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Prompt Payment Requirements Now in Effect

Small business subcontracting payment protections supplement those already in place in the Federal Prompt Payment Acts of 1982 and 1988 for construction subcontractors.

Those requirements (Far Part 52.232-5) require the prime contractor to pay the subcontractor within seven days of the prime’s receipt of payment for the subcontractors’ work.

The law permits the prime to impose retainage on the sub and permits withholding for written cause for specific performance deficiency. Interest is payable on late payments after seven days; interest accrues on payments withheld for cause after seven days as well. The payment rules affect all subcontractors on the covered project.

In addition, the Obama Administration has issued supplementary guidance to the Prompt Payment Act (PPA) calling for accelerated payments to small business prime contractors and subcontractors within 15 days of the contracting agency’s receipt of an invoice (the PPA permits agencies to take 30 days from receipt to pay the prime).

Click below to access OMB memos extending the accelerated payment procedures through December 2016.

OMB Memorandum

PBGC Issues Reports on Future Status of its Multiemployer Plan Insurance Fund

The Pension Benefit Guaranty Corporation (PBGC) recently issued two reports underscoring its multiemployer plan insurance fund’s precarious position, predicting that complete insolvency is more likely than not by 2025, if not sooner.

The PBGC reports (PBGC MPRA Report, and FY2015 PBGC Projections Report) call for substantial if modulated minimum level premium increases as follows . . . “for the longer-term PBGC solvency scenarios, all four scenarios require a very substantial increase from the current $27 per participant premium rate, ranging from a 363 percent increase to a 552 percent increase.” They acknowledge that higher rate increases raise the likelihood of driving greater numbers of financially challenged plans into insolvency – compounding the need for further PBGC premium increases.

The reports offer some discussion of the Administration’s budget proposal for Congress to allow PBGC to set its own premiums, charge additional new risk-based premiums on multiemployer plans, and to charge an “exit” fee on sponsoring employers (not paid out of plan assets) to shore up PBGC resources.

In all this, there is little discussion on the impact of these measures on the competitiveness of plan sponsoring employers, or the tendency of PBGC premium issues and uncertainty to push sponsoring employers and plans out of the defined benefit system.

On these points, the PBGC MPRA report says: “Given the scale of the necessary premium increases, their design and structure are critical. A well-designed increase may encourage additional contributions, encourage continued participation in plans, and strengthen the multiemployer system. A poorly designed premium increase may encourage employer withdrawals and accelerate plan insolvency with a resulting cost to plan participants and a need for even larger premiums.”

House Education and Workforce Chairman John Kline (R-MN-2)(retiring), the leading proponent of the MCAA and NCCMP-backed composite plan proposal, cited the PBGC fiscal challenge as yet one more instance of the imperative need for Congress to modernize the multiemployer system. MCAA and the entire NCCMP Retirement Security Reform Coalition continue to press for new composite plan design options to be enacted by Congress.

Click here for the PBGC reports.

CEA Submits Construction Industry Priorities to National Party Platforms

Last week, the Construction Employers of America (CEA), of which MCAA is a member, submitted a list of construction industry policies to the national Democrat and Republican Parties to consider for inclusion in their platforms during their upcoming conventions.

In introducing these proposed policies, CEA explained that it “works to strengthen the construction industry and provide opportunities for top-quality construction workers to learn and maintain the skills they need to deliver highly productive, quality workmanship that provides the best value to project owners while earning high-value compensation and benefits for themselves, their families and their communities.”

The proposed policies would:

promote sound infrastructure policies;
modernize retirement plan options;
prepare the next generation of skilled workers;
invest in energy efficient buildings;
enhance manufacturing efficiency;
support responsible employers through bid listing; and
close the employee misclassification loophole.

Read the full policy proposals

Labor Department “Persuader” Rules Enjoined for Now

The Department of Labor (DoL) issued new rules pertaining to reporting by labor relations consultants and counsel relative to “persuader” activity, which were to take effect on July 1, 2016.

Instead, a federal court issues a national injunction staying the rules for now while further challenges develop.

The Landrum-Griffin law previously required labor relations consultants hired by management to address employees in union organizing campaigns primarily to meet Landrum-Griffin reporting requirements. DoL has broadened those rules to conceivably include legal counsel advice to employer bargaining teams in collective bargaining negotiations, or representation at the bargaining table, beyond consultants’ basic role of addressing employees in an organizing context.

