On July 16th the New York Times reported on a potential compromise on the “so-called” Employee Free Choice Act (EFCA). The real story behind the story is that one unnamed senator among six that are working on a compromise leaked to the Times that they will likely drop the card-check portion of the EFCA bill with the blessing of some union leaders. The article also explains some of the other areas that the senators may include in their compromise, but that no deal has been struck with the undecided senators who control the outcome of this debate.

The barrier continues to be 60 senators voting to end cloture and move the EFCA bill. As the story reports, the Democrats have 60 senators in their caucus, but two are ill (Kennedy-Mass., and Byrd-W.Va.) and eight senators are officially undecided on EFCA (Lincoln-Ark., Pryor-Ark., Bennet-Colo., Landrieu-La., Hagan-N.C., Nelson-Neb., Specter-Pa. and Warner-Va.). The cloture vote is the key vote in this debate.

AGC has said from the start that compromise is not an option. Dropping the card check portion of the bill does not change our opposition to the binding government mandated arbitration provision and the increased penalties on only businesses for unfair labor practices. Some of the ideas being mentioned in any alleged compromise also concern AGC, including using post-cards instead of secret ballot elections, so-called “quickie” elections, and increasing access to the workplace by union organizers.

Even a genuine and well-intended proposal for a compromise could become a “Trojan horse” that EFCAâ€^TMs proponents would simply use to sneak EFCA past a cloture vote in the Senate. Unless and until EFCAâ€^TMs proponents completely and irreversibly abandon that legislation, the risk of a compromise becoming a “Trojan horse” for EFCA will remain too great for this industry to entertain any discussion of compromise.

This serves as a reminder that all Members of Congress, especially senators, need to be contacted by AGC members. Top target states are: Arkansas, Colorado, Louisiana, Nebraska, North Carolina, and Virginia. Please send letters in opposition to EFCA by using the AGC Legislative Action Center.

Guidance does not include mandate to use PLAs

On July 14, 2009, the Federal Acquisition Regulation (FAR) Council issued a notice of proposed rulemaking implementing President Obamaâ€^TMs Executive Order 13502, by creating new FAR contract clauses to be included in Federal contracts should an agency choose to require a Project Labor Agreement (PLA) on a particular Federal construction project. Comments are due on August 13, 2009.

In short, the proposed rule (FAR Case 2009-005) would:

• Provide a new FAR Subpart 22.5, Use of Project Labor Agreements for Federal Construction Projects;
• Add a new provision at 52.222-XX, Notice of Requirement for Project Labor Agreement, to be included in solicitations where the agency has exercised its discretion to require a project labor agreement as prescribed at FAR 22.505(a);
• Add a new clause 52.222-YY, Project Labor Agreement, to be included in contracts in accordance with FAR 22.505(b).

The proposed rule seems to implement the executive order carefully, without expansion, by encouraging (not requiring) agencies to consider (not necessarily adopt) a PLA requirement on large-scale construction projects (defined as projects with a total cost to the federal government of $25 million or more) on a project-by-project basis where certain criteria are met.

It expressly leaves to the contracting agency discretion to decide whether or not to require a PLA. AGC is encouraging agencies to exercise this discretion prudently, leaving the decision of whether to perform the work under a collective bargaining agreement up to the contractor-employers and their employees, as provided under federal labor law. AGC believes that it is inappropriate for public agencies to use their contracting authority to interfere with labor relations among private employers and employees, and explained that position to White House and other officials at a recent meeting about PLAs.

AGC also explained that the proper parties to negotiate any PLA are the employers and employees performing work on the covered project, or their respective collective bargaining agents. The proposed rule seems to recognize this by including a provision stating that the government will not participate in the negotiations of any PLA. AGC would argue that the term “government” as used in that provision must include a construction manager that is acting as an agent of the owner-agency and that will not employ any workers covered by the PLA, but it is unclear whether the Councils intended such coverage. This will be addressed in AGC comments submitted to the Councils.

The proposed rule includes standards for all PLAs issued under the rule. These include that the PLA must “allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements.” AGC intends to point out in its comments how this ostensibly fair principle is unrealistic, considering the very burdensome changes that a public PLA typically imposes on an open shop contractorâ€^TMs operations.

The Councils are also considering factors for the contracting officer to consider, on a project-by-project basis, in determining whether use of a project labor agreement will be in the best interest of the federal government. The Councils welcome public comment on the factors that should be considered, such as the difficulty of coordinating multiple contracts in the absence of a project labor agreement, or the importance of timely project completion. If you have suggestions on such factors that AGC should point out, please let us know.

