Engineering Inc. - May/June 2008 - 9

acec advocates for increased water Funding ACEC President Dave Raymond urged U.S. House and Senate appropriators to restore funding for the Clean Water State Revolving Fund (SRF) to $1.35 billion for F.Y. 2009. He called on Congress to reject President Bush’s budget request of $555 million, which represents a cut of $134 million from the current level and a reduction of more than 50 percent of what the SRF traditionally received for several years before F.Y. 2005. In letters to the appropriators, Raymond noted that “the ACEC President Dave Raymond need for increased investment in our nation’s 16,000 wastewater systems is tremendous and has been well-documented,” citing EPA’s most recent “needs” survey, which reported that publicly owned treatment plants will need $202 billion in capital investments over a 20-year period to remain in service. “The nation has made significant progress in enhancing water quality since passage of the Clean Water Act in 1972,” Raymond said. “If we are to continue this trend and realize the goals set forth in the act, it is critical that Congress take action to restore funding to the SRF program. Congress needs to reject this request and restore appropriate funding.” new development in effort to Repeal 3 Percent withholding As ACEC and its coalition allies continue efforts to repeal the 3 percent withholding mandate, the House of Representatives has adopted legislation addressing contractors and their tax liabilities. The House approved the Contracting and Tax Accountability Act of 2007 (H.R. 4881), introduced by Rep. Brad Ellsworth (D-Ind.), which would bar any individual or companies that have seriously delinquent federal tax debt from contracting with the federal government. This would apply to anyone with an outstanding tax debt for which a lien has been filed, unless the taxpayer has agreed on a payment plan with the IRS or is appealing the debt. Under H.R. 4881, potential contractors would be required to certify that they do not have tax debt, and would have to authorize the IRS to share certain information about the contractor’s tax status with federal agencies. ACEC and its allies in the contracting community are closely monitoring the progress of this legislation and are advocating the full repeal of 3 percent withholding before any new requirements are imposed. In addition, ACEC has submitted comments to the U.S. Treasury Department highlighting serious problems with the implementation of 3 percent withholding, such as whether withholding can be passed on from prime contractors to subcontractors, and how withholding will interact with prompt-pay laws. small Firm council Members weigh in on Retainage; sBa to Review Practice The Small Business Administration’s (SBA’s) Office of Advocacy is proceeding with a review of retainage policies following input from ACEC members concerned about the effect on smaller firms. Retainage is a practice followed by federal agencies where a percentage of payment—typically 10 percent—is withheld from federal A/E contracts. In some instances, the retainage fee is not released until the related project has been completed, which often can take years. The practice can have a negative effect on a firm’s cash flow, especially small firms. “Retainage requirements pose a significant burden on small firms,” said ACEC Small Firm Council Chairman Gregg Ten Eyck of Denver-based Leonard Rice Engineers, Inc. “The law is unclear about when retainage fees will be released, resulting in an interest-free loan to the federal agencies at small firms’ expense. We look forward to working with SBA and the [Federal Acquisition Regulatory Council (FAR)] to address this issue.” The SBA’s Regulator Review and Reform Initiative was established to identify issues for federal agency review to determine if they are ACEC Small Firm Council outdated, ineffective, duplicative Chairman Gregg Ten Eyck or overly complex. As part of the initiative, SBA has requested that the FAR Council review the practice of withholding retainage fees and reduce their impact on A/E firms. FoR MoRe news For weekly legislative news, visit Acec’s Last Word online at www.acec.org. MAY / JUNE 2008 ENGINEERING INC. 9

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Engineering Inc. - May/June 2008

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