Construction Legislative Week in Review
www.agc.org December 1, 2016
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On the Inside
LABOR/HR
Federal Court Temporally Halts Overtime Rule; Labor Department Will Appeal
WATER INFRASTRUCTURE
Final Deal on WRDA Bill is Close
2016 ELECTIONS
What Trump Presidency Could Mean for Construction
SAFETY
AGC Emphasizes the Illegality of OSHA’s Latest Recordkeeping Rule
FEDERAL CONTRACTING
Congress Readies to Pass Defense Bill
New Federal Contractor Greenhouse Gas Reporting Rule
AGC Meets with NAVFAC Commander
Webinar: Cybersecurity – Federal Construction Perspective
Register Now for the 2017 Federal Contractors Conference
TRANSPORTATION
AGC Comments on Federal Highway Buy America Revisions
TAX/ACCOUNTING
IRS Convenes Hearing on Proposed Estate Tax Regulations
Register for the Winter Financial Issues Committee
LABOR/HR
Federal Court Temporally Halts Overtime Rule; Labor Department Will Appeal
 

On Nov. 22, a federal judge issued a nationwide injunction against the U.S. Department of Labor’s overtime rule, which was scheduled to take effect today, Dec. 1. As a result of this court order, implementation of the rule is temporarily halted until litigation comes to a close. Earlier today, the Department filed court documents to appeal the judge’s ruling.  As a result of both measures, it is unclear if or when the rule will take effect.

The most significant change under the rule is a doubling of the standard salary threshold for exempt employees – from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). Many AGC contractors had already taken steps to implement this rule, such as reducing employee hours or notifying employees of salary increases. Given the uncertain path ahead, those contractors may want to re-evaluate the overall impact of the changes made and either roll-back or keep those implementation efforts in place, considering both the impact on the company’s bottom line as well as employee morale.

AGC will continue to support legislation and regulatory changes to lower the overtime threshold and gradually phase in the requirement over several years.

For more AGC information on this rule, click here. For more AGC information on the regulatory road between now and Inauguration Day, click here. Or, contact Tamika Carter at cartert@agc.org or (703) 837-5382. Return to Top

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WATER INFRASTRUCTURE
Final Deal on WRDA Bill is Close
Contact your Member of Congress and tell them to pass WRDA NOW!
 

The House and Senate are continuing to negotiate a final Water Resources and Development Bill (WRDA) with the hopes of a vote next week.  AGC needs your help in pushing a final WRDA bill across the finish line.

Negotiations over whether or not the bill will include emergency funding for the lead contamination of drinking water in Flint, MI, as well as other non-Army Corps related water provisions – such as the creation of an AGC supported Clean Water Trust Fund – are still being discussed.

Please contact your members of Congress and tell them to pass the WRDA bill now!

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

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2016 ELECTIONS
What Trump Presidency Could Mean for Construction
 

Listen to the latest ConstructorCast for an in-depth examination of president-elect Donald Trump’s surprise victory and what it could mean for the construction industry. For this episode, we sit down with Steve Sandherr, AGC's Chief Executive Officer, for the full story on what we might expect from Trump’s leadership, how his presidency could affect regulations, and what surprises might still be forthcoming.

Stream or download the full episode hereReturn to Top

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SAFETY
AGC Emphasizes the Illegality of OSHA’s Latest Recordkeeping Rule
 

On Nov. 22, AGC staff met with the White House Office of Information and Regulatory Affairs to raise concerns over the Occupational Safety & Health Administration’s (OSHA) “Clarification of an Employer’s Continuing Obligation to Make and Maintain Accurate Injury and Illness Records” rule, which is currently under review at the Office of Information and Regulatory Affairs.

This rule would allow for the issuance of citations and associated penalties for injury and illness recordkeeping inaccuracies that occurred more than 5 years prior to enforcement actions.  If finalized, this would drastically expand OSHA’s statute of limitation, even though the OSH Act clearly states that “no citations may be issued after the expiration of six months following the occurrence of any violation.”  AGC staff also raised concerns regarding the impact this rule would have on small businesses, the majority of which do not have personnel dedicated solely to recordkeeping responsibilities.  This meeting is a follow-up to the comments AGC submitted as part of the Coalition of Workplace Safety (CWS) in 2015.

For more information, contact Kevin Cannon at cannonk@agc.org or (703) 837-5410. Return to Top

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FEDERAL CONTRACTING
Congress Readies to Pass Defense Bill
AGC Procurement Priorities Close to Finish Line
 

A host of AGC-backed federal construction procurement provisions important to construction contractors are included in the National Defense Authorization Act for Fiscal Year 2017, which was released last night. The Defense Bill is expected to be passed by Congress and signed into law by the president before year’s end.

