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On Dec. 13, the U.S. Department of Labor announced its final rule on Nondisplacement of Qualified Workers Under Service Contractors, which will implement Executive Order 14055.
Issued on Nov. 18, 2021, by President Joe Biden, the EO requires that contractors and subcontractors that work on covered federal service contracts, which include most contracts valued at or above $250,000 covered by the Service Contract Act, must in good faith offer service employees employed under the predecessor contract a right of first refusal of employment on the successor contract. ABC opposed the proposed rule and urged the DOL to withdraw the entire rule. To learn more, read ABC general counsel Littler Mendelson’s analysis of the final rule.
According to the DOL press release, the final rule does the following:
The final rule is effective Feb. 12, 2024, and will apply to solicitations issued on or after the effective date of the final regulations issued by the Federal Acquisition Regulatory Council.
More information on the final rule:
Background:
On Aug. 15, ABC submitted comments to the DOL identifying a number of concerns with its proposed rule on Nondisplacement of Qualified Workers Under Service Contracts, which would implement EO 14055.
In its comments, ABC urged the DOL to withdraw the rule in its entirety. The comments state, “ABC is concerned that, as written, the NPRM conflicts with the plain language of the SCA, which does not authorize the DOL, or the president, to require contractors to hire the incumbent employees of predecessor contractors on projects covered by the SCA. Two courts have so held without contradiction by Congress or by any other courts. In each of these cases, the courts rejected efforts by employees and/or labor organizations to assert preferential hiring rights for incumbent employees under the Act.
“In addition to and apart from the above conflict between the NPRM and the governing statute, ABC is also concerned that the proposal would create gross inefficiencies in the procurement process and would disproportionately impact small contractors and subcontractors through the imposition of additional regulatory burdens and substantial costs of compliance.” According to the NPRM, the total number of potentially affected small firms ranges from 74,097 to 329,470.
Further, “ABC observes that neither the EO nor the proposed rule contains any evidentiary support for the claim that the proposed changes will actually achieve greater efficiency in federal procurement. As is evident from the discussion of specific provisions of the NPRM, the proposed rule is likely to create greater inefficiencies as successor contractors are forced to employ workers who are not familiar with the often-different work practices that the successors may wish to implement. Thus, the cost savings that an agency may seek to achieve by hiring a new contractor will be lost or unobtainable if the successor is not allowed to bring its own uniquely qualified workforce onto the project.”
The Obama administration finalized a similar rule which was rescinded by the Trump administration in 2020.
Continue to follow Newsline for any further updates.
The Biden administration recently released its Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions. The agenda lists upcoming rulemakings and other regulatory actions from each agency that the administration expects to publish in 2023 and 2024. ABC has prepared a summary of the actions of interest to ABC members by agency.
U.S. Department of Labor
Occupational Safety and Health Administration
Read about other OSHA issues that could affect the construction industry on the Office of Information and Regulatory Affairs website at reginfo.gov.
Wage and Hour Division
Office of Apprenticeship
U.S. Department of the Treasury
Federal Acquisition Regulation Council
Federal Trade Commission
National Labor Relations Board
Council on Environmental Quality
U.S. Department of Transportation
To learn more about these regulatory actions, read ABC’s Regulatory Roundup.
Throughout 2023, the Biden administration has pushed to roll back Trump-era initiatives and institute new, pro-union policies that challenge ABC members’ ability to win work. ABC continues to fight against these proposed rules and regulations affecting merit shop contractors and advocate for open competition and free enterprise.
ABC’s Regulatory Roundup is updated on a regular basis and includes information about federal regulations, guidance and compliance materials from the U.S. Department of Labor, U.S. Department of the Treasury, Federal Acquisition Regulation Council, National Labor Relations Board, Federal Trade Commission, Environmental Protection Agency and Council on Environmental Quality.
Read ABC’s December Regulatory Roundup to learn more about the latest developments affecting the construction industry.
Reports indicate that not a single electric vehicle charging station has been constructed with the $7.5 billion in federal investment available through the Federal Highway Administration’s National Electric Vehicle Infrastructure Formula Program, threatening the Biden administration’s goal to build 500,000 EV chargers by 2030. The final rule implementing the NEVI Formula Program contained a number of ABC-opposed, union-favoring labor requirements that may be contributing to the program’s stagnation.
