The Contractors Plan logo

Login Provider Login Send Secure Email Get A Quote
Participant Call Center (all benefits): 1-855-433-2981

Overview of SBA Annual Agency Procurement Scorecards

September 19, 2022


The Small Business Administration (SBA) Office of Policy, Planning and Liaison recently published its annual procurement scorecard assessing how well federal agencies did in reaching their 2021 Small Business (SB) contracting goals. The SBA works with 24 agencies annually to establish their prime and subcontracting goals, and their scorecard grades are based on the agreed-upon goals.

The annual scorecard is an assessment tool to measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting.

Overall, in 2021, agencies reached their prime contracting goals for small businesses, small disadvantaged businesses, and service-disabled veteran-owned small businesses. However, agencies did not meet goals in small businesses located in Historically Underutilized Business Zones (HUBZones) nor with small woman-owned businesses.

Agency scorecard grades consist of their achievements in four areas, and each area is graded by percentage, with 50% from Prime Contracting. Letter grades are then given to reflect what percent of their goals were met or exceeded. The agencies with the highest scoring letter grade (+A) include Commerce, DHS, DOL, EPA, GSA, Interior, NCR, NSF, OPM, SBA, and State. The lowest scoring agencies include HHS and Treasury; both scored a letter grade of “B.” HUD can in with the lowest grade of a “C,” but that is improved from the “D” they earned the previous year.

The Agency Scorecard can be found at Scorecard Landing (sba.gov).

July 2022 Construction Spending

September 7, 2022


The U.S. Census Bureau announced construction spending for July 2022 was at a seasonally adjusted annual rate of $1,773 billion, 0.4% below the revised estimate of $1,784 billion in June. However, construction spending in July was up 9% compared to last year.

While private construction spending in July was $1,424 billion, 0.8% below the revised June estimate, public construction spending was $353 billion, 1.5% above the revised June estimate. One of the vital contributors to public construction was highway construction at $103 billion, 4.3% above the revised June estimate of $98 billion.

In the first seven months of this year, the total construction value was $1,014 billion, 10.8% above for the same period in 2021. Compared to July 2021, highway construction through July 2022 was up 0.3% to $54 billion.

More information may be found by clicking here.

The Inflation Reduction Act of 2022; Impacts on Prevailing Wage and Other Requirements

August 4, 2022


Last week, Senate Democrats released the draft of the Inflation Reduction Act of 2022 (the Act), which is intended to achieve deficit reduction and fight inflation. The Act includes several provisions connected to renewable energy tax incentives. If adopted, it would expand the number of eligible construction projects, impact prevailing wage requirements, and could alter how businesses qualify for tax credits.

Essentially, the Act would reestablish the full investment tax credit (ITC) rate of 30% for ITC-eligible facilities that satisfy the prevailing wage and apprenticeship requirements. It also extends the production tax credit (PTC) rate of 1.5 cents per kilowatt-hours for construction projects beginning before January 1, 2025.

The Act would also adopt new provisions extending the ITC and PTC for projects placed in service in 2025 or later in which construction begins before 2033. Finally, the Act defines “projects” as those with zero greenhouse gas emission rates.

Furthermore, the ITC and PTC would implement additional requirements to qualify for the full credit. These other requirements include (1) satisfying specific prevailing wage requirements for wages paid to employees (contractors and subcontractors alike) for the construction and maintenance of facilities and (2) minimum thresholds for employment of apprentices (for both contractors and subcontractors) in connection with the construction and maintenance of facilities.

At this time, Senate Democrats intend to vote on the Act through the budget reconciliation process, permitting the legislation to pass with a majority vote in the Senate. President Biden has announced his support of the Act, but it still needs to garner enough support to pass both chambers.

The U.S. Department of Labor (DOL) Published a Proposed Rule to Implement the Executive Order on Nondisplacement of Qualified Workers

July 26, 2022


The U.S. Department of Labor published a Proposed Rule to Implement President Joe Biden’s Executive Order (EO) reinstating the Nondisplacement of Qualified Workers Under Service Contracts.

The EO and DOL proposed rule reinstates a policy that requires successor federal contractors, in certain circumstances, to offer a right of first refusal of employment to employees working under the predecessor contract.

The EO requires DOL to develop this regulation and the FAR Council to create a contract clause to apply to new solicitations. Since the EO was signed, “agencies are strongly encouraged” to include the new contract clause in solicitations before the FAR clause is final.

