Construction Legislative Week in Review
www.agc.org June 20, 2019
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On the Inside
Infrastructure
Infrastructure Stakeholders Urge Leaders Back to the Table
Regulations
First False Claims Act Case Under New Cybersecurity Requirements
Trump Administration Finalizes Changes to Health Reimbursement Arrangements
AGC Submits Comments in Response to the RFI Issued by OSHA
AGC Provides Input on Proposed DOL Revisions to Regular Rate of Pay Regulations
Federal Contracting
AGC Federal Contractors Ascend upon Washington
Infrastructure
Infrastructure Stakeholders Urge Leaders Back to the Table
AGC Joins National Trade Associations in Calling for Gas Tax Increase
 
On June 14, AGC joined the U.S. Chamber of Commerce and a coalition of national business and labor groups in expressing disappointment that the May 22 meeting between President Trump and Congressional Democrats to discuss infrastructure investment solutions did not result in a substantive conversation. The letter goes on to urge Congress to consider raising the federal gas tax as a solution to solving our nation’s surface transportation infrastructure needs and warns of the consequence of inaction – cutting states infrastructure funds. AGC and our coalition partners will continue to urge the President and Congressional Democrats to come back to the table and enact a bipartisan infrastructure bill this year.   
 
For more information, contact Sean O’Neill at oneills@agc.org or (202) 547-8892.
 
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Regulations
First False Claims Act Case Under New Cybersecurity Requirements
Fear of More Lawsuits Against Federal Contractors to Come
 
A recent federal court decision signals the beginning of what could potentially be a wave of lawsuits against federal contractors for compliance with cybersecurity requirements under DFARS 252.204-7012 (Safeguarding Covered Defense Information & Cyber Incident Reporting).  The case involves a false claims action brought by a federal contractor employee alleging the contractor fraudulently claimed it was in compliance with this DFARS requirement. The federal contractor argued that the U.S. Department of Defense had never expected full compliance, which is evidence by the amended guidance and regulations that have come out since early 2018. The court rejected the federal contractor’s argument and stated that compliance still impacted the federal government’s decision to contract with the company. To access AGC’s webinar on these cybersecurity requirements, click here.
 
This decision is the first ruling invoking DFARS cybersecurity compliance, but it is expected that this case may open the floodgates for similar actions brought by whistleblowers and perhaps other project stakeholders. AGC has repeatedly communicated the difficulty many construction contractors have had implementing these complex cybersecurity requirements. DOD has consistently stated that the agency does not plan on auditing contractors’ electronic devices, but will rely on contractor’s attesting to their compliance with the requirements. As AGC first reported in 2017, Department of Defense contractors must follow security control requirements to ensure sensitive federal information remains confidential when stored in any non-federal electronic system under this provision. 
 
For more information, contact Jordan Howard at jordan.howard@agc.org or (703) 837-5368.
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Trump Administration Finalizes Changes to Health Reimbursement Arrangements
Expands Employer and Employee Insurance Options
 
On June 13, The U.S. Departments of the Treasury, Health and Human Services, and Labor issued a final rule that expands the usability of health reimbursement arrangements (HRAs). This final regulation is in response to President Trump’s Executive Order on “Promoting Healthcare Choice and Competition Across the United States.” Specifically, the rule allows the use of employees’ personal health reimbursement accounts to buy individual health plans and providing them the same tax advantage as an employee choosing traditional employer sponsored coverage.
 
Health reimbursement accounts, which are typically offered by large employers, are used to reimburse employees for medical expenses up to a specified dollar limit. Expanding the arrangements to cover individual insurance premiums could allow employers to give workers more options and make it easier for smaller employers to offer some type of benefit.  Employers fully fund HRAs, in contrast with health flexible spending accounts, which are funded as pre-tax contributions from workers’ salaries.
 
For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.
 
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AGC Submits Comments in Response to the RFI Issued by OSHA
 
On June 10, AGC and its coalition partners submitted comments in response to the U.S. Occupational Safety and Health Administration’s (OSHA) request for information on issues related to requirements in the standards on powered industrial trucks for general, maritime, and construction industries. OSHA has sought information regarding the types, age, and usage of powered industrial trucks, maintenance and retrofitting of powered industrial trucks, how to regulate older powered industrial trucks, the types of accidents and injuries associated with operation of powered industrial trucks, the costs and benefits of retrofitting powered industrial trucks with safety features, and the costs and benefits of all other components of a safety program including operator training. 
 
The comments recommended that OSHA elicit feedback from small contractors and review injury data related to powered industrial trucks in construction before engaging in any rule making as well as cautioned the agency to be very careful with changing existing training requirements in the absence of evidence warranting such a change. AGC will continue to monitor this issue and engage with OSHA and its coalition partners as necessary.
 
For more information, please contact Kevin Cannon at cannonk@agc.org or (703) 837-5410. 
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AGC Provides Input on Proposed DOL Revisions to Regular Rate of Pay Regulations
 
On June 12, AGC submitted comments to the U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) in response to its Notice of Proposed Rulemaking (NPRM) updating the regulations governing regular rate requirements for the first time in more than 50 years. Regular rate requirements define what forms of payment employers include and exclude in the "time and one-half" calculation when determining workers' overtime rates. The NPRM focused primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate. Because these regulations have not been updated in decades, the proposal’s intent is to better define the regular rate for today's workplace practices.
 
AGC’s supports the WHD’s efforts to address the regular rate regulations to provide clarity and better reflect the 21st-century workplace and believes that employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee pay and benefits and clarity for employers when preparing total compensation packages. Specifically, in response to proposed revisions addressing “Reimbursable Expenses,” AGC educated the WHD on the prevalent industry practices around providing per diem allowances. AGC also advised that any changes in processes or requirements should be minimally disruptive to business operations and burdensome administratively.
 
AGC will continue to provide input to the DOL on the impact further changes might have on the construction industry and will notify members of any developments.   
 
For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.
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Federal Contracting
AGC Federal Contractors Ascend upon Washington
Leaders from Federal Agencies Make Major Announcements
 
On June 10, hundreds of members participated in AGC’s annual Federal Contractors Conference in Washington D.C. where contractors met with major federal agencies and members of Congress to discuss issues within the federal construction space. Representatives from the U.S. Army Corps of Engineers (USACE), Naval Facilities Engineering Command (NAVFAC), Air Force Civil Engineer Center, Department of Veterans Affairs (VA), General Services Administration (GSA), Small Business Administration (SBA), Bureau of Reclamation (BOR), and Natural Resources Conservation Service (NRSC) participated, with several agencies making significant announcements about their respective programs.
 
Among the many highlights, NAVFAC’s new commander Rear Admiral John Korka discussed his vision for the agency’s future and ways to build upon their partnership with AGC and the construction industry. USACE Chief of Engineers and Commanding Lt. General Todd Semonite, spoke about the partnering initiatives AGC and USACE have begun, based on AGC’s recommendations, and was followed by a joint AGC-USACE roundtable discussion of these initiatives. Dan Mathews, Commissioner of GSA’s Public Buildings Service, gave updates on the courthouse construction program and on the Public Buildings Reform Board that will make recommendations of at least $8 billion worth of underutilized and vacant federal properties. AGC CEO Steve Sandherr also led a Q&A session with Nebraska Congressman Don Bacon to discuss the legislative outlook of the construction industry.
 
Presentations and other information from the conference were made available this week to the attendees of the conference. If you’d like to see photos from the event, click here.
 
For more information, please contact Jordan Howard at jordan.howard@agc.org or (703) 837-5368.
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