Having wrapped up work on the economic recovery package, House and Senate Appropriations Committees will return from the President's Day recess to complete work on the fiscal year 2009 appropriations process and prepare for the arrival of the President's FY 2010 budget. Because Congress failed to enact all but three (Defense, Homeland Security and Military Construction) of its annual appropriations bills, the majority of federal programs are operating under a Continuing Resolution through March 6. Congress is expected to pass an Omnibus appropriations bill that would consolidate the nine remaining annual spending measures to fund the government through the remainder of the fiscal year without much controversy.

The Obama Administration's spending priorities are likely to be included in the upcoming FY2010 budget request to Congress, which is expected to be released in full in April. The Administration is expected to release a blueprint of the budget next week, which will preview the Administration's fiscal agenda for the next four years.

The annual Congressional appropriations process provides, on average, about $100-110 billion for federal construction spending accounts. Congress is expected to use this year's appropriations process to conduct hearings on the efficiency and effectiveness of stimulus funding and to determine where additional spending may be directed to continue recovery efforts. This process will allow AGC an opportunity to highlight the job creation and quality of life improvements that we expect from the stimulus funding.

Last week, Congressman Sullivan (R-Okla.) introduced legislation (H.R. 983) that seeks to ensure that federal contracts are awarded through open competition. The Government Neutrality in Contracting Act would prohibit the use of government mandated project labor agreements.

This legislation mirrors the Senate bill, S.90, which was introduced by Senator Vitter (R-La.).

AGC does not support government-mandated labor agreements (GMLAs) and believes they effectively compel both union and open shop contractors to alter their hiring practices, work rules, job assignments and benefits in order to compete or perform work on publicly-funded projects. This not only constitutes inappropriate government interference with private labor relations, but it amounts to an unfair government preference that can significantly impact the cost of public works.

AGC sent a letter to the House in support of Congressman Sullivan's bill. Please visit the AGC Legislative Action Center to send a letter in support of The Government Neutrality in Contracting Act.

Supporters of the (so-called) Employee Free Choice Act (EFCA) remain short of their goal of original cosponsors thanks to AGC members voicing their concerns. AGC opposes the Employee Free Choice Act and urges AGC members to discourage cosponsorship.

EFCA would take away a worker's right to a federally supervised private ballot election when deciding whether or not to select union representation. It also imposes unrealistically short deadlines for labor-management negotiations over a first contract before mandating third-party mediation and binding arbitration.

AGC supports the status quo, which allows both card-check recognition and secret-ballot elections to establish union representation and remains the most fair and reliable way to determine the desire of employees to be represented by a union.

Please reach out to your Members of Congress to urge them not to co-sponsor or support the bill. Make your voice heard on this issue by using AGC's Legislative Action Center. Contact your congressional delegation today and urge them not to co-sponsor or support the (so-called) Employee Free Choice Act.

On Tuesday February 17, the Government Accountability Office publicly released a report on diminishing contractor participation in the State Department's Bureau of Overseas Buildings Operations (OBO) embassy construction program. The report was jointly requested by the Senate and House Foreign Relations Committees in August 2007 after a series of meetings with AGC, congressional staff and OBO.

The report, titled Embassy Construction: Additional Actions Are Needed to Address Contractor Participation, highlights longstanding AGC concerns that have led to diminishing contractor participation in the OBO program. Additionally, the report examined proposed legal changes in OBO prequalification criteria, factors that have impacted contactors interest in participating in the program including risk allocation, project management, design issues, REA's, compressed schedules and the termination of partnering under the direction of former OBO Director Charles Williams.

In addition to the GAO report, AGC's efforts led to an internal review by the State Department Inspector General released in August 2008 which examined of the entire OBO program and made over 50 recommendations to improve construction and management issues at the State Department.

In a letter to AGC of America President Doug Barnhart on January 9, 2009, OBO highlighted many of the changes that are underway, including instituting project management, streamlining the Standard Embassy Design (SED) RFP, creating bridging documents, improving REA and change order management, address scheduling and other management issues which are intended to create a more equitable and consistent relationship with contractors. AGC and OBO remain committed to an open and honest dialogue as OBO undertakes these significant steps to improve its program.