Employees working on predecessor contracts covered by the Service Contract Act, and meeting other requirements, who would be terminated as a result of the contract’s end, should be offered by the successor “a right of first refusal of employment under this contract in positions for which those employees are qualified.”

A copy of the Notice of Proposed Rulemaking can be found here: https://www.federalregister.gov/documents/2022/07/15/2022-14967/nondisplacement-of-qualified-workers-under-service-contracts

Can We Build It? Not With Michigan’s Prevailing-Wage Mandate

July 22, 2022


Gov. Whitmer defies the law to reimpose a rule favoring unions in big state construction projects.

The builders I work with are used to Michigan putting the thumb on the scale for labor unions. But we never expected Gov. Gretchen Whitmer to go so far as to disregard the law. She has unilaterally imposed a prevailing-wage mandate on the biggest state construction projects, even though the state Legislature officially ended this policy in 2018. The nonunion construction companies I represent are no longer able to compete for these contracts fairly and openly. And we aren’t the only losers. Ms. Whitmer is lawlessly sticking it to taxpayers, too.

Read the entire article here: https://www.wsj.com/articles/can-we-build-it-not-in-michigan-we-cant-union-prevailing-wage-mandate-construction-taxpayers-governor-whitmer-11658437152

U.S. Department of Labor Publishes Notice of Proposed Rulemaking on Nondisplacement of Qualified Workers Under Service Contracts

July 14, 2022


On July 14th, 2022, the Department of Labor announced an Notice of Proposed Rulemaking (NPRM) to implement the executive orders of President Biden made late last year. The order requires that contractors and subcontractors working on covered federal service contracts (i.e., most SCA-covered contracts over $250,000) must, in good faith, offer service employees employed under the predecessor contract a right of first refusal of employment on the successor contract.

Possible positive impacts from the proposed rule include:

  • Making federal procurement more efficient by reducing worker turnover and preventing disruptions in federal services.
  • Keeping skilled workers in their jobs.
  • Making it easier for employers to find workers who are already trained for the job.
  • Saving taxpayer dollars by improving the efficiency of federal procurement.

The Department of Labor encourages interested parties to submit comments on the NPRM by 11:59 p.m. ET on August 15, 2022.

You can view the full press release below:

US Department of Labor proposes rule to provide workers on federal service contracts right of first refusal of employment | U.S. Department of Labor (dol.gov)

The Department of Labor’s Wage and Hour Division Announces the 2022 SCA Health and Welfare Fringe Rate

June 27, 2022


Per 29 C.F.R. subsection 4.52, the prevailing wage health and welfare fringe benefit rates will be increased under the McNamara-O’Hara Service Contract Act effective June 23, 2022.

Any contracts awarded before January 1st 2017, will have a new fringe rate of $4.80 per hour. 

Any contracts awarded after January 1st 2017 that have to comply with EO13706, will have a new fringe rate of $4.41 per hour.

You can view the entire Memorandum Number 239 by clicking here.

FBG Responds to Department’s NPRM

June 15, 2022


In response to the Department of Labor’s (Department’s) notice of proposed rulemaking (NPRM), updating the Davis-Bacon and Related Acts Regulations, Fringe Benefit Group worked with The Groom Law Group on comments promoting retirement savings and limiting the administrative burden on contractors.

In March, the Department issued the NPRM, representing the most comprehensive review of the Davis-Bacon Act regulations in 40 years. The Department encouraged interested parties to submit comments on this proposal by May 17, 2022.

The proposed updates were extensive and involved a broad range of changes. Our expertise allowed us to focus on the proposed rules that would have the greatest impact to our clients and their benefit plans. Based on our years of experience and countless conversations with contractors, we knew it was imperative to provide comments on two fundamental aspects: encouraging retirement benefits and addressing the advantage of simplifying administrative requirements.

Our comments emphasize that the Departments proposed updates can be enhanced for both covered workers and contractors. We underscore that covered workers should have access to the highest quality benefits, such as retirement savings. In addition, these benefits should be portable, so they do not risk losing access to them when moving from project to project. We also reiterate that covered contractors want to meet their DBRA requirements and use their fringe benefit programs to attract and retain superior workers.

These interests align with a regulatory scheme that appropriately protects workers’ interests but does not create excessive administrative requirements. Therefore, it is essential that requirements are consistent and streamlined, ultimately minimizing the potential of high administrative costs so as not to limit contractors’ ability to offer such benefits but rather to encourage them to provide the highest-quality benefits and workers’ access to them.

