34 states add jobs; PPIs for new buildings and construction inputs each rise 0.8%. [more]
Tag: AGC
AGC’s Data Digest – December 1-9, 2016
Employment hits eight-year high in November; spending, job openings rise in October. [more]
FHWA Issues Final CM/GC Regulations
Source: AGC Highway Facts Bulletin
The Federal Highway Administration (FHWA) on December 2, 2016 issued final rules on the use of Construction Manager General Contractor (CM/GC) procurement procedures in the federal-aid highway program. This regulatory action was mandated in the MAP-21 legislation. FHWA has been allowing states to use CM/GC under the authority of its Special Experimental Project Number 14 (SEP-14) process for the past several years. MAP-21 provided the statutory authority to allow state DOTs to use CM/GC as a routine contracting practice. AGC commented extensively on the proposed rule and FHWA highlighted those comments in the background portion of the rule notification. AGC will be reviewing the rules to determine which of our comments were adopted.
One significant issue AGC raised suggested that the rule should clarify whether the CM/GC contractor’s responsibilities are limited to providing constructability and material reviews, or whether the CM/GC contractor is expected to perform design services. The AGC referenced recent legal decisions that showed a trend of liability and responsibility being assigned to CM/GC contractors related to the preconstruction phase of the contract for what have been considered professional services provided. The FHWA decided that further clarification on this issue was unnecessary.
AGC Comments on FHWA Buy America Revisions
Source: AGC Highway Facts Bulletin
AGC submitted comments to the Federal Highway Administration (FHWA) in strong support of its proposal to provide nationwide waivers of Buy America requirements for commercially available off-the-shelf (COTS) products with iron and steel components and for steel tie wire permanently incorporated in precast concrete products. AGC also urged FHWA to issue a nationwide waiver for specialized steel lifting devices that are incorporated in precast concrete products. AGC suggested that FHWA raise the dollar threshold for the minimum amount of steel products that can be exempted from Buy America requirements from $2500 to $20,000 or base it on a PPI escalator. AGC also suggested that utility relocation work required as part of a highway improvement project also be exempted.
FHWA took this action to relieve some of the burden on states in implementing Buy America requirements. While these requirements have been in place since the mid-1980s, following the ramp up of Federal highway funding under the American Recovery and Reinvestment Act (ARRA), new scrutiny was placed on how Buy America requirements were enforced on FHWA funded projects. The new scrutiny led to unreasonable requirements to obtain certification that every component of every manufactured product was Buy America compliant. The new scrutiny also led to every project component, no matter how small (nails, bolts, etc) to also meet the mandate. At AGC’s urging FHWA issued guidance relieving some of the mandate on manufactured products but this was challenged in court. The judge ruled that FHWA had not followed proper procedures in issuing this guidance. AGC along with several industry groups urged FHWA to issue a rule following the proper procedures to relieve some of the burden.
AGC’s Data Digest – November 22-30, 2016
Fewer metros add construction jobs in October; Dodge, Beige Book report mixed starts. [more]
Federal Court Temporarily Halts Overtime Rule
Source: AGC of America
On November 22, a federal judge issued a nationwide injunction against the U.S. Department of Labor’s (DOL) overtime rule, which was scheduled to take effect on December 1, 2016. As a result of this court order, implementation of the rule is effectively halted. However, the injunction is a temporary measure that suspends the regulation until litigation comes to a close. DOL has said that it is currently “considering all of [its] legal options.” At this time, it is unclear if or when the rule will take effect.
The most significant change under rule is a doubling of the standard salary threshold for exempt employees – from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). Many AGC contractors had already taken steps to implement this rule, such as by reducing employee hours or notifying employees of salary increases. Given the uncertain path ahead, those contractors may want to re-evaluate the overall impact of the changes made and either roll-back or keep those implementation efforts in place, considering both the impact on the company’s bottom line as well as employee morale.
It is not clear how President Trump will proceed as this is a rule that pits Trump, the populist, against Trump, the businessman. On the campaign trail, he did not clearly oppose or support the rule. Nevertheless, AGC has and will continue to support legislation and regulatory changes to lower the overtime threshold and gradually phase in the requirement over several years.
For more AGC information on this rule, click here. For more AGC information on the regulatory road between now and Inauguration Day, click here.