ASA Government Relations 2021 Recap
Despite the continued impact of COVID-19 on the construction industry, along with the ever-changing political, regulatory, and legislative landscape, the ASA Government Relations Team wanted to briefly update you on our 2021 legislative successes as we enter the new year. Though 2021 proved to be challenging, we offer thanks to our Government Relations Committee (GRC) for their tireless efforts in advocating for our members and industry as we worked to address COVID-19 related issues along with our 2021 Legislative Priorities.
The ASA’s 2021 Legislative Priorities included:
- H.R. 26 – Technical Corrections Bill to Prohibition on Reverse Auctions becomes law on July 26, 2021
- H.R. 2949 – Exemption of Increases to the Miller Act Bond Threshold
- H.R. 1641, S. 638 – P3 Bonding Transportation Requirements
- Freedom from Government Competition Act
- FY22 NDAA Request to Rep. Crow (D-CO) re: Small Business Protection Act of 2020 (HR 9012)
- Creation of the Congressional Construction Procurement Caucus
In 2021 ASA was successful in securing in the INVEST Act (the infrastructure bill signed into law on November 19, 2021), H.R. 1641, “The Promoting Infrastructure by Protecting Our Subcontractors and Taxpayers Act.” For nearly a hundred years, the federal government has recognized the importance of surety bonding requirements for its direct public works projects. Surety bonds play a vital role in ensuring contractors in financial distress avoid bankruptcy, allow subcontractors and workers of public works projects to receive compensation and allow the project to be delivered within budget and on time. Over 95% or more of all public projects require bonding under the Miller acts. However, Miller acts’ bonding requirements are not clear on public private partnerships (P3s), and therefore often do not maintain the same level of protections that have been required on public infrastructure projects over the past century. This legislation addresses the shortcoming mentioned above by directing U.S. DOT to ensure P3 projects using Transportation Infrastructure Finance Innovation Act (TIFIA) financing have appropriate payment and performance security and are sound federal investments by requiring a surety bond. It is a commonsense solution to a complex problem. Well done to our ASA GRC team in securing this important legislative victory.
Additionally, on December 15, 2021 ASA secured Miller Act exemption from inflationary increases in the FY22 NDAA. Maintaining Miller Act Bond Threshold at $150,000 is big win for small business contractors. ASA commends Congress for passing S. 1605, the National Defense Authorization Act (NDAA) for Fiscal Year 2022 and including a provision in the bill that removes the Miller Act from periodic threshold increases based on inflation, which has been a legislative priority for ASA more than a decade. The U.S. Senate, by a vote of 89-10, concurred with the House by passing S. 1605. The U.S. House of Representatives had passed S.1605 by a vote of 363-70 on December 7. Arbitrarily increasing the Miller Act bond threshold based on inflation exposes businesses, including smaller and disadvantaged businesses working as subcontractors and suppliers, to loss of vital payment protections on federal construction projects. Maintaining the bond threshold at $150,000 protects U.S. taxpayers by ensuring tax dollars are not being placed in jeopardy by the absence of performance bonds due to a rote inflationary indexing.
At the request of ASA Past President Kerrick Whisenant, the ASA is working with Reps. Brooks (R-AL) and Huizenga (R-MI), to address unfair competition issues in the federal prison industry by offering suggested legislative language for the elimination of mandatory sourcing for government contracts along with small business set-asides for federal prisons, and a report to Congress on the extent of which domestic markets Federal Prison Industries compete with domestic capacity in the private sector, including small business, and identify new markets overseas for Federal Prison Industries to begin to compete for in which there is no domestic capacity in the private sector, including small business. The ASA’s partnership with Rep. Brooks on this issue led to his visit of Claborn Manufacturing’s new, state of the art facility located in Tanner, AL. The tour was led by Kerrick, who is the President of Limestone Building Group, the constructor of the Industrial Park where the facility is located.
