Category: News Line

The Small Business Administration’s Office of Advocacy will host a roundtable to discuss the Federal Acquisition Regulatory Council’s proposed rule that would require federal contractors and their subcontractors to enter into project labor agreements for federal construction projects of $35 million or more. The virtual roundtable will take place on Thursday, Sept. 29, 2022, from 1-2 p.m. ET. ABC encourages all federal contractors and subcontractors to participate to make their voices heard on this critical issue.

On Aug. 19, 2022, the FAR Council proposed a rule to amend the Federal Acquisition Regulations to implement EO 14063, the Use of Project Labor Agreements for Federal Construction Projects, which increased the contract threshold from $25 million to $35 million. A PLA is defined as a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.

Ben Brubeck, vice president of regulatory, labor and state affairs at ABC, will present at the roundtable on the impact of the proposed rule on small construction companies.

Roundtable meetings are open to all interested persons, except the press, in order to facilitate an open and frank discussion about issues of interest to small business. The purpose of this meeting is to exchange opinions, facts and information and to obtain attendees’ views and opinions regarding regulatory and policy issues affecting small businesses.

The Office of Advocacy does warn that presentations made during this roundtable will not substitute for written comments directly from interested parties to the FAR Council. Written comments on this proposed rule are due on Oct. 18, 2022. If you need assistance drafting your comments, contact Michael Altman at [email protected].

RSVPs should be sent to Janis Reyes, assistant chief counsel, at [email protected]. 

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According to a September 2022 survey of ABC contractor members published today, 98% oppose President Biden’s proposed rule mandating project labor agreements on federal construction projects of $35 million or more. PLA schemes needlessly increase costs and exacerbate the construction industry’s skilled labor shortage because they exclude almost nine out of 10 workers from participating in these contracts.

“The overwhelming opposition to PLA mandates demonstrates that fair and open competition on federal and federally assisted infrastructure projects is a win-win for taxpayers and the U.S. economy because it ensures all Americans and qualified companies are welcome to fairly compete to rebuild America’s infrastructure,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “In contrast, the Biden administration’s proposed rule requiring government mandated PLAs on federal contracts of $35 million or more, and other policies promoting PLAs on federally assisted construction projects, will needlessly increase costs by 12% to 20% and reduce competition from quality contractors and the 87.4% of construction workers who freely choose not to join a union.”

According to the survey:

• 97% of survey respondents said a construction contract that required a PLA would be more expensive compared to a contract procured via free and open competition.
• 99% said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions.
• 97% of respondents said that government-mandated PLAs decrease economy and efficiency in government contracting.
• 96% expected a requirement to result in less competition from subcontractors.
• 95% of survey respondents said the requirements of government-mandated PLAs for firms to contribute to union benefits programs harm employees and 96% said they undermine investments in workforce development programs.

“Between 2009 and 2021, federal agencies mandated just 12 PLAs on 2,075 federal construction projects of $25 million or more, illustrating that when given the option, PLA mandates are unnecessary on federal construction projects,” said Brubeck. “ABC members are top federal contractors—they were awarded 57% of the value of $127 billion worth large-scale federal construction projects during this time period—but are needlessly excluded by the Biden administration’s policies promoting PLAs, which favor unionized contractors and labor.”

The majority of survey respondents said PLA mandates would either result in construction projects that are less safe (65%) or have no impact on safety (34%). Three-quarters (75%) said PLAs would result in poorer quality or have no impact on quality (24%). Fully 85% said PLA mandates decrease the likelihood of completing a project on time and on budget, with 9% saying there would be no impact.  

In addition, 94% of survey respondents said a PLA would result in worse local hiring outcomes for a project. Almost 69% of respondents agreed that a PLA would decrease the hiring of women, veteran and disadvantaged business enterprises and construction workers, which have traditionally been unaffiliated with labor unions, while another 27% of respondents felt that PLAs would have no effect in hiring these disadvantaged populations and contractors.

Opposition to the Proposed Rule Is Nearly Universal Among Membership Segments

In other findings from the survey, the proposed rule is opposed by respondents who self-identified as active and potential federal contractors as well as small businesses:

• Among active federal contractors who responded to the survey, 96% said the proposed rule would increase costs, 73% said it would decrease construction quality and 93% stated the rule would result in less competition from subcontractors.
• Additionally, 97% of respondents who are federal contractors who self-identified as small businesses said they would be less likely to bid on contracts if the rule is finalized, potentially affecting the federal government’s small business procurement goals. 73% of small businesses stated PLAs decrease hiring of minority, women, veteran and disadvantaged business enterprises.
• 99% of respondents who currently do not perform federal contracting said they would be discouraged from beginning to do so by the proposed rule, indicating the rule would likely suppress competition from new federal contractors if finalized.
• In addition, 99% of respondents oppose other Biden administration policies independent of the proposed rule encouraging PLAs on federally assisted construction projects procured by state and local government with the help of federal funding allocated via competitive grant programs administered by federal agencies.

