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During his address to the nation, President Joe Biden expressed his support for the Protecting the Right to Organize, saying, “Let’s pass the PRO Act. When a majority of workers want to unionize, they shouldn’t be stopped.” ABC issued a statement criticizing the president’s anti-merit shop agenda three minutes later.

“The construction industry is currently up against historic global supply chain disruptions, rising materials prices, a workforce shortage of 650,000 and regulatory chokeholds,” said Michael Bellaman, ABC president and CEO, in the statement. “To make matters worse, ABC’s 21,000 members have faced a barrage of anti-growth regulatory actions and policies from the Biden administration that have driven up construction costs, created barriers to job creation and damaged the American economy.

“From President Biden’s support of the devastating Protecting the Right to Organize Act to Executive Order 14063, which mandates the use of anti-competitive project labor agreements on large-scale public works projects, and the union-favoring COMPETES Act, this administration has spent its first year in office relentlessly advocating for policies that steer construction contracts to unionized companies and workers. Yet 87.4% of the construction workforce has chosen not to join a union. President Biden must consider the negative conditions he is creating for the industry that wants to build and modernize America’s roads, bridges, airports and affordable housing under the bipartisan 2021 Infrastructure Investment and Jobs Act and other legislation financing federal and federally assisted construction projects.

“The Biden administration and Congress must put aside partisan politics and the influences of special interest donors and embrace bipartisan solutions that give all 7.5 million workers in the construction industry the opportunity to rebuild America.”

ABC has been resilient in opposing the PRO Act through the Free Enterprise Alliance and the ABC-led Coalition for a Democratic Workplace.  

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On Feb. 11, the ABC-led Coalition for a Democratic Workplace filed an amicus brief before the National Labor Relations Board in The Atlanta Opera, a case dealing with the independent contractor standard.

In the brief CDW called on the NLRB to keep its 2019 SuperShuttle standard in place, which “correctly explained how the Board’s prior rulings in FedEx I and II ‘fundamentally shifted the independent contractor analysis, for implicit policy-based reasons, to one of economic realities…,’ thereby violating the National Labor Relations Act and multiple court rulings.” CDW also cautioned the board against overruling its SuperShuttle decision, which would violate the Act and deprive many independent contractors of their preferred flexible work methods and entrepreneurial opportunities.

The brief was one of 39 filed with the board, a much larger number than normally filed in board cases.

CDW’s statement on the independent contractor case brief can be read here.

On Feb. 15, CDW sent a second letter to the NLRB calling for members David M. Prouty and Gwynne Wilcox to be recused from any cases involving the Service Employees Internal Union or any rulemaking dealing with the joint employer standard. Both Wilcox and Prouty recently worked for the SEIU and specifically advocated on the union’s behalf on joint employer issues.

CDW filed its original letter in January. In both letters CDW expressed concerns about Wilcox and Prouty’s ability to remain impartial when dealing with these cases and policies. CDW also requested information related to any determination by the NLRB’s Designated Ethics Official that their past employment and work on the joint employer standard do not present a conflict of interest.

CDW’s statement on the letter concerning Wilcox and Prouty can be read here.

ABC will continue to provide important updates on these important issues in Newsline.

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On Feb. 23, ABC and a coalition of 19 associations and organizations representing the construction industry and business community sent Congress a letter of support for the Fair and Open Competition Act (S. 403/H.R. 1284), sponsored by Sen. Todd Young, R-Ind. and Rep. Ted Budd, R-N.C.

The Fair and Open Competition Act would prevent federal agencies and recipients of federal assistance from requiring or encouraging contractors to sign a controversial project labor agreement as a condition of winning a federal or federally assisted, taxpayer-funded construction contract. 

“Co-sponsoring the Fair and Open Competition Act is critical in light of President Biden’s Feb. 4, 2022, E.O. 14063, which requires PLAs on federal construction projects of $35 million or more,” the letter states.  “PLA mandates exacerbate the construction industry’s skilled labor shortage of 650,000 workers in 2022 by unfairly discouraging competition from quality nonunion contractors and their employees, who comprise 87.4% of the private U.S. construction industry workforce.”

“Support for the FOCA bill would also protect state and local construction projects receiving federal money from government-mandated PLA schemes,” said Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs.

The Biden administration is “promoting PLAs on federally assisted projects procured by state and local governments competing for federal dollars authorized and funded through bipartisan legislation—like the Infrastructure Investments and Jobs Act of 2021 and other bills—that do not require or encourage the use of PLAs on taxpayer-funded construction projects,” the letter states.

