ASA Government Relations 2023 Recap

Despite the ever-changing political, regulatory, and legislative landscape, the ASA Government Relations Team wanted to briefly update you on our 2023 legislative successes as we enter the holiday season. Though this year has proven 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 your legislative priorities.

Since the beginning of the 118^th Congress, ASA has introduced our association to many newly elected members of Congress, along with maintaining our relationships with the returning members.   We served as a critical voice for small and privately owned construction businesses during another challenging year on Capitol Hill.  We worked with the 118^th Congress to advocate for the protection and promotion of tax issues that are important to small businesses, privately owned businesses, and their owners along with our continued commitment to maintain a high estate tax exemption to protect privately owned and small businesses from destructive taxes when they are passed down to future generations.  Our immediate priorities included continued investment in infrastructure, tackling supply chain issues, addressing the labor shortage, promoting workforce development and contracting reform. Finally, opposing intrusive and burdensome legislation and regulations was a major objective for ASA in 2023.  Compliance and disclosure issues relating to economic, social, and governance (ESG) requirements, particularly those that are overly costly and/or burdensome, were a major priority.

Our 2023 Fly-In on Capitol Hill on June 12, 2023, completed the following:

• 47 congressional meetings
• 26 Senate Meetings including Senate Small Business Committee Staff
• 21 House Meetings including House Small Business Committee Majority/Minority staff; House Transportation and Infrastructure Water Resources’ Subcommittee Staff.
• Members heard directly from Rep. Stauber (R-MN), sponsor of the change order bill, and we met with Rep. Fitzpatrick (R-PA), co-Chair of the Problems Solvers Caucus and the original cosponsor of the change order bill. Sens. Cruz (R-TX) and Wicker (R-MS) met with ASA members.

ASA Government Relations Director Mike Oscar, along with ASA Government Relations Team and the Government Relations Committee, work on your behalf to educate, advocate, promote collaboration, voice support and/or opposition to construction-related policies with members of Congress and congressional staff.  More specifically, we focused on the following three key areas:

• Workforce Development
  • Apprenticeship Funding Opportunities
  • Prevent the Misclassification of Employees as Independent Contractors
• Federal Tax Reform
  • Make the Pass-Through Deduction Permanent to Ensure Certainty and Predictability
  • Maximize the Value and Integrity of the New Deduction for Pass-Through Businesses
  • Repeal the Estate Tax
  • Repeal the Alternative Minimum Tax and Make Remaining Tax Extenders Permanent
• Contracting Reform
  • Establish a statute of repose for federal construction projects
  • Ensure payment protections for construction subcontractors and suppliers performing federal construction under Public-Private Partnerships
  • Prohibit the utilization of reverse auctions for the procurement of construction contracts
  • Improve the design-build construction process
  • Ensure responsible contractors are given priority in the bidding process of federal contracts

ASA’s 2023 Legislative Priorities

• H.R. 2726, the “Small Business Payment Performance Act” (ASA drafted legislation regarding change order reform)
• Infrastructure Package Implementation
• Introduction of Comprehensive Federal Procurement Legislation: change order and statute of repose reform, and pre-bid transparency in federal contracts
• P3 Bonding Water Transportation Projects
• Protecting the Small Business Information Act

The FY24 National Defense Authorization Act (NDAA) includes ASA supported procurement policies regarding progress payments, cash flow, military base access, PFAS, architectural and engineering services, and wastewater assistance.  Our top priority for this year’s bill was change order reform, but unfortunately the final bill did not address such reform.  In July, Reps. Peters (D-CA) and Stauber (R-MN), the chair of the Congressional Procurement Caucus, addressed change order reform by introducing H.R. 2726, the “Small Business Payment Performance Act.” This legislation was offered as an amendment to the House version of the FY24 NDAA and it would assist small business construction contractors receive timely payment for change orders. Construction firms of all sizes, but especially small businesses, have had to weather the effects of the pandemic and soaring construction materials costs. This commonsense and bipartisan legislation would help ensure that our nation's small business construction contractors do not go bankrupt waiting to be paid for work the federal government ordered them to perform.  We will continue to make change order reform a priority in the 118th Congress.

