling block preventing Congress from acting on a long-term measure. Congress either has to increase the federal gas tax or identify other revenue to provide the approximately $100 billion needed just to keep transportation spending at current levels. The Senate Finance and House Ways and Means Committees are responsible for finding the revenue for the program but they remain focused on comprehensive tax reform and have deferred action on highway funding until later this summer

AGC continues to press for a long-term bill that supports growing investment in the nation’s transportation infrastructure. Your support is key to this effort. Please continue to deliver that message to members of the House and Senate through the Hardhats for Highways (focused on contractors) and Drive Better Roads (focused on drivers) campaigns.

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

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FEDERAL CONTRACTING
Blacklisting Executive Order Proposed Rule & Guidance Released
AGC to Provide Comments in Opposition
 

On May 27, the Federal Acquisition Regulation (FAR) Council issued a proposed rule and the Department of Labor (DOL) issued guidance implementing the president’s “Fair Pay and Safe Workplaces” Executive Order (EO) 13673, commonly referred to as the Blacklisting EO.

Under the proposed rule, both prime and subcontractors must report violations of 14 federal labor laws and “equivalent” state labor laws during the previous three years, and again every six months, on federal contracts over $500,000. A single violation, or a combination of multiple violations, could lead a contracting officer to either (1) deny the contractor the right to compete for a federal contract; or (2) remove a prime contractor or subcontractor from an ongoing project. Such determinations would be made on an individual contracting officer basis with assistance from newly-created agency labor law compliance advisors. The DOL guidance further articulates the policies outlined in the proposed rule such as, the rule would only apply to direct-federal contracts and not to federal-aid highway contracts awarded by state departments of transportation.

Since the administration issued the Blacklisting Executive Order in July 2014, AGC has advocated against its implementation on Capitol Hill and helped form an industry coalition to stop it. AGC also participated in a White House meeting with Secretary of Labor Thomas Perez, where the association noted its deep concerns with the Order. AGC will provide more analysis and information on this rulemaking as it reviews the proposed rule and guidance. There is a 60-day public comment period on the proposed rule and guidance, during which time AGC members are encouraged to comment directly on the proposals and share that input with AGC as it articulates its own comments.  

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

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Denver VA Hospital Project Narrowly Averts Work Shutdown
Congress Passes AGC-Backed Measure to Allow Construction to Continue
 

Late last week, the House and Senate passed legislation to allow work on the Department of Veterans Affairs Denver Hospital Project to continue for several more weeks. The Veterans Access, Choice and Accountability Act of 2014, introduced by Rep. Mike Coffman (R-Colo.) and Sen. Michael Bennet (D-Colo.), increases funding for the project by $100 million. The U.S. Army Corps of Engineers recently found that the project will cost about $1.7 billion to complete, $1.1 billion more than the initial cost estimate. The project was slated to run out of funds on May 24. 

The temporary extension passed the House shortly after AGC sent a letter to House Speaker John Boehner urging him to pass a short-term extension of funding for the project. AGC also worked to address concerns with the extension in the Senate, as several senators had put a hold on the legislation that jeopardized its passage. AGC met with VA Secretary Robert McDonald last month to discuss AGC’s concerns with the agency’s construction program. The association will meet with the secretary again in June. AGC has called for significant, long-term reforms of the VA construction program and continues to meet with members of Congress on this important issue.

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

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Army Rule Would Remove 400 US Army Corps of Engineers Contracting Officers
AGC Takes Action through Congress to Prevent Removal and Begins Dialogue with Army
 

The Department of the Army recently issued a final rule (via memorandum) to the Army Federal Acquisition Regulation that, if implemented, would remove contracting authority from about 400 engineers within the U.S. Army Corps of Engineers. The rule would remove construction experts from having the authority to make construction contracting decisions for the safe and efficient construction of everything from barracks that house and protect our soldiers to the levees and dams that guard millions of Americans from floods. The Army issued this rule without providing for any public comment and claims that such a rule will not impact the contracting industry. Ultimately, the Army is seeking to move all contracting activities, including the procurement of construction through USACE, within the Army Contracting Command.

