Construction Projects: A Costly Solution in Search of a Problem.” In February, President Obama issued Executive Order 13502, which encourages agencies to require contractors to use PLAs on federal construction projects costing $25 million or more. In addition, the Federal Acquisition Regulatory Council (FAR) issued proposed regulations in July that will turn the executive order into a formal rule that federal agencies must follow when procuring construction services.  “Our report shows that there is no reason to implement a PLA on a federal construction project, except perhaps for political payback to union leaders,” said David G. Tuerck, one of the authors of the study and executive director of BHI. “PLAs are anti-competitive by nature and add costs to the taxpayers. The federal government should consider this research when making its final decision about implementing the President’s order.”

BHI used the findings of three previous studies that analyzed the effect of PLAs on school construction projects and demonstrated that PLAs add 12-18 percent to construction costs, to estimate the effect Obama’s executive order would have had on projects initiated in 2008.  According to the results, if President Obama’s Executive Order 13502 were in effect in 2008, construction costs would have increased an additional $1.6 billion to $2.6 billion.

The study pointed out that although taxpayers would have footed an unnecessarily large bill for these projects because of PLAs, they would not have received any benefits in return.  Although the purpose of a PLA is to keep labor “peace” during construction projects, BHI’s examination of federal projects with a price tag of at least $25 million, initiated between 2001 and 2008, did not reveal any evidence that those built without a PLA suffered significant delays or cost overruns due to labor issues.  “The justifications for PLAs provided by Executive Order 13502 are, therefore, unproven,” the study pointed out. “What is proven is that PLAs add to the dollar amount of winning bids and increase construction costs…The Obama Executive Order should be seen as a costly giveaway to the construction unions with no proven benefit to the taxpayers.”

HELP GUIDE ABC IN 2010 BY APPLYING TO SERVE ON A NATIONAL COMMITTEE: ABC would like to encourage all members who are interested in serving on an ABC National committee to complete an application before the Nov. 2 deadline.  Click here to apply now.  Committee members help the National Board of Directors to establish the policies, priorities and objectives of ABC.  Volunteers who choose to participate on an ABC National committee not only provide the association with real-world expertise on the complicated issues facing the construction industry, but also gain the opportunity to meet and work with knowledgeable members from across the country.

All 2010 ABC National committee members will officially be appointed by ABC’s incoming National Chairman in December.  Existing National committee members do not need to complete an application. Click here to view descriptions of active committees and to fill out an application. 

ABC MEMBERS TOP ENR’S GREEN CONTRACTOR LIST:Seven of the top 10 companies on Engineering News-Record’s 2009 Top 100 Green Contractorslist are ABC member firms. They are: The Turner Corp., Hensel Phelps Construction, Clark Group, Bovis Lend Lease, Gilbane Building, PCL Construction Enterprises, and Balfour Beatty Construction.  ABC members also claimed 57 of the 100 slots and together have generated more than $21.5 billion from green construction – only slightly less than the $22.76 billion generated by all 100 top green contractors in 2007.  According to McGraw-Hill Construction’s Green Outlook 2009: Trends Driving Change report released Dec. 1, 2008, green building has increased five-fold since 2005 and will likely continue to grow, possibly reaching $96-$140 billion by 2013.  

TITLE VII UPDATE:On May 22, 2009, the Federal District Court in Chicago approved a $500,000 settlement of an EEOC lawsuit against a construction company for violation of Title VII.  The lawsuit was on behalf of Hispanic workers of the construction company alleging that the company foreman and its former superintendent referred to Hispanic employees by derogatory terms, including “fucking Mexican,” “spics,” “chico,” and “wetback.”  The employees complained but alleged that the company took no steps to correct the racial slurs and the racial graffiti on the jobsite, including the portable toilets used by the construction company employees.  The settlement also requires the construction company to develop a written policy against race and national origin discrimination.  The policy must also designate an individual who will have the responsibility to promptly investigate discrimination and harassment complaints.  The settlement requires that the policy “affirmatively state” that employees will not be subject to retaliation if they file a complaint or participate in an investigation.  Further, compliance with the anti-discrimination and anti-harassment policy must be made a part of each company supervisor’s performance evaluation.  This case settlement is a reminder to all construction industry employers that failure to take steps to ensure that Title VII is followed by company supervisors and managers can result in a costly award or settlement like it did in this case.  All company supervisors should be provided with anti-discrimination and anti-harassment training and senior management should make periodic checks of all jobsites to ensure that company policies to comply with Title VII are being followed.                                                                                             By Bill Harding, Chapter Attorney

FALL 2009 TAX SEMINAR SCHEDULE: Do you find sales and use tax confusing? Would you like someone to explain sales and use tax to you in plain and simple language? The Nebraska Department of Revenue is conducting several educational seminars in our area.  Below are just a few of the locations:            

                October 1 – Norfolk, NE

                Northeast Community College

                8:30 a.m. – Noon – Sales and Use Tax

                1:00 – 4:30 p.m. – Microenterprise Tax Credit and Construction Contractors

                Register: (402) 844-7000

                October 7 – Fremont, NE

                First State Bank, 1005 E 23^rd Street

                Courses: FINA 501N 70 Nebraska Sales and Use Tax

                                 FINA 503N 70 Microenterprise Tax Credit & Construction Contractors

               8:30 a.m. – Noon – Sales and Use Tax

                1:00 to 4:30 p.m. – Microenterprise Tax Credit and Construction Contractors

                Register: Metropolitan Community College – (800) 228-9553 or (402) 457-5231

                October 19 – Lincoln, NE

                Southeast community College

               8:30 – Noon – Sales and Use Tax

                1:00 – 4:30 p.m. – Microenterprise Tax Credit and Construction Contractors

                Register: Amy Chelsey (402) 437-2834              

The Nebraska Department of Revenue offers these seminars as a free service; however, the facility may charge a fee.  These fees are the responsibility of the attendee.  For more information go to www.revenue.ne.gov

EXCELLENCE IN CONSTRUCTION

Entry forms and more information regarding EIC

will be mailed to you NEXT WEEK!