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On April 27, ABC sent a letter to a congressional subcommittee warning of the negative impacts of imposing government-mandated project labor agreements on infrastructure spending.

Citing construction-related economic data and trends, including the construction industry shortage of 650,000 workers in 2022, ABC wrote that Congress should recognize that more regulations and less worker freedom will make it harder to fill any potential jobs created by the $1.2 trillion Infrastructure Investment and Jobs Act of 2021.

In the letter, sent to the U.S. House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit for its hearing, “Examining Workforce Development and Job Creation in Surface Transportation Construction,” ABC advocated against President Joe Biden’s Executive Order 14063 requiring project labor agreements on federal construction contracts greater than $35 million. Government-mandated PLAs increase the cost of construction by 12% to 20%, reduce competition by excluding 87.4% of the construction industry workforce and steal up to 34% of wages from the few nonunion workers allowed to work on a PLA jobsite.

In addition to ABC’s hearing comment letter, the following letters were also entered into the record at the hearing:

• A letter sent to President Biden by 17 Republican governors, led by Asa Hutchinson of Arkansas and Bill Lee of Tennessee, opposing the Biden administration’s policies promoting government-mandated project labor agreements on taxpayer-funded construction projects.
• A letter signed by 60 members of the House to President Biden saying that PLA mandates and preferences will “deny critical construction jobs to local workers and small businesses,” urging the White House to refrain from “attaching strings to infrastructure funding that create discriminatory barriers to recovery.”
• A letter to the White House with more than 1,200 signatures from ABC members and chapters voicing strong opposition to President Biden’s PLA EO. The letter also lays out concerns with other federal agency policies promoting PLAs on federally assisted construction projects, which would affect the allocation of funds under the $1.2 trillion bipartisan infrastructure package that was signed into law last year, as well as other laws providing funds for state and local governments to improve its infrastructure.

During the hearing, Rep. Scott Perry, R-Pa., discussed the harm caused by President Biden’s executive order mandating PLAs and the need to reform Davis-Bacon prevailing wage laws. Watch Rep. Perry’s statement and question on the topic here or below.

Additionally, Rep. Brian Babin, R-Texas, highlighted his concern over the PLA executive order, stating, “At a conference last month, Sen. Chuck Schumer stated that, in his role as majority leader of the Senate, he will fight to ensure that ‘every effing federal dollar only pays for union labor,’ further emphasizing his support for ‘PLAs everywhere.’ For everyone’s awareness, IIJA says nothing about project labor agreements and definitely nothing about every dollar only paying for union labor. These comments are pretty concerning, especially to the 87.4% of nonunion workers in that construction arena.” Watch Rep. Babin’s statement on the topic here or below.

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On April 18, the Biden administration’s Office of Management and Budget issued a memo providing initial implementation guidance to federal agencies on the application of a “Buy America” preference for materials used in infrastructure projects.

The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58), enacted in November 2021, expanded and made significant changes to Buy America requirements for federally funded infrastructure projects.

The OMB memo states that by May 14, 2022, agencies must ensure that all applicable programs comply with section 70914 of the IIJA, including by the incorporation of a Buy America preference in the terms and conditions of each award with an infrastructure project.

The IILA requires the following Buy America preferences:

(1) All iron and steel used in the project are produced in the United States. This means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

(2) All manufactured products used in the project are produced in the United States. This means the manufactured product was manufactured in the United States, and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55% of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.

(3) All construction materials are manufactured in the United States. This means that all manufacturing. processes for the construction material occurred in the United States.

The OMB guidance “applies to all federal financial assistance as defined in section 200.1 of title 2, Code of Federal Regulations—whether or not funded through the IIJA—where funds are appropriated or otherwise made available and used for a project for infrastructure.”

The memo outlines a Buy America waiver system for federal agencies to follow under certain circumstances.   

Buy America requirements previously applied to iron, steel, and certain manufactured goods. The IIJA broadens coverage to include nonferrous metals, such as copper used in electric wiring; plastic- and polymer-based products; glass, including optical fiber; and certain other construction materials, such as lumber and drywall.

April 20, OMB released a notice of listening sessions that will take place on April 18 from 10:30 a.m.-12 p.m. ET, focused on nonferrous metals and plastic and polymer-based products, and April 28 from 2-3:30 p.m. ET, focused on glass, lumber, drywall and all other products.

