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May 9, 2011- IRS Defers Three Percent Withholding Regulation for Another Year

     
Washington, D.C. – Associated Builders and Contractors (ABC) today welcomed the decision by the Internal Revenue Service (IRS) to defer for one year – from Jan. 1, 2012 to Jan. 1, 2013 – the withholding of 3 percent tax on all payments for goods and services made by the federal, state, and local governments with total expenditures of $100 million or more. Three percent withholding applies to the total contract, not to the net revenue generated from a project.

While we welcome this news by the IRS, ABC firmly believes that delaying the effective date is not a solution because there is still no equitable, practical, or cost-effective way to implement this new requirement,” said ABC Vice President of Federal Affairs Geoff Burr. “We will continue to work with our coalition partners to fully repeal this burdensome and unfair regulation.”

The problem with the 3 percent withholding regulation for construction contractors is that the government will retain the funds necessary to complete a project, such as those needed to pay for subcontractors, materials and suppliers,” said Burr. “In addition, the increased administrative costs to both large and small contractors as well as the government to comply with this withholding requirement will drive up the cost of construction, which in turn, will force smaller firms out of the public sector market.

Currently, there are three bills pending in Congress: H.R. 674, S. 89 and S.164 that would fully repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005.

To view this statement on ABC's website, click here.

Associated Builders and Contractors (ABC) is a national association with 77 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. Visit us at www.abc.org.   

April 15, 2011 - WASHINGTON, D.C.

Associated Builders and Contractors (ABC) today issued the following statement regarding repeal of the expanded 1099 tax reporting requirements (H.R. 4), which was signed into law April 14 by President Obama.“Repeal of the 1099 mandate eliminates an unnecessary administrative burden that more.. 

April 14, 2011 - WASHINGTON, D.C. – In testimony today before the U.S. House Committee on Education and the Workforce Subcommittee on Workforce Protections, Associated Builders and Contractors (ABC) member Thomas Mistick, principal of Church Restoration Group, Cranberry Township, Pa., stated that the Davis-Bacon Act, as administered by the U.S. Department of Labor, “hinders economic growth, increases the federal deficit; and imposes an enormous paperwork burden on both contractors and the federal government.” Mistick spoke at the hearing "Examining the Department of Labor's Implementation of the Davis-Bacon Act.” more..

GAO NOTES MAJOR FLAWS IN DAVIS-BACON; HOUSE TO HOLD HEARING APRIL 14
 (04/13/2011)
 An April 6 report by the Government Accountability Office (GAO) uncovered serious flaws in how Davis-Bacon Act wages are determined and recommended steps for the Department of Labor (DOL) to take in order to remedy some of the issues.  GAO examined how well DOL has addressed previous concerns from stakeholders and also looked at new issues that need to be resolved.

In the report, GAO acknowledged recent actions by DOL to correct problems with the process and with the surveys themselves, but criticized its inability to fix major problems related to accuracy, overall quality and timeliness – pointing out that DOL is still years behind schedule on many of its surveys, forcing federal contractors to rely on out-of-date information.

GAO also noted ongoing issues with the representativeness of the wage determination survey results, reporting that about 25 percent of final wage rates for job classifications are based on wages reported for six or fewer workers. In addition, 63 percent of all DOL wage determinations consider wages set by union agreements to be “prevailing,” even though only 13 percent of construction workers are covered by such an agreement.

According to the report, DOL acknowledged that nonunion contractors are more likely not to respond to wage surveys because it can be more difficult for them to compile the information and because of a generally more cautious attitude toward wage reporting.

The report showed that a lack of transparency in the process and no incentive to participate was partially to blame for the low response rates and noted that less participation often results in wage determinations that are inaccurate. DOL also admitted nonresponse is likely to cause a bias in the surveys; however the agency said it has no idea whether its wage determinations accurately reflect prevailing wages because it does not calculate response rates or analyze survey nonrespondents.

In light of the major flaws the report uncovered, GAO recommended DOL obtain expert and objective advice on its survey design and methodology and examine the possibility of using statistical sampling instead of a census survey. DOL agreed that there are problems with the surveys, but told GAO it would prefer to rely on staff experience to implement those changes. 

The GAO report was released in advance of a U.S. House Committee on Education and the Workforce Subcommittee on Workforce Protections hearing titled, “Examining the Department of Labor's Implementation of the Davis-Bacon Act.”  During the hearing, an ABC member will testify on how the Davis-Bacon Act negatively impacts his construction business and ways that the problems can be addressed. Those interested can watch the event live April 14 at 10:00 a.m. (ET).

