Federal Contractor Report

 

Congress has passed a full fiscal year 2022 funding package that sets new spending levels for the year after multiple continuations of funding at prior year levels. It is important that Congress passes this to authorize new and increased funding for construction programs included in the November-passed Infrastructure Investment and Jobs Act. This legislation also includes earmarks, or congressionally directed spending as it has been rebranded, for the first time in over a decade. For those that don’t remember, this is funding dedicated to local infrastructure projects chosen by the member representing that area. Proponents of this practice argue that it will help ease partisan dysfunction and give members a local project to point to as a result of their support of a larger bill. 

 

 

Take action now and tell your members of Congress and President Biden to oppose government-mandated project labor agreements (PLAs). On February 4, President Biden signed E.O. 14063 that will require—with limited exceptions—every federal prime contractor and subcontractor to engage in negotiation or agree to project labor agreements (PLAs) on federal construction projects valued at $35 million or more. (For more, see this AGC Memo).

 

Over the past two months, AGC of America, working with a coalition of other industry stakeholders, has worked with Congress to pass an extension of the Employee Retention Tax Credit (ERTC) through the fourth quarter of 2021. The ERTC was originally extended to run through the end of 2021 but was retroactively repealed for the fourth quarter after passage of the Infrastructure Investment and Jobs Act (IIJA), to expire after September 30. Because of the delay in passing IIJA some construction firms already claiming the credit in October 2021 face a potential tax penalty when they file their 2021 tax returns as a result.

 

The Commerce Department made a preliminary determination to lower softwood lumber import tariffs from Canada from the current rate of 17.9 percent to 11.64 percent. The rate is set to take effect by August of 2022. In November of 2021, the tariff rate was doubled to 17.9 percent. Although it is difficult to quantify the impact of these tariffs on lumber prices, the price of lumber rose by 50 percent since the tariff rate doubled. Any increase in the rate can adversely impact the construction industry, as Canadian imports make up nearly 30 percent of total U.S. consumption of softwood lumber.

 

AGC of America recently issued an updated Construction Inflation Alert, a document contractors can use to help educate owners on the latest price increases impacting projects and bids. The document articulates how and why every construction market has experienced extreme cost escalations. For example, from December 2020 to December 2021, the PPI for steel mill products more than doubled, rocketing up 127.2%. There were double-digit increases in the PPIs for plastic construction products, 34.0%; aluminum mill shapes, 29.8% and lumber and plywood, 17.6% among others.  AGC of America plans to issue an updated document in the weeks to come that reflects impacts (or potential impacts) on the construction supply chain as a result of the war in Ukraine and economic sanctions on Russia as well as updates based on the latest U.S. government economic data.

WebEd series in April on Davis-Bacon compliance & prevailing wage

On March 11, the Wage and Hour Division (W&HD) of the U.S. Department of Labor (DOL) released a proposed rule to significantly revise the regulations implementing the Davis-Bacon Act and its prevailing wage. The Davis-Bacon Act and 71 Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year and provide minimum wage rates for an estimated 1.2 million U.S. construction workers. AGC of America is reviewing the proposed rule and will seek input to prepare comprehensive comments. While these changes are "proposed" at the moment and will have to go through the lengthy regulatory process before being finalized with changes, compliance with the existing regulations continues as is. With existing compliance in mind, AGC of America is hosting a WebEd series in April that includes a representative from DOL’s W&HD, among others, who will discuss existing prevailing wage requirements and compliance. Please keep in mind that this WebEd series will not be covering the proposed changes, just current compliance. 

 

Experience the AGC Annual Convention, providing contractors of all sizes and markets the opportunity to gain business-critical insights into the issues most affecting their operations. AGC brings together experts from across the industry to share their knowledge and help prepare contractors to meet the challenges of today (and tomorrow). Alongside the incredible keynote speakers, the AGC Annual Convention will feature more than 15 education breakout sessions covering a variety of key industry topics. 

Held in conjunction with this event, the AGC Equipment, Technology & Construction Solutions Expo provides a one-of-a-kind opportunity for your whole team to meet with more than 100 leading industry suppliers showcasing the latest tools, solutions and equipment to power your construction business.

 

Construction firms are coping with a seemingly unending series of supply-chain disruptions that are compounding problems caused by record materials cost increases and pandemic-induced challenges to operations. It has never been more important for project participants to be prepared with strategies to mitigate the risk of material price escalation and delays due to material shortages -- in order to preserve the feasibility and profitability of the project. On this episode, Greg Sweeso of Tarlton Corporation, Jack Mumma of Michigan State University, and Ronald Ciotti of Hinckley, Allen & Snyder LLP share risk mitigation strategies available during the bidding, procurement, and contracting phases of the project.

 

All Constructor magazine readers and AGC of America members are invited to share their feedback on our communications program. As a valued reader and member, your participation in this survey will provide AGC of America with the insights they need to continue to produce a top-notch media program. The survey should take no longer than 15 minutes to complete. We invite your honesty and assure your answers will remain anonymous. Survey participants will have the option to enter a prize drawing to receive a FREE pair of Beats Solo3 Wireless Headphones. There will be one winner, notified via email. Thank you in advance for your time and we look forward to receiving your feedback.

The March/April 2022 issue of Constructor magazine is now available. Read how AGC's incoming president is ready to bring the industry forward in our cover story, "AGC President Dan Fordice: Ready to Bring the Industry Together Forward."