PLAs reduce competition and increase costs and are likely to result in delays, poor local hiring outcomes and litigation. Multiple studies of taxpayer-funded affordable housing and school construction projects found that government PLA mandates increase the cost of construction by 12% to 20% compared to similar non-PLA projects already subjected to prevailing wage regulations. Simply put, hardworking taxpayers get less and pay more when PLAs are encouraged or mandated during the procurement of federal and federally assisted construction projects.

The coalition concluded that opposing  President Biden’s pro-PLA EO and any legislative and regulatory language promoting controversial government-mandated PLAs on spending bills, coupled with support of the Fair and Open Competition Act, will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, decrease construction costs and spread the job-creating benefits of federal and federally funded contracts throughout the construction industry.”

ABC members and construction industry stakeholders can learn more about EO 14063 here and urge their lawmakers to cosponsor the FOCA legislation via this ABC grassroots campaign.

Learn more about government-mandated PLAs at BuildAmericaLocal.com.

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The Russian invasion of Ukraine will have three first-order impacts on the U.S. construction industry. The first relates to materials prices, which are already sky-high and have induced some project owners to delay project start dates.

The Russians are significant producers of a number of key metals, including copper, aluminum, palladium, platinum and nickel. Russia produces about 10% of the world’s nickel, a key input into stainless steel. Contractors have used stainless steel in construction for more than a century. Steel mill product prices are up more than 110% over past year according to government data.

Approximately 40% of the world’s palladium is produced in Russia, a key input for catalytic converters and microchips. To the extent this invasion crimps the movement of palladium, existing microchip shortages could expand and vehicle and heavy equipment prices will be pushed higher.

The Russians are also significant producers of oil and natural gas. An increase in energy prices would exacerbate already-high transportation costs, pushing commodity prices even higher. In addition to rising international shipping rates, the cost of moving freight by truck in the United States is up more than 22% since pandemic onset. Further price increases would put significant pressure on already diminished contractor margins as construction input prices are already elevated, having risen nearly 24% during the year ending January 2022.

The second major impact relates to monetary policy. Coming into the crisis, the perception has been that the Federal Reserve would tighten monetary policy significantly in 2022. In the weeks preceding the invasion, markets were predicting the equivalent of seven to nine quarter-point rate hikes for the year. While the fed will raise rates this year, the economic dislocation and uncertainty generated by the Russian assault on Ukraine may eventually take one or two rate hikes off the table.

Lower interest rates are positive for construction, all things being equal, since it reduces the financing costs for project owners. They also help contractors keep debt service low as they finance equipment and other purchases.

The third impact relates to the nation’s defense sector, which will receive a significant bump in orders. Orders for planes, tanks and other forms of armament are already pouring into the likes of Lockheed Martin and General Dynamics from governments near and far.  Increased production often translates into industrial facility improvement and expansion. America is already in the midst of implementing a major infrastructure bill, and rapid growth within the nation’s defense sector will offer contractors additional work.

That will create both opportunities and challenges. Contractors are already wrestling with massive skills shortages. Ironically, the Russia-Ukraine conflict could result in even more work going forward, creating additional labor market strains in the process.

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The U.S. Department of Labor’s Wage and Hour Division is offering two free webinars on Feb. 28 and March 1 at 1:30 p.m. ET to provide an overview of the Davis-Bacon compliance requirements for projects receiving funding under the Infrastructure Investment and Jobs Act. It will also include a question-and-answer session. Participants will be able to submit questions in advance or during the webinar.

On Nov. 15, President Biden signed into law the IIJA, which includes an expansion of Davis-Bacon requirements. As the bill made its way through Congress, ABC continued to advocate for merit shop priorities in the legislation, ultimately remaining neutral on passage.

Read more about the webinar here, and register for either session here.

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ABC joined a diverse coalition of more than a dozen associations and organizations representing millions of workers in the construction industry in a letter to President Joe Biden opposing the administration’s new executive order mandating project labor agreements on federal construction contracts of $35 million or more. Executive Order 14063 was signed on Feb. 4.

In the letter, the coalition said the EO and similar policies applying to federally assisted projects “will undermine taxpayer investment in public works projects financed by the Infrastructure Investments and Jobs Act of 2021 and additional bipartisan legislation passed by Congress and signed into law free from language requiring or encouraging the use of PLAs.”

The coalition’s letter further states that the Biden administration’s rationale for pro-PLA policies ignores the fact that government-mandated PLAs can needlessly increase costs to taxpayers and limit competition for contracts by the best-quality contractors. Nine out of 10 contractors and workers are nonunion and are excluded from these contracts. Government-mandated PLAs have also resulted in delays, poor local hiring outcomes and litigation.