Prior legal challenges to enjoin the rules’ broader coverage of legal advice have failed, but legal challenges on eventual enforcement will continue. The reporting burden falls on the consultant and the association.

Most MCA and UA local agreements and relations are in the context of voluntary recognition construction prehire agreements, so the organizing context of the “persuader” rules are inoperative in the prehire agreement context. Check with your local labor counsel to determine whether this rule change might affect your working relationship with counsel for labor relations or collective bargaining. Click here to download a powerpoint from an Ice Miller webinar on the new requirements.

NEMCA Contributes to MCERF

The Mechanical Contracting Education & Research Foundation (MCERF) recently received a $10,000 contribution from the New England Mechanical Contractors Association, raising its total contributions to $220,800.

The MCERF Board of Trustees greatly appreciates the generous support which enables the Foundation to continue funding industry-relevant education and research programs.

Find out more about how MCERF has been helping your industry by checking out their website.

2016 Faculty Boot Camp was an Over-the-Top Success

Sixteen faculty members from as many universities came to the P1 Group, Inc. in Lenexa, KS in June for a three-day crash course in mechanical, electrical and plumbing systems (M-E-P) – the 2016 Mechanical-Electrical Academic Consortium’s (MEAC) Faculty Training Camp.

The Mechanical Contracting Education & Research Foundation (MCERF) co-sponsored the conference with Electri International of the National Electrical Contractors Association.

The educational sessions, led by Prof. Mike Feutz of Ferris State University, Prof. Tim Wentz of the University of Nebraska-Lincoln, Prof. Lori Brown of California State University, Chico and Prof. Shannon Nicklaus of Pittsburg State University (Kansas), covered mechanical systems and properties; plumbing systems and equipment; testing, balancing and commissioning; estimating; scheduling; high performance contracting; electrical fundamentals; power distribution; systems; lighting; and electrical estimating and scheduling.

All the sessions were designed to brief faculty on M-E-P basics and suggest effective ways to teach the information to students. The P1 Group not only hosted the conference this year, but also arranged tours of its fabrication facility and a new addition to the Olathe Medical Center that’s under construction. Thanks to the P1 Group for hosting the conference and arranging the tours, Shannon Nicklaus for organizing the conference and to MCERF and Electri International for their financial support!

MCAA Construction Technology Conference Looks to the Future

Technology is changing the game for mechanical contractors, and 250 MCAA members have come to Indianapolis to find out how.

MCAA’s Construction Technology Conference will introduce members to the latest technologies now in use in the construction industry and just coming down the pipe from experts that include James Benham and Rob McKinney of JB Knowledge, Inc. and Nathan Wood of Spectrum AEC.

Then, participants will check out how these innovations work at an exhibit presented by BuiltWorlds. Case studies led by Chris Weaver of the Andy J. Egan Company on Integrating Technology and Britton Langdon of Modern Piping will provide more in-depth discussion and insights on how technologies are shaping project management in the office and in the field.

Breakout sessions will give participants an opportunity to exchange information and learn more about how devices could and should work to enhance business operations by improving data security and helping contractors deal effectively with owner-driven software mandates and disruptive technology.

MCAA Releases Safety Bulletin on OSHA’s Final Rule to Improve Tracking of Workplace Injuries and Illnesses

MCAA has just made available its Safety Bulletin with information about the Occupational Safety & Health Administration’s (OSHA) revised recordkeeping rule to Improve Tracking of Workplace Injuries and Illnesses.

The revised rule requires affected employers to electronically submit, annually, specified occupational injury and illness information directly to the agency. The bulletin provides information on key compliance dates and a summary of recently amended provisions in the rule (29 CFR 1904).

MCAA Safety Bulletin on Final Recordkeeping Rule

Bolton Meets with Secretary of Labor Tom Perez

Bob Bolton, a member of the MCAA Board of Directors and the MCAA Government Affairs Committee, discussed the recent Treasury Department decision to veto the Teamster Central States remedial benefit suspension proposal with Labor Secretary Tom Perez at a recent Rhode Island Chamber of Commerce event in Providence, RI.

Bolton raised the issue of the potential impact of Treasury Department Special Master Ken Feinberg’s reevaluation and denial of the Teamster Central States remedial plan and its potentially devastating impact on the Pension Benefit Guaranty Corporation (PBGC) multiemployer plan insurance fund. He also noted the devastating PBGC premium increases on all well-funded plans in other industries.

