Construction Legislative Week in Review
www.agc.org May 25, 2017
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On the Inside
TRANSPORTATION
Trump Budget Status Quo for Federal Construction
LABOR
Job Training and Education Programs Receive Large Cuts in FY 18 Budget, Enforcement Agencies See Similar Cuts
FEDERAL CONTRACTING
AGC Testifies Before Congress
TRANSPORTATION
House Members Continue to Push Highway Trust Fund Fix as Part of Tax Reform
ENVIRONMENT
Congress Asks AGC for Ideas on Making the Endangered Species Act More Efficient, Cost-Effective
LEGAL
AGC Successfully Challenges Contract Goals for DBE Participation
TRANSPORTATION
Trump Budget Status Quo for Federal Construction
 

This week, President Trump released his first budget request covering fiscal year 2018 that also looks out over the next 10 years (2018-2027). The proposal, “A New Foundation for American Greatness,” calls for $1 trillion in total tax cuts over the next 10 years, while also cutting federal spending by $4.6 trillion over that same time period. The budget assumes the economy will grow by $2.1 trillion, which would reduce 10-year deficits by $5.6 trillion and balance the budget in FY 2027.

As with most budgets submitted by respective administrations, President Trump’s is largely seen as a messaging document that primes the budget and appropriations debate for the coming year. This year however, the budget carries a bit more relevance due in large part to the president’s promise to include $200 billion for his infrastructure initiative. The budget did provide a fact sheet detailing four key principles for the White House’s initiative, but did not provide any details on a specific infrastructure plan.

In terms of federal construction accounts tracked by AGC, the budget is status quo with previous year’s appropriations and budget requests—approximately $120 billion. While the budget provides significant funding increases for border wall construction and a $5 billion dollar down payment on the administration’s infrastructure initiative, it also cuts TIGER grants, Capital Investment Grants for transit projects, rural water programs, and the Community Development Block Grant Program. Even more troubling, the budget assumes that funding for the Highway Trust Fund will be cut by $95 billion in 2021.

A full analysis of the FY 2018 budget for federal construction accounts can be found here.

Additional details on budget funding and policy issues—including the infrastructure initiative—can be found here.

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


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LABOR
Job Training and Education Programs Receive Large Cuts in FY 18 Budget, Enforcement Agencies See Similar Cuts
 

The fiscal year 2018 budget (FY 2018) proposal shows new priorities for the Trump Administration, with the Federal Education and Training Programs taking the brunt of the proposed budget cuts. The Department of Labor’s budget (DOL) includes a 20% reduction in funding from the FY 2017 enacted level, and large job training reductions and employment service accounts represent some of the largest cuts. Funding for state grants for the Workforce Innovation and Opportunity Act (WIOA) have received a 40% cut, and funding for apprenticeship grants have received a 5% reduction. WIOA overwhelmingly passed Congress in 2014, so it is unlikely that Congress will allow the proposed cuts.

The FY 2018 budget proposal also contains reductions within the Department of Education for accounts that fund career and technical education. The budget proposes a 15% reduction in funding despite the fact that Congress is working towards reforming and reauthorizing career and technical education.

Among the federal agencies within the DOL, funding levels are little changed. The Wage and Hour Division has received a small increase for compliance assistance and outreach to employers, while the Office of Labor-Management Standards has received one of the largest percentage increases—primarily to fund a program that audits larger international unions. Meanwhile, funding for the National Labor Relations Board has been decreased. The Occupational Safety and Health Administration’s funding has stayed relatively level, but the budget does call for the elimination of Susan Harwood Training Grants, a grant program that AGC has benefitted from and that has provided valuable safety training to thousands of industry workers.

The budget also proposes dramatic changes to the premium structure paid to the Pension Benefit Guaranty Corporation. Ultimately, these large increases would have to be absorbed by contributing employers and would require congressional approval first. AGC will strongly oppose any such unilateral increases.

Interestingly, the budget proposal calls for the merging of the Office of Federal Contract Compliance Programs and the independent Equal Employment Opportunity Commission. AGC is concerned by this merging of agencies, and it remains unlikely that Congress will approve of such a change.

Finally, among one of the more public proposals in the budget is a proposal to create a federal-state parental leave benefit program within the unemployment insurance program. Beginning in 2020, this program would provide six weeks of family leave to new parents. The proposal expands upon President Trump’s campaign promises, but like many others, the details of how such a program might work in practice have yet to be determined.