In addition, multiple studies of hundreds of taxpayer-funded affordable housing and school construction projects found that government-mandated PLAs increase the cost of construction by 12% to 20% compared to similar non-PLA projects already subjected to state prevailing wage regulations.

The coalition asked for the White House to promote win-win policies that ensure fair and open competition on taxpayer-funded construction projects that will ultimately result in savings to taxpayers, more opportunities for all qualified small, minority- and women-owned businesses in the construction industry and the completion of more quality infrastructure projects on time and on budget.

The coalition’s letter garnered national attention, including from The Hill and Reuters, which generated dozens of stories in media outlets around the country.

ABC has pushed back against the new EO since it was first issued. Read more about all of its efforts here. Read ABC’s detailed analysis of Executive Order 14063 here.

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On Feb. 4, the House of Representatives passed H.R. 4521, he America COMPETES Act by a vote of 222-210. The ABC-opposed bill is filled with anti-competitive provisions that would impose harmful labor policies, including instituting “card-check” provisions, expanding prevailing wage requirements and restricting access to the nation’s registered apprenticeship system for nonunion workers through the ABC-opposed National Apprenticeship Act.

The mostly party-line vote saw Rep. Adam Kinzinger, R-Ill., vote with Democrats while Rep. Stephanie Murphy, D-Fla., joined all other Republicans in opposition.

On Feb. 3, ABC sent a Key Vote letter to the House urging representatives to oppose this bill. The ABC-led Coalition for a Democratic Workplace also sent a letter to the House and released a statement highlighting the coalition’s opposition to the “card check” provision in the legislation.

The America COMPETES Act is the House version of the Senate-passed bill S. 1260, the United States Innovation and Competition Act. Importantly, although the Senate-passed version does include prevailing wage expansion, it does not include the other ABC-opposed provisions from the House bill. The pieces of legislation will now head to a conference committee to resolve differences before returning to both chambers for final passage.

ABC will continue to advocate against these anti-competitive provisions and keep members updated on this bill as it makes its way through the House and conference.

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On Feb. 7, ABC, as a member of the Waters Advocacy Coalition, filed comments on the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers’ proposed rule to revise the definition of “waters of the United States” applicable to all Clean Water Act programs. The rule would repeal the Trump administration Navigable Waters Protection Rule and codify a definition that reflects the pre-2015 regulatory regime that the agencies are currently implementing. Raising numerous important concerns, the coalition urged the agencies to withdraw the proposed rule, reconsider the rule while addressing the coalition’s concerns and reengaging stakeholders, and repropose a rule that adheres to the CWA and relevant U.S. Supreme Court precedent.

The comment letter states:

“WAC members have substantial interests in ensuring that federal CWA jurisdiction is exercised lawfully and in promoting national uniformity and consistency in the definition of what features are WOTUS. Their members must comply with the CWA’s prohibition against unauthorized ‘discharges’ into any areas that are ultimately deemed jurisdictional. Their projects and operations are all subject to regulation (to differing extents) under CWA Sections 402, 404, 401, 311, other provisions of the Act, and the state and local laws that protect water quality.

“In contrast with the Navigable Waters Protection Rule, which provided WAC members long-overdue certainty in describing what features are or are not WOTUS, the proposed rule codifies a return to unpredictable case-by-case determinations of jurisdiction by agency staff, thereby subjecting WAC members and landowners nationwide to considerable confusion about what features on their lands may be jurisdictional.

“This confusion deprives WAC members of notice of what the CWA requires and makes it impossible for WAC members to make informed decisions about the operation, logistics and finances of their businesses. Even worse, under the CWA, WAC members may be subjected to severe criminal and civil penalties and citizen suits.”

ABC and the coalition have consistently urged the agencies to define WOTUS in a way that:

• Gives appropriate weight to the explicit statutory policy to recognize, preserve and protect the states’ traditional and primary authority over land and water use;
• Adheres to the full Supreme Court precedent on the definition of WOTUS under the CWA;
• Gives effect to the term “navigable” in the statutory text;
• Draws clear lines between federal and state or tribal jurisdiction so that regulators and regulated entities can easily identify which features are subject to federal CWA jurisdiction; and
• Accounts for science but recognizes that the statutory text ultimately dictates jurisdiction.

The WAC continues to believe that the NWPR is an appropriate foundation for a durable and defensible rule. Rather than wiping out that rule in its entirety and replacing it with the flawed pre-2015 framework that prompted stakeholders to demand more clarity and certainty, the agencies should focus their efforts on revisions to the NWPR or related implementation guidance.

