The Department of Veterans Affairs Office of Construction and Facilities Management (CFM) is conducting a series of surveys regarding the use of project labor agreement (PLAs) on various projects.  CFM is asking contractors to respond to the questionnaire for certain projects in Houston, Texas, Palo Alto, Calif., and San Juan, Puerto Rico, by June 4.  AGC encourages interested contractors to complete the survey and provide CFM with a clear idea of the impact that a government-mandated PLA would have on the construction of federal projects.

The survey, which is included with individual job solicitations. asks the following questions:

1. Is your company familiar with Project Labor Agreement (PLA) used on construction projects? Yes/No Comments
2. Would your company likely submit a proposal for the VA construction solicitation that requires the use of a PLA? Yes/No Comments:
3. If VA requires a PLA, would your proposed construction cost likely to increase? Yes/No Comments
4. Does the VA requirement to use of a PLA on a construction project restrict competition? Yes/No Comments
5. Do you expect subcontractor resistance should VA requires the use of a PLA on this construction solicitation? Yes/No Comments
6. Do you have additional comments regarding the use of a PLA for this project?

For talking points on PLAs, click here.  For information on the final rule implementing President Obama's executive order on PLAs, including a link to AGC's comments, click here.

For more information, please contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

An Advance Notice of Proposed Rulemaking (ANPR) was issued May 13 seeking input on how the government can best implement a policy of posting government contracts online. FAR Case 2009-004, Enhancing Contract Transparency, notes that while no policy mandating the online posting of contracts exists yet, the Councils anticipate that one could be coming soon.

They point to the general tone of several of President Obama's memoranda (including the Freedom of Information Act Memorandum and the Transparency and Open Government Memorandum) and other points of executive branch policy and conclude that given the shift to more open government, a requirement to post government contracts online is coming. The ANPR asks for suggestions for how best to revise the FAR to facilitate such posting without violating statutory and regulatory prohibitions against disclosing protected information that belongs to the government or to contractors.

AGC will closely monitor the development of this ANPR and will soon solicit ideas from contractors on how to proceed.

If you would like to submit comments on this rule to AGC, please contact Marco Giamberadino at giamberm@agc.org or (703) 837-5325.

On May 6, 2010, Senators Russ Feingold (D-Wis.) and Tom Coburn (R-Okla.) introduced the 2010 Federal Contracting and Oversight Act. The bill is designed to prevent contractors with poor performance records from receiving government contracts and give members of Congress and federal agency contracting officers more information about companies by expanding the reach of the recently enacted Federal Awardee Performance and Integrity Information System (FAPIIS). The legislation would double the length of time contractors' past performance records remain in a government database and broaden the types of information stored from five to ten years.

The bill would condition the award of a federal contract on fulfillment of the reporting requirements for the FAPIIS database. It would also require federal agencies to submit:

• An annual audit of the contract files required under the Clean Contracting Act of 2008 to ensure that federal contracting officials are appropriately consulting and considering the FAPIIS database prior to making contract award decisions.
• An annual report on overlap between companies that have been suspended or debarred and those that are receiving federal contracts.
• An assessment on the need and feasibility of developing a new, more effective system of uniquely identifying federal contractors.
• An assessment of the feasibility and possible approaches to integrating and consolidating the wide range of existing contracting information databases into a single searchable linked network for contracting officers, members of Congress, and appropriate government officials.

The bill would direct the Office of Management and Budget to integrate and consolidate nine government-wide contractor information databases into a single searchable and linked network. Such databases include: USASpending.gov, which tracks all contract spending; Federal Business Opportunities, which lists contracts up for bid; and the Excluded Parties List System, a site of all suspended and debarred firms.

AGC is especially concerned that this legislation would double the length of time such information would be retained in the FAPIIS and expand the database to include information concerning all administrative proceedings against contractors. We are also concerned that the database would be required to track federal-aid contracts as well as federal contracts. AGC will continue meeting with members of Congress and other key procurement leaders to relay these concerns and explain the impact on the construction industry.

For more information, please contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

Annual Meeting with Major Construction Agencies Makes Major Advances

The 2010 AGC Federal Contractors Conference was another major success, highlighting the excellent relationships that AGC maintains with the federal agencies on behalf of its members. The meeting was held April 26-29, 2010, in Washington, D.C. Government representatives from over 20 federal construction agencies participated, including the Army Corps of Engineers, Federal Highway Administration, Naval Facilities Engineering Command, Environmental Protection Agency, General Services Administration and Air Force.

The Conference broke new ground by expanding to three tracks of meeting sessions for contractors based on the type of work procured by the federal government: federal facilities, water infrastructure, and highway and transportation infrastructure. Agencies participating in those sessions included the Federal Highway Administration and the Environmental Protection Agency.

