WILLIS CONSTRUCTION RISK MANAGEMENT CONFERENCE STEPHEN SANDHERR CEO SEPTEMBER 12, 2013.

WILLIS CONSTRUCTION RISK MANAGEMENT CONFERENCE

STEPHEN SANDHERRCEO

SEPTEMBER 12, 2013

WHO/WHAT IS AGC?

• Nation’s largest commercial construction assn.

• 95 chapters in 50 states/DC/PR• Staff of 65 in Arlington, VA

• Capitol Hill townhouse• 25 engaged in public policy issues• 7 attorneys

• Broadest policy portfolio in the industry

OVERVIEW

• Divided government yielding few results• Partisanship at toxic levels/easy work is

hard• Administration aggressive in regulatory

area• Assuming statutory authority (employer

mandate/exempting Congress from exchanges/ DREAM Act)

• Environment/labor areas of concern• Upcoming budget battles: debt ceiling &

continuing resolution

IMMIGRATION REFORM

• AGC principles:• Earned legalization for existing workers (10

YRS)• Workable guest worker program/future flow• No vicarious liability• Maintain “knowing” standard• Limit debarment as penalty/keep FAR stds• Federal preemption• E-verify for new hires

• Senate bill meets most except guest workers

GUEST WORKER PROVISION

• Negotiated between AFL-CIO & US Chamber

• BCTD: exhaust hiring hall before guest workers

• Proposed program:• Caps workers @ 15,000 per year• 0 if unemployment rate >8.5% in MSA• Other industries using construction

occupation (i.e. welder) would count against cap

• Woefully inadequate to meet future needs

POLITICS OF IMMIGRATION REFORM

• Senate: 14 GOP votes• Recognition that system broken• Demographics not favorable• GOP rhetoric unwelcoming

• House• GOP doesn’t trust Obama• Amnesty• Not issue in majority of GOP districts• Fear of primary competition

IMMIGRATION PROSPECTS

• 68 votes in Senate not impressing House GOP

• House taking piecemeal approach• Border security• “DREAM” Act• E-verify/employer violations• Visas for tech, investors

• Can any or all of these get to conference?

• Political balancing act for Boehner

EFFECTIVE TAX RATE COALITION

INFRASTRUCTURE

• Federal investment subject to budget pressures

• MAP-21 good on policy; bad on $• HTF hits cliff 9/30/14; CBO says “broke”

• Advancing “all of the above” scenarios• PPP’s• Repatriation of foreign profits• Oil royalty fees• Transition to VMTs• Gas tax

INFRASTRUCTURE

• Seeking Clean Water Trust Fund• WRDA passed Senate

• WIFIA• House introduced bipartisan bill yesterday

• Counting lower tier subs• Passed House as amendment to defense bill• Lining up Senate co-sponsors

ENVIRONMENTAL REGULATIONS

• EPA stormwater rule: significant AGC victory• Withdrew nationwide numeric discharge limit• No need to monitor/control turbidity of runoff

• Post construction runoff• Lead paint removal in public/commercial

bldgs• Follow existing guidelines for bldgs inhabited

by kids• Training, certification, dust control, ventilation,

etc.• AGC working with real estate groups: EPA

needs to establish hazard not cured by existing practices

LABOR/HR

• PLA’s• AGC has thwarted over 60 PLA’s directly and

countless others indirectly• “efficiencies and economies” in federal

contracting• MULTI-EMPLOYER PENSION REFORM

• AGC represented on NCCMP Reform Commission

• Report provides tools/including benefit cuts• Working w/BCTD on lobbying/PR campaign• Legislative effort this year and next

OSHA SILICA RULE

• 8/23 OSHA released highly anticipated rule

• New PEL of 50 micrograms/m3 (current is 100)

• Employers conduct initial/periodic exposure assessments of workers/air sampling

• Engineering/work practice controls/PPE• No cost medical surveillance for

employees exposed to levels >PEL for 30+ days/year

• Potential duty of care to employees/public

OFCCP DISABILITY & VETS REGS

• Forced AGC to object to measures whose goals we support and objectives already meet

• Disability rule: 7% goal (2% “severe” removed)• No apparent concern for impact on safety• Employer can identify disability

• Veterans ideal candidates for construction but it is the economy that is discriminating not employers: vets unemployment rate lower than construction rate

OFCCP DISABILITY & VETS RULE

• Demonstrate GFE in hiring/promotion• Written affirmative action program• Periodic review of job descriptions (not

annual)• Maintain records for 3 years (not 5)• Training for all mgrs who hire/discipline

(not annual meeting of all employees)• No need to provide written

documentation of hiring/promotion decision

OFCCP DISABILITY & VETS REGS

• AGC response:• OFCCP has not shown need: veterans and

disabled unemployment rates < national rate

• OFCCP has not shown discrimination: their own audits show < 0.02% “claims”

• Costs: OFCCP says $500 per employer; $2.2 B appears to be more accurate

• Met w/ OIRA: OFCCP needs rational basis

DOT DBE REGS

• AGC & 15 chapters submitted comments 12/24

• DBE’s submitted in bid w/ $ amount & scope w/ written confirmation by DBE or no pay

• State DOT must give written consent to change • GFE (detailed in writing) to replace w/ DBE• Price not determinative of goal

• GFE documentation submitted w/bid if goal short (include all sub quotes)

DOT DBE REGS

• States must include in contracts that failure to carry out DBE commitments=material breach

• DOT now considers this “significant” rule

• AGC met w/DOT• Make program work• Reduce/eliminate inconsistencies• Permit mentoring

DOES 2014 ELECTION OFFER HOPE?

• Barring something unforeseen GOP keeps House

• For 3rd straight cycle, Senate map favors GOP• Dems defending 20 seats/GOP 15 seats• 7 Dem seats in states won by Romney: SD,

MT, WV, AR, NC, LA, AK• GOP needs net gain of 6 seats for majority

?