The NEVI Formula Program is intended to implement provisions of the Infrastructure Investment and Jobs Act, signed into law in 2021, that dedicated $7.5 billion for electric vehicle charging stations. The program’s goal is to support the installation of electric vehicle chargers across the country as part of a domestic push to shift away from gas-powered vehicles.
In order to receive NEVI program funding, EV charging station developers are required to ensure that all electricians working on electric vehicle supply equipment projects either be certified by the International Brotherhood of Electrical Workers’ Electric Vehicle Industry Training Program or be a graduate or recipient of a continuing education certificate from a government-registered apprenticeship program with a focus on EVSE installation approved by the U.S. Department of Labor in consultation with the FHWA. To date, ABC is not aware of any such programs approved by the DOL and FHWA.
Additionally, the rule requires all NEVI-funded projects that require more than one electrician to use at least one GRAP-enrolled apprentice. Finally, other on-site, nonelectrical workers directly involved in the installation, operation and maintenance of chargers must have graduated from a GRAP or have appropriate licenses, certifications and training as required by the state.
ABC submitted comments in response to both the proposed rule and a request for information strongly urging the FHWA to avoid union labor requirements and to instead welcome all qualified contractors to build EV chargers. Unfortunately, the agency disregarded these recommendations in the final rule.
Under the IIJA, the NEVI funds are administered by states, which can contract out the construction and operation of the charging stations to private companies. So far, every state has taken the initial steps to receive the NEVI cash by submitting a plan to the Joint Office in 2022 and an update in 2023. But if a governor were to reject the funds, municipalities could apply to administer the funds instead.
According to a Politico article, Ohio was the first state to break ground on the nation’s first charger funded by the NEVI program in October. Following Ohio, Pennsylvania also broke ground on its first NEVI-funded charger in November. Another six states have awarded contracts for their first round of charging sites, while 15 states and Puerto Rico are in the process of soliciting bids from the private sector.
But 27 states and the District of Columbia have yet to even start soliciting bids, and some states like Missouri indicate they may not post their solicitation until 2025. (Three of those states—Nevada, New York and Vermont—are procuring some federally funded chargers outside of a public request for bids, but plan to solicit bids in the future.)
Even some states with high rates of EV adoption, like California and Washington, have yet to award any of their funds.
In a June study, the National Renewable Energy Laboratory projected the United States will need 1.2 million public chargers by 2030 to meet charging demand, including 182,000 fast chargers.
In response to unfavorable coverage about the NEVI program’s lack of progress, White House officials maintained that the administration is making progress and is on track to meet their EV charging station goals.
If you are an ABC member, perform EV charging station construction and have a story to share about your experience with projects subject to NEVI funding and regulations, please contact Michael Altman at altman@abc.org.
On Nov. 22, the Federal Highway Administration released its Greenhouse Gas Performance Measure final rule.
The final rule requires that state departments of transportation and metropolitan planning organizations—the state entities responsible for transportation infrastructure construction and maintenance—must measure and report GHG emissions associated with transportation. Further, state DOTs and MPOs must set targets for reducing carbon dioxide emission and report on progress toward these targets. The rule does not mandate particular targets, allowing states to set their own targets as long as they achieve some amount of emission reduction.
Depending on how state DOTs and MPOs implement their emission reduction targets, certain transportation projects such as roadways and bridges could be delayed as the agencies seek to achieve GHG emission goals. ABC will continue to monitor the impact of this rule as state DOTs and MPOs move forward with implementation.
The key components of the STEP Safety Management System work synergistically to build an effective safety culture. Beyond responsibilities, resources and rules are imperative. All three “Rs” work together and missing just one sets a company up for potential failure.
There is one additional “R” that affects the equation: relationships. Safety is all about relationships and planning, and planning requires logical allocation of resources following a specific set of rules.