“The survey illustrates how PLA mandates undermine inclusive workforce development, hiring and small business subcontracting practices and hinder the ability of the best contractors to safely deliver taxpayer-funded construction projects on time and on budget, which is why ABC members are outraged by the Biden administration’s discriminatory policies favoring special interests,” said Brubeck. “ABC encourages concerned taxpayers, government officials and construction industry stakeholders to submit comments in opposition to the Biden administration’s proposed policy mandating PLAs on federal contracts by the Oct. 18 comment deadline via ABC’s action alert.”

The survey of ABC member contractors was conducted between Sept. 7 and 23 following the Biden administration’s Aug. 19 release of the Federal Acquisition Regulation Council’s proposed rule (FAR Case 2022-003, Use of Project Labor Agreements for Federal Construction Projects RIN: 9000-AO40) implementing President Biden’s Feb. 4 Executive Order 14063.

Once final, the Biden proposal will replace President Obama’s Feb. 2, 2009, Executive Order 13502, which encourages federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. The Biden administration expects its proposed rule to affect about 120 federal contracts valued at $10 billion per year.

PLA Mandates on Federally Assisted Construction Projects a Concern

ABC estimates more than $95 billion worth of federal grants for federally assisted construction projects procured by state and local governments are subject to Biden’s pro-PLA policies independent of the FAR Council’s proposed rule.

Currently, 24 states have enacted laws ensuring fair and open competition on state and local taxpayer-funded construction projects by restricting government-mandated PLAs and PLA preferences. On April 26, 18 Republican governors, led by Asa Hutchinson of Arkansas and Bill Lee of Tennessee, sent a letter to the White House opposing the Biden administration’s policies promoting government-mandated PLAs on federal and federally assisted taxpayer-funded construction projects because it “will undermine taxpayer investment in billions of dollars of forthcoming public works projects financed by the Infrastructure Investments and Jobs Act of 2021 and additional bipartisan legislation passed by Congress, all of which was signed into law free from language requiring or encouraging the use of PLAs.”

ABC and a diverse coalition of construction industry, small business and taxpayer advocates strongly oppose the Obama and Biden administration’s pro-PLA policies and have continually advocated for federal legislation, the Fair and Open Competition Act (S. 403/H.R. 1284) introduced by Sen. Todd Young, R-Ind., and Rep. Ted Budd, R-N.C, which prohibits government-mandated PLAs on federal and federally assisted projects and helps taxpayers get the best possible product at the best possible price.  

Members of the U.S. House and Senate supportive of this legislation have all written letters to the White House in opposition to anti-competitive pro-PLA policies championed by the Biden administration.

About Government-Mandated PLAs

Problematic, anti-competitive terms in government-mandated PLAs typically force construction workers to join a union and/or pay union dues as a condition of employment and require contractors to:

• Use union hiring halls to obtain most or all workers instead of their existing workforce.
• Obtain apprentices exclusively from union apprenticeship programs.
• Follow inefficient union work rules.
• Pay into union benefit and multiemployer pension plans that any limited number of nonunion employees permitted on the project will be unlikely to access unless they join a union and vest in these plans, resulting in wage theft estimated at 34% of their paycheck.

To learn more about how corrupt government-mandated PLAs rig the competitive bidding process, hurt taxpayers and endanger plans to rebuild America’s infrastructure, visit the coalition website BuildAmericaLocal.com.

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ABC recently released a new action alert to help members tell the Federal Acquisition Regulatory Council to withdraw a controversial proposed rule opposed by ABC that would require project labor agreements on federal construction contracts of $35 million or more.

Government-mandated PLAs are anti-competitive schemes that restrict competition, increase costs, create delays and place nonunion contractors at a significant competitive disadvantage.

The FAR Council issued the proposed rule, Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects, on Aug. 19, which implements President Biden’s Feb. 4 Executive Order 14063 mandating PLAs on federal construction contracts procured by federal agencies.

Take action now and submit comments by Oct. 18!

For any questions regarding the action alert, please reach out to Michael Altman at [email protected]. 

