Construction Legislative Week in Review
www.agc.org March 30, 2017
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On the Inside
REGULATORY REFORM
“Blacklisting” Rule Finally Dies, Marking Big Win for AGC Members
New Executive Order Scraps Several Permitting Review Hurdles
FEDERAL CONTRACTING
Legislation to Prohibit Government Mandated PLAs Advances in Congress
TAX REFORM
AGC Defends Muni-Bonds
INFRASTRUCTURE INVESTMENT
Infrastructure Funding Targeted for Reduction in President Trump’s Budget Outline
AGC EVENTS
Early-Bird Extended for AGC’s Financial Issues Summer Meeting
Take Advantage of the Federal Contractors Conference Room Rate
REGULATORY REFORM
“Blacklisting” Rule Finally Dies, Marking Big Win for AGC Members
 

Thanks in part to AGC’s advocacy efforts, contractors are enjoying a major victory today:  permanent nullification of regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order, often referred to as the “blacklisting” rule. On March 27, President Trump signed into law a joint resolution under the Congressional Review Act (CRA) by which Congress expressed disapproval of the rule and stripped it of all force and effect.

Under the blacklisting rule, both prime and subcontractors were required to report violations and alleged 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. Prime contractors were also responsible for evaluating the labor law violations of subcontractors at all tiers. A single alleged violation could have led a contracting officer to remove a contractor from an ongoing project or to deny to a contractor the right to compete for a contract. The rule also required contractors to provide certain pay information to employees and independent contractors, and it limited the use of mandatory arbitration of employment disputes. All but the paycheck transparency provisions had been on temporary hold since a federal court issued preliminary injunction in October 2016.

“To be clear, there should be no place in federal contracting for unsafe or unscrupulous firms. Yet the former president’s measure did nothing to reform or improve the existing suspension and debarment process,” said AGC Chief Executive Officer Steve Sandherr. “Instead, it created a new layer of bureaucracy that would have given federal officials broad discretion to punish construction firms based on any number of unsubstantiated allegations without establishing a process for those firms to defend themselves. That is why the Associated General Contractors worked so aggressively to push for passage of today’s repeal measure.”

The CRA enables Congress to invalidate recently-issued federal agency regulations under certain circumstances. Once Congress passes a joint resolution under the CRA and the president signs it into law, federal agencies may not issue the same, or a substantially similar, regulation absent authorization from Congress. Accordingly, Congress’s and the president’s use of the CRA to “kill” the blacklisting rule is considered a better outcome than the President simply withdrawing the executive order and regulations. Enactment of the present resolution also renders continued litigation over the rule moot.

Unwinding the paycheck transparency requirements that were already in effect at the time president Trump signed the resolution may take time, and some federal contracting officers may not be aware of this development. Contractors responding to a request for proposal that includes FAR 52.22-60, Paycheck Transparency (Executive Order 13673), should ask the contracting officer to remove the provision in light of this development. Contractors already performing work on a contract that incorporates FAR 52.222-60 should consider evaluating the burden of continued compliance, and, if significant, ask the contracting officer to remove the clause by modification.

For more information, contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org or Denise Gold at 703-837-5326 or goldd@agc.org.

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New Executive Order Scraps Several Permitting Review Hurdles
 

On March 28, 2017, President Trump signed a new executive order that rescinds, as recommended by AGC, several Obama administration environmental review/permitting hurdles that could have delayed construction projects. The order, entitled “Promoting Energy Independence and Economic Growth,” rescinds Council on Environmental Quality guidance that required federal agencies to quantify and additionally consider direct and indirect greenhouse gas emissions for construction projects during the National Environmental Policy Act (NEPA) review, for which environmental impact statements already take 4.6 years on average to complete. The order also rescinds an Obama presidential memoranda that created sweeping new authority for several federal permitting agencies, establishing a preference for compensatory mitigation to restore, establish, or enhance the environment within the scope of a construction project where unavoidable adverse environmental impacts may occur.

The order notes that changing or rescinding some of these actions may involve additional notice and comment period to be consistent with the law, which will take time. It does not address how existing case law that upholds certain considerations of greenhouse gasses during NEPA review will continue to affect how agencies handle those impacts. AGC will follow up with additional analysis of the impact of this order on the construction industry.

For more information, contact Melinda Tomaino at (703) 837-5415 or tomainom@agc.org.

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FEDERAL CONTRACTING
Legislation to Prohibit Government Mandated PLAs Advances in Congress
Contact Your Members of Congress and the President
 

The AGC-supported “Fair and Open Competition Act” passed the House Oversight and Government Reform Committee this week. The legislation would prohibit federal contracting agencies from mandating that contractors and unions enter project labor agreements (PLAs) on direct federal projects. In addition, the bill would preserve the right of contractors and unions to voluntarily negotiate and execute project labor agreements on federal projects, if they so choose. There is no timeline for if or when the full House would consider the legislation, or if the Senate would consider its companion bill.

