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ABC Newsline
On Oct. 15, the U.S. Department of Defense issued a final rule establishing its Cybersecurity Maturity Model Certification Program requiring federal contractors and subcontractors competing for DOD contracts to demonstrate continued compliance with a range of cybersecurity measures in order to maintain eligibility for performing and winning new federal awards.
The new requirements apply to all contractors and subcontractors on DOD projects that process, store or transmit information on contractor servers that meet the standards for Federal Contract Information or Controlled Unclassified Information.
Requirements vary from a self-assessment of compliance with cybersecurity measures to triennial assessment and certification of compliance by third-party contractors or the DOD, depending on the data involved in a specific contract.
According to analysis by Wiley’s cybersecurity legal practice group, “The final rule also offers some clarity for contractors about the security requirements they will need to address under CMMC 2.0. The final rule incorporates by reference the security requirements in certain existing publications, such as NIST SP 800-171 Revision 2.”
In February 2024, ABC joined the U.S. Chamber of Commerce and eight other groups in submitting comments on the proposed rule calling for more clarity (e.g., definitions), expressing concerns about costs and asking questions regarding capacity and other process and organizational issues. The comments urged flexible implementation of CMMC program requirements.
The final rule is effective Dec. 16, 2024. However, CMMC 2.0 will be phased in over time, and the DOD estimates that full implementation by all defense contractors will take several years.
In addition, the phased implementation of CMMC 2.0 will begin only after the related Defense Federal Acquisition Regulation Supplement rule, Assessing Contractor Implementation of Cybersecurity Requirements––which would implement contractual requirements related to CMMC 2.0 and was proposed in August 2024––is finalized. This rule is expected to be finalized some time in 2025.
On Oct. 11, ABC submitted comments on the August 2024 proposed rule, again calling for critical clarifications and improvements to ensure CMMC 2.0 does not unnecessarily burden federal contractors. ABC also engaged over 200 members to submit comments urging the DOD to improve the rule through ABC’s grassroots regulatory efforts. Finally, ABC joined an Oct. 15 comment letter from a coalition of industry groups.
For more information on CMMC 2.0 and other cybersecurity requirements that affect contractors, visit abc.org/cybersecurity.
On Oct. 1, 2024, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs released its updated its Construction Compliance Review Scheduling Letter and Itemized Listing (also known as a construction scheduling letter). The construction scheduling letter notifies federal contractors they will be undergoing a compliance review of their equal employment opportunity obligations. The updated letter applies to all reviews scheduled on or after Oct. 1, 2024.
OFCCP’s new construction scheduling letter requires additional information to be submitted by the contractor. New information contractors must submit includes:
Contractors must also demonstrate that personnel practices such as seniority practices, job classifications and work assignments do not result in discrimination.
For additional information, see OFCCP’s FAQ and Contractor Compliance Institute, as well as law firm Jackson Lewis’s analysis.
On Sept. 30, the U.S. Department of Labor’s Wage and Hour Division issued an annual update to the hourly minimum wage for federal contract workers covered by Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, in the Federal Register.
Effective Jan.1, 2025, the EO 14026 minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase from $17.20 to $17.75 per hour. This minimum wage rate will apply to nontipped and tipped employees alike. Visit the DOL’s webpage on EO 14026 for more information.
Contracts similar to those covered by EO 14026 that were entered into, renewed or extended before Jan. 30, 2022, are generally subject to a lower minimum wage rate established by the Feb. 12, 2014, Executive Order 13658, Establishing a Minimum Wage for Contractors. On Jan. 1, 2025, the EO 13658 minimum wage will increase from $12.90 to $13.30 per hour.
Visit the DOL’s Wage and Hour Division for more information.
Effective Jan. 1, 2024, the Corporate Transparency Act requires certain entities, including many small businesses, to report information about the individuals who ultimately own or control them (also known as “beneficial owners”) to the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.
A separate regulatory requirement currently requires many financial institutions to also collect beneficial ownership information, or BOI, from certain customers that seek to open accounts as part of federal customer due diligence requirements.
ABC has expressed serious concerns with the Treasury’s FinCen’s implementation of CTA. FinCEN’s implementing regulations require millions of small businesses, including nearly every employer with 20 or fewer employees, to report personal information of their beneficial owners and update that information periodically throughout the life of the business. Failure to comply with the onerous reporting requirements could subject small business owners and employees to potential fines and jail time.
On March 1, a federal judge for the U.S. District Court for the Northern District of Alabama Northeastern Division ruled that the CTA is unconstitutional. The decision, however, only applies to members of the association involved in the suit, and all other businesses are still required to adhere to the CTA’s filing requirements. ABC has called on Congress to examine the ruling and has argued that a stay in enforcement should apply to all affected parties. On March 11, Treasury appealed the decision.
On Sept. 3, ABC joined 150 members of the Small Business & Entrepreneurship Council in a letter of support for H.R.9278, introduced by Rep. Zach Nunn, R-Iowa. This legislation would provide small businesses with an additional year to file the beneficial ownership information.