Federal and Heavy Construction Division Chairman Dan Fordice welcomed such honored guests as Lieutenant General Robert Van Antwerp, Commander and Chief of Engineers for the Army Corps of Engineers (USACE); Rear Admiral Greg Shear, NAVFAC Commander and Chief of Civil Engineers; Major General Tim Byers, the Air Force Civil Engineer; and Small Business Assistant Administrator Joseph Jordan. Additional guests included Major General Bo Temple, Deputy Commanding General;  Robert Slockbower, Director of Military Programs, USACE; Joseph Gott, Chief Engineer, NAVFAC; and Assistant Commissioner of Capital Improvements William Guerin of the General Services Administration. Other agencies represented included the Federal Bureau of Prisons, Forest Service, Small Business Administration, Department of Veterans Affairs, Department of Energy, Coast Guard, Agency for International Development, Bureau of Reclamation, Department of Commerce, Environmental Protection Agency, Rural Utilities Services, Federal Transit Administration, Federal Railroad Administration, Federal Highway Administration, Office of Federal Lands Highway, and the Federal Aviation Administration.

The AGC Federal Owners Advisory Council held its annual meeting at the Conference as well. The Council's membership includes key decision makers from 19 federal agencies, as well as AGC Federal and Heavy Division leadership and committee chairs. This year's session featured robust discussions on implementation of the American Recovery and Reinvestment Act, the Obama Administration's final rulemaking on Project Labor Agreements, long-term goals for the use of Building Information Modeling (BIM), and achieving small business participation goals. Additional topics of discussion included developing a consistent process for administrating past performance ratings, and new federal workforce development initiatives.

Conference attendees also received a special address from Lieutenant General Robert Van Antwerp. His presentation was followed by the signing of a new AGC-USACE Partnering Agreement, the first signed since 2001. AGC president Ted Aadland welcomed LTG Van Antwerp and signed the agreement as well. In addition, AGC NAVFAC Committee Chairman Tex Barnhart presented RADM Shear with the Division's Federal Construction Excellence Award, commemorating his distinguished career with NAVFAC and the agency's successful partnering with the AGC.

Finally, Federal & Heavy Construction Division Members launched an all out offensive on the legislative front during the meeting. As part of a series of organized Capitol Hill visits, AGC members participated in providing information on a range of issues, including comprehensive immigration reform, reauthorization of the Water Resources Development Act, legislation to repeal the imposition of the three percent withholding tax on government contractors, legislation authorizing the creation of a Clean Water Trust Fund, and passage of a new transportation authorization bill.

Presentations from the conference will be available online soon.

For additional information, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

The Obama Administration is currently reviewing a proposal supported by the Center for American Progress and the National Employment Law Project, which claims that the federal contracting market is financing millions of poverty wage jobs across our economy, and supporting employers that are significant or repeat violators of workplace, tax and other laws. To address these allegations, these organizations are calling on the administration to establish a range of "responsible contractor" policies to ensure that federal contracting promotes the creation of good jobs by offering bid preferences to businesses that engage in "responsible" employment practices.

The recommendations of these organizations specifically call for the following changes to the federal procurement system:

• Institute more rigorous responsibility screening of prospective bidders to ensure that federal contracts are not awarded to employers that are significant or repeat violators of workplace, tax or other laws.
• Establish a preference for employers that provide good jobs in the contractor selection process, prioritizing firms that provide "living wages," health benefits and paid sick days.
• Quickly bring on-line, expand and improve the newly authorized national contractor misconduct database mandated by the 2008 National Defense Authorization Act.
• Strengthen monitoring and enforcement of contractors' compliance with existing and new workplace standards.

AGC sent a letter to the Obama Administration which cautioned them to reject calls to impose new contracting rules that would allow for blacklisting of companies based on arbitrary reasons, false accusations and unproven anonymous complaints.

The proposed changes, referred to as 'High Road' contracting rules, also have the potential to delay countless federal construction projects by adding new levels of time-consuming and costly bureaucratic reviews.

If the White House chooses to move towards implementing these recommendations, it is very likely it will be done through Executive Order and then a change to the Federal Acquisition Regulation. AGC is closely monitoring this situation and evaluating the recommendations of these reports and their potential effect on the federal construction market.

To read a copy of the letter, click here.

Read AGC's press release here.

For more information, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

The Federal Acquisition Regulation (FAR) Council has issued a final rule implementing Executive Order 13502on the use of project labor agreements  (PLAs) on federal construction projects, giving contracting agencies broad discretion to determine whether to impose a PLA mandate on a project, when the PLA should be executed, and what terms the PLA will contain.

