Senate Expected to Consider Legislation Next Week
The House, by a vote of 244 to 188, passed the American Recovery and Reinvestment Act of 2009, better known as the Stimulus Package, on January 28. The bill now goes to the Senate, which is expected to take up its version next week. The package includes significant funding for all of the major construction markets, in most cases exceeding yearly appropriations as compared to FY '08. The funds generally have to be obligated in 180 days, with unobligated funds reprogrammed by their disbursing agencies. Similar provisions apply to funds not spent in 2 years, with any unspent funds being reprogrammed by disbursing agencies.
AGC members were at the forefront of this legislative struggle, sending almost 10,000 letters, delivering a petition signed by over 3,000 supporters, and making an unknown number of phone calls in support of this legislation.
The debate now shifts to the Senate. We strongly urge you to reach out to your employees, your suppliers, your subcontractors, and your local government and business community leaders to ask them use the tools on the AGC website to contact your Senators. Visit www.agc.org/s1.
Highlights of the Stimulus Package
- Building Infrastructure Funding: Approximately $55 billion in Building Infrastructure, including: $6.7 billion for GSA buildings, $8.5 billion for Military Construction, and $1 billion for VA Construction- all distributed at the discretion of the particular federal agency of jurisdiction. This also includes $20 billion for K-12 School and Higher Ed Construction, distributed by Title I formulas (for K-12) and by a new formula (for Higher Ed).
- Tax Provisions: Permanent repeal of 3% withholding tax on government contractors, extension of increased small business expensing, extension of the depreciation bonus, a 5-year carry-back of net operating losses, long term extension and modification of the renewable energy tax production credit, a tax credit bond option for state and local governments, and numerous bonding provisions for energy and schools
- Funding for Water, Highway and Transportation Infrastructure
- Davis-Bacon Requirements: Any projects funded directly by or assisted in whole or in part by and through the Federal Government will have Davis-Bacon wage requirements. In addition, the bill calls for the application of Davis-Bacon to any projects funded by tax bonds.
- Buy American: The House bill mandates that iron and steel used in construction and repair projects funded under the bill be produced in the United States unless found to be prohibitively expensive (by increasing the cost of the project by 25 percent).
- Federal Contracting Requirements: The Federal Acquisition Regulation shall apply to contracts awarded with funds in the Act where pre-existing contracting regulations do not exist. Contracts are encouraged to be awarded as fixed-price contracts through the use of competitive procedures. Existing contracts already awarded may be utilized in order to obligate such funds expeditiously (such as multiple award contracts). Any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website Recovery.gov.
- E-Verify: The House bill mandates the use of the "E-Verify" electronic verification system for all businesses receiving funds derived from the stimulus. This would be both direct federal and federal-aid projects. Efforts are underway to get this provision removed from the final bill. The Senate may consider an amendment that would create a more expansive E-Verify requirement. This remains a moving target which will likely be addressed in conference.