Constructor - March/April 2014 - (Page 39)

LEGISLATIVE AND REGULATORY NEWS AGC's Advocacy Efforts Win Big for Small Business LEGISLATION IS AN ADVOCACY-DRIVEN PROCESS BY TOM KELLEHER SENIOR PARTNER SMITH CURRIE & HANCOCK DESPITE REPORTS OF CONGRESSIONAL GRIDLOCK, CONGRESS passes hundreds of bills each year and the president signs them into law. What survives this process is a result of successful advocacy campaigns, involving citizens writing and calling Congress, meeting with and educating their representatives and senators, and supporting concerted lobbying efforts. On Dec. 26, 2013, Congress passed and President Obama signed into law the National Defense Authorization Act of 2014 (NDAA). This law includes an AGC-supported provision that will allow prime contractors on direct federal projects to count lower-tier small business contractors toward their small business subcontracting goals. Currently, contractors that are not small businesses must submit a small business subcontracting plan on any construction award in excess of $1.5 million. These plans contain goals for small business subcontracting, which can easily exceed 50 percent of the dollar value of all subcontracted work. The current program, as implemented in the Federal Acquisition Regulation (FAR), only allows prime contractors to count first-tier small business subcontractors toward these goals. This reform should encourage prime contractors to make sure small businesses have opportunities to compete for subcontracts at every tier, thereby allowing more opportunities for small business growth. In addition, it should help prevent first-tier small business "pass-through" situations and provide transparency to the small business program. This reform effort began when an AGC member - Eric Wilson with Hensel Phelps Construction - introduced the idea in 2003. AGC members - both small and large - agreed this would be a positive reform for the industry and began addressing it to federal owners at AGC meetings in Washington, D.C., such as the annual AGC Federal Contractors Conference and others throughout the nation. AGC met with federal agencies and appealed to the FAR Council and the U.S. Small Business Administration (SBA) to make this change. The agencies ultimately told AGC that a legislative change would be necessary. In 2012 the AGC Board of Directors elevated this reform to the association's list of top legislative priorities. On May 23, 2013, I testified on behalf of AGC before the House Small Business Subcommittee on Contracting and Workforce on this issue. On June 4, 2013, Small Business Committee Chairman Sam Graves (R-Mo.) introduced the Make Every Small Business Count Act. After hundreds of emails sent through AGC's Legislative Action Center (, calls and meetings in Congress by AGC members and lobbyists, this bill was attached to the NDAA and passed the House. In the Senate, at the urging of AGC and its members, Sens. Roger Wicker (R-Miss) and Chris Coons (D-Del.) introduced an amendment to the Senate version of the NDAA in November 2013. The continued grassroots and lobbying efforts by AGC, in addition to the positive momentum this amendment provided for support of this reform, ultimately led to the reform's inclusion into the final NDAA bill. Legislation is an advocacy-driven process. As this story shows us, the AGC advocacy campaign moved the legislative wheels forward, benefitting the entire industry. What began as an idea of one AGC member led to the support of hundreds of members, effecting change. MORE TO COME - REMAIN ENGAGED However, as a lawyer, I must remind everyone that the legislative process has also been referred to as "sausage making." What goes into the process doesn't necessarily come out completely the same. In the final provision for this reform, Congress added a number of reporting requirements and responsibilities for prime and subcontractors alike. Ultimately, this reform and these possibly burdensome requirements will not become effective until the SBA and the FAR Council issue final rules interpreting the law, which could be years from now. AGC members need to watch for notices of the draft regulations and be prepared to work with the AGC staff to provide substantive comments on these proposals. The details will really matter. But, as AGC has proven in the past, such rules and burdensome requirements can be mitigated. And, with that, I have another saying for you: Regulation is an advocacy-driven process. ◆ For more information on the federal government's tiered program, read Constructor's July/August 2012 cover story, "Shaky System," ( and visit MA R C H / A P R I L 2 0 1 4 | 39

Table of Contents for the Digital Edition of Constructor - March/April 2014

Editor’s Note
President’s Message
CEO’s Letter
Wise Investment
Simonson Says
Water Resources Development Act Addresses Critical Infrastructure Needs
Legislative and Regulatory News
Can-Do Attitude Meets a Job Well Done
Technology Toolbox
The Mobile Gold Rush
Index to Advertisers
Final Inspection

Constructor - March/April 2014