On December 3, 2021, ASA, along with the Construction Industry Procurement Coalition (CIPC), offered comments to the House and Senate Armed Services’ Committee Leadership highlighting our views regarding the FY22 National Defense Authorization Act (NDAA). We support the Defense Department submitting a report on the Cybersecurity Maturity Model Certification (CMMC) on small businesses. CMMC is one of the most ambitious cybersecurity compliance requirements ever undertaken by the department. The program is designed to be a mandatory requirement on all defense contracts. The potential of excluding a significant portion of small business defense contractors and the ability for agencies and prime contractors to meet small business goals should be evaluated and reported to Congress and the public. Additionally we supported the exemption of the Miller Act from the periodic indexing required under Title 41. The Miller Act currently requires all general contractors on federal construction projects over $150,000 to furnish surety bonds to protect the government’s use of taxpayer funds and to ensure payments to subcontractors, and suppliers. Any increase in the contract price threshold through indexing exposes workers, suppliers, and taxpayer dollars to unnecessary risk. Finally, we opposed the bill’s section regarding new and onerous requirements for military construction contractors which goes against decades of federal contracting policies and precedent, including requiring all contractors and subcontractors performing a military construction contract be licensed in the state where the work will be performed and issuing local hiring preferences.
In the wake of COVID-19, the ASA was on the front lines working with a coalition of other construction associations to ensure our industry remained essential across the country. In consultation with the GRC, the ASA drafted a Gubernatorial Statement on keeping the construction industry an essential service as governor’s issued shutdown orders. The ASA ran a VoterVoice advocacy campaign and 1,399 members sent the Gubernatorial Statement to 38 governors across the country.
Throughout the pandemic, we have worked diligently to ensure members are aware of major federal regulations and relief opportunities through the creation of our COVID-19 webpage. In consultation with the Attorneys Council, the ASA also created the following resources: a COVID-19 Employer Guide, Attorneys Council Legal Guidance, Families First Coronavirus Response Act Leave Provisions Guide, and a Small Business Administration Loan Program Summary. Through our membership to the Construction Industry Safety Coalition (CISC), ASA members also have access to a COVID-19 Exposure Prevention Preparedness, and Response Plan as well. As Congress considers new programs to address the pandemic along with the extension of federal programs to support small businesses and families impacted by the virus, the ASA Government Relations Team will provide timely analysis and resources to support our members.
Much of Congress’ focus in 2021 has been related to addressing COVID-19 and the ASA has been at the forefront of advocacy efforts to support the construction industry during these difficult times. The ASA has signed onto the following letters related to COVID-19:
- ASA, along with the U.S. Chamber of Commerce and many other organizations representing small businesses, urged Congress to extend the deadline for the Paycheck Protection Program (PPP) through December 31, 2021.
- On January 29, 2021 ASA, along with the Construction Industry Safety Coalition (CISC), wrote to OSHA regarding President Biden’s recently issued “Executive Order on Protecting Worker Health and Safety.” Per the order, the President has tasked the Agency with several actions including the issuance of clear guidance regarding protecting employees from COVID-19 in the workplace and considering whether an Emergency Temporary Standard (ETS) is warranted to address the pandemic. Per the letter, we wanted to inform OSHA of CISC’s work to keep construction workers safe in these unprecedented times and to request a meeting to discuss ways that we may assist the Agency in its efforts related to developing guidance for COVID-19 prevention in construction workplaces.”
- ASA, along with the CISC, sent a second letter to OSHA outlining several issues the agency should consider while they deliberate the need for an emergency temporary standard (ETS) on COVID-19. Per the letter, “we call on OSHA to be more transparent about the process of developing the ETS and also raise concerns about the need for a COVID-19 ETS in construction and potential burdensome provisions in a COVID-19 standard.”
- On March 11, 2021, ASA joined the U.S. Chamber of Commerce, National Federation of Independent Business (NFIB), American Hotel & Lodging Association, International Franchise Association and more in strong support of the Paycheck Protection Program Extension Act of 2021, which would extend the Small Business Administration’s (SBA) application period beyond March 31, 2021 to June 30, 2021.