Key Senate staff has indicated that S. 1005, the Water Infrastructure Financing Act of 2009, could be up for a vote for the full Senateâ€^TMs consideration as early as next week. S.1005 authorizes $39.191 billion for EPA water infrastructure programs over the next five years, including: $20 billion for the Clean Water State Revolving Fund Program and $14.7 billion for the Drinking Water State Revolving Fund Program.

Other key programs funded in the bill include $1.8 billion for Sewer Overflow Grants, $1.43 billion for the Critical Drinking Water Infrastructure Grant Program, grants for reducing lead in drinking water and technical assistance for small, rural and disadvantaged communities.

S.1005 is the result of a true bi-partisan effort in the Senate Environment & Public Works Committee and AGC members are encouraged to contact their senators and urge their support of S.1005 by using the AGC Legislative Action Center.

AGC Highway and Transportation Division Chairman Don Weaver, Weaver Bailey Contractors (El Paso, Ark.), testified today before the House Ways and Means Committee asking for action to ensure that the Highway Trust Fund has sufficient revenue to reimburse states for on-going construction contracts through the end of fiscal year 2009 and into 2010. Weaver also pointed out the need to enact a six year transportation reauthorization measure and to provide sufficient revenue to address the nation's growing transportation infrastructure deficit.

Weaver's testimony recommended that the federal highway user fee be increased by 18 cents to return the purchasing power that has been lost due to inflation in construction materials since the fee last increased in 1993. AGC's testimony also called for creation of a federal commission to set and raise highway user fee rates in the future and called for increased use of tolling, private funding and other revenue sources to supplement user fees. "Our highways are crowded and crumbling while our country is growing and demanding," he said. "Increased investment is necessary."

The Senate Banking and Commerce Committees have joined the Environment and Public Works Committee in approving legislation to extend highway and transit program spending authorization through March 2011. Still to act is the Finance Committee, which must provide the revenue needed to keep the Highway Trust Fund solvent for the next eighteen months.

Committee Chairman Max Baucus (D-Mont.) has introduced legislation that would transfer $27 billion from the general fund to the Highway Trust Fund. That legislation, once approved by the committee, will be consolidated with the 18-month authorization provisions and considered by the Senate sometime before its summer recess begins.

No legislation to provide an authorization extension has been introduced in the House. Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) asked the Ways and Means Committee today to instead provide a $3 billion general fund transfer to the HTF to allow FHWA to continue to reimburse states through the end of the fiscal year. Chairman Oberstar would prefer to enact a six-year authorization bill when the House returns from the summer recess and believes an 18-month extension will undermine those efforts.

This week, over 125 contractors traveled to Washington, D.C. to attend the 2009 AGC Safety and Health Committee Meeting.  In addition to the networking opportunities and forums with federal agencies, attendees received updates on legislative issues that directly affect the safety and health professionals in the construction industry and visited their congressional delegations.

During the congressional visits, the safety and health professionals addressed the industry and AGC's strong and lasting commitment to safety, while also stressing the importance of taking a cooperative approach to safety. Cooperative relationships between the construction industry and OSHA help promote safe and healthy work environments. The attendees also advocated for improving highway work zone safety programs.

Jack Mills, President of Plum Contracting, Inc., located in Greensburg, Pennsylvania, testified today before the House Small Business Committee's Subcommittee on Investigations and Oversight on the upcoming surface transportation reauthorization bill.  Mills testified on behalf of AGC and called on Congress to pass a multi-year bill to replace SAFETEA-LU, set to expire on September 30, as well as an immediate fix to ensure that the Highway Trust Fund has the cash balance it needs to continue making daily reimbursements to state departments of transportation.  

The U.S. Department of Transportation has found that the balance of the fund will fall below the minimum cash level necessary to make daily payments by the end of August.  Mills explained the cash flow implications that contractors would face under this circumstance.  U.S. DOT and the American Association of State Highway and Transportation Officials (AASHTO) have estimated that the fund needs an additional $7-8 billion to finish fiscal year 2009 and an additional $10 billion for fiscal year 2010.  

