federal legislative and regulatory overview
TRANSCRIPT
Federal Legislativeand
Regulatory OverviewAGC of Washington
November 1, 2017
Jordan HowardDirector of Federal & Heavy Construction
Associated General Contractors of America
Sold: $140 millionNo. 5, 1948 by Jackson Pollock
Taken from Art Market Watch.com
Sold: Not YetSpin Art by Jordan Howard
Broad Overview of D.C. Enviroment
• Trump is shaking things up without developing a clear plan.• Spin Art Politics
• The regulatory machine is being retooled.
• Agencies are generally in listen mode.
• Congress has rolled back regulations.• Ex: “Volks” and “Blacklisting” regulations.
• Being run like a family owned small business• Autocratic style of leader
• Family members with no accountability; internal criticism discouraged.
• No coordinated messaging• Unconventional candidate is unconventional President
• Resulting in…..• Sending conflicting messages/undermining credibility
• Ex: FBI firing; tweets on “travel ban”
• Making GOP Congressmen wary of being abandoned
• Ex: House healthcare bill is “mean”
• Risk putting House of Representatives in play for Democrats
• GOP holding 23 seats in congressional districts Clinton won
• Democrats only need 24 for control
AGC of America Advocacy Goals for 2017
•Convince agencies to revise and/or retract regulations & Executive Orders or convince Congress to block them.
•Based on timeliness, achievability, and impact on industry:• Comprehensive Tax Reform
• Increase Infrastructure Investment
• Environmental Streamlining
• Addressing Workforce Shortage
Policy Issues for 2017-2018
Top priority issues:
• Comprehensive Tax Reform
• Infrastructure Investment
• Environmental Permitting Reform
• Workforce
• Prior Approval for PAC
Other issues:
• Civilian BRAC
• Composite Plans
• Contractor Blacklisting
• Paid Sick Leave EO
• Procurement Reform
• Project Labor Agreements
• Regulatory Reform
• Silica
• Thin Republican majorities• Freedom Caucus
• U.S. system built to force compromise • Checks and balances• Senate filibuster requires 60 votes.
• Polarization on left and right makes compromise difficult.
• Lack of delegation from President Trump• Trump reviews applicants for 3rd tier employees.• Only 30% of confirmable posts nominated.
Advocacy Challenges
Tracking how many key positions Trump has filled
Congressional Calendar
■ House in session ■ Senate in session ■ Both Chambers in session ■ Holiday
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30
November December
12/8 • Government Funding Expires• Flood Insurance Expires 12/12• Alabama Senate ElectionEnd of the Year• Tax Reform
11/7Virginia Election Day:• Governor
Continue Debate:• Tax Reform• Infrastructure
Tax Reform
Effective Tax Rates by Industry
23.3%
30.3%
0%
5%
10%
15%
20%
25%
30%
35%
Source: Department of Treasury
Speaker Paul Ryan
Ways & MeansKevin Brady
National Economic Council Gary Cohn
TreasurySteven Mnuchin
Majority LeaderMitch McConnell
FinanceOrrin Hatch
HOUSE OF REPRESENTATIVES SENATE ADMINISTRATION
President Donald Trump
Key Players in Tax Reform
Key Players in Tax Reform
House Committee on Ways and Means
Senate Committee on Finance
70
1061750
30
159
46 52
46-2-52
U.S. Senate
Freedom Caucus
Republicans
Tuesday Group
Progressive Caucus
Democrats
Blue Dog Coalition
U.S. House of Representatives
Republicans
Democrats
Independents
AGC Priorities for Tax Reform
• Reduce tax rates for corporations and pass-through businesses
• Simplify the tax code• Repeal the Alternative Minimum Tax
• Raise the small contractor exemption
• Increase the availability of cash accounting
• Eliminate look-back rules for long-term contracts
• Promote infrastructure investment in the tax code
• Maintain tax-exempt status of municipal bonds
Infrastructure Investment & Tax Reform?