You must allocate resources for safety during the planning phase of a project. Waiting too long will cause insurmountable issues during later phases and jeopardize employee health and project viability. When resources are lacking, leaders must be willing to immediately stop, reevaluate and move forward after enacting a plan utilizing sufficient resources to mitigate identified and potential hazards.
Success in Safety = Responsibilities Explained + Rules Understood + Resources Allocated + Robust Relationships
Trailing indicators are metrics used to measure past safety performance and are usually based on a calendar or policy year. Two traditional trailing indicators for safety are Total Recordable Incident Rate and Days Away, Restricted or Transferred rate. Both TRIR and DART are compiled using the formula from the OSHA 300 form. These are expressed in the number of incidents per 100 employees. Additionally, your insurance broker can provide you with your Experience Modification Rate, which is another commonly used trailing indicator. Trailing indicators are like the final score of a game: They tell you results, and you can study them when planning for future improvement.
To be more effective, find other metrics that can be expressed in terms that are meaningful to people outside of the safety department. For example, if you’re a concrete company, workers’ comp costs per 100 cubic yards of concrete might make sense, or workers’ comp costs per $100 of payroll may resonate as well. Listen to your executives and front-line workforce and learn to speak their language to build those robust relationships to make your company safer for everyone.
Looking for help building your safety program?
Discover resources available through ABC’s STEP Safety Management System and other health and safety topics at abc.org/safety.
For more information or assistance, please reach out to Joe Xavier or Aaron Braun.
Throughout 2023, ABC has been closely monitoring federal regulatory actions and updating ABC members through the ABC Regulatory Roundup. Several federal rules have gone into effect or are scheduled to go into effect in the near future.
See the below list to learn more about important compliance dates.
NLRB’s Joint Employer Final Rule
On Oct. 27, the National Labor Relations Board published its final rule on Joint Employer Status Under the National Labor Relations Act, which takes an ax to the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status. On Nov. 16, the NLRB extended the effective date of its final rule from Dec. 26 to Feb. 26, 2024. The new standard will only be applied to cases filed after the rule becomes effective.
On Nov. 9, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s Joint Employer Final Rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. Read more about the final rule.
OSHA’s Improve Tracking of Workplace Injuries and Illnesses Final Rule
On July 21, 2023, the U.S. Department of Labor’s Occupational Safety and Health Administration issued its Improve Tracking of Workplace Injuries and Illnesses final rule, which will undo the ABC-supported provisions of the 2019 final rule promulgated under the Trump administration and reprise the 2016 Obama-era rule. The final rule becomes effective on Jan. 1, 2024, for certain employers and OSHA intends to make much of the data it collects publicly available online. Read more about the final rule.
NLRB ‘Ambush’ Election Final Rule
Despite years of litigation, the Biden administration’s NLRB has revived a controversial policy from the Obama era in the form of its Representation-Case Procedures final rule. The direct final rule, issued without notice or the opportunity to comment, essentially restores provisions of the “ambush” election rule of 2014 and rescinds the remaining ABC-supported provisions of the 2019 final rule. The rule will apply to representation petitions filed on or after Dec. 26, 2023, and employers will have less time to respond to representation petitions. Read more about the final rule.
DOL’s Updating the Davis-Bacon and Related Acts Regulations Final Rule
On Aug. 23, the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers took effect on Oct. 23.
On Nov. 7, ABC and its Southeast Texas chapter announced the filing of a complaint in the U.S. District Court for the Eastern District of Texas, challenging the controversial final rule. Read more about the final rule.
DOL’s Form LM-10 Employer Report Final Rule
On July 28, the DOL’s Office of Labor-Management Standards published its final revision to the Form LM-10 Employer Report, which adds a checkbox to the Form LM-10 report requiring certain reporting entities to indicate whether such entities were federal contractors or subcontractors in their prior fiscal year, and two lines for entry of filers’ unique entity identifier and federal contracting agency or agencies, if applicable. The revision is effective for reports filed on or after Aug. 28, 2023. Read more about the final rule.
EPA and Army Corps Revised Definition of WOTUS
On Aug. 29, the U.S. Environmental Protection Agency and Army Corps of Engineers issued a final rule regarding amendments to the definition of “waters of the United States” subject to Clean Water Act regulation. This rule is aimed at bringing the January 2023 WOTUS final rule into compliance with the U.S. Supreme Court’s May 25 decision in Sackett v. Environmental Protection Agency.