The rule implements the executive order's stated policy to "encourage" executive agencies to "consider" requiring the use of project labor agreements in connection with large-scale construction projects, which are defined as projects with a total cost to the federal government of $25 million or more.  Mimicking the Executive Order, the rule provides that an agency "may" require that every construction contractor and subcontractor on a particular project agree to negotiate or become a party to a PLA if the agency decides that use of a PLA will (1) advance the government's interest in achieving economy and efficiency in federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters; and (2) be consistent with the law.  The rule adds several other factors that agencies may consider in their project-by-project evaluation of whether a PLA is appropriate, but it neither requires the agencies to consider those factors nor limits their consideration to those factors.  The added factors include whether:

1. The project will require multiple construction contractors and/or subcontractors employing workers in multiple crafts or trades;
2. There is a shortage of skilled labor in the region in which the construction project will be sited;
3. Completion of the project will require an extended period of time;
4. PLAs have been used on comparable projects undertaken by federal, state, municipal, or private entities in the geographic area of the project;
5. A PLA will promote the agency's long-term program interests, such as facilitating the training of a skilled workforce to meet the agency's future construction needs; and
6. Any other factors that the agency decides are appropriate.

If an agency decides that it will impose a PLA, then the rule provides the agency with three options for going forward.  The agency may require submission of an executed PLA (1) when offers are due; (2) prior to award, by the apparent successful offeror; or (3) after award.  If the agency decides to permit execution of the PLA after award, then the contractor "will be required to submit an executed copy of the agreement to the contracting officer."  This is a troubling change from the proposed rule, which required only that the contractor "bargain in good faith to a PLA."  Requiring settlement of a contract rather than just good-faith bargaining may give the unions involved extraordinary bargaining leverage, as the contractor must execute a PLA or it will be in breach of its contract with the government.

Moreover, the rule allows agencies to include in the contract solicitation specific PLA terms and conditions and to require the successful offeror to become a party to a PLA containing those terms and conditions.  This is another troubling change from the proposed rule, which expressly prohibited the contracting agency from participating in the negotiations of any PLA.  The final rule notes that that the agency "may seek the views of, confer with, and exchange information with prospective bidders and union representatives" in its efforts to identify appropriate terms and conditions and to facilitate agreement on those terms and conditions.

Every PLA must meet certain minimum requirements like those established in the executive order:

1. Bind all contractors and subcontractors engaged in construction on the construction project to comply with the project labor agreement;
2. Allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;
3. Contain guarantees against strikes, lockouts, and similar job disruptions;
4. Set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the term of the project labor agreement;
5. Provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and
6. Include any additional requirements as the agency deems necessary to satisfy its needs.

On a positive note, the FAR Council adopted AGC's recommendations that the final rule clarify that agencies must notify contractors of a PLA mandate prior to contract award and that they are prohibited from initiating a PLA mandate after contract award.  The FAR Council also encouraged agencies to make their evaluations about whether to impose a PLA mandate early in each project's planning process.

The final rule is expressly limited to direct federal contracts over $25 million, as covered in the executive order.  The FAR Council did not (and could not) expand coverage to projects below that cost threshold or to federally funded projects, although it points out that the executive order states that agencies are not precluded from using PLAs on projects not covered by the order.

"We appreciate that the administration accepted our counsel to avoid retroactively imposing government-mandated labor agreements once contracts have already been awarded," responded AGC Chief Executive Officer Stephen Sandherr .  However, we continue to strongly oppose any effort by government officials, who often have little or no experience in construction labor relations, to undermine existing relationships between contractors and construction workers by imposing project labor agreements.  Any comprehensive review of existing construction worker benefits and current federal contracting guidelines will prove that government mandated labor agreements are as unnecessary as they are costly and counterproductive.  That is why we will continue to encourage agency officials to exercise the broad latitude provided by these rules to avoid imposing these agreements."

Read AGC's statement here.

For more information on the rule, contact Denise Gold at (703) 837-5326 or goldd@agc.org, or Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.

On April 6, 2009 President Obama issued a new memorandum calling for federal agencies to further intensify their efforts to improved reporting compliance by prime recipients of Recovery Act funds. The memo directs those agencies to take appropriate action by terminating awards; pursuing measures such as suspension and debarment; reclaiming funds; and considering, initiating, and implementing punitive actions.

The Recovery Act requires contractors, grantees and loan recipients to submit to FederalReporting.gov quarterly information on how they are spending the funds. During the most recent quarter - the final three months of 2009 - more than 1,000 recipients failed to file the reports. More than 300 of those recipients made the board's "repeat offender" list for also neglecting to file during the initial reporting cycle last October.

According to the memo, OMB Director Peter Orszag will, within the next 30 days, review and update the administration's Recovery Act reporting guidance to include additional agency actions and oversight strategies.

The current reporting period began on April 1 and ends April 10. Recipients will have until April 29 to make corrections to their reports. The third batch of recipient data will be published on Recovery.gov on April 30.

For more information on the rule, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.