While Congress has not yet voted on the American Recovery and Reinvestment Act, House and Senate negotiators have released details of the plan and expect a vote before the weekend. All reports indicate significant infrastructure investment, as outlined in the AGC summary of infrastructure and public building investment provisions.

Highlights include $4.6 billion for the Corps of Engineers; $1.2 billion for the VA hospital and medical facility construction and improvements; $3.1 billion for repair, restoration and improvement of public facilities; $4.2 billion for facilities sustainment, restoration and modernization; $2.33 billion for Department of Defense Facilities; $1 billion for the Bureau of Reclamation; $48 billion for transportation infrastructure; $14.5 billion for environmental clean-up and clean water programs; $39.5 billion to local school districts for modernization or other purposes; and $4.5 billion for increased energy efficiency in federal buildings. AGC will alert all members as soon as more information is available. In addition, www.agc.org/stimulus is updated regularly with stimulus news and AGC's efforts related to the bill.

Thanks to a strong grassroots effort nationwide, AGC of America, AGC's nationwide network of Chapters and members can be proud that combined efforts resulted a bill that will bring work and jobs back to the construction industry.

AGC committed thousands of hours over the last several months to advocating for investment in infrastructure and public buildings. AGC submitted written and oral testimony to six Congressional hearings and delivered four letters to Capitol Hill on behalf of member companies advocating for investment in infrastructure and public buildings. In addition, activity on AGC's legislative action center was unprecedented, ultimately sending 12,000 letters to Senators and Representatives in support of the stimulus plan while countless phone calls were made to Congressional offices. AGC and its coalition partners stirred grassroots efforts with five new advertisements and significant media coverage, and AGC's petition for investment now includes more than 3,000 supporters.

AGC Presents Podcast on Details of Recovery Plan, Requests Member Help

AGC created a 30-minute podcast February 2 to update members on the status of the stimulus plan then circulating on Capitol Hill and urged members to contact their Senators in support for infrastructure investment as part of the stimulus plan. Visit www.agc.org/stimulus.

AGC of America: Working for You

In January alone, members of AGC benefited from three free webinars and thousands of man and woman hours working in support of infrastructure investment in the pending stimulus plan. Two webinars, For CEOs Only: Where Do I Turn for Answers in Tough Times? and Have We Hit Bottom?, were designed to help members cope with the economic downturn. Last week's webinar, Understanding the New FAR Requirements for Mandatory Disclosure and Stronger Compliance Programs, provided detailed analysis of the federal government's new Mandatory Disclosure Rule for federal contractors.

View AGC's other stimulus-related activities here.

The deadline for comments in response to the December 5, 2008 Internal Revenue Service (IRS) notice of proposed rulemaking to implement the 3 percent withholding provision is approaching on March 5. With Congress unlikely to include a full repeal of the law in its economic stimulus package, but rather a one-year delay in its effective date (from 2011 to 2012), AGC is preparing comments to the IRS. AGC has once again made full repeal of the onerous 3 percent withholding tax a top priority of the 111th Congress and will continue efforts to urge Congress to enact such legislation.

Effective January 1, 2011 (or January 1, 2012 under the proposed stimulus bill), federal, state, and local governments with annual expenditures of $100 million or more are required to withhold 3 percent from payments for goods and services, including payments made under government contracts with construction companies. The law was intended to reduce the so-called "tax gap" and tax evasion.

IRS' proposed rule clarifies that payments for the construction of a building or other public works projects are subject to 3 percent withholding. For additional information on the proposed rule and AGC's position, please click here.

On January 7, Representative Kendrick Meek (D-Fla.) introduced H.R. 275, a bill to repeal the 3 percent withholding law. On January 21, Senator Arlen Specter (R-Pa.) introduced a Senate version, S. 292. AGC is working with a broad coalition of stakeholders to enact the legislation.