“Although filing under the CTA began at the start of this year, FinCEN reports it has received just 10% of required submissions,” the letter stated. “This compliance rate can be attributed directly to the general lack of awareness among the small business community when it comes to the new rules. Given this massive education gap, it is clear additional time is needed for regulators and other stakeholders to continue their outreach to affected small businesses."
In the letter, ABC and the SBE Council urged House Speaker Mike Johnson, R-La., to bring H.R. 5119 to the U.S. House of Representatives floor for a vote to provide business owners and employees with more time to comply with the CTA.
A similar bipartisan bill to H.R. 5119 sponsored by Reps. Nunn and Joyce Beatty, D-Ohio, passed the House late last year, 420-1. However, U.S. Senate Banking Committee Chair Sherrod Brown, D-Ohio, stalled the legislation, putting small businesses at risk.
Information about FinCEN’s BOI reporting requirements:
ABC encourages members and small business owners to discuss FinCEN’s BOI reporting requirements with counsel.
Please continue to monitor Newsline for additional updates.
On Oct. 7, ABC submitted comments on the U.S. Small Business Administration’s proposed rule on the Historically Underutilized Business Zone program. In addition to revisions to the HUBZone program, the proposal also makes a number of significant changes to a wide range of SBA programs utilized by federal contractors, including joint ventures, the mentor-protege program and recertification requirements under multiple award contracts.
Key changes to SBA programs include:
ABC’s comments recommend that the SBA reconsider aspects of the proposal that would increase the difficulty for small businesses to access HUBZone and other programs. The comments urge the SBA to balance the agency’s valid interest in ensuring that firms accessing these programs meet the appropriate statutory requirements against the potential for unintentionally discouraging small business participation.
For more information, see law firm Wiley Rein’s article.
ABC has added Alabama chapter member Tim Harrison of Harrison Construction Co. Inc. to the Beam Club Hall of Fame Level.
The Beam Club was established in 1966 to recognize ABC’s top membership recruiters for their commitment to growing the association. By recruiting five new members, ABC members are automatically enrolled in the Beam Club by their chapter. Members receive one point for each new member recruited. Beam Club activity is ongoing from year to year, with members’ point totals continually accruing and advancing members to the next Beam Club award level.
To reach the Hall of Fame Level of the Beam Club, ABC members must recruit 50 new members.
For more information on the Beam Club, contact Kayli Lewis at [email protected].
After months of failed negotiations, a strike by members of the International Longshoremen’s Association began Oct. 1. As ILA members walked off the job without a new contract from the United States Maritime Alliance, more than 35 ports shut down along the East and Gulf coasts. In their first strike since 1977, the ILA has pledged to strike ‘as long as necessary’ seeking higher wages and a new language on automation in a six-year contract with the U.S. Maritime Alliance.
According to estimates, the economic loss from the strike will cost billions of dollars each day. It will also affect businesses large and small that are not party to the negotiations, but rely upon the free flow of goods, both imports and exports, through these critical ports.
In a statement on Oct. 1, ABC vice president of legislative & political affairs Kristen Swearingen said, “President Joe Biden must invoke his powers under the Taft-Hartley Act to restore operations at the ports and bring parties to the negotiating table so a contract can be reached with the help of a federal mediator. If the Biden-Harris administration is serious about rebuilding America––and maximizing hundreds of billions of dollars in taxpayer investments in infrastructure, clean energy and manufacturing––the construction industry simply can’t afford any more supply chain disruptions and additional costs on critical materials.”
“The price of construction materials has already increased by almost 40% since February 2020 and there have been reports of widespread shortages of key construction materials. Coupled with the construction industry’s skilled labor shortage topping half a million in 2024, these industry headwinds needlessly inflate the cost of construction projects and are exacerbated by the Biden-Harris administration’s weak leadership and anti-competitive executive actions.”
On Oct. 2, ABC joined a coalition of 270 federal, state and local trade associations in a letter calling upon President Biden to immediately use his authorities to end the strike and, resolve this situation expeditiously to protect businesses and consumers from further harm. The letter also explains that while the coalition prefers parties reach agreements on their own, the closures’ devastating economic impact requires intervention by the administration.
Several members of Congress have also commented on the port strike, including House Speaker Mike Johnson’s, R-La., statement calling for leadership from the administration and for the parties to return to the table as well as a letter from Transportation and Infrastructure Committee Chairman Sam Graves, R-Mo., and Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster, R-Fla., urging President Biden to use the authority of his office to bring an end to the strike at U.S. East and Gulf Coast ports.
Prior to the strike, on Sept. 29, President Biden was asked about his intentions on whether to exercise his powers under the Taft-Hartley Act to keep the ports open and longshore workers on the job, responded, “No … because it’s collective bargaining, and I don’t believe in Taft-Hartley.” Notably, President George W. Bush applied the act in 2002 to halt an 11-day lockout of union members at West Coast ports.