DOL plans to hold five conferences throughout the United States this year to attempt to clarify some of the rules concerning prevailing wage requirements under the Davis-Bacon Act, McNamara-O’Hara Service Contract Act and the labor standards provisions of the American Recovery and Reinvestment Act of 2009. For more information, visit the DOL website

ABC TELLS CONGRESS: GOVERNMENT-MANDATED PROJECT LABOR AGREEMENTS VIOLATE FEDERAL LAW (03/16/2011)
WASHINGTON, D.C. – In testimony delivered today on Capitol Hill, Associated Builders and Contractors’ (ABC) General Counsel Maurice Baskin, a partner with Venable, L.L.P., stated that recent administration efforts to make project labor agreements (PLAs) part of the federal procurement process are “threatening to violate the longstanding Congressional mandate of full and open competition in federal procurement—at taxpayers’ expense.”  Baskin’s remarks were given during a hearing on the impact of the administration’s pro-PLA policy on construction job creation and the efficient use of taxpayer dollars held by the House Committee on Oversight and Government Reform’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending.

“Neither the president nor the Federal Acquisition Regulatory Council has the authority to override the statutory mandate of full and open competition in all federal procurements,” Baskin said.  “No fact-based justification for the change in policy has ever been shown, leading to the widespread belief that the administration’s policy is simply a political payback to organized labor.” According to Baskin, this is the kind of political favoritism that The Competition in Contracting Act was enacted to prevent.

“Since 2009, ABC members have filed a series of bid protests with the Government Accountability Office to stop unjustified PLA mandates from being imposed by federal agencies.  In each case, the federal agency has withdrawn the PLA mandate rather than risk a finding of a procurement law violation.
“The government’s own market research has shown repeatedly that PLAs will not serve the interests of taxpayers, will discourage competitive bidding and will increase costs. Yet, we continue to see PLA requirements popping up on agency procurements around the country,” Baskin said

“Eighty-seven percent of all construction workers currently choose not to belong to a labor union. Rather than promoting full and open competition and maximizing the available labor pool for government construction projects, which is overwhelmingly merit shop, government-mandated PLAs result in the award of federal construction contracts primarily to the much smaller group of unionized contractors and their union employees,” said Baskin.

PLAs are pre-hire contracts that require projects to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; obtain apprentices exclusively from union apprenticeship programs; pay into underfunded and mismanaged union benefit plans; and obey costly, restrictive and inefficient union work rules.

In his testimony, Baskin also urged Congress to support the Government Neutrality in Contracting Act (H.R. 735), which would prohibit the federal government from requiring contractors to execute a PLA as a condition of winning federal or federally funded construction projects.  “This legislation will result in more construction jobs, more infrastructure renewal and a more accountable federal government,” Baskin said. ABC members John Ennis, Jr., CEO of Ennis Electric Company, Inc., Manassas, Va.; and John F. Biagas, CEO of Bay Electric, Newport News, Va., also testified at the hearing. Associated Builders and Contractors (ABC) is a national association with 75 chapters representing more than 23,000 merit shop construction and construction-related firms with nearly two million employees. Visit us at www.abc.org and www.thetruthaboutplas.com.

 

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DISCHARGE PETITION SEEKS TO REDUCE PAPERWORK FOR SMALL BUSINESS

(09/22/2010)

A discharge petition Sept. 15 was filed in the U.S. House of Representatives by Rep. Dan Lungren (R-Calif.) order to move forward the Small Business Paperwork Mandate Elimination Act (H.R. 5141) that would repeal the expansion of information reporting requirements contained in the Patient Protection and Affordable Care Act (PPACA).

Under PPACA, beginning in 2012, businesses will have to file a Form 1099 to all vendors, both incorporated and unincorporated, to which they pay more than $600 annually for both goods and services.  ABC Sept. 13 sent a letter to all members of the U.S. Senate urging passage of an amendment that would have repealed the Form 1099 requirements.  The amendment failed in a 46-52 vote.

In order for the discharge petition to be successful in forcing the bill out of the House Committee on Ways and Means and up for a vote, 218 members of Congress must sign the petition.  ABC encourages all members to write or call their member of Congress and encourage him or her to sign onto this petition and help reduce the burden on small businesses.  For a list of Representatives and their contact information, click here.

For more information on Form 1099 reporting, visit ABC’s dedicated page.       
For more information on tax issues, visit ABC’s online tax toolkit.

