IIJA Implementation as Midterm Elections Loom: Elections will have major impact on future path of landmark infrastructure law
The current 117th Congress has seen a number of significant accomplishments for the United States and the utility contracting industry, none more substantial than the landmark bipartisan Infrastructure Investment and Jobs Act (IIJA) which will deliver over $550 billion in new infrastructure spending directly to NUCA members in key markets.
NUCA has written extensively in past “Inside Washington” columns about the many benefits that IIJA will bring to our country, and our members will be on the front lines of implementing this historic legislation. However, the fight over how best to implement the legislation has just begun.
Since IIJA’s passage in November 2021, our industry has found itself facing numerous severe challenges in business operations. Supply chain issues, the rising price of gas, and the effects of inflation on the costs of materials have rocked the industry. Furthermore, contractors across the country continue to grapple with workforce capacity issues. Unfortunately, policy decisions by the Biden Administration and the current Congress run the risk of exacerbating these challenges, directly threatening the success of IIJA.
Of these issues, perhaps none is more concerning to NUCA membership than federally mandated project-labor agreements (PLAs). President Biden’s Executive Order (EO) 14063, issued in February 2022 and recently formally proposed through the rule-making process, represents a dangerous step in the wrong direction for American infrastructure construction.
Despite most of Washington’s framing, this is not purely a labor policy issue, nor is it limited to certain types of construction. NUCA represents both union and merit-shop contractors. Our members build and maintain all underground utility systems. We’re doing everything possible to combat the enduring workforce and inflation challenges facing our industry, but the proposed rules that would implement Biden’s ill-advised EO do nothing but make matters much worse by limiting the number of workers available to carry out jobs while also driving up the costs of projects.
The proposed rules’ expressed intent is to help with management challenges that can interfere with federal construction projects, but mandating PLAs will only exacerbate existing workforce capacity challenges by our industry. And unfortunately, PLA mandates are likely to lead to higher costs on IIJA projects, limiting how far badly needed infrastructure dollars can go. PLAs tend to increase construction costs significantly on projects, with increases of 12% to 20% on some jobs. Combined with continuing supply chain and materials challenges, as well as inflation, this will further limit the impact of federal infrastructure investment – and balloon the number of contracts subject to this onerous requirement.
PLA requirements restrict the majority of construction firms who traditionally bid on contracts that include federal financing assistance, in particular merit-shop contractors who make up over 80% of the construction industry. Industry surveys have consistently shown that over 70% of contractors are unable or unwilling to bid on projects carrying a mandatory project-labor agreement, with the further damaging result that small and/or disadvantaged businesses are often unable to bid on these jobs. Requirements imposed by PLAs often make it difficult for contractors to find enough eligible workers, as well. And in an industry already facing a shortage of hundreds of thousands of workers, we cannot afford to cut anyone out.
Government-mandated project-labor agreements are a damaging policy that will reduce the workforce available to build infrastructure projects, including those funded by the IIJA. NUCA has urged the Administration to withdraw the proposed rules, and has continued to work to overhaul the proposed rule, but the makeup of the current Congress is not conducive to progress on this front.
If IIJA is to be successfully implemented, Congress will need to exercise appropriate oversight and guidance at all stages of the process.
The 2022 midterm Congressional elections will have a major impact on the path our country takes, and on how the IIJA and other work done by our industry is carried out. NUCA members should be sure to cast their ballots to elect candidates that support American infrastructure.
Please make sure that you are registered to vote and have a plan to cast your ballot: in-person or by mail, early or on Election Day. Voting is the most important way that you can make your voice heard as a NUCA member. Please also give your employees time on that day to vote, as that ability to cast a ballot for our leaders is one of the most important rights we possess as Americans.
Watch for additional 2022 election-related NUCA communications as Election Day, November 8, approaches, and keep an eye out for our column in the November/December 2022 Utility Contractor issue detailing NUCA’s 2023 legislative strategy for the new Congress.