SECOND QUARTER NONRESIDENTIAL INVESTMENT CONTINUES TO RISE: Real nonresidential fixed investment, which includes the purchase of nonresidential structures, equipment and software, rose 2.3 percent in the second quarter of 2008 compared to a 2.4 percent increase in the first quarter, according to a gross domestic product (GDP) report released July 31 by the U.S. Commerce Department.  Investment in nonresidential structures increased 14.4 percent in the second quarter of 2008, compared to an increase of 8.6 percent in the first quarter.  Real residential fixed investments continued to decline 15.6 percent and imports declined 6.6 percent in the second quarter while personal consumption increased 1.5 percent and exports jumped 9.2 percent.

“For ABC members, the implication is that new business generation will continue to become increasingly difficult with the exception of certain business segments such as energy production facilities and export-oriented manufacturing,” said ABC’s Chief Economist Anirban Basu. “Commercial builders are likely to be among the most impacted by ongoing economic weakness due to diminished demand for additional office, hotel and retail square footage.  Going forward, builders associated with government-financed projects will also be impacted as government tax collection at federal, state and local levels generally fall short of expectations.”

TEXAS COURT REVERSES PREVAILING WAGE DECISION FOR DFW AIRPORT:In a victory for merit shop construction, the Dallas Court of Appeals, July 25 overturned a judgment against the Dallas/Fort Worth (DFW) International Airport Board that would have required the board to investigate unsubstantiated allegations of project-wide prevailing wage violations on DFW’s new international Terminal D project.. The Texas prevailing wage statute requires a public body to determine whether a statutory violation occurred whenever it receives information about a violation, such as a complaint by a worker.  Although the suit was filed by only 16 workers on the project, the plaintiffs claimed the right to sue for enforcement of the statute on behalf of thousands of other unnamed, hourly workers.  Despite the fact that these workers were unidentified and they had never made complaints on their own, the trial court ordered the board to undertake a massive investigation of the workers’ wages within 30 days of the court’s order.  Once the case reached the Court of Appeals, ABC’s Texas chapters recognized the paralyzing effect an adverse ruling would have on future public works projects and filed an amicus curiae, or “friend of the court,” brief with funding assistance from ABC.

HOUSE APPROVES MEASURE TO EXTEND E-VERIFY FOR FIVE YEARS: The U.S. House of Representatives July 31 voted to extend E-Verify, the federal government’s electronic employment verification system, for five years. “The Employee Verification Act of 2008” (H.R. 6633) was approved with a 407-2 vote, without amendment.

H.R. 6633 would amend the Immigration Reform and Immigrant Responsibility Act of 1996 to extend the life of the voluntary program until October 31, 2013. It also includes advance funding to the Social Security Administration so the agency can meet its responsibilities under the verification program.  The bill would also require the General Accounting Office to study the problems currently plaguing the E-Verify program and to propose remedies.

PREVAILING WAGE UPDATE: On July 9, 2008, two St. Louis area contractors were sentenced to three years of probation for prevailing wage violations.  The two contractors each pleaded guilty to one felony count of mail fraud for failing to pay prevailing wages to workers on prevailing wage projects even though the payroll forms claim that the workers had been paid the prevailing wage rates.  Under the terms of the probation, each contractor was ordered to pay approximately $60,000.00 in restitution.  This development is a reminder to all construction industry contractors to carefully comply with prevailing wage determinations on any project which involves such a determination.  Moreover, contractors should be very careful to ensure that the signed payroll forms, which are submitted to the contracting agency, accurately reflect payments made to workers on that project.  Of course, it is essential that any worker assigned to the prevailing wage project is actually paid in accordance with the prevailing wage determination.  Failure to do so could lead to a felony conviction.                                                                                          By Bill Harding, Chapter Attorney

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NOW IS THE TIME to begin planning your 2009 Excellence In Construction entry.

Watch Your Mail for the entry forms and information regarding the “How-To-Sessions”