ASA protects U.S. taxpayers, subcontractors, small businesses, and workers by supporting H.R. 1740. This legislation ensures the common use of payment and performance insurance bond protections are applied on water infrastructure projects where federal funds are being used. Ultimately, H.R. 1740 would help ensure parity with payments protections already in place for traditionally procured infrastructure projects.

Surety insurance bonds have played a vital role in building out our nation’s infrastructure. Since the passage of the Miller Act in 1935, and subsequent state “Little Miller Acts,” payment and performance bonding have been a common requirement for public works projects. Through payment guarantees and completion assurances, surety bonds have worked to ensure projects are done on time, subcontractors and workers on the projects receive compensation, while also protecting precious taxpayer resources. Currently, more than 95 percent of all public projects require bonding. However, the advent, and increased use, of creative financing measures, such as public-private partnerships (P3s), has created an area of ambiguity, and in some instances, bonding requirements are not especially clear. This potential coverage gap leaves workers, subcontractors, suppliers, small businesses, and taxpayers exposed to unnecessary risks.

Congress previously corrected this coverage gap for P3s utilizing the Transportation Infrastructure Finance and Innovation Act (TIFIA) program with broad bipartisan support in both the House and the Senate.  H.R. 1740, which is modeled off the TIFIA policy, would close this coverage gap by ensuring proper financial protections are in place for P3 water infrastructure projects receiving Water Infrastructure Finance and Innovation Act (WIFIA) assistance.

Protecting against the risk of contractor default on infrastructure projects is of paramount concern for Congress. This bill would ensure essential payment and performance security protections will continue to exist for all forms of financing where federal funds are being used.

ASA joined the American Institute of Certified Public Accountants (AICPA) in strongly urging Congress to support the Protecting Small Business Information Act, which would delay implementation of the beneficial ownership reporting under the Corporate Transparency Act (CTA) by one year. The CTA requires the submission of regular reports to the federal government identifying the beneficial owners of businesses and other legal entities. The stated goal is to target shell companies used in illicit financial transactions, but the new law defines the targeted entities as those having fewer than 20 employees and $5 million in revenues. In other words, not just shell companies but nearly every small business in America.

A National Federation of Independent Business survey found that 90 percent of respondents were entirely unfamiliar with the reporting requirements. The CTA includes civil and criminal penalties of up to $10,000 and two years of jail time for failing to comply, so this lack of awareness is alarming and needs to be addressed before the law is implemented.

A year’s delay will provide FinCEN and the business community with more time to educate owners of their new obligations. It will also give Congress and FinCEN time to review the new rules to ensure they are successful.

Proudly, this year, ASA returned to Capitol Hill to ensure the voices of subcontractors, who define three-fourths of the construction industry, were heard throughout the halls of Congress.  We had over forty ASA members from around the country attend this year’s fly-in, who met with 28 Senate offices and 21 House offices.  During our welcome reception and dinner, we heard remarks from Rep. Stauber (R-MN), the cochair of the Congressional Procurement Caucus, and we were joined by my colleagues from the Construction Industry Procurement Coalition (CIPC).  We advocated for change order, retainage, workforce development, and permitting reform, proper bid listing opportunities, along with ensuring payment and performance bonds are aligned with public-private partnership projects (P3s). Our fly-in was especially timely as the House Armed Services Committee began debate on the FY24 National Defense Authorization Act (HR 2670), which contains many procurement-related policies important to the construction industry, during it.

ASA applauded the House Administration Committee in their approval of the Construction Procurement Caucus (CPC) as a Congressional Member Organization (CMO) of the U.S. House of Representatives for the 118^th Congress. This caucus serves as a bipartisan forum for the exchange of ideas and information on construction procurement in the U.S. House of Representatives.  Educational briefings will be planned throughout the year with members of the Caucus, their congressional staff, along with construction industry experts engaged in architecture, engineering, surveying and mapping, prime contracting, subcontracting, specialty trade contracting, supplying, construction and program management and surety bond production.  These briefings will highlight important legislative and regulatory matters impacting the construction industry.   We thank Reps. Stauber (R-MN) and Scholten (D-MI) for their leadership serving as the CPC Chair in the 118^th Congress.

