November 14th, 2019 
Volume 21, No. 46

Contents


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Registration for SUBExcel 2020

is Now Open!

March 4-7, 2020 in Las Vegas, NV

 

SUBExcel is American Subcontractors Association's annual meeting, the perfect place for you to join YOUR association working hard for the needs of construction subcontractors, specialty trade contractors and suppliers. Perks of attending SUBExcel include:

  • Get proven business tips from acclaimed speakers that will transform your company and your bottom line to succeed in today’s construction markets.
  • Learn about the latest productivity-enhancing products and services provided by ASA exhibitors.
  • Enjoy the luxury hotel accommodations.
  • Enjoy special events, including the ASA President’s Welcome Reception and the Final Reception & Banquet.
  • Take a deeper look at your industry, your chapter, and your association and be part of mapping our industry’s path forward in ASA’s task force, committee and council meetings.
  • And much more!

Today's economy is changing at an ever-increasing pace, and business owners need to be prepared for both the successes and the obstacles of the future.  Making sure your business is financially sound is crucial in today's competitive market, and ASA wants to help you be as strong as you can be for the years ahead. 

In keeping with this idea, the theme of SUBExcel 2020 will be “The Economy Moving Forward”. Several education workshops will focus on strengthening your business financially for the future.
Register Today for SUBExcel 2020!

VA Design-Build Construction

Legislation Passes the House

On Thursday, July 25, 2019, Reps. Banks (R-IN) and Perlmutter (D-CO) introduced the VA Design-Build Construction Enhancement Act, which would encourage the Department of Veterans Affairs (VA) to use design-build construction in appropriate circumstances. Design-build is an innovative and effective method for managing construction projects that is widely used in the private sector and some parts of the federal government. This legislation, otherwise referred to as H.R. 3996, would require the VA to use government- wide design-build selection procedures if it seeks to enter into a contract for the design and construction of a medical building. 

The federal government began widespread use of design-build construction in 1996. Design-build is a delivery method for construction projects that combines the architectural, engineering, and construction services into a single contract. It is an innovation from traditional design-bid-build construction, where design and construction are sequential and performed by different contractors. When used in appropriate circumstances, design-build construction can accelerate projects, reduce change orders, and increase warranty protections.

Some federal agencies use design-build construction frequently, while others, like VA, have limited experience with it. VA unsuccessfully attempted to use the “integrated-design and construct” method, which is somewhat similar to design-build, in the troubled Aurora, Colorado replacement medical center construction project. Some have interpreted this experience to mean design-build is unsuitable for VA, but this is a bad conclusion. 

Specifically, the VA Inspector General found that VA switched to this method in the fourth year of the project, when the vast majority of the design had already been completed, rendering it ineffective.
On Tuesday, November 12, 2019, the legislation passed the House by a voice vote. H.R. 3996 moves to the senate for further consideration. The ASA Government Relations Team will continue to monitor this legislation and future procurement legislation.


U.S. Surgeon General Encourages

Employers to Ramp Up Well-Being Initiatives

U.S. Surgeon General Jerome M. Adams is urging employers to make worker well-being a higher priority, in an article published in the Public Health Reports – the official journal of the Office of the Surgeon General and the U.S. Public Health Service on October 10, 2019. Per Surgeon General Adams, “healthy and happy employees have a better quality of life, a lower risk of disease and injury, increased work productivity, and a greater likelihood of contributing to their communities than employees with poorer well-beings.” For this reason, the Occupational Safety and Health Administration (OSHA) and the National Academy of Medicine have identified worker well-being as a key national health issue. To help address this issue, Surgeon General Adams writes that public health leaders need to continue to make a strong case to employers that worker well-being programs (including onsite health centers, weight-management programs and financial counseling) benefit their human capital needs and bottom lines.

Read Surgeon General Adams’ full article here. 


Are You Working To Engage Young People in the Trades?  Tell ASA About It!

We want to hear from you!  Tell us how you are working to engage young people and new employees in the trades.  Are you working with programs like Helmets to Hardhats?  Does your company have a partnership with a local community college, university or apprenticeship program??  How do you connect with your local community?

The American Subcontractors Association is currently working to gather all of your amazing ideas to be able to share with other ASA chapters around the country.  Let us know how you reach out to young, new talent, as well as your best practices in each initiative.