• AGC is pushing to link tax reform and infrastructure investment; • Infrastructure enjoys broad bipartisan support and could help move tax reform
through Congress
• Multiple letters with bipartisan support; infrastructure bills pass overwhelmingly
• Combining tax reform and infrastructure investment is a win for the economy
• A dollar invested in infrastructure provides greater economic output than tax cuts
• Tax reform and infrastructure investment are already connected
• Our nation’s infrastructure needs are well documented
Infrastructure InvestmentSurface Transportation
Current Funding $941 B Solutions
Highway Trust Fund: Increasing the gas tax by
20 cents would raise $340 billion over 10 years.
Private Activity Bonds (PABs): Increasing the
volume cap for transportation PABs by $5
billion would result in an additional $19 billion
in investment.
Dedicate Partial Revenue from Repatriation to
Surface Transportation – $125 billion
Dedicate 15% of Customs Revenue to
Infrastructure Investment—$58.3 billion
$100 Annual Registration Fee on Electric Cars,
$50 on Hybrid Electric – $2.971 billion
One Cent Car and Four Cent Truck Vehicle Mile
Traveled Fee – $408 billion
Gap $1.1 T
Total Needs: $2.042 T
AGC Solutions $545 to 613B
Reform Environmental Permitting
AGC message:
• Performing sequential and duplicative environmental reviews after the NEPA Record of Decision results in massive schedule, budget, and legal hurdles
• Merge the NEPA review process and the Clean Water Act Section 404 permitting process
• A reasonable and measured approach to citizen suit reform could prevent misuse of environmental laws
Reprisals Against Bidders on Border Wall
• 23 state and local jurisdictions considering penalties.• Ban on future contracts
• Divest in state pensions
• Concerned similar contractor discrimination on future federal construction projects. • Examples: military bases, pipelines, healthcare
clinics, etc.
• Seeking federal preemption.
Fighting Regulations
AGC of America is tracking over 30 different regulations and pushing back through comprehensive comments, agency meetings, congressional oversight and litigation in some cases. Some of the most significant regulations include:
Safety• Silica • Drug Testing• “Volks Rule”
Labor Relations• Persuader Rule• Quickie Elections• Joint Employer
Employment Practices• EEO-1 Forms• Overtime• Affirmative Action
Environment• WOTUS • Permit Streamlining
Tax• Death Tax
Technology• Drones
Transportation• Local Hire • Greenhouse Gas Measurement• Hours of Service• Electronic Logging Devices
Federal Contractors• “Blacklisting”• Project Labor Agreements• Paid Sick Leave• Cybersecurity Requirements
Source: Project On Government Oversight
Important Regulations for Federal Contractors
1. OSHA Silica Standards• Webinar: Available now
2. Paid Sick Leave• Webinar: November 8th at 2-3pm
3. Cybersecurity Requirements• Webinar: November 9th at 2-3pm
Silica• October 23, 2017, the U.S. Occupational Safety and Health Administration
(OSHA) began full enforcement of its respirable crystalline standard for construction.
• The standard has established a new exposure limit of 50 micrograms of respirable crystalline silica per cubic meter of air as an 8-hour Time-Weighted Average (TWA)• Along with a host of ancillary provisions such as establishing a written exposure
control plan, housekeeping requirements, record-keeping, and medical surveillance. • This is arguably one of the most complex standards the construction industry has faced.
• Washington is one of the 26 states that operate under OSHA state-plans.
Paid Sick Leave
• Paid Sick Leave under Executive Order 13706 (signed by President Obama on September 7, 2015) • Requires 1 hour of PSL for every 30 hours worked with annual accrual
of up to 56 hours.
• Became effective for certain types of contracts, and subcontracts from solicitations issued, or contracts awarded outside the solicitation process, on or after January 1, 2017.
• Current contracts may be amended by contracting agency through bilateral modification for renewal, option or extension.