On February 6, President Obama issued an executive order revoking an earlier order issued by President George W. Bush that largely prohibited federal agencies from imposing a project labor agreement on federal and federally assisted construction projects. The new order encourages agencies to consider imposing a project labor agreement but falls short of requiring agencies to do so.

The order establishes that "it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects." A "large-scale construction project" is defined as one with a total cost to the federal government of $25 million or more.

The order provides that, in awarding a contract for a large-scale construction project or obligating funds pursuant to such a contract, "executive agencies may, on a project-by-project basis, require the use of a project labor agreement." The order expressly states that it "does not require an executive agency to use a project labor agreement on any construction project."

The order also (a) directs the Federal Acquisition Regulations (FAR) Council to amend the FAR as needed and (b) directs the Office of Management and Budget, in consultation with the Secretary of Labor and other officials, to provide the President with recommendations about "whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects."

AGC opposes government-mandated labor agreements (GMLAs) and is concerned about the impact of the order. "[The] executive order has the unfortunate potential to limit contractors' ability to compete for projects at a time when the government is reporting that over one million construction workers have lost their jobs," said AGC CEO Stephen Sandherr. "Given that federal agencies have no demonstrated expertise in writing contracts that cover contractors and their employees, we strongly encourage officials to exercise the discretion this order provides and avoid government-mandated labor agreements."

AGC will closely monitor developments, such as the FAR rulemaking process, and report to members as they occur.

Click here to view President Obama's executive order. Click here to learn more about AGC's position on government-mandated labor agreements and related advocacy activities.

This week, Congressman Sullivan (R-Okla.) introduced legislation (H.R. 983) that seeks to ensure that federal contracts are awarded through open competition. The Government Neutrality in Contracting Act would prohibit the use of government mandated project labor agreements.

This legislation mirrors the Senate bill, S.90, which was introduced by Senator Vitter (R-La.).

AGC does not support government-mandated labor agreements (GMLAs) and believes they effectively compel both union and open shop contractors to alter their hiring practices, work rules, job assignments and benefits in order to compete or perform work on publicly funded projects. This not only constitutes inappropriate government interference with private labor relations, but it amounts to an unfair government preference that can significantly impact the cost of public works.

AGC sent this letter to the House on Wednesday in support of Congressman Sullivan's bill. Please visit the AGC Legislative Action Center to send a letter in support of The Government Neutrality in Contracting Act.

Supporters of the (so-called) Employee Free Choice Act (EFCA) are making a push to introduce this legislation in the House very soon and are continuing to push for original co-sponsors of the bill. AGC opposes the Employee Free Choice Act and urges AGC members to discourage cosponsorship.

EFCA would take away a worker's right to a federally supervised private ballot election when deciding whether or not to select union representation. It also imposes unrealistically short deadlines for labor-management negotiations over a first contract before mandating third-party mediation and binding arbitration.

AGC supports the status quo, which allows both card-check recognition and secret-ballot elections to establish union representation and remains the most fair and reliable way to determine the desire of employees to be represented by a union.

Please reach out to your Members of Congress to urge them not to co-sponsor or support the bill. Just last week over 4,000 AGC members made their voice heard on this issue by using AGC's Legislative Action Center. Contact your congressional delegation today and urge them not to co-sponsor or support the (so-called) Employee Free Choice Act.

Registration for AGC's Federal Contractors Conference can now be accessed through the new meeting Web site.

The Federal Contractors Conference is the only national event where AGC contractors and Federal agency personnel can meet and review procurement and contracting issues from around the United States. This year will include meetings with USACE, NAVFAC, USAF, GSA, OBO and the AGC Federal Owners Advisory Council, as well as a day of visits to Capitol Hill to discuss increased infrastructure investment and ensure fair federal contracting opportunities, among other issues.

Sponsorships are still available and serve as a great way to increase your company's brand awareness, create positive public relations and gain recognition as a key player in federal contracting and procurement.