Among the procurement wins for AGC and its members in the final legislation are:

  • A provision allowing construction contractors to protest non-Department of Defense (DOD) agency task order contracts above $25 million before the General Accountability Office. The ability to protest such civilian agency task orders had expired in September;
  • Language enabling congressional oversight of DOD use of one-step design-build solicitations and inclusion of more than five teams on two-step design-build short lists; and
  • The exclusion of several harmful provisions, such as a requirement for contractors to pay for GAO protests, a ban on DOD task order protests where an ombudsman is appointed, and a penalty disincentivizing DOD use of cost-type contracts.

The Defense Bill also includes many small business-oriented provisions. It requires the Small Business Administration (SBA) to improve its reporting requirements, requiring SBA to better track small businesses that are no longer small and to clarify prime contracting goals. Additionally, the report establishes a first-tier, small business subcontractor past performance pilot program.

Of note, the Defense Bill does not include previous House and Senate provisions that would have put limitations on the Fair Pay and Safe Workplaces (Blacklisting) Executive Order. Given the election results, AGC has advocated for a more enduring and comprehensive approach to repealing that order through the Congressional Review Act (CRA).  Under the Act, Congress can repeal the executive order’s implementing rules in their entirety and make it very difficult for a future president to undertake a similar regulatory initiative.

AGC will continue to monitor the Defense Bill as it heads for a floor vote in the both houses of Congress, and will advocate for further reforms in the new Congress.

For more information, contact Jordan Howard at Jordan.Howard@agc.org or (703) 837-5368. Return to Top

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New Federal Contractor Greenhouse Gas Reporting Rule
Effective December 19, 2016; Ripe for Repeal in 2017
 

The Federal Acquisition Regulation (FAR) Council recently issued a final rule that will require direct-federal contractors make an annual representation within the System for Award Management indicating if and where they publicly disclose their company’s greenhouse gas (GHG) emissions and reduction goals or targets.  The rule applies to contractors with annual gross revenues of $7.5 million and above and goes into effect on Dec. 19. AGC will work with the new Trump administration and Congress to repeal this and other unnecessary regulations in 2017.

The rule does not require contractors to generate new or currently unavailable information about their companies’ emissions. Rather, it merely requires those contractors that already publicly disclose such information to make such a representation in the system. AGC shared its concerns about the proposal in its comments, which noted that the reporting requirement should only apply to the offeror company on federal projects and not to that company’s immediate, parent or holding company owners. The FAR Council agreed.

Again, the rule only impacts direct federal contractors who work on contracts directly for federal agencies. The rule does not apply to contracts issued by state agencies, like highway construction contracts issued by state departments of transportation. Direct-federal contractors will have to abide by this new requirement under new FAR Clause 52.233-22, Public Disclosure of GHG Gas Emissions and Reduction Goals—Representation. This clause will be incorporated by reference under FAR Clause 52.204-19, Incorporation by Reference Representations and Certifications. Therefore, federal contractors will not likely see the new GHG clause directly cited in newly issued solicitations on or after December 19, but will be responsible for complying with it.

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

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AGC Meets with NAVFAC Commander
Discussed Present Issues and Future Opportunities
 

 AGC met with Rear Admiral Bret Muilenburg, the commander of Naval Facilities Engineering Command (NAVFAC), at the agency’s headquarters in Washington, D.C. Among the topics discussed were timeliness of contract modifications, costly design specifications, requests for proposals, and other issues.

Rear Admiral Muilenburg also discussed his vision and primary objectives for NAVFAC during his tenure. AGC and NAVFAC additionally delved into ways to increase partnering between the two in order to help solve the problems facing federal contractors and owners. AGC firmly believes that effective communication between contractor and owner is essential to delivering a construction project in a safe, efficient and timely manner. AGC will continue to advocate for the construction industry before NAVFAC and all other federal agencies. 

For more information, contact Jordan Howard at Jordan.Howard@agc.org or (703) 837-5368. Return to Top

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Webinar: Cybersecurity – Federal Construction Perspective
Tuesday, Dec. 6 | 2:30pm – 3:30pm EST
 

Register today for this session focusing on contractors who do federal work. Federal agencies are mandating minimum cybersecurity requirements for companies that do business with the federal government. This presentation will give an overview of the new cybersecurity requirements for contractors who contract with the Department of Defense and other federal agencies, highlight the FAR provisions that give this new rule teeth, and explore the potential impacts of compliance failure for federal contractors. Additionally, this presentation will discuss the many mechanisms which can assist organizations in becoming compliant.

Please join AGC’s Associate Director of the Federal and Heavy Construction Division Jordan Howard, SureID’s Greg Russell, and Axiad IDS’ Bassam Al-Khalidi for an overview on:

  • Basic components and understanding of the final rule
  • Potential impact to current and future federal contractors
  • The steps federal contractors need to take to become compliant

Click here for more info or to register now at the AGC-member price of $79 or the non-member price of $99.