Have something exciting to share?  Email us your ideas at communications@asa-hq.com.  We can't wait to hear from you!


Small Business Administration

Releases a Guide for Federal Rulemaking 

To help small business owners understand their role in the federal rulemaking process – including worker safety and health – the Small Business Administration’s Office of Advocacy has published a guide. The four-page document details how a potential rule begins and explains the rulemaking steps; considerations for small businesses; and how the process allows small-business owners to share their comments, experiences and potential alterative solutions. The guide also includes tips to make comment letters more effective so that the voice of small-business owners is heard in the rulemaking process.

To view the document, click here.


ASA’s Opposition to the

Elimination of Stretch IRAs

ASA joined the Small Business Legislative Council (SBLC) in a letter to the Senate Minority Leader Schumer regarding the SECURE Act (H.R. 1994).  The SBLC does NOT support the elimination of the stretch IRA and the increased penalties for the late filing of retirement plan forms contained in the SECURE Act because they will adversely affect the small businesses.

The SBLC is an independent, permanent coalition of forty national trade and professional associations whose goal is to maximize the advocacy and presence of small business on federal legislative and regulatory policy issues, and to disseminate information on the impact of public policy on small businesses and closely held businesses, including family owned businesses. Founded in 1976, the SBLC is the only small business association whose membership is comprised exclusively of trade and professional associations and, through its members and their members, it represents all sectors of the economy and a significant swath of the country’s small businesses. It is also one of the few associations representing small and closely-held businesses which is non-partisan and through its members represents more than 50,000 businesses across the economy. ASA has been a long-standing member of the SBLC.

Per the letter, “we urge you to amend or remove these provisions to ensure Americans can continue to save in their retirement plans without fearing that their non-spousal beneficiaries will be left with a new and significantly larger tax burden.  The hard working small business owners who did the right thing and established retirement plans for themselves and their employees will be subject to an unanticipated new tax that at least one expert believes will have a more far reaching impact on Americans than all of the recent changes made to estate taxes in the recent Tax Cuts and Jobs Act. Unfortunately, few understand the impact of the elimination of the stretch IRA which is contained in the SECURE Act but not in the Senate’s Retirement Enhancement and Savings Act (RESA) (S.2526). 

The elimination of the stretch IRA may very well have a negative impact on the long term funding of small business retirement plans. This is because once this new tax is understood, owners will tend to underestimate what they will need to save in the plan for their retirement and are likely to stop employer contributions to the plan once they have reached that amount. The elimination of the stretch IRA will hurt small business owners but it could hurt their employees even more because once the small business owners think they have saved enough in the plan, many companies will stop making employer contributions and their employees will be losing the valuable contributions made by the small business on their behalf.
 
Section 401 of the House-passed SECURE Act would limit the stretch period for IRAs to 10 years for the vast majority of non-spousal beneficiaries, requiring the account to be fully distributed—and the beneficiary to pay the full tax on those distributions—within that timeframe.  This will have the effect of depriving these beneficiaries (almost always children) of potentially decades’ worth of investment income and a valuable safety net. It would also greatly increase their tax burden, potentially pushing them into a higher tax bracket, during the 10-year distribution period.  Some experts have estimated that the elimination of the stretch IRA decreases the value of an IRA by about a third.  This will force employees to start taking money out of the plan sooner and small business owners shutting the plan down sooner to make sure money is left to the children in a more favorable manner.  Many of these Americans would not have saved in these retirement plans (as urged by Congress) if they had known the tax treatment on their savings would be changed so dramatically and in effect, retroactively.” 


 

Help Defend Our Future by Supporting the Subcontractors Legal Defense Fund

ASA underwrites the legal costs of filing "friend-of-the-court" briefs to inform the Court regarding the broader impact of relevant cases throughout the country. We have won dozens of these cases since 1997, vindicating subcontractor rights today and into the future!

Each year, courts across the country hand down hundreds of decisions on federal and state laws, as well as court-made or "case"law, that apply to subcontractors' businesses. Many of the decisions impacting subcontractors interpret the contract provisions of subcontract agreements—provisions like pay-if-paid, hold harmless, duty-to-defend, and no-damages-for-delay. Some of these decisions are precedent-setting and carry significance for subcontractors across state lines.