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Nine of 10 Build Design + Construction’s recently published list of the 90 best hospitality sector contractors and construction management firms are ABC members. These successful contractors were ranked based on 2021 revenue.

AECOM (#1)

Suffolk (#2)

The Yates Companies, Inc. (#4)

Swinerton (#5)

PCL Construction Enterprises Inc. (#6)

Balfour Beatty US (#7)

Hensel Phelps (#8)

Gilbane Building Co. (#9)

Brasfield & Gorrie LLC (#10)

View the full list in Build Design + Construction’s 2022 Giants 400 Report. Check out ABC’s 2022 Top Performers to find contractors ranked by work hours in hospitality, infrastructure, mixed use and other commercial and industrial markets, or visit FindContractors.com to search for members by location STEP level, special designations and more.

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ABC’s National Craft Championships won the Spirit of EEC Award during the Engineering and Construction Contracting Association’s Perspectives Conference on Sept. 8 in San Antonio. ABC national chair-elect Milton Graugnard; NCC Chair Bill Lastinger; retired NCC Committee member Mike Stilley; Brandon Mabile, 2020 Young Professional of the Year and businesses development manager at Performance Contractors; and NCC director Jarrell Jackson accepted the award at the conference.  

“The National Craft Championships highlight the talents of people pursuing a career in construction and the variety of opportunities available to them at ABC and member education programs across the United States,” said Lastinger. “These craft professionals dedicate themselves to mastering a trade that will support them and their families for years to come—and builds the places where America lives, learns, plays, works, prays and heals.”

The annual Spirit of ECC Awards honor programs that display an exemplary demonstration of a wide array of talents, skills and passions that encapsulate the ECC’s mission to engage and improve the construction industry.

ABC won this year’s Spirit of ECC Award for effectively showing:

• A strategic response to a fundamental challenge or opportunity;
• A solid application of thought leadership; and
• A certain stewardship toward the betterment of the industry, its participants and the people it serves.

Learn more about this recognition at ecc-conference.org. Stay up to date on 2023 National Craft Championships news and information at abc.org/ncc.

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On Sept. 15, the U.S. Department of Labor’s Occupational Safety and Health Administration announced it had expanded its Severe Violator Enforcement Program to include all hazards and OSHA standards and focus on repeat offenders in all industries.

Specific changes to the Severe Violator Enforcement Program include:

• The expanded program criteria now include all hazards and OSHA standards. The old criteria were limited to cases involving fatalities, three or more hospitalizations, high-emphasis hazards, the potential release of a highly hazardous chemical (process safety management) and enforcement actions classified as egregious.
• Employers will be placed in the program if OSHA finds at least two willful or repeated violations or issues failure-to-abate notices based on the presence of high-gravity serious violations. Under the old criteria, the focus was on cases where a willful or repeated serious violation, or a hazard the employer failed to abate, that was directly related to either an employee death or an incident that caused three or more hospitalizations. 
• Follow-up or referral inspections must be conducted within one year, but not longer than two years, after the final order. Previously, there was no required time frame in which OSHA would conduct a follow-up inspection after the final order.
• The potential for removal from the program begins three years after the date of verification that all SVEP-related hazards have been abated, instead of when final order is issued. A final order and meeting other conditions are still required for removal from SVEP, but the clock for potential removal starts when the employer fixes the hazard instead of at the end of a highly variable administrative process.
• Employers can reduce the amount of time in SVEP to two years if they consent to an enhanced settlement agreement that involves implementing a safety and health management system. The system must include the seven basic elements outlined in OSHA’s Recommended Practices for Safety and Health Programs. Previously, employers were only eligible for removal from SVEP after three years. These last two changes incentivize employers to fix problems quickly and develop lasting solutions to change their health and safety culture.

Learn more about the Severe Violator Enforcement Program.

ABC members know exceptional jobsite safety and health practices are inherently good for business, the industry, the communities ABC members build and our most important asset—our workforce. ABC strongly believes that employers committed to safety should be viewed as partners in achieving safer workplaces and that the Occupational Safety and Health Administration’s cooperative programs, such as the Voluntary Protection Program, should be further promoted. We urge the department to focus on its long-successful cooperative efforts with employers, which can prevent companies from ending up in the administration’s Severe Violator Enforcement Program. ABC condemns violators who meet the criteria of the SVEP and encourages them to improve their safety process to keep the workforce safe.

Participate in ABC’s STEP Safety Management System to improve your safety performance.