- On March 26, 2021, ASA, along with the American Road & Transportation Builders Association and the American Association of State Highway and Transportation Officials, sent a letter to Treasury Secretary Yellen this week urging her Department to ensure transportation infrastructure is defined explicitly as a qualifying eligibility in the American Rescue Plan. The Department of the Treasury’s guidance on the measure’s $350 billion in relief funds for state and local governments and $10 billion in capital assistance will be critical. States and local transportation revenues were hit hard by COVID-19, with 49 states publicly projecting declines. State departments of transportation are facing at least $18 billion in estimated revenue shortfall through 2024.
- On September 9th, President Biden issued a new plan entitled “Path of the Pandemic,” which includes a six-pronged, comprehensive national strategy to combat the surge of COVID-19 variants, with the primary goal of vaccinating the unvaccinated. One prong of the plan would entail OSHA issuing an Emergency Temporary Standard (ETS) that will require all employers with 100+ employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. OSHA is currently developing this 2nd ETS and the Agency does not have to follow the Administrative Procedure Act, meaning there is not an opportunity for a formal public notice-and-comment period. However, ASA believed it was very important for the construction industry to engage on this issue quickly, as we did with the 1st COVID ETS. Therefore, we sent a letter to James Frederick, OSHA Deputy Assistant Secretary highlighting the Construction Industry Safety Coalition (CISC)’s COVID-19 prevention efforts to date, which states the construction industry is low-risk for COVID-19, and raises issues of concern, including Workforce Shortages, Employer and Employee Obligations for Vaccinations and Testing, Paperwork Burdens, Recordability of Adverse Reactions to the COVID-19 Vaccine, Cost of Paid Time Off for Vaccinations and Adverse Reactions, and Availability of Testing Kits.
- On October 8, 2021, ASA, along with the Construction Industry Procurement Coalition (CIPC), sent a letter to the White House’s Coronavirus Response Coordinator & Counselor to the President of the United States, Jeffrey Zients, requesting a delay in the implementation of the Executive Order (E.O.) 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors.” In the letter we stated “our concern that the timeline and elements of the policy will undercut the ability of the businesses we represent to support the critical needs of our federal agency clients and the taxpayers they serve. These critical services include the maintenance, design and construction of critical infrastructure, operations of national laboratories, preserving the world’s preeminent defense industrial base, as well as providing essential cybersecurity services. We believe that we can achieve the goals of the President’s policy in a manner that would limit disruptions in the essential work we perform for our federal clients.” The letter requests the delay to allow for the implementation of the following recommendations:
- Include the option of testing for non-vaccinated employees.
- Ensure consistent enforcement across agencies. To this end, agencies such as the General Services Administration (GSA) are including vaccination requirements in other contracts that are not required to be covered by E.O. 14042, such as applying the mandate to contracts below the Simplified Acquisition Threshold.
- The chilling effect coupled with the significant uncertainty that this creates for many businesses further erodes the partnership between the private sector and their federal clients.
- With all the attention on “Billionaire Taxes,” we are concerned that two top issues for our ASA membership, the proposed changes to grantor trust and the changes to valuation rules, might not receive the attention they deserve. For family businesses, these two provisions have the potential to raise their estate tax levies to the point where the business can no longer survive. To that end, ASA, along with several contractor associations, sent a letter to the House Ways and Means Leadership urging the rejection of the proposed changes to these rules. Per the letter, “the changes related to the taxation of grantor trusts would eliminate the usefulness of the grantor trust for normal and legitimate business (non-tax) purposes, such as facilitating the transfer of business ownership between generations and protecting assets from liability or creditor claims of a trust beneficiary. These new rules would unfairly punish taxpayers who relied on decades-old laws and Internal Revenue Service guidance to establish estate plans to transfer family businesses to future generations, threatening the viability of thousands of family businesses across the country. It is simply unfair for Congress to step in and retroactively change them now, just when they are to be called upon to help with the transfer of a family business from one generation to the next.”