The April 20 OMB notice also includes a request for information on Buy America requirements. The Federal Acquisition Regulatory Council, of which OMB is a member, must provide a definition of “end product manufactured in the United States” for purposes of the new Buy America requirements, and OMB is seeking input from stakeholders to ensure regulatory clarity in the final definition.

Key topics OMB is seeking feedback on include:

• Which materials should be included as “construction materials.”
• How to distinguish between “construction materials” and “manufactured products.”
• The current/projected capacity of United States manufacturers, and whether they will be able to meet demand.

Written responses to the RFI must be submitted electronically via regulations.gov. The comment deadline will be 30 days from when the RFI is published in the Federal Register later this week or early next week.

While ABC supports strategies to expand domestic jobs and manufacturing to avoid global supply chain disruptions and capture economic benefits within America, Buy America policies need to be balanced with safeguards against increased costs and/or delays of infrastructure projects funded by the federal government and ultimately taxpayers.

ABC is reviewing the OMB memo and RFI to assess its impact on the construction industry and its global supply chain. ABC will be soliciting feedback from members and industry stakeholders and participating in the regulatory process.

Prior to this proposal, it was already unclear whether taxpayers could hope to gain a substantial rate of return on infrastructure investment given the intense increases already sustained in construction input costs over the past two years. The United States is the world’s largest steel importer; more than 31 million net tons was imported in 2021. Iron and steel prices are already up more than 50% over the past year, and restricting infrastructure projects to U.S.-produced iron and steel means taxpayers will get less infrastructure per dollar spent.

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On April 19, the Council on Environmental Quality announced its final rule revising the implementation regulations of the National Environmental Policy Act, which will cause needless delays for small businesses and increase costs for taxpayers. Under former President Trump, CEQ issued an ABC-supported 2020 final rule that modernized the federal environmental review process and provided a coordinated, predictable and transparent method to streamline permitting under NEPA.

Following the release of the rule, ABC issued the following statement:

Unfortunately, the Biden administration’s rulemaking reverses the much-needed efforts of the previous administration to update and streamline the federal environmental review and permitting process. Modernizing this process would be a bipartisan win, as both sides of the aisle have long identified the need for faster, more efficient permitting. While Congress recently passed legislation providing an unprecedented investment in our nation’s infrastructure, including language specifically calling for streamlined environmental review, today’s rulemaking will delay the completion of these critical projects and increase costs for the construction industry and taxpayers without providing meaningful environmental benefits.

The new rule makes the following changes to the 2020 NEPA rules:

1. Restores the requirement that federal agencies evaluate all the relevant environmental impacts of the decisions they are making;
2. Restores the full authority of agencies to work with communities to develop and analyze alternative approaches that could minimize environmental and public health costs; and
3. Establishes CEQ’s NEPA regulations as a floor, rather than a ceiling, for the environmental review standards that federal agencies should meet.

The final rule has an effective date of May 20, 2022. Federal agencies now have until Sept. 14, 2023, to implement the changes outlined above into their NEPA regulations.

Previously, ABC filed comments with a coalition of stakeholders to CEQ in response to its notice of proposed rulemaking. The coalition urged CEQ to retain several provisions of the 2020 final rule, which provided needed clarity and maintained consistency with the original 1978 NEPA rulemaking and decades of case law. Additionally, the coalition expressed concerns that the proposed revisions would hinder NEPA’s goal of more informed agency decisions.

Unfortunately, CEQ ignored these concerns and left the proposed rule largely unchanged in its final rulemaking. The only significant change to the proposed rule is to add language specifying that environmental impacts that agencies consider must be “reasonably foreseeable.” This change, which ABC advocated for in the coalition comments, provides some limitations on environmental impacts federal agencies can consider. Overall, the final rule will have a negative impact on the environmental review process and likely lead to increased delays.

This rule is the first step of a two-step process to revise the 2020 NEPA regulations. While phase one will implement a narrow set of changes to the NEPA regulations, phase two will propose broader changes to the final rulemaking.

ABC has supported legislative and regulatory efforts to modernize and create a more efficient NEPA review process, including support for H.R. 2515, the BUILDER Act and S.717, the UNSHACKLE Act. In March 2021, ABC joined dozens of members of the Unlock American Investment Coalition in calling on Congress to improve and modernize the federal permitting process under NEPA.

To learn more, see the coalition’s fact sheet.

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