At the urging of AGC, Representatives Sam Graves (R-Mo.) and Mike Coffman (R-Colo.) sent the Army a letter calling for implementation of this rule to cease and to allow for further oversight of, and comment on, an otherwise behind-closed-doors rulemaking process. AGC has also begun discussions with the Army and will meet with Army Deputy Assistant Secretary of Procurement shortly on the need to keep contracting authority within USACE.

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

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2016 ELECTIONS
More Candidates Enter the Presidential Fray
 

Two Republicans officially declared their intention to seek the presidency this week bringing the total number of announced candidates to 10 – two Democrats and eight Republicans.

On Wednesday, former US Senator Rick Santorum (R-Penn.) stated that he would again become a candidate in the Republican presidential primary.  Mr. Santorum served two terms in the US House of Representatives and then US Senate where he rose to become the party’s third highest ranking member.  After a period in the private sector, Mr. Santorum entered the 2012 presidential contest.  With lackluster competition, he was able to win contests in 11 states and netted nearly 4 million votes. 

In a party that typical turns to the “next-in-line,” Mr. Santorum is finding it difficult to gain traction following his second place finish.  With many current/former governors and US Senators running or considering a bid, Mr. Santorum will likely find it difficult to replicate his 2012 successes. 

Former New York Governor George Pataki also entered the Republican contest this week.  Being out of office for almost a decade did not stop the former Governor from throwing his hat into the ring.  Prior to serving as his state’s chief executive for three terms, Mr. Pataki had been a mayor and a member of both the New York State Assembly and Senate.  He enters a crowded Republican field with many more recognizable names and will likely find it difficult to gain traction.  While he toyed with running for president in 2008 and 2012, voters are less familiar with him now which is evident in a recent Quinnipiac poll where he received less than one percent.

The presidential contest also includes Dr. Ben Carson (R), former US Secretary of State Hillary Clinton (D), US Senator Ted Cruz (R-Texas), businesswoman Carly Fiorina (R), former Governor Mike Huckabee (R-Ark.), US Senator Rand Paul (R-Ky.), US Senator Marco Rubio (R-Fla.), and US Senator Bernie Sanders (I-Vt.)

Considering a bid are former Governor Jeb Bush (R-Fla.), former Governor Lincoln Chafee (D-R.I.), Governor Chris Christie (R-N.J.), US Senator Lindsey Graham (R-S.C.), Governor Bobby Jindal (R-La.), Governor John Kasich (R-Ohio), former Governor Martin O’Malley (D-Md.) former Governor Rick Perry (R-Texas), Governor Scott Walker (R-Wis.), and former US Senator Jim Webb (D-Va.).

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

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AGC EVENTS
Complimentary Webinar: Surviving the Federal Construction Regulatory Onslaught
Thursday, June 4 @ 2:00 p.m. to 3:30 p.m. ET
 

Register to join construction law and regulation experts for a complimentary webinar on Thursday, June 4 from 2:00 p.m. to 3:30 p.m. eastern time for a discussion on the new and pending federal regulations impacting your business. AGC’s Director of the Federal and Heavy Construction Division Jimmy Christianson and the construction law firm Smith, Currie and Hancock’s Doug Tabeling and Stephen Kelleher will provide an overview on:

  • The Fair Pay and Safe Workplaces Executive Order that requires federal contractors and subcontractors to track and report safety, health and employment law violations within the past three years and report every 6 months on that information after contract or subcontract award;
  • Department of Labor proposed and final rules requiring contractors to report data on equal pay and employee compensation, prohibiting pay secrecy policies, revising reporting requirements for veteran employees, discrimination based on sexual orientation, and establishing a federal contractor minimum wage;
  • Small Business Administration proposed rules expanding the mentor-protégé program to all small businesses, changing small business performance of work requirements, and tweaking small business affiliation rules; and
  • A new Federal Acquisition Regulation rule requiring contractors to police their subcontractors and suppliers for human trafficking violations.

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

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Still Time to Register for the AGC Financial Issues Summer Meeting
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 meeting is geared toward member company AGC member company CFOs, Treasurers, Finance Directors, Controllers, Tax Directors and other senior accounting professionals. Members have an opportunity to learn as well as formulate positions on tax and accounting matters that directly affect the bottom line and operations of AGC member companies of all sizes and specialties. Current FIF projects include helping construction companies to prepare for the new Revenue Recognition Accounting Standard Update that goes into effect in 2017.

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

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