President Obama has issued an executive order revoking Pres. Bush's executive order that essentially prohibited government-mandated project labor agreements on federal and federally assisted projects.

The new executive 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." However, the order specifically states, "This order does not require an executive agency to use a project labor agreement on any construction project." Rather, 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." (Emphasis added.) A "large-scale construction project" is defined as one with a total cost to the federal government of $25 million or more.

The order also (a) directs the 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 has issued the following statement regarding the order: "Today's 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. 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."

Click here for a copy of the order. AGC staff will continue to monitor and keep you informed of developments in this area.

By a 61-37 vote, the Senate today passed its $838 billion economic stimulus bill after adopting the compromise amendment offered by Sens. Susan Collins, (R-Maine) and Ben Nelson (D-Neb). Sens. Olympia Snowe of Maine and Arlen Specter of Pennsylvania joined Collins as the only Republicans to vote for the bill. The bill will now go to a conference committee to work out the differences between the House and Senate versions. While the goal of the Democratic leadership is to have a final bill by the end of this week, the significant differences in the two measures will make that timeline difficult to meet.

While there were numerous amendments in the Senate related to increasing highway, bridge, transit and other transportation funding, in the end, the amounts for these programs were left unchanged from the figures included by the Appropriations Committee. A comparison of the House and Senate passed versions of the bill is as follows:

Senate

• Federal-aid Highway $27 B
• Discretionary Grants $5.5 B
• Transit Formula Grants $8.4 B
• TRANSIT New Starts 0
• Airport Improvement $1.1 B

House

• Federal-aid Highway $30 B
• Discretionary Grants 0
• Transit Formula Grants $9.5 B
• TRANSIT New Starts $2.5 B
• Airport Improvement $ 3 B

The Federal-aid highway funds will be distributed according to SAFETEA-LU formulas but the bills use two different formulas. The Senate formula will result in approximately 55 percent of each states' apportionment going to the State DOT, 45 percent to metropolitan areas and 5 percent to the Congestion Mitigation and Air Quality Improvement program (CMAQ). The House formula gives approximately 70 percent of each states' apportionment directly to the DOT, 25 percent to metropolitan areas and 5 percent will be used for enhancement projects.

In addition to traditional highway and bridge projects, the Senate bill makes storm water runoff, passenger and freight rail, and port projects eligible for these formula funds. The Senate bill also establishes a new Discretionary Grant Program for surface transportation projects funded at $5.5 billion. States would have to apply for these grant funds which could be used for highway, transit, freight rail, passenger rail, port and intermodal connection projects valued between $20 million and $500 million. Priority would be given to projects that could be completed within 3 years. Grants would be awarded on a competitive basis based on criteria to be established by DOT.

Both the House and Senate bills include "use or lose" requirements. In the House bill, states are required to obligate 50 percent of their apportionment within 90 days. States would lose funds not obligated in the first 90 days which would be redistributed to states that had obligated their funds (50 percent of their apportionment) within the 90 day window. States would be further required to obligate the second 50 percent of their apportionment by August 1, 2010. Funds not obligated by that date would be redistributed to states that had fully obligated their state apportionment. These redistributed funds would have to be obligated by September 30, 2010 or they would be lost.

In the Senate, states would have to obligate fifty percent of their formula funds within 180 days, at which time unobligated funds would be redistributed to states that used their funds. The second 50 percent of the formula funds would have to be obligated one year after enactment. Funds not obligated within one year would go into the new Discretionary Grant Program, rather than be redistributed to other states as in the House bill. The discretionary grants would be available until September 30, 2011.

"Today's report on job losses underscores the urgency of implementing a job-boosting economic stimulus package focused on infrastructure," said Ken Simonson, chief economist for The Associated General Contractors of America. Simonson commented on the January employment data from the Bureau of Labor Statistics.

"It is tragic that 3,500,000 jobs have disappeared in the past 12 months and the unemployment rate has climbed to 8.5 percent before seasonal adjustment, or 7.6 percent, seasonally adjusted," Simonson stated. "Construction workers have suffered far more than their share of that pain, accounting for 747,000-or more than one-fifth-of the job cuts and an unemployment rate of 18.2 percent in January, not seasonally adjusted."

Simonson pointed out that the job destruction is no longer confined to homebuilding. "In the past 12 months, nonresidential builders and specialty trade contractors, along with heavy and civil engineering construction firms, have had to lay off 309,000 workers, or nearly 7 percent of their workforce. Many of these workers would be re-employed within weeks if Congress passes a stimulus bill with at least $150 billion of construction spending."

The U.S. Senate is struggling to finish its work on its nearly $900 billion version of the American Recovery and Reinvestment Act of 2009, with a vote expected by the end of the week. The U.S. House of Representatives passed its $819 billion version by a vote of 244 to 188 on January 28 with no Republican support. Senate debate on the package has been largely partisan where neither party holds enough seats to guarantee passage. As a result, a bipartisan group of Senators is working with the Obama Administration to craft a compromise which would eliminate more than $50 billion in "wasteful" spending proposed in the bill. At the same time, Senate Majority Leader Harry Reid (D-Nev.) believes there are enough votes to pass the measure as early as Thursday evening.