Congress is also currently considering whether to pass an extension of SAFETEA-LU of up to 18 months in lieu of multi-year reauthorization bill.  The Administration supports an 18-month extension, and the Senate Environment and Public Works Committee approved such a measure on Wednesday.  Mills urged Congress to reject an 18-month extension and to continue working towards a multi-year bill.  Mills called on Congress to boost investment in surface transportation funded by an increase in the motor fuels user fee, as well as improved highway work zone safety provisions and incentives to contractors to retrofit their diesel-powered equipment.

During the hearing, Subcommittee Chairman Jason Altmire (D-Pa.) and Ranking Member Mary Fallin (R-Okla.) indicated their opposition to an 18-month extension.  Both are also members of the Transportation and Infrastructure Committee, which is currently debating a multi-year reauthorization bill, the Surface Transportation Authorization Act.

On the eastern front of the U.S. Capitol Representative Earl Blumenauer (D-Ore.) announced the introduction of bipartisan legislation to establish a Water Trust Fund. The "Water Protection and Reinvestment Act," H.R.3202, establishes a $10 billion annual fund for repairing America's corroded pipes and overburdened sewer systems, which pose serious health, environmental and security consequences.

For a summary of the legislation click here.

Establishing a "Trust Fund" for clean water and drinking water infrastructure is a top legislative priority for AGC of America and will address the serious gap in water infrastructure investment, which is estimated at $400-600 billion dollars over the next 20 years. This legislation is the result of years of work by AGC and the WIN Coalition and we are encouraged that the legislation has finally been introduced.  The goal of H.R. 3202 is to raise at least $10 billion annually thorough a series of user fees on bottled beverages, pharmaceuticals, flushables and other sources

AGC CEO Steve Sandherr participated in the event and stated, "While our water infrastructure is often out of sight and out of mind, failures in the system threaten our health, our environment and our economy. That is why the 33,000 member companies of the Associated General Contractors of America, along with their millions of employees and families, support establishing a Water Trust Fund and doing it now." Read AGC's official statement here

This legislation is subject to the jurisdiction of several congressional committees and AGC will continue to work with the WIN Coalition and other industry and congressional allies to ensure this legislation is successful and based on sound policy

AGC Vice President Kris Young, President and CEO of Miller the Driller in Des Moines, Iowa, testified before the House Transportation and Infrastructure Subcommittee on Water and Natural Resources  regarding the GAO report titled "Opportunities and Challenges in the Creation of a Clean Water Trust Fund."

Young voiced AGC of America's support of a "trust fund" for water infrastructure, and shared a contractor's perspective on the funding challenges that local communities face in replacing and rehabilitating drinking water and wastewater infrastructure. In her testimony, Young stated that often a contractor is not called until disaster strikes, citing frequent infrastructure failures in her local community. Young also pointed out the high unemployment in the construction industry and referenced AGC research on how infrastructure investment spurs economic growth and provides employment for construction workers and numerous other industries.

Young also cited the precedent for using trust funds to tackle national infrastructure priorities and that financing water infrastructure through a trust fund would have several advantages over general fund financing. This is because the funding stream would not be subject to the vagaries of the annual appropriations process, thereby providing the certainty that state and local officials need to commit to long-term infrastructure projects. Additionally, Young stated that the revenue sources for a trust fund must be defensible and supported by the public.

Young also discussed the importance of educating the public about our water infrastructure needs and highlighted AGC's efforts to do so with the Liquid Assets documentary. Several other witnesses including the National Association of Clean Water Agencies, Maryland Department of the Environment, and the American Society of Civil Engineers testified in support of the trust fund concept

For a summary of the hearing content, witness testimonies and video of the hearing, click here.

The Department of Homeland Security (DHS) on July 8 announced the Administration's intent to "push ahead with full implementation" of a rule requiring federal contractors to use the E-Verify system to verify employees' authorization to work in the U.S.  The E-Verify rule will apply to federal solicitations and contract awards government-wide beginning September 8.  At the same time, DHS announced its intent to issue a new regulation rescinding a rule establishing procedures for employers to follow upon receipt of a "no-match letter" from the Social Security Administration (SSA) or DHS.

For background information on E-Verify and No-Match, click here.

AGC will monitor all related litigation and legislation and will report on significant developments.

Meanwhile, further guidance on immigration compliance is available in an MP3 download of a live educational session held at AGC's Annual HR Professionals Conference in June 2008.  An immigration law update will also be provided at AGC's next HR Professionals Conference, which will take place October 27-29, in Atlanta, GA.  Click here for conference details and registration.  For additional resources and for information on immigration reform efforts, click here.