- On November 17, 2021 ASA issued the following statement regarding the Associated General Contractors (AGC) of America’s legal challenge against the Occupational Safety and Health Administration (OSHA)’s COVID Vaccine Mandate Emergency Temporary Standard (ETS):
ASA applauds the AGC of America regarding their legal challenge against OSHA’s COVID-19 Vaccine Mandate ETS, which will have significant implications for the construction industry’s workforce, particularly since OSHA has generally characterized the construction industry as low risk. The AGC of America’s petition filed in the U.S. Court of Appeals for the Fourth Circuit notes “that OSHA exceeded its statutory authority to promulgate an ETS, and it failed to comply with the Occupational Safety and Health Act.” Additionally, this new standard will impact all construction companies with 100 or more employees by causing many of them to lose a substantial number of their workers to smaller companies, instead of leading to more people getting vaccinated in the industry.
Beyond the regulatory issues regarding COVID-19, ASA addressed the following regulatory issues in 2021:
- On November 5, 2021, ASA requested a delay of OSHA’s Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings Advance Notice of Proposed Rulemaking (ANPRM).
- ASA and AGC submitted comments on the Defense Department’s Past Performance of Subcontractors Interim Rule.
- ASA worked directly with the Small Business Administration (SBA)’s Surety Bond Guarantee Program regarding retainage bonds.
- ASA closely monitored OSHA’s new enforcement exposure guidance on beryllium dust.
The ongoing pandemic did not slow down ASA Government Relations Director Mike Oscar this year in visiting with chapters across the country. Mike visited with these Chapter’s in-person and virtually, to provide our members with a federal legislative, regulatory, and political update. Each of these Chapter visits provided a tremendous opportunity to brief members about ASA’s efforts to advance subcontracting issues nation-wide, while also highlighting individual Chapters. In 2021, Mike met with the following chapters:
- Carolinas (Charleston and Midlands)
- Central PA (Virtual)
- New Mexico (Virtual)
- Southwest Florida
- Utah (Virtual)
- San Antonio
- ASA North Texas
- ASA of California
Speaking of state chapters, we engaged our membership in three Voter Voice campaigns in OK, CO, and DC Metro, dealing with retainage, prompt payment, and public-private partnership projects, which involved 109 ASA participants, who sent 1,189 email messages to their state legislators.
As of December 13, 2021, our social media presence increased with 1,503 people liking the ASA Facebook page, an increase from 1,312 likes from September 2019 and 2,092 people followed the page up from 1,773 followers in September 2019. The most popular posts continue to focus on ASA Staff/members meeting and engaging:
- Two posts on October 22, 2021 focused on the Attorneys’ Council meeting and SLDF Fundraiser in San Antonio were viewed 575 times with 59 engagements.
- A January 25, 2021 post on an ASA Panel Discussion on managing growth reached 431 people.
- Our Thanksgiving message reached over 300 members with 22 engagements on Twitter, 3,248 followers, an increase from 2,307 in September of 2019.
On Twitter, 3,279 followers, an increase from 2,307 in September of 2019. Additionally, this year we introduced Podcasts as another communication method to engage our membership and to that end we held the following:
- Two Podcasts for Women in Construction Month (3/21)
- Mike Oscar interviewed Shelia Ohrenberg and Dana Thompson (Women in Construction Coalition)
- Shannon Oscar interviewed Bethany Beck (ASA AC Chair)
- Podcast with Jordan Howard, AGC’s Director of Federal & Heavy Construction, on May 20, 2021
- Podcast with Dalton Defendis, the Surety & Fidelity Association of America’s GRC Director, on July 28, 2021
- Podcast on H2K Oklahoma SLDF Case on September 28, 2021
Finally, the ASA looks forward to 2022, where we will build on the momentum of this year’s advocacy achievements and use our voice to continue to advance our legislative priorities.