In response, Mr. Perez said that the Administration was carefully analyzing the impact on PBGC premiums and the collateral effects on healthy plans in other industries on an ongoing basis. Bolton attended the Rhode Island event just after lobbying the pension reform issue at the MCAA/Quality Construction Alliance National Issues Conference in Washington, DC.

National Issues Conference Attendees Focused on Critical Industry Issues

Close to 200 contractors and association executives attended the 2016 MCAA/QCA National Issues Conference in Washington, DC, last week to get the latest information on critical industry issues and to share their concerns about those issues with their Senate and House members.

During the three-day conference, over 120 visits took place between MCAA and Quality Construction Alliance (QCA) members and Congressional Representatives and Senators.

A long list of House and Senate representatives made this conference a success, briefing attendees on a wide range of issues affecting MCAA and allied association members’ business concerns.

Issues included:

A new bill to stem payroll fraud stemming from misclassifying employees as independent contractors from lead Representative Tom MacArthur (R-NJ);
Federal Infrastructure funding measures by Senator John Barrasso (R-WY), Congressman Lou Barletta (R-PA) and Representative John Delaney (D-MD);
Congressman Peter Welch (D-VT) addressed energy policy legislation; and
Representative David McKinley (R-WV) described the formation of the new bipartisan Congressional Building Trades Caucus.

The Conference also focused on recent critical regulatory developments. This part of the program consisted of three expert panel discussions which detailed developments on the Administration’s pending regulations to:

Require registered apprenticeship programs to file annual written affirmative action plans showing apprentice enrollment of women and minorities and the relation of that utilization rate to the availability of women and minorities in the apprenticeship recruitment area;
Executive Order 13673, requiring prime contractors and subcontractors competing for federal contracts and subcontracts of $500,000 or more to file legal compliance certifications for pre-award responsibility reviews; and
Executive Order 13706, requiring federal prime contractors and subcontractors to provide one hour of paid sick/family leave for every 30 hours their employees work directly on or related to (20% or more) a covered federal contract or subcontract.

All of the attendees enjoyed remarks from CNN news commentator and analyst Gloria Borger as she discussed the 2016 political scene.

The program concluded with a strong address by Sean McGarvey, president of the North America Building Trades Unions, on:

The broad scope of NABTU (formerly BCTD) initiatives with owner/labor/management tripartite market councils;
Workforce development pre-apprentices outreach efforts to incorporate under-served potential workers into the construction industry;
Initiatives for economically targeted investments by pension plans to earn high return and support union construction; and
Ways to focus project owner/financing groups on collaborative efforts with the union-sector delivery system.

President McGarvey made very positive remarks on industry pension reform phase 2 efforts.

Pension and health plan benefits experts Cary Franklin and Aruna Vohra from Horizon Actuarial Services and Malcolm Slee and Josh Shapiro from Groom Law Group discussed a broad scope of tough challenges for attendees’ health and pension plans from the perspectives of either contributing employers or plan trustees.

The 2017 MCAA/QCA National Issues Conference will take place May 2-4, 2017, at the Marriott Georgetown Hotel in Washington, DC. So save the date!

Pension Reform Phase 2 Took Center Stage at the Newseum

Former Congressman George Miller took charge of the pension reform segment of the program at the 2016 National Issues Conference. He led an expert discussion of the alternate/composite plan proposal that MCAA and the Quality Construction Alliance are hoping to see adopted by Congress this year.

Mr. Miller and Randy DeFrehn of the National Coordinating Committee for Multiemployer Plans (NCCMP), along with Preston Rutledge, Senior Tax and Benefits Counsel for the Senate Committee on Finance, explained the many cross-currents on a variety of pension reform issues confronting Congress this year, including the need to shore up funding for the Pension Benefit Guaranty Corporation and recent developments affecting other union pension and health plans.

Former Congressman Miller summarized all the pension reform issues, based on his many years as the leading labor Democrat in the House, and encouraged the group to engage positively with Congress on this most essential reform for the industry.

MCAA participants reviewed a letter from the UA and MCAA leadership recently submitted to the Senate Finance Committee supporting composite plan reforms.
Download joint UA-MCAA Letter on Pension Reform

NCPWB Technical Bulletin Focuses on Failures in Seamless Carbon Steel Pipe, Fittings, Flanges

A Technical Bulletin just issued by the National Certified Pipe Welding Bureau (NCPWB) concerns failures in seamless carbon steel pipe, fittings and flanges during hydrostatic testing due to changes in steelmaking practices by certain mills over the last five years. The Bulletin recommends that, except when the piping system hydrostatic test pressure is less than 20% of the code maximum allowable pressure, contractors should include a requirement in their purchase orders that seamless carbon steel pipe, fittings and flanges have a manganese-to-carbon ratio of 5:1 or greater and a grain size of 7 or finer to avoid such failures. Find out more by clicking on the link below.