ASA's Subcontractors Legal Defense Fund supports ASA's critical legal activities in precedent-setting cases to protect the interests of all subcontractors. ASA taps the SLDF to fund amicus curiae, or  friend-of-the-court," briefs in appellate-level cases that would have a significant impact on subcontractor rights.


Support the SLDF Today!
 

 

116th Veteran

Congressional Representation

As the nation celebrated Veterans Day on Monday, the number of veterans serving in Congress continued a decades-long downward trend. Veteran ranks in the 116th Congress fell by roughly 1.2 percent compared to the previous Congress.   About 21.5 percent of the current Congress has served in the military.  The drop-in members with experience in the armed forces comes after a major turnover; 100 new members have joined Congress since the 2018 midterms. The current Congress includes 95 veterans, with 77 in the House and 18 senators. Of the freshman class, 20 percent are veterans. The largest swath of congressional veterans joined the military prior to the 9/11 terrorist attacks. Among House members, 61 served before 9/11 and 16 joined the military after 9/11. Only one senator started military service after 9/11; Sen. Cotton (R-AR), who joined the Army in 2004.

Veterans in Congress span six decades of military service. Rep. Young (R-AK), who served in the Army from 1955 to 1957 is both the oldest member of Congress and the oldest veteran. At 32, Rep. Rose (D-NY), is the youngest veteran in Congress serving in Afghanistan during his stint in the Army from 2012 to 2014, four years before being elected to Congress.

Four former high-ranking military officers are currently serving in Congress. Of the four, Rep. Bergman (R-MI), is the highest ranking and he retired from the Marine Corps as a lieutenant general. Only one member of Congress reported military service to another nation. Rep. Mast (R-FL), volunteered with the Israel Defense Forces after his stint in the Army.


Government Funded Until December 20th

House and Senate Appropriations Chairs Lowe and Shelby met Tuesday evening to discuss a way forward on FY20 Appropriations Bills.  They agreed on a new continuing resolution (CR) date to extend the existing government funding until Friday, December 20th, which is the last day of session before the Christmas/End of Year Recess. The White House officials appear to be open to a CR through December, as long as it does not place additional strings on administrative transfer authority for border wall funding.


Impeachment Inquiry Advances in the House

The House Intelligence Committee hearing, convened on Wednesday and heard from the following witnesses:  William B. Taylor, Jr., the acting U.S. Ambassador to Ukraine, and George Kent, the Deputy Assistant Secretary of State for European and Eurasian Affairs. Both are long-time employees of the State Department.  The hearing offered congressional Democrats their first opportunity to present their case for President Trump's impeachment to the American people, while Republicans will have a chance to lay out their defense of the President.   House Intelligence Committee chairman Schiff (D-CA) and ranking member Nunes (R-CA) will each have up to 45 minutes to question the witnesses, although they are expected to yield their time to the panel's staff attorneys. Rank-and-file members of the committee had then five minutes each for questioning.


Upcoming Events



December 10th, 2019

DOL Issues New Salary Threshold Requirements,
Effective January 2020

by Bill Ford, SESCO Management Consultants

January 7th, 2020


Payment Clauses: What to Watch For and How to Negotiate Them
by James Yand and Brian Esler


 


Advocacy

ASA is the united voice dedicated to improving the business environment in the construction industry, representing subcontractors before all branches (executive, legislative, judicial) and levels (federal, state, local) of government, to organizations representing other parts of the construction industry, to the news media, and others.


Networking

Being active in ASA is a great way to meet and get to know others in the construction industry. Through ASA networking opportunities, you can learn about the issues that most impact your business, exchange factual information about prospective customers before submitting a bid, cultivate business relationships, and make lifelong friends! Through volunteer service on an ASA task force or committee, you can develop leadership skills and play an important role in changing the construction industry for the better.


Education

ASA offers subcontractor-tailored events and education including Members-only educational resources ranging from model contract language to risk management and marketing tools. We also offer in-person and online educational events open to members and nonmembers for a fee.


Resources

ASA members have exclusive access to resources—articles, podcasts, model contract language, industry reports, and more—designed to help them bid and negotiate contracts, and manage projects. Log in with your username and password.

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