In direct support of congressional efforts to boost retirement savings, we encourage the Department to include a safe harbor provision to automatically qualify defined contribution pension plans (DCPPs) for the annualization exception when they meet the exception requirements. This change would help eliminate an unnecessary burden on contractors and administrators who would otherwise prepare submissions for all fringe benefit plans seeking an exception from an annualization requirement.

Having a safe harbor included in the DCPP would also help address time constraints and administrative complexity, which would help encourage small businesses or new entrants to pursue opportunities covered by the DBA or DBRA. And demographically, covered workers in these scenarios are the ones who could benefit the most by achieving improved financial security.

Alternatively, we proposed that the Department adopt a concept that has been used successfully in other contexts by federal agencies for many years and allow contractors to adopt “pre-approved” plans that have met the annualization requirements. This, again, benefits both covered workers and contractors by supporting the provision of worker benefits and affording timely and efficient administrative requirements for the contractors.

The proposed regulations also include a new provision that a contractor or subcontractor may not take Davis-Bacon credit for its administrative expenses incurred with the administration of fringe benefits. The Department has specially requested comments concerning “whether it should clarify this principle further concerning third-party administrative costs.”

In our response, we stressed that the Department should confirm that reasonable administrative expenses paid to a third party and directly related to the provision of fringe benefits should be creditable. Essentially, if the third party expense would not have been incurred “but for” the provision of fringe benefits, it should be creditable, encompassing administrative costs associated with providing fringe benefits to employees and the administration and delivery of benefits.

This recommendation is consistent with ERISA, the governing statute of employee benefit plans, allowing plan assets to “defray reasonable expenses of administrating the plan.” In other words, Congress and the Department have determined that benefit plan assets can be used to pay for plan administrative expenses. In addition, allowing employers to receive credit for reasonable expenses paid to third-party providers encourages them to utilize providers who can efficiently maximize the value to covered employees. Furthermore, any additional costs would disproportionately impact smaller businesses, which often struggle the most in absorbing added expenses.

We hope that the Department will incorporate our suggestions, making it easier to access retirement savings benefits and less burdensome for contractors to administer benefits and overall compliance.

SFWTF Announces Updated Guidance and Vaccination Certification Form

June 6, 2022


On May 27, the Safer Federal Workforce Task Force (SFWTF) updated their guidance concerning its new vaccination certification form, intended to help protect the health and safety of all Federal employees against the spread of COVID-19. Submission of this signed verification form or proof of any required negative COVID-19 test may be required to enter a Federal facility.

This form aims to ensure compliance with safety protocols for all Federal employees and onsite contractor employees, visitors to Federal facilities, and other individuals interacting with the Federal workforce. The SFWTF is authorized to request the information on this form per Executive Order 13991, Protecting the Federal Workforce and Requiring Mask-Wearing (Jan. 20, 2021). However, the agency will not maintain any documentation, and therefore, it is essential to keep the form once completed while visiting a federal facility.

The guidance clarifies that the forms will be required whenever the COVID-19 Community Level in a county where a Federal facility is located is “MEDIUM” or “HIGH” as defined by CDC. Onsite contractor employees must attest to their vaccination status by being able to present a completed Certification of Vaccination form while in that Federal facility. If they fail to submit this signed form or cannot provide proof of any required negative COVID-19 test, entrance may be denied.

The guidance and form can be found at: https://www.saferfederalworkforce.gov/downloads/CertificationVaccinationPRAv7.pdf

Is It Time to Update Your Recruiting Strategy?

May 16, 2022


Nat Peniston, vice president of The Contractors Plan, recently wrote an article which appears in Construction Executive. In this article, he discusses the number one challenge contractors face nationally, which is the inability to hire and retain an adequate number of skilled craft workers.

While businesses are having problems finding and retaining qualified employees in today’s post-COVID-19 economic recovery, the construction labor market has been tightening for years, and contractors are uniquely affected. According to ABC analysis, there is a shortage of over 500,000 skilled workers in the United States. There are various reasons for this labor shortage, but false perceptions of a career in construction are a primary cause. Many Gen Y and Z workers perceive construction as dangerous work, with poor income potential and limited career opportunities.

You can read the entire article here: https://www.constructionexec.com/article/is-it-time-to-update-your-recruiting-strategy