Founded in 1989 as a safety benchmarking and improvement tool, STEP has evolved into a world-class safety management system that dramatically improves safety performance among participants, regardless of company size or type of work. Participating ABC member firms measure their safety processes and policies on key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incident rates. Companies receive a rating of Diamond, Platinum, Gold, Silver, Bronze or Participant based on their safety performance.

STEP members prove that world-class safety is achievable with a companywide commitment to safety as a core value. ABC’s 2022 Safety Performance Report documents the dramatic impact of STEP participants deploying proactive safety practices—leading indicators such as supervisor safety training, pre-planning for project safe and behavior-based safety—to reduce recordable incidents by up to 84%, making the best-performing companies 645% safer than the industry average.

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On Sept. 15, the Office of Federal Contract Compliance Programs announced that it was extending the deadline for federal contractors to submit written objections to the disclosure of EEO-1 reports from Sept. 19 to Oct. 19. On Aug. 19, the OFCCP published a notice in the Federal Register to inform federal contractors of a Freedom of Information Act request that seeks all Type 2 Consolidated EEO-1 report demographic data (or “Component 1” EEO-1 reports) submitted by federal contractors and first-tier subcontractors from 2016 to 2020. According to the OFCCP, Will Evans from the Center for Investigative Reporting submitted the FOIA request. 

In granting the extension, the OFCCP explained:

“There are multiple reasons for the extension, including the following. First, since publication of that notice, numerous contractors and contractor representatives have contacted the agency requesting an extension of time to submit objections. Additionally, since the publication of the original notice, some federal contractors have raised questions regarding their efforts to verify whether they are included in the universe of Covered Contractors during the requested timeframe. To address this second issue, OFCCP will also take the additional step of emailing contractors that OFCCP believes are covered by this Freedom of Information Act (FOIA) request, using the email address provided by contractors that have registered in OFCCP’s Contractor Portal and the email addresses provided as a contact for the EEO-1 report.”

The Aug. 19 Federal Register notice provides specific instructions and a list of questions that should be addressed by contractors who wish to object to the disclosure of their Type 2 Consolidated EEO-1 report data. ABC recommends that contractors review the questions outlined in the OFCCP’s FAQs, specifically No. 10:

10. What information should contractors include in a written objection if their company decides to file one?

Contractors should include the first and last name of their company’s point of contact, the POC’s phone number and email address, the company’s name and address and the parent company’s EEO-1 unit number.

Contractors should also provide as much information as possible addressing why they believe their Type 2 EEO-1 report data should not be released under FOIA, including whether the information is commercial/financial and confidential. At a minimum, OFCCP suggests that written objections address the following questions:

• Do you consider information from your EEO-1 report to be a trade secret or commercial information? If yes, please explain why.
• Do you customarily keep the requested information private or closely held? If yes, please explain what steps have been taken to protect data contained in your reports, and to whom it has been disclosed.
• Do you contend that the government provided an express or implied assurance of confidentiality? If yes, please explain.
• If you answered “no” to the previous question, were there expressed or implied indications at the time the information was submitted that the government would publicly disclose the information? If yes, please explain.
• Do you believe that disclosure of this information could cause harm to an interest protected by Exemption 4 (such as by causing genuine harm to your economic or business interests)? If yes, please explain.

If you plan to submit a written objection and require further assistance from ABC National, please contact Karen Livingston at [email protected].

Learn how to submit the written objection by web form, email or mail. Note: The OFCCP strongly encourages contractors to use the web form due to the volume of responses the OFCCP expects to receive.

Additional resources:

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On Sept. 19, California Gov. Gavin Newsom signed Assembly Bill 2188 into law, enacting restrictions effective Jan. 1, 2024, on employers’ use of cannabis metabolite testing to penalize existing employees and candidates for employment. AB 2188 lends definition to an emerging nationwide landscape of adjustments in state employment regulation to increasingly permissive medical and recreational cannabis laws.

AB 2188 does not apply to employment in the building and construction trades. It also does not apply to employment in positions requiring federal background investigations or security clearances, or positions otherwise subject to testing requirements under state or federal law. Cannabis metabolites are detectable days or weeks after cannabis use, and do not indicate impairment.

The new law targets cannabis testing that captures off-hours, off-site use, and does not prohibit employer penalization of impairment, including via tests that identify psychoactive cannabis constituents in bodily fluids. The law cites the availability to employers of “multiple types of tests that do not rely on the presence of nonpsychoactive cannabis metabolites,” including tests which “measure an individual employee against their own baseline performance.”

AB 2188 explicitly does not permit any employee to possess, use or be impaired by cannabis at work.

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