While differing from the House version in cost, the Senate version is largely similar in the spending and tax provision it proposes. Both bills, for example, recommend over $150 billion in federal construction spending and authorize nearly $50 billion in new and existing bonds to finance infrastructure projects. The Senate version, however, includes a costly provision to "patch" the alternative minimum tax (AMT) for 2008 at a cost of about $70 billion. It also includes an amendment that would increase the $7,500 first-time homebuyer credit to as much as $15,000 for any home purchased in 2009 and remove the repayment requirement. In addition, the Senate passed an amendment to paper over free trade concerns regarding the "Buy American" requirements in the bill, but did not approve an amendment to remove the controversial provision.

The House and Senate must still negotiate a final package and pass it before presenting it to the President for his signature. We strongly urge you to reach out to your employees, your suppliers, your subcontractors and your state and local community leaders to ask them to use the tools on the AGC Web site to contact their Senators and Representatives. Urge your members of Congress and Senators to add additional infrastructure investment to the bill. For more information on the economic stimulus proposals and to contact Congress, visit www.agc.org/stimulus.

Highlights of the Senate Stimulus Package:

• Highway and Transportation Funding: Over $47 billion for transportation infrastructure, including $27.1 billion for the federal-aid highway program; $5.5 billion for competitive surface transportation grants (new program); $8.4 billion for transit; $3.1 billion for Amtrak and high-speed rail; and $2.5 billion for airport improvements.
• Building Infrastructure Funding: Over $58 billion for building infrastructure repair, renovation, and construction, including $9.3 billion for the General Services Administration; $6.3 billion for Military Construction; $3.4 billion for Veterans Affairs construction; and $20 billion for public school and higher education construction.
• Water and Environmental Infrastructure: Over $24 billion for water and environmental infrastructure, including: $4 billion for the Clean Water State Revolving Loan Fund (SRF) program; $2 billion for the Drinking Water SRF; $1.4 billion for U.S. Department of Agriculture rural water grants and loans; $4.6 billion for the Corps of Engineers; $1.4 billion for the Bureau of Reclamation; and $6.4 billion for former weapon production and energy research site cleanup.
• Tax Provisions: One-year deferral of the 3 percent withholding tax on government contractors; a 5-year carryback of net operating losses; extension of small business expensing and 50 percent bonus depreciation; a tax credit bond option for states and local governments; extension and increase in unemployment benefits; temporary suspension of taxation on unemployment benefits.

Other provisions in the bill:

• Davis-Bacon Requirements: Any projects funded directly or assisted in whole or in part by and through the federal government will have Davis-Bacon wage requirements. In addition, the bill calls for the application of Davis-Bacon to any projects funded by tax bonds.
• Buy American: The bill mandates that iron, steel and manufactured goods used in the construction and repair projects funded under the bill be produced in the United States. The provision "shall be applied in a manner consistent with United States obligations under international agreements."
• Federal Contracting Requirements: The House bill would apply the Federal Acquisition Regulation (FAR) to contracts awarded with stimulus funds where pre-existing contracting regulations do not exist. The Senate bill does not contain a similar provision.
• E-Verify: The House bill contains language that would make any contractor who receives funds through the stimulus to use the E-Verify electronic verification system. The Senate bill does not have this provision, although an amendment could be offered that would make the same requirement.

On January 30, President Obama issued three executive orders favorable to organized labor. The orders include:

1. Notification of Employee Rights Under Federal Labor Laws - reverses an order issued by Pres. Bush requiring federal contractors to post a notice informing workers of "Beck" rights (the right not to join a union).This executive order also requires contracting agencies to include a new clause in government contracts. Under this contract clause the contractor agrees to post a notice containing content issued by the Secretary of Labor in its workplaces. Failure to post the notice or failure to comply with the provisions of the notice and related rules, regulations, or orders established by the Secretary can result in contract cancellation, termination or suspension, or debarment. The contractor is also required to include the contract clause in subcontracts. AGC is concerned about the vagueness of the executive order regarding the content of the notice and regulations and about the extreme remedies established for simple failure to post a notice without any finding of substantive labor law violation.
2. Economy in Government Contracts - prevents federal contractors from being reimbursed for "persuader" activity expenses (expenses incurred in trying to influence workers' decision about whether to form a union or engage in collective bargaining).
3. Nondisplacement of Qualified Workers Under Service Contracts - requires service contractors, when contracts change, to offer jobs to qualified workers already working on the project.

AGC also anticipates that a fourth executive order that addresses government-mandated project labor agreements (GMLAs) will be issued soon. AGC will keep you informed of developments as they occur.

To review AGC's position on GMLAs, click here.

While 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 making a last call for original cosponsors of the bill, AGC is working to discourage cosponsorship of the "card check" bill. AGC opposes the Employee Free Choice Act because it 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 interference.

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.

More than 2000 letters have gone to members of congress in the last 24 hours discouraging members from cosponsoring this legislation. If you have not already done so, please contact your Members of Congress to urge them not to cosponsor or support the bill by using AGC's Legislative Action Center. It only takes a minute to send a letter.

"Today's construction figures underscore the dramatic decline in business activity that is putting hundreds of thousands out of work, endangering the viability of tens of thousands of businesses and dragging on the broader economy. This is a stark reminder of the need for immediate and significant federal investments in vital construction and infrastructure projects. Without those investments, we estimate over a million construction workers will lose their jobs while many of the small businesses that dominate the construction industry will close their doors. With these investments, however, construction companies will be able to save those jobs, expand payrolls and invest in equipment and supplies, while building the foundation for a stronger economy," said Stephen Sandherr, chief executive officer of the Associated General Contractors of America.