Federal Contractor Report
October 2020
Federal Government
AGC calls for withdrawal and provides guidance for members
As previously reported, AGC and other members of the business community called on President Trump to rescind Executive Order (EO) 13950 on “Combating Race and Sex Stereotyping.” The EO has caused much confusion and uncertainty. AGC fears that it could fuel federal investigations of government contractors for simply trying to promote diversity and combating discrimination in the workplace. To that point, AGC engaged a leading law firm to review the EO. AGC is pleased to share that firm’s analysis with AGC members struggling to determine whether and, if so, how to adjust their training programs. The Office of Federal Contract Compliance Programs (OFCCP) recently issued a set of frequently asked questions on the EO and created an EO landing page that includes information on a Complaint Hotline. OFCCP also published a Request for Information requesting—not requiring—that federal contractors and their employees provide copies of their D&I related programming, among other things.  
Avoid needless shutdown of and confusion within construction industry
On October 15, AGC called for the establishment and implementation of a nationwide plan for the distribution of approved coronavirus vaccines in letters to President Trump and candidate Biden. Within that plan, AGC articulated the need to help avoid interruptions of the essential work that the construction industry performs as the result of voluminous and conflicting government guidelines and orders, among other things. AGC continues to remind government officials and the public of the construction industry’s designation as essential and its ability to operate in a safe and effective manner throughout this pandemic. For more information, contact Jimmy Christianson at jimmy.christianson@agc.org.
PPP loan deductibility remains top AGC objective
On October 21, legislation to provide an additional half trillion in COVID-relief failed to advance in the Senate. The Senate also considered a narrower bill to extend, modify, and provide additional funding for the Paycheck Protection Program (PPP), but it was blocked as well. While the PPP legislation provided some important improvements to the PPP program and allowed businesses to take out “second draw” loans, it failed to address AGC’s biggest priority for PPP: reversing the Internal Revenue Service’s (IRS) decision to disallow tax deductions for business expenses associated with PPP loan forgiveness. This decision will lead to a surprise tax increase on PPP loan recipients, and AGC is continuing to work with coalition partners to overturn the IRS’s actions. If you have any questions or concerns, please contact Matthew Turkstra, Director of Tax, Fiscal Affairs, and Accounting, at matthew.turkstra@agc.org or (202) 547-4733.
Federal Agencies
Impact on construction unclear 
The Director of National Intelligence recently unclassified its memorandum  extending the waiver issued in August on the applicability of new prohibition of certain telecommunications for the Department of Defense (DOD).  The new memo will allow DOD to continue to contract for “low risk” products and services with entities it’d otherwise be prohibited until September 30, 2022.  It is unclear what exactly constitutes “low risk” as no accompanying guidance has been made public.  Contractors should check their contracts to ensure they either do or do not meet the waiver’s requirements.
The Interim Final Rule (IFR), often referred to as “Section 889 Part B,” prohibits federal agencies from entering into, extending, or renewing a contract with a contractor that uses any equipment, system, or service that utilizes certain Chinese companies’ telecommunications equipment or services as a component or critical technology of any system, unless an exception applies or a waiver is granted.  AGC has long called on Congress, and other agencies, to extend the date of implementation and to make key changes to the rule.  AGC will continue to update on any developments. For more information, contact jordan.howard@agc.org or (703) 837-5368.
AGC has prepared a packet of information to help document current market conditions that helped influence many firms’ decisions for Paycheck Protection Program loans now that the government is starting to review PPP forgiveness requests. The intent of this packet is to provide a snapshot of media coverage starting on March 27 – the launch of the initial round of Paycheck Protection Program loans – covering topics like declining demand, growing layoffs and general worries about market conditions for the construction industry.
Smith, Currie & Hancock, LLP
Watermark Solutions
AGC News

California and Vermont post worst losses since February as Virginia and South Dakota add the most; Illinois and Iowa have worst one-month job losses, while New York and Vermont post biggest gains
Only eight states and the District of Columbia have recouped the severe pandemic-induced losses of construction jobs that occurred last spring, according to an analysis by AGC of America of government employment data released recently. Association officials warned that job losses will become even more widespread unless lawmakers promptly renew and expand the loan program that enabled firms to temporarily retain and rehire many workers.
In response to the pandemic, the president issued an executive order establishing a Coronavirus Mental Health Working Group to respond to the mental-health conditions induced or exacerbated by the pandemic, including issues related to suicide. The Partnership for Employer-Sponsored Coverage—of which AGC is a member—provided input to the Working Group. There, the coalition expressed support for expanding access to telehealth services to all employees, including variable workforces. In addition, the coalition noted support for addressing access to affordable mental and behavioral health care, thereby avoiding large out-of-network bills or even surprise medical bills to employees. AGC continues to advocate for avenues for its members to offer high-quality and affordable health care options to their employees.



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