Federal Contractor Report
May 2018
Federal Contractors Conference
Leaders from Ten Federal Agencies Made Announcements

Hundreds of federal construction contractors met with major federal construction agencies and members of Congress in the Washington, DC metro area in early May at the AGC Federal Contactors Conference. Representatives from the U.S. Army Corps of Engineers, Naval Facilities Engineering Command, Air Force Civil Engineer Center, Department of Veterans Affairs, General Services Administration, Small Business Administration, Bureau of Reclamation and Natural Resources Conservation Service participated, with several agencies making significant announcements about their respective programs.
Federal Government
Encourages Transparency and Reporting

The House of Representatives passed an AGC-backed bipartisan bill that will require federal agencies to publish their change orders policy and procedures on any small federal construction contract. This change allows prospective federal construction contractors to better factor into their bids the risk and resulting cost of delayed payment for change orders. This bill resulted from AGC member testimony during a House Small Business Committee on the impact of change order delays on federal construction contractors.
Includes Army Corps, Drinking and Wastewater Infrastructure Priorities

Last week Congress took an important step in keeping its promise to authorize a water resources development bill (WRDA) entitled America’s Water Infrastructure Act of 2018. While not a spending bill, WRDA authorizes billions in funding for U.S. Army Corps of Engineers Civil Works projects, including navigation (dredging, locks), flood control (levees), hydropower (dams), recreation (parks), and water supply. This bill would authorize about $2.4 billion of new federal spending on six projects involving disaster recovery. Additionally, the bill includes several provisions impacting drinking water and wastewater infrastructure. AGC applauds Congress for returning to a regular two year authorization of WRDA and is advocating for reform.

The House Appropriations Committee passed a funding bill to boost military construction and Department of Veterans Affairs (VA) construction accounts for fiscal year (FY) 2019. Military construction received $10.3 billion, an increase of roughly $241 million over the FY 2018 budget.
$25 Billion for Airport Construction Included

On April 27, by a bipartisan vote of 393-13, the House approved HR 4, a five-year reauthorization of Federal Aviation Administration (FAA) programs which includes airport infrastructure improvement funding totaling $25.4 billion—a $5.3 billion increase compared to existing levels—over the next five years as part of the multi-year Federal Aviation Administration (FAA) reauthorization bill. The infrastructure funds would come through the Airport Improvement Program (AIP), which helps finance runway construction, among other critical airport construction projects. The additional $5.3 billion is part of an AGC-backed amendment to the FAA bill introduced by House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Penn.).
Smith, Currie & Hancock, LLP

AGC joined industry partners last week in expressing concern to the Secretary of the Treasury on a provision in the recent tax reform law that may be interpreted as having the unintended consequence of creating a substantial disincentive for private investment in public infrastructure through the use of public-private partnerships (P3s). The letter highlights the fact that the interpretation of section 163(j) of the tax bill could cause substantially increased costs at all levels of government as they pursue P3 projects. Section 163(j) would cause the effective tax rate on P3s to skyrocket by restricting the P3 project company’s deductions for interest payments.

AGC, along with our industry partners, is asking Treasury to issue guidance to clarify the intent of section 163(j) and offered suggested guidance that is consistent with the tax bill and its legislative intents.

For more information, contact Sean O’Neill at oneills@agc.org or (202) 547-8892.

Infrastructure Week 2018 runs May 14-21 and AGC – a longtime affiliate and partner of the week – looks forward to this being the largest Infrastructure Week yet. Infrastructure Week is a time for members of America’s business, labor, and government communities to turn up the volume on the need to fix our nation’s infrastructure.

To get involved, sign up for our Thunderclap! By signing up, you authorize one Infrastructure Week tweet or post to be sent from your Twitter or Facebook account at noon ET on Monday, May 14. The message will be: “Infrastructure Week starts today! A foundation of infrastructure = good jobs & a strong economy. It’s Time To Build.” By using the Thunderclap, we can make sure that every participating account sends the same message at the same time creating a lot of traction on our first day of Infrastructure Week.

Learn more about how you can get involved here.

Upcoming Events

On April 30, ahead of a midnight May 1 deadline, President Trump extended temporary relief from the steel and aluminum tariffs to three trading partners: Canada, Mexico, and the 28-member states of the European Union (EU). The decision to extend the temporary exemption window to June 1 staves off a potential trade spat with the EU. Unfortunately, it also creates greater uncertainty in steel and aluminum markets, which will likely contribute to continued steel and aluminum prices.

On the latest episode of The ConstructorCast, we explore President Trump's recent tariffs on steel and aluminum imports. We talk with Collin Janich, AGC of America's Manager of Political & International Affairs, about how the tariffs have begun to hurt construction companies' bottom lines, negatively impact construction employment, and what AGC is doing to fight them.

Stream or download the episode here or search for "ConstructorCast" in your podcasts app!

Last week a rare and controversial procedural maneuver in the U.S. House began gaining traction to address the expiration of the Deferred Action for Childhood Arrivals (DACA) program – otherwise known as Dreamers. The maneuver would require two dozen Republicans to join the entire Democratic caucus in supporting a legislative maneuver that then would force a vote on four separate and competing legislative proposals. The four proposals range from purely giving DACA recipients a pathway to citizenship, to coupling the legislation for Dreamers with increased border security, interior enforcement, and limits on future immigration.
AGC News

This year, AGC celebrates 100 years as the leading association for the construction industry. To commemorate this momentous occasion, AGC has created a centennial website where members can learn about the association's rich history, share their own stories, register for upcoming events, and much more.

Construction employment increased by 17,000 jobs in April and by 257,000 jobs over the past year while firms boosted pay to help recruit new workers, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that the increases in pay appear to be attracting more former construction workers back into the job market, but cautioned that labor conditions remain extremely tight.

"Many firms are boosting pay and taking other steps to compete for a relatively small pool of available, qualified workers to hire," said Stephen E. Sandherr, the association's chief executive officer. "While these steps appear to be luring more construction workers back to the job market, firms report they would hire even more workers if they could find enough qualified candidates."



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