4 Major Categories of Covered Contracts
The federal contractor paid sick leave requirements apply to the following types of contracts, and subcontracts:
1. Procurement contracts for construction covered by the Davis-Bacon Act;
2. Service contracts covered by the Service Contract Act (SCA);
3. Concession contracts, including any concessions contract excluded from the SCA by DOL’s regulations at 29 CFR 4.133(b);
4. Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public (this includes leases).
Who Gets Paid Sick Leave?
• Any worker who:(1) Performs work
• On a covered contractOR
• In connection with a covered contract
AND(2) Whose wages are governed by the SCA, DBA (includingindependent contractors), or FLSA (including employees who are exempt under the FLSA).
Source: Jackson Lewis P.C.
NIST 800-171 Cybersecurity Requirements• History: It’s not a new rule. It has applied to federal agencies since at least 2013.
• 2015 to contracts. Then gave a two year extension.• Baseline requirements “as soon as possible,” but not later than December 31, 2017
• Deadline: December 31, 2017 deadline to apply to contractors on Department of Defense contracts.• DFARS Clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting
• Not Retroactive: It is not required to be applied retroactively, but a contracting officer may modify an existing contract to add the clause.
• Purpose: To ensure that unclassified DoD information residing on a contractor’s internal information system is safeguarded from cyber incidents, and that any consequences associated with the loss of this information are assessed and minimized through cyber incident reporting and damage assessment processes.
DFARS 252.204-7012(Safeguarding Covered Defense Information &
Cyber Incident Reporting)
• Requires Covered Contractor Information Systems to comply with NIST 800-171 (Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations) in effect at the time the solicitation is issued.• NIST = Department of Commerce’s National Institute of Standards and
Technology.
• Requires implementation of NIST 800-171 by no later than December 31, 2017.
15 Security Requirements1. Limit access to authorized users.2. Limit information system access to the types of transactions and functions that authorized users are permitted to execute.3. Verify controls on connections to external information systems.4. Impose controls on information that is posted or processed on publicly accessible information systems5. Identify information system users and processes acting on behalf of users or devices6. Authenticate or verify the identities of users, processes, and devices before allowing access to an information system 7. Sanitize or destroy information system media containing Federal contract information before disposal, release, or reuse. 8. Limit physical access to information systems, equipment, and operating environments to authorized individuals.9. Escort visitors and monitor visitor activity, maintain audit logs of physical access, control and manage physical access devices.10. Monitor, control, and protect organizational communications at external boundaries and key internal boundaries of information systems.11. Implement sub networks for publicly accessible system components that are physically or logically separated from internal networks.12. Identify, report, and correct information and information system flaws in a timely manner.13. Provide protection from malicious code at appropriate locations within organizational information systems.14. Update malicious code protection mechanisms when new releases are available.15. Perform periodic scans of the information system and real-time scans of files from external sources as files are downloaded, opened, or executed. FAR 52.204-21(b).
“Covered Defense Information” (CDI) means:
• Unclassified Controlled Technical Information or
• Other information described in the Controlled Unclassified Information (CUI) registry published by the National Records and Archives (NARA); and that
• Requires safeguarding or dissemination controls and is:• Marked or otherwise identified in the contract; or• Collected, developed, received, transmitted, used, stored, etc. by the contractor.
Overview on DFARS 252.204-7012
• Implementing NIST 800-171• NIST 800-171, Rev. 1 (Dec. 2016) emphasized role of:
• System Security Plans (SSPs) and • Plans of Action/Milestones (POAMs)
• “Individual, isolated, or temporary deficiencies should be managed through [POAMs].”
• Identify gaps in 800-171 compliance and identify corrective action plan
• Sept. 2017 DOD Memo (Shay Assad) • Some comfort for DFARS 252.204-7012 compliance
Important Regulations for Federal Contractors
1. OSHA Silica Standards• Webinar: Available now
2. Paid Sick Leave• Webinar: November 8th at 2-3pm
3. Cybersecurity Requirements• Webinar: November 9th at 2-3pm