Finally, because the Supreme Court has decided to hear the case of Sackett v. Environmental Protection Agency, which challenges EPA’s overreach of its CWA jurisdiction, there is no sense in rushing through a rulemaking proceeding that codifies a standard that the Supreme Court could change or foreclose altogether.

ABC will continue to provide important updates on this important issue in Newsline.

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On Feb. 4, President Biden signed Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which mandates the use of PLAs on federal construction projects of $35 million or more in value.

ABC slammed the order in a statement: “This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects,” said Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs. .

ABC also said that the new policy will exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs and reduce opportunities for local contractors and skilled tradespeople.

Here is what you need to know about Executive Order 14063:

• The EO directs federal agencies to require PLAs on “federal construction projects within the United States for which the total estimated cost of the construction contract to the federal government is $35 million or more.”
• Senior federal agency officials may grant an exception to the PLA requirement only under a very narrow set of circumstances.
• The EO will trigger a Federal Acquisition Regulatory Council rulemaking. A proposed rule must be issued within 120 days of publication of the EO in the Federal Register. ABC will comment on the proposed rule and help ABC members do the same. A final rule will be issued after the FAR Council evaluates proposed rule comments from stakeholders and finalizes an effective date.
• Once issued, the final rule will rescind and replace President Obama’s pro-PLA EO 13502 and related FAR Council regulations.
• The order directs the departments of Defense and Labor, along with the Office of Management and Budget, to design “a training strategy for agency contracting officers to enable those officers to effectively implement this order.” In addition, “within 180 days of the date of the publication of proposed regulations,” they “shall provide a report to the Assistant to the President for Economic Policy and Director of the National Economic Council on the contents of the training strategy.”
• ABC anticipates federal contracting officers to be under tremendous pressure to mandate PLAs and the training to limit their ability to rightfully opt out of requiring PLAs.
• The EO does not affect federally assisted projects, although federal agencies like the departments of Transportation, Treasury, Interior and Agriculture have already been pushing PLAs on federally assisted construction projects through grant applications and other tactics independent of this EO, drawing the ire of GOP governors.
• According the text of the order, “This order shall be effective immediately and shall apply to all solicitations for contracts issued on or after the effective date of the final regulations issued by the FAR Council under section 8(a) of this order. For solicitations issued between the date of this order and the effective date of the final regulations issued by the FAR Council under section 8(a) of this order, or solicitations that have already been issued and are outstanding as of the date of this order, agencies are strongly encouraged, to the extent permitted by law, to comply with this order.”

Research has demonstrated that government-mandated PLAs increase construction costs by 12% to 20%, which results in fewer construction projects and improvements to roads, bridges, utilities, schools, affordable housing and clean energy projects. PLAs steer contracts to unionized contractors and workers at the expense of the best-quality nonunion contractors and workers who want to compete at the best price for taxpayers, said ABC. PLA mandates exclude almost 90% of the industry that choose not to join a union from being a part of taxpayer-funded construction.

ABC’s statement was included in national coverage from Fox Business, The Epoch Times, The Washington Times, NewsNation USA, Engineering News-Record, GovExec and Construction Dive, in addition to local coverage generated by chapters. ABC Illinois’s letter to the editor about the impact of the EO was published in The Telegraph, saying, “We cannot effectively rebuild our nation’s crumbling infrastructure, increase accountability, and reduce waste with anti-competitive and costly union-only PLAs. Come election time, voters will remember.”

ABC suspects the EO, at least on paper, is attempting to make it much more difficult to defeat federal PLA threats. Contracting officers can opt out of requiring a PLA only under a very narrow set of circumstances.

However, may take some time until the details and ultimate impact of the Biden administration’s pro-PLA policy harm the federal contracting community and taxpayers.  

“The EO is effective immediately, however, it will take months for a forthcoming rulemaking by the Federal Acquisition Regulatory Council to issue a final rule that will replace the federal government’s existing pro-PLA policy and incorporate the new Biden policy into new federal contracts,” said Brubeck.  “In the interim, it is possible that federal agencies will try to mandate PLAs immediately and ABC will be there to fight them, as we have successfully done on almost 2,000 large-scale federal contracts totaling more than $130 billion since 2009.”

ABC is evaluating legal options to challenge the EO policy and individual PLAs on federal construction contracts.

ABC has already activated a grassroots campaign, including an action alert urging members of the U.S. House and Senate to co-sponsor the Fair and Open Competition Act (H.R. 1284/S. 403), which would prevent the federal government from mandating PLAs as a condition of winning federal or federally assisted construction contracts. ABC members are encouraged to visit the ABC Action Center and urge their members of Congress to support FOCA.

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