PENNSYLVANIA MAN DELIVERS ANTI-PLA PETITION TO CONGRESSMAN 

(09/22/2010)
John Falk of York Pa., Sept. 21 hand-delivered a petition with approximately 5,000 signatures protesting the use of project labor agreements (PLAs) on construction projects, after walking 89 miles from York to the U.S. Capitol in Washington, D.C.  Falk delivered the petition to Rep. Todd Platts (R-Pa.).
After witnessing the impact PLAs had on his employer and the construction industry in Pennsylvania and angered by federal and state policies promoting the use of PLAs on taxpayer-funded work, Falk began circulating the petition urging Congress to overturn President Obama’s pro-PLA Executive Order 13502 and enact legislation to guarantee fair and open competition on federally supported construction, such as the Government in Neutrality in Contracting Act (H.R. 983/S. 90). A website was launched Sept. 14 that tells Falk’s story, chronicles his progress, shows the route he took, and gives visitors the opportunity to sign his petition, which is still active. 
The site is available at www.89milesforfreedom.com and a Facebook page, is available at http://www.facebook.com/pages/89-Miles-for-Freedom/159776164032888?created#!/pages/89-Miles-for-Freedom/159776164032888?ref=ts.  
For more information on PLAs, John Falk’s 89-mile walk and photos, visit www.thetruthaboutplas.com or www.facebook.com/thetruthaboutplas .

ABC's 2010 Priority Issue Areas
Employee Free Choice Act / Card Check

Obama Administration’s Executive Order on Project Labor Agreements

ABC Analysis, February 6, 2009: Click to read

ABC strongly opposes government-mandated project labor agreements (PLAs) on public construction projects. 
Anti-competitive project labor agreements (PLAs) are special interest schemes that end open, fair and competitive bidding on public works projects. PLAs drive up the cost of construction by reducing competition and effectively excluding merit shop contractors and their skilled employees from building projects paid for by their own tax dollars.
Typical PLAs are pre-hire contracts that require projects be awarded only to contractors and subcontractors that agree to:

  • recognize unions as the representatives of their employees on that job 
  • use the union hiring hall to obtain workers
  • obtain apprentices exclusively from union apprenticeship programs    
  • pay into underfunded and mismanaged union benefit plans  
  • obey costly, restrictive and inefficient union work rules 


In the end, government-mandated PLAs prevent taxpayers from getting the best possible product at the best possible price.
Learn more about why ABC opposes government-mandated PLAs.   

 


Visit www.thetruthaboutplas.com for the latest news, facts, studies and current information about PLAs.

Federal Government-Mandated Project Labor Agreements: President Obama's Executive Order 13502 Encourages PLAs on Federal Construction Projects Costing More Than $25 million
 
On February 6, 2009, President Barack Obama issued Executive Order 13502, which repeals Executive Order 13202 and encourages federal agencies to require PLAs on federal and federally funded construction projects in excess of $25 million. Executive Order 13202 had prohibited federal agencies and recipients of federal financial assistance from requiring wasteful and discriminatory union-only PLAs on federal and federally funded construction projects.  Construction contracts subject to union-only PLAs are usually awarded to unionized contractors and their all-union workforces.   

On March 13, 2010, the Federal Acquisition Regulation (FAR) Council released the final rule to implement President Obama’s Executive Order 13502.  The release of this final rule represents the culmination of a process that began in July 2009 with the FAR Council’s release of a proposed rule to implement the content of Executive Order 13502 into federal procurement regulations.

Even before the release of the final rule to implement Executive Order 13502, the Obama Administration signaled its desire for federal agencies to begin mandating PLAs.  The Office of Management and Budget (OMB) on July 10 issued a policy memorandum encouraging federal agencies to consider utilizing PLAs on a project-by-project basis and require PLAs in “appropriate circumstances.”  This memorandum came in advance of the FAR Council’s proposed rule implementing Executive Order 13502.
 
Between 2001 and 2008, Executive Order 13202 ensured that at least $147.1 billion worth of federal construction projects was bid without discriminatory and wasteful government-mandated PLAs. The actual value of construction projects protected by Executive Order 13202 is exponentially larger, as the above figure does not include local construction spending that received federal funding or assistance protected by the executive order.  Free and open competition saved American taxpayers an estimated 10 percent to 20 percent on federal construction spending and provided women, minorities and other qualified craft professionals the opportunity to work in their communities.     
  
Learn more about President Obama's Executive Order 13502 and the history of PLAs on federal construction projects


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