Finally, in September, which marks the beginning of National Preparedness Month, a nationwide campaign to increase awareness about disaster preparedness, we announced the addition of a natural disaster resource guide for ASA members. We are grateful for the guidance of the Attorneys’ Council and ASA sponsor, Assured Partners, as well as input provided by Southwest Florida Executive Director LaRae Davenport Rose in the aftermath of Hurricane Ian, in compiling this valuable resource.  Per the National Oceanic and Atmospheric Administration (NOAA), there were 18 weather/climate disasters in 2022 with losses exceeding $1 billion. While late summer often brings hurricanes, we know that wildfires, earthquakes, floods, and other natural disasters can happen at any time. These events take both a personal and professional toll and are often accompanied by long and costly interruptions to business operations and home life. We believe it is in all our best interests to be prepared for these events ahead of time.  Please visit FASA Natural Disaster Guide - American Subcontractors Association - National (ASA) (asaonline.com) to begin your preparation today.

ASA addressed the following regulatory issues in 2023:

• DOL Proposed Rules: Project Labor Agreements, Independent Contractor, Davis Bacon, Overtime, and Joint Employer
• OSHA
  • Healthcare Construction
  • Blood Lead Levels
  • Process Safety Management for Hazardous Chemicals
  • Severe Violator Enforcement
  • Personal Protective Equipment
  • Heat and Injury Illness Prevention
• SBA Surety Bond Guarantee Program – Retention Bonds

ASA Government Relations Director Mike Oscar continued his visits with chapters across the country. Mike visited these chapters 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 2023, Mike met with the following chapters:

• Central PA
• New Mexico
• ASA North Texas
• ASA of California
• Houston
• Tennessee
• Washington
• DC Metro
• Mississippi
• SWFL

ASA would like to thank our Attorneys’ Council for their continued contribution to ASA and the GRC, this year, they have provided the following Contractor’s Compass articles:

• Time Is Money: Key Elements & Considerations by Jim Sienicki and Christian Fernandez
• Pathways to a Happier New Year by Jim Yand
• Have You Been Wrongfully Denied Coverage for a Construction Defect Claim? By David Humphreys
• OSHA’s Revised Instance-by-Instance Policy & the Impact on the Construction Industry by Michael Metz-Topodas
• Crucial Steps to Succeed on Claims by Timothy Woolford
• Legal Checkups Can Help Subcontractors Avoid Legal Mishaps Before They Happen by Joseph Kanfer
• Educational Law and Policy Obstacles to Construction Workforce Development by Michael Metz-Topodas
• Protecting The Right To Payment by Ben Lowenthal

Media:

Voter Voice Report:

• February 2023  Email Messages were sent by ASA DC Metro and Baltimore Chapters to Maryland State Senators regarding Support SB453 a bill regarding state and private construction contracts and prompt payment.

• July 2023  Email messages (24) were sent by ASA members nationwide to their members of Congress regarding the inclusion of Amendment 453, Payment for Performance Act, in the FY 2024 NDAA bill.

Facebook

• As of December 2023, the ASA Facebook page has 2,221 followers, up from 1,312 in September 2019
• Post with highest engagement: Construction Trades promotion on 9/14/2023 with 2,847 reach
• Facebook visits up 49% over 2022

Twitter/X

• 3,366 followers as of December 2023, up from 2,307 in September of 2019
• Top Tweet on Women in Construction and Bev Reynal from March 2023
• Analytics logging over 1200 impressions every month

LinkedIn

• Participation doubled on site with 388 new followers over the last year
• Strongest impressions on Billd National Subcontractor Report (5/8/23) and the Construction Industry Forecast (7/10/23)

Finally, this year we highlighted the following podcasts and webinars:

• Price escalation webinar with Lee Brumitt
• Negotiating Form Subcontracts webinar with Mark Felezzola and Jim Yand
• Project Documentation webinar with Brian Carroll
• The Small Business Administration (SBA) Ombudsman’s Office Advocacy Webinar
• Killer Contract Clauses with Bethany Beck

The ASA Government Relations Team looks forward to 2024, where we will build on the momentum of this year’s advocacy achievements. We want to thank you for your commitment to our initiatives, and your passion and purpose propelled many of our 2023 legislative accomplishments.

Our best wishes to you for health and happiness in the New Year!