On Oct. 1, when the strike began, the White House issued a statement: “President Biden and Vice President Harris are closely monitoring potential supply chain impacts and assessing ways to address potential impacts, if necessary. The President and Vice President were briefed on Agency assessments that show impacts on consumers are expected to be limited at this time, including in the important areas of fuel, food, and medicine.
“The President has directed his Supply Chain Disruptions Task Force to meet every day and prepare to address potential disruptions, if necessary. He has also directed his team to continue engaging extensively with labor, industry, state and local officials, ocean carriers, and rail and trucking companies. The Administration has already conducted dozens of meetings with industry on their plans, including multiple meetings with retailers, grocers, manufacturers, agriculture.”
USMX issued a statement yesterday noting its support for collective bargaining and said, “Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running.” The ILA responded to USMX, saying, “The ILA has rejected their so-called “nearly 50% wage increase” because it fails to address the demands of our members adequately.” The ILA has also created a strike update website.
Meanwhile, Acting Secretary of Labor Julie Su issued a statement yesterday on the negotiations. The statement seems to favor labor’s position on wages, saying that the shipping companies “have refused to put an offer on the table that reflects workers’ sacrifice and contributions to their employer’s profits.”
In response to the strike, the Federal Maritime Commission issued a release yesterday highlighting consumer assistance, enforcement and litigation services that individuals and companies could find helpful in seeking relief from current supply chain challenges.
ABC will continue to provide updates in Newsline.
On Sept. 27, California Gov. Gavin Newsom, a Democrat, issued a veto on SB 894, a bill that centered around the imposition of mandated project labor agreements on state construction projects. When introduced, the bill originally was crafted to mandate PLAs on all state projects over $35 million in total project costs, directly mirroring President Joe Biden’s Executive Order 14063, which mandates PLAs on all federal construction projects over the same $35 million threshold.
Due to ABC-led advocacy, the bill’s negative impacts were first significantly mitigated through the legislative process and amended to apply to only a handful of projects within the California State University system or overseen by the state’s Judicial Council. This amended bill was passed by the legislature and sent to Gov. Newsom for his assumed signature and enactment.
However, Gov. Newsom vetoed the bill outright and sent an accompanying letter to the legislature explaining that “while … generally supportive of PLAs as an option,” he was wary of the budgetary impacts and the lack of prudence in spending taxpayer money on important projects under this mandate. Newsom wrote, “The new requirements proposed in this bill could result in additional cost pressures that were not accounted for in this year’s budget.”
He said that he aimed to “[avoid] deep program cuts to vital services and protected investments in education, health care, climate, public safety, housing, and social service programs that millions of Californians rely on.” Through the veto and letter, Newsom acknowledged that the unnecessary added costs of PLAs would not only affect the bottom lines of the much-needed projects the state aimed to build, but also have negative impacts on other important goods and services funded by California taxpayers.”
This veto follows similar recent actions and statements from other state and local leaders on government-mandated PLAs, including Washington, D.C., Democratic mayor Muriel Bowser, who declined to sign a city council ordinance this year that would have expanded pro-PLA policies on District of Columbia projects.
It also comes amidst executive action in other states pushing forward with the imposition of PLAs on public projects, and subsequently those states’ elected officials deciding how to implement the policies and navigate the budget implications sure to come. In Maryland, Democratic Gov. Wes Moore implemented a PLA mandate earlier this year on all state projects over $20 million dollars, while Hawaii Gov. Josh Green, also a Democrat, issued a directive mandating PLAs on all state projects over $1.5 million. Pennsylvania’s Democratic governor, Josh Shapiro, also issued a directive urging general PLA use on state projects where feasible.
On Sept. 30, ABC launched an important survey to obtain ABC member contractor feedback on OSHA’s Heat Injury and Illness Prevention in Indoor and Outdoor Settings proposed rule. OSHA’s proposed rule would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards.
Elements of the proposal include the following:
For more information about the proposed rule, see OSHA’s fact sheet and heat webpage as well as ABC’s Regulatory Roundup.
OSHA is accepting comments on the proposed rule from public stakeholders until Dec. 30. ABC will utilize the anonymous survey data and anecdotes to inform our efforts. Understanding the impact of these requirements on ABC members is critical.
ABC contractor members who are interested in participating in the survey should email Karen Livingston at [email protected] to receive the survey link. The survey will close at 5 p.m. ET on Oct. 11.
ABC has added Empire State chapter member Diane Cahill of Cahill Strategies LLC to the Beam Club Presidential Level. The Beam Club was established in 1966 to recognize ABC’s top membership recruiters for their commitment to growing the association. By recruiting five new members, ABC members are automatically enrolled in the Beam Club by their chapter. Members receive one point for each new member recruited. Beam Club activity is ongoing from year to year, with members’ point totals continually accruing and advancing members to the next Beam Club award level.
To reach the Presidential Level of the Beam Club, ABC members must recruit 25 new members.