The final rule took effect on Sept. 8, 2023, except in states where it has been blocked by a federal court. EPA has provided information on the litigation and a map of impacted states. Read more about the final rule.
Treasury/IRS Inflation Reduction Act Prevailing Wage and Apprenticeship Requirements
The Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax incentives for the construction of energy projects, conditioned on requirements that contractors meet prevailing wage and government-registered apprenticeship requirements.
Following guidance issued in Nov. 2022, these requirements took effect for projects beginning on or after Jan. 30, 2023. On Aug. 29, Treasury issued a proposed rule to provide additional guidance on the requirements. The proposed rule states that taxpayers may now rely on it for guidance regarding IRA tax incentives, until a final rule is published and takes effect. Resources and guidance on the IRA are available on ABC’s website.
CEQ Phase I National Environmental Policy Act Implementation Revisions
On April 19, 2022 the Council on Environmental Quality announced its final rule revising the implementation regulations of the National Environmental Policy Act. The rule reversed elements of the ABC-supported 2020 final rule that modernized and streamlined the federal environmental review process.
While the rule took effect on May 20, 2022, federal agencies were given until Sept. 14, 2023, to incorporate the revisions into their environmental review processes. Read more about the final rule here.
ABC honored Ben Houston with the Life Membership Award at ABC Leadership Institute in Palm Springs, California. A Life Member is an individual retired from an active role in the industry who contributed outstanding service to ABC during their active years.
Working for more than 50 years at TDIndustries of Dallas in various roles, Houston is also licensed as a professional engineer and air conditioning contractor. Houston also carries master plumbing and master electrician licenses in Texas. Highlighted projects of his career include AT&T Stadium in Arlington, Texas, and the 60-story Bank of America Building in Charlotte, North Carolina, the tallest building in the state.
In addition to playing an instrumental role in industry-leading projects, Houston remains active in TEXO, his local ABC chapter, and along with his wife, Sally Houston, has sponsored scholarships at the School of Mechanical Engineering at the University of Texas at Austin.
On Nov. 15, Rep. Lloyd Smucker, R-Pa., introduced a resolution (H.J. Res.103) under the Congressional Review Act providing for congressional disapproval of the U.S. Department of Labor’s final rule, Updating Davis-Bacon and Related Acts Regulations. This controversial final rule largely disregards the feedback of ABC, construction industry stakeholders and thousands of small businesses urging the withdrawal of––and/or improvements to––this unnecessary, costly and burdensome regulation.
Smucker’s Nov. 20 press release promoting the CRA highlights opposition from lawmakers, taxpayer watchdogs and dozens of construction industry groups to the Biden administration’s final rule, which makes radical revisions to regulations implementing the Davis-Bacon Act and Related Acts that apply to federal and federally assisted construction projects funded by taxpayers and procured by government and private owners.
“The Wage and Hour Division’s Davis-Bacon rule is a complete giveaway to union bosses,” said Education and the Workforce Committee Chairwoman Virginia Foxx, R-N.C. “This rule dims America’s infrastructure outlook by increasing costs for federal construction projects and imposing a massive financial burden on taxpayers. I commend Rep. Smucker for leading a CRA resolution to block this harmful rule and the Biden administration’s bureaucratic overreach.”
An ABC-led construction industry coalition letter expressed support for Rep. Smucker’s CRA, because “onerous new requirements and artificial inflation of construction costs imposed by this new Davis-Bacon Act rule will only exacerbate [economic headwinds facing the construction industry] and undermine taxpayer investments in much-needed infrastructure.”
Instead, the DOL is moving forward with dramatic changes to Davis-Bacon Act regulations, reversing much-needed reforms that were established by the Reagan administration and unlawfully increasing the regulatory burden on small businesses, new industries and critical public works projects.
The final rule was published in the Federal Register on Aug. 23, 2023, and became effective on Oct. 23, 2023. Therefore, construction contracts executed after this date are subject to the new rule. In addition, the DOL will begin implementing the final rule’s ill-advised changes to its broken and convoluted wage determination process that are likely to make government-determined wages inaccurate and less reflective of a local prevailing wage.