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

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FEDERAL CONTRACTING
AGC Testifies Before Congress
Impact of Change Order Delays on Contractors
 

Yesterday, AGC members Ed DeLisle and Andy Brown testified at the House Small Business Committee hearing on change order delays and the impacts they can have on federal construction contractors. Members of Congress heard how federal agency delays in processing and paying change orders can disrupt cash flow, impact schedules, waste taxpayers’ money, and restrict opportunities for contractors to bid on additional projects. AGC called for greater transparency, oversight, and agency action to address delays in paying contractors for the work they do for the federal government.

AGC will continue to advocate for greater accountability among the different federal agencies in the change order process. In March, the House of Representatives’ Small Business Committee requested that the Government Accountability Office (GAO) conduct a review on the use of change orders on federal construction contracts. This bipartisan request was a direct result of AGC’s efforts with both parties in Congress to address the many issues associated with change orders.

Previously, AGC called on the Federal Acquisition Regulation Council to improve the data federal agencies collect regarding the administration of change orders in response to the Council’s information request. AGC’s recommendations would require federal agencies to collect a range of data regarding the timeliness of action by the contracting officer (CO) to encourage greater CO accountability.

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

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TRANSPORTATION
House Members Continue to Push Highway Trust Fund Fix as Part of Tax Reform
Tell your Rep. to Sign Bipartisan Letter in Support of Long-Term Fix DEADLINE EXTENDED
 

A bipartisan group of congressmen are circulating a letter asking House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Ranking Democrat Richard Neal (Mass.) to fix the Highway Trust Fund as a part of any tax reform package the committee considers.

Contact your representative and urge them to sign this letter, which is being circulated by Transportation & Infrastructure Subcommittee on Highways and Transit Chairman Sam Graves (R-Mo.) and Ranking Democrat Eleanor Holmes Norton (District of Columbia). As of press time, 156 members of the House have signed onto the Graves/Holmes Norton letter (check to see if your representatives has signed on).

If you recall, Representatives Graves and Holmes Norton circulated a similar letter last year (check here to see if your Rep. signed the 2016 letter) that was signed by 130 bipartisan members of the House. The FAST ACT provides funding certainty for the Highway Trust Fund through fiscal year 2020. However, following the FAST Act's expiration, the Highway Trust Fund will face cuts of approximately $18 billion per year. A permanent fix for the Highway Trust Fund needs to be found in order to eliminate these cuts.

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

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ENVIRONMENT
Congress Asks AGC for Ideas on Making the Endangered Species Act More Efficient, Cost-Effective
 

AGC members report struggles with Endangered Species Act (ESA) requirements that delay infrastructure projects and significantly increase costs while not necessarily providing commensurate species and habitat benefits. At the request of Congress, AGC has identified legislative and administrative improvements to the ESA that support: the protection of listed species; responsible land and resource management; and streamlined delivery of critical infrastructure projects.

AGC’s May 23rd response to the House of Representatives Natural Resources Committee flags construction specific concerns and offers possible ESA reforms related to:

  • species listing or delisting;
  • critical habitat designation;
  • timing, length and application of the Section 7 “consultation” process; and
  • compensatory mitigation practices and policies.

Additionally, AGC explained how the current interplay between the ESA and the National Environmental Policy Act (NEPA) is forcing excessive paperwork, duplicate consultation procedures and reviews, and inefficient project planning and construction phasing (due to, in the case of ESA, time-of-year restrictions relating to tree and bush clearing and species surveys). AGC suggested improvements to current law that would reduce the frequency of NEPA document/decision re-evaluations and related ESA re-analysis.

AGC’s letter concludes by calling on Congress to reform the citizen suit provisions in 20 environmental statutes that are being used to challenge all types of projects, land restrictions and permit requirements relating to projects.

For more information, please contact Leah Pilconis at pilconisl@agc.org.

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LEGAL
AGC Successfully Challenges Contract Goals for DBE Participation
 

On May 16, the U.S. Court of Appeals for the Ninth Circuit reaffirmed that that the states within that circuit cannot lawfully impose contract goals for DBE participation in federal-aid highway projects unless, and until, they “establish the presence of discrimination within [their] transportation contracting industr[ies].”

In this case, Mountain West Holding Company v. State of Montana, the court then held that the State of Montana had not met that burden, explaining that “a decline in DBE participation” over a six-year period when the state ran a race-neutral program was “not necessarily evidence of discrimination against DBEs.”  The court also observed that the state had failed to account for differences in the “size, age [or] geography” of its DBE and other construction companies, or why it was “appropriate” to compare “the proportion of available subcontractors to the proportion of prime contract dollars awarded.”  [Emphasis in original.] 

In May of 2015, AGC of America and its Montana chapter had jointly filed a friend-of-the-court brief in the Ninth Circuit in support of the contractor’s position.

For more information, contact Mike Kennedy at kennedym@agc.org or (703) 837-5335.

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