AGC is committed to full and open competition for all public projects and urged the Committee to support the legislation. Contact your members of Congress and urge them to support passage of the “Fair and Open Competition Act” and petition President Trump to repeal President Obama’s Government-Mandated PLA executive order.

On February 6, 2009, President Obama issued Executive Order 13502, which encourages government agencies to use PLA’s in large-scale federal construction projects where the total cost to the government is $25 million or more. AGC strongly believes that the choice of whether to adopt a collective bargaining agreement should be left to the contractor-employers and their employees, and that choice should not be imposed as a condition to competing for, or performing on, a publicly funded project. Government mandates and preferences for PLAs can restrain competition, drive up costs, cause delays, lead to jobsite disputes, and disrupt local collective bargaining. In cases where use of a PLA would benefit a project, the construction contractors otherwise qualified to perform the work would be the first to recognize that fact and to adopt a PLA voluntarily.

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

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TAX REFORM
AGC Defends Muni-Bonds
 

This week, AGC joined our partners in the Don’t Mess With Our Bonds coalition in urging House and Senate leaders to preserve the tax-exempt status for municipal bonds as they begin discussions on tax reform. Tax-exempt municipal bonds have been used to finance critical infrastructure including the construction of schools, hospitals, airports, affordable housing, water and sewer facilities, public power and gas utilities, roads and public transit.

These bonds have been the primary method by which state and local governments finance public capital improvements and infrastructure construction, and any proposals to reduce or repeal the tax exemption would severely hamper these governments’ ability to meet their infrastructure needs.

AGC will continue to work with our coalition partners to maintain the tax-exempt status of municipal bonds.

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

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INFRASTRUCTURE INVESTMENT
Infrastructure Funding Targeted for Reduction in President Trump’s Budget Outline
Tell your Senators and Representative to Maintain Funding for these Programs
 

President Trump recently released a budget outline to identify administration priorities for Fiscal Year 2018. This budget outline is a mixed bag for federal infrastructure accounts as it proposes to cut billions in federal spending from construction-related programs. Proposed cuts include: a $2.4 billion reduction for the Department of Transportation by eliminating the TIGER grant program and limiting funding for the transit new starts grant program, eliminating the Agriculture Department’s Water and Wastewater grant program funding of $498 million and eliminating the Housing and Urban Development’s Community Development Block Grant funding of $3 billion. Contact your members of Congress and urge them to maintain funding for these critical infrastructure investment programs.

While we look forward to working with the administration on the president’s promised infrastructure investment initiative, in the meantime, AGC supports maintaining funding for existing infrastructure programs. Contact your senators and representatives to urge them to ignore Trump’s proposed cuts to infrastructure programs.

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

 

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AGC EVENTS
Early-Bird Extended for AGC’s Financial Issues Summer Meeting
Early-Bird Registration Ends April 14
 

The AGC Financial Issues Committee (FIC) Summer Meeting will be held June 27-28, 2017, at the Loews Minneapolis. Visit the meeting site to register TODAY & book your stay!

With tax reform moving front and center and the IRS seeking comments on FASBs Revenue Recognition standard, discussions with this year’s featured speakers will be critical. This year’s lineup includes senior tax-writer Congressman Erik Paulsen (R-MN) invited, AGC Chief Economist Ken Simonson, and insightful FASB staff.

The Committee is geared toward member company CFOs, Controllers, Tax Directors, Sureties and other senior accounting professionals – in which attendees have an opportunity to learn as well as formulate positions on tax and accounting matters that directly affect AGC member companies. Meetings center around discussions with FASB, practitioners, and financial officer breakout groups on topics including internal controls, project performance reviews, and cybersecurity solutions. Attendees also have an opportunity to network and discuss a wide variety of topics, including: audit issues faced by construction companies; Executive & Congressional action on federal tax policy; and best practices for industry professionals.

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

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Take Advantage of the Federal Contractors Conference Room Rate
Only A Few Rooms Remain
 

We are just 32 days away from the 2017 Federal Contractors Conference, held May 1-3 at the Mayflower Hotel in Washington, D.C. The Mayflower Hotel rooms are full, but AGC has reserved a limited number of additional rooms at the nearby Loews Madison Hotel. Make your Loews Madison Hotel reservation now to get the AGC discounted room rate.

Register today for AGC’s Federal Contractors Conference, the premier conference for federal construction contractors to discuss the latest projects, policies, and contracting issues facing the industry with federal agencies. This conference offers the latest project forecasts, expert insight on upcoming regulatory hurdles, and ample networking opportunities with agency decision makers that are critical to being competitive in the federal construction market.

Join construction industry leaders and their federal agency counterparts at the Federal Contractors Conference.

Click on the agency to see the draft agendas:

·        Army Corps of Engineers

·        Naval Facility Engineering Command

·        General Services Administration

·        Department of Veterans Affairs

·        Small Business Administration

·        Air Force Civil Engineer Center

·        Natural Resources Conservation Service

·        Bureau of Reclamation

To register for AGC’s Federal Contractors Conference, click here.

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

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