On Nov. 7, ABC and the ABC Southeast Texas chapter filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging numerous aspects of the DOL’s inflationary and anti-competitive final rule.
As outlined in ABC’s Aug. 31 op-ed published in The Hill opposing the Biden DOL rule, litigation appears to be the best short-term strategy to defeat or delay some or all aspects of the rule until a pro-free enterprise White House can reverse this policy.
Unfortunately, a Sept. 6 letter to Acting DOL Secretary Julie Su signed by 13 House Republicans expressed support for the DOL’s new regulation.
ABC has issued a targeted grassroots alert asking ABC members to contact lawmakers in support of Rep. Smucker’s CRA and in opposition to the DOL’s final rule as it is unclear if lawmakers understand the radical changes in the final rule.
The CRA requires agencies to report the issuance of “rules” to Congress and provides Congress with special procedures, in the form of a joint resolution of disapproval, under which to consider legislation to overturn rules. If a CRA joint resolution of disapproval is approved by both houses of Congress and signed by the president, or if Congress successfully overrides a presidential veto, the rule at issue cannot go into effect or continue in effect. Rep. Smucker’s CRA is not likely to succeed in the current Congress.
Background on the Davis-Bacon Act
The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers.
According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.
The Biden administration and Congress have recently expanded the application of Davis-Bacon Act prevail wage and benefit requirements onto hundreds of billions of dollars’ worth of private sector clean energy and microchip manufacturing projects that have never been covered by Davis-Bacon regulations. In addition, the rule is expected to inflate costs on hundreds of billions of dollars of new government-financed infrastructure projects funded in part by the Infrastructure Investment and Jobs Act.
Learn more at abc.org/davisbacon.
Congratulations to the 30 ABC members that have been honored by the U.S. Department of Labor with the 2023 HIRE Vets Medallion Award, only federal-level award that recognizes a company or organization’s commitment to veteran hiring, retention and professional development. The members are:
Adaptive Construction Solutions, Houston
Armcorp Construction Inc., Celina, Ohio
Caddell Construction Co. (DE) LLC, Montgomery, Alabama
Carter Machinery Co. Inc., Salem, Virginia
Clarklift of Des Moines Inc., Des Moines, Iowa
Convergint Technologies LLC, Schaumburg, Illinois
Converse Construction Inc., Redding, California
Converse Electric, Grove City, Ohio
Delmarva Veteran Builders LLC, Salisbury Maryland
Diplomat Construction & Demolition Inc., West Chester, Pennsylvania
DVL Group Inc., Bristol, Pennsylvania
Early Services Inc., Decatur, Alabama
EquipmentShare.com, Columbia, Missouri
Foley Inc., Piscataway, New Jersey
Gary R Banks Industrial Group, West Berlin, New Jersey
Herc Rentals, Bonita Springs, Florida
Hudgins Contracting Corp., Hampton, Virginia
Kwest Group LLC, Perrysburg, Ohio
National Native American Construction Inc., Coeur D’Alene, Idaho
NextEra Energy, Juno Beach, Florida
NextOp Inc., Houston
Phillips 66, Houston
Relyant Global LLC, Maryville, Tennessee
SDV Construction Inc., Albuquerque, New Mexico
Sevan Multi-Site Solutions Inc., Downers Grove, Illinois
Silver Mountain Construction LLC, Palmer, Alaska
Southern Co., Atlanta
Trotter Management Services LLC, Schwenksville, Pennsylvania
United Rentals Inc., ABC strategic partner and program sponsor of ABC’s inclusion, diversity and merit initiatives, Stamford, Connecticut
Warfeather, Coweta, Oklahoma
The purpose of the HIRE Vets Medallion Award is to recognize employers that have employed and retained veterans, including their efforts to establish employee development programs for veterans, and employers who offer veteran-specific benefits to improve retention. Award recipients may utilize the medallion in the marketing of their firm as a veteran-friendly business when hiring, and in efforts to attract additional business.