For more information, contact Jordan Howard at Jordan.Howard@agc.orgor (703) 837-5368. Any questions or changes to your registration should be made via email to meetings@agc.org. Return to Top

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Register Now for the 2017 Federal Contractors Conference
Save $50 on Registration Fee
 

Register today for the 2017 AGC Federal Contractors Conference (FedCon) and save $50 off the registration fee. FEDCON is the premier conference for federal construction contractors to discuss the latest projects, policies and contracting issues facing the industry with federal agencies, including the U.S. Army Corps of Engineers, Naval Facility Engineering Command, Air Force Civil Engineer Center, General Services Administration, Department of Veterans Affairs, Department of State, Natural Resources Conservation Service, and Bureau of Reclamation.

In addition to substantive discussions and presentations with federal agencies, attendees will hear from legal experts about the latest federal regulations that will impact their businesses and may have the opportunity to continue a dialogue with federal agencies after the conference. Leading federal construction attorneys will address executive orders, Small Business Administration and Federal Acquisition Regulation rules, and case law trends your company needs to know to work in the federal market. And, when the conference concludes, AGC member attendees will have the opportunity to participate in ongoing dialogue and meetings with agency headquarters later in the year.

For more information and to register, go to http://meetings.agc.org/fedcon/registration/ Return to Top

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TRANSPORTATION
AGC Comments on Federal Highway Buy America Revisions
 

AGC submitted comments to the Federal Highway Administration in strong support of its proposal to provide a nationwide waiver of Buy America requirements for commercially available off-the-shelf (COTS) products with iron and steel components and for steel tie wire permanently incorporated in precast concrete products. AGC also urged the Highway Administration to issue a nationwide waiver for specialized steel lifting devices that are incorporated in precast concrete products.

The Administration took this action to relieve some of the burden on states in implementing Buy America requirements. While these requirements have been in place since the mid-1980s, following the ramp up of federal highway funding under the American Recovery and Reinvestment Act (ARRA), new scrutiny was placed on how Buy America requirements were enforced on federal highway-funded projects. The new scrutiny led to unreasonable requirements to obtain certification that every component of every manufactured product was Buy America compliant. The new scrutiny also led to every project component, no matter how small (nails, bolts, etc) being required to meet the mandate.

At AGC’s urging, the Federal Highway Administration issued guidance relieving some of the mandate on manufactured products but this was challenged in court. The judge ruled that the Administration had not followed proper procedures in issuing this guidance. AGC along with several industry groups urged the Highway Administration to issue a rule following the proper procedures to relieve some of the burden.

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

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TAX/ACCOUNTING
IRS Convenes Hearing on Proposed Estate Tax Regulations
 

On Dec. 1, the Internal Revenue Service (IRS) held a public hearing for witnesses to testify on the implications of the proposed Section 2704 rules that would limit valuation discounts (lack of control and marketability) utilized in estate tax planning structures commonly used by family-owned businesses. AGC was present at the hearing to observe the inquiries by IRS and Treasury Department attorneys – no substantive discussions were borne out of the Q&A.

On Nov. 1, AGC submitted formal comments to the Department of Treasury requesting that the proposed regulations on removing minority valuation discounts for family owned businesses be withdrawn in their entirety. Nearly 10,000 comments were filed and AGC also cosigned other industry letters with the same request to vacate the proposed regulations. Left as proposed, the rules would increase estate and gift taxes by 30 to 50 percent or more on family-owned businesses. These burdensome regulations would be particularly damaging to family-owned construction companies, which often have illiquid capital assets due to equipment and rolling stock, but maintain relatively modest annual incomes.  In early October, over 730 family-owned AGC member companies signed a letter sent to Treasury Secretary Jacob Lew and key tax-writers in Congress requesting a complete withdrawal of the proposed rules.

The expectation is that Treasury may finalize the rule prior to the end of the Obama Administration in January. If finalized – and not repealed completely under the Trump Administration – the rules will be challenged in the courts, as there is past precedent from the tax courts, and prospects for a legal challenge would likely be successful. AGC will evaluate the best course of action and at the appropriate time alert AGC members to the most effective way to impact changes to the regulations if the next Treasury Secretary does not act.

Meanwhile, AGC is coalescing support for legislation to negate the effects of the rule by joining other industries in promoting H.R. 6100, the Protect Family Farms and Businesses Act, introduced by Congressman Warren Davidson (R-Ohio). Moreover, Senator Marco Rubio (R-Fla.) offered a companion bill, S. 3436 at the end of September. AGC continues to meet with key congressional staff and President-elect Trump’s transition staff about the possibility for a solution in year-end legislation or at the beginning of the next Administration.

For more information about the new rule and AGC’s efforts to protect member firms, contact Brian Lenihan at lenihanb@agc.org or (202) 547-4733.    Return to Top

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Register for the Winter Financial Issues Committee
Register Now and Hotel Deadline is Dec. 26
 

Timely guidance, accurate advice on reporting requirements and common practices are essential items for any financial professional’s toolbox. We invite you to join your peers at the Winter 2017 AGC Financial Issues Committee, January 10-11, 2017 at Trump National Doral in Miami, FL. The two-day meeting is filled with interactive sessions, covering the latest industry issues and their financial implications.

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

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