NCPWB Technical Bulletin

OSHA’s Improve Tracking of Workplace Injuries and Illnesses Rule is Final

As anticipated, the Occupational Safety and Health Administration (OSHA) rule – Improve Tracking of Workplace Injuries and Illnesses – is final and was published in the May 12 issue of the Federal Register. The final rule includes substantive changes from the proposed rule and some favor employers.

The rule takes effect on January 1, 2017, except for two provisions which become effective August 10, 2016. The exceptions include the provisions on employee involvement and prohibition against discrimination. The enforcement dates are as follows:

Employers of 250 or More Employees (large employers) will be required to electronically submit to OSHA their 2016 OSHA 300 A Summary information by July 1, 2017. Going forward, large employers will be required to electronically submit to OSHA information from their OSHA 300 Log, OSHA 300 A Summary, and OSHA 301 Incident Report Forms once each year. The 2017 information must be submitted by July 1, 2018. However, starting in 2019 and each year thereafter, the information from the preceding year must be submitted by March 2.
Employers of 20 to 249 Employees will be required to electronically submit to OSHA information from their OSHA 300 A Summary once each year. The 2016 information must be submitted by July 1, 2017. The 2017 information must be submitted by July 1, 2018. Starting in 2019 and each year thereafter, the information from the preceding year must be submitted by March 2.
OSHA State Plan States have six months to adopt the rule or establish another that is similar and at least as stringent.

OSHA Final Recordkeeping Rule

MCA of Kansas City Contributes to MCERF

The Mechanical Contracting Education & Research Foundation has received a $10,000 contribution from the MCA of Kansas City, raising its total contributions to $295,000.

The Foundation Board of Trustees is very grateful for the generous contribution which will help support MCERF’s continuing industry education and research activities. Find out more about how MCERF is assuring the growth and advancement of our industry by visiting the Foundation’s website.

MCERF Information

Treasury Department Rejects Teamsters’ Remedial Pension Plan

The Treasury Department’s Special Master, Kenneth Feinberg, rejected the remedial application of the Teamsters Central States’ pension plan to cut benefits in order to save the plan from even greater cuts due under the Pension Benefit Guaranty Corporation insolvency status.

Feinberg said the remedial plan actuarial and participant age assumptions were unreasonable, the benefits cuts were not distributed equitably across all participant categories and the explanation of the remedial plan did not meet the “understandability” criteria of the Pension Reform Act.

Reacting to the Treasury Department’s action, the Partnership for Retirement Security (sponsored by MCAA, the National Coordinating Committee for Multiemployer Plans and other signatory groups), said,

“While today’s decision by the U.S. Department of the Treasury to deny Central States Pension Fund’s rescue plan will temporarily spare many from cuts to their hard-earned benefits in the short-term, it also sentences participants to an insecure retirement where massive benefits cuts are inevitable. By their decision today, Treasury is gambling that Congress, which has flatly refused to assist these plans or the PBGC in the past, will now appropriate more than $100 billion required to rescue, not just Central States, but the entire system. It is a big bet. Unfortunately, rather than those who made the decision, it will be the pensioners who pay the price if it is lost.”

The NCCMP alternate plan design proposal – composite plans – which is designed to avoid the Central States type problem, will be at the top of the agenda for the Quality Construction Alliance National Issues Conference, which takes place in Washington, D.C. May 10-12.

MCAA 2016 Fabrication Conference was Over the Top

About 180 MCAA members traveled to central Texas last week for MCAA’s 2016 Fabrication Conference. Hosted by Dynamic Systems, Inc. (Austin, TX), the tour of the company’s fabrication operation gave attendees an appreciation of the company’s focus on process and productivity and dedication to providing its employees with the best possible work environment.

Attendees saw the virtual design area; machines, tools and equipment including a spiral machine, CNC plasma tables and coil line and delivery, the Vernon 5 Axis and Victaulic machine; the bar coding and basketing operation; cutting and welding procedures; quality assurance/quality control; and much, much more.

Educational sessions augmented the program. Dynamic Systems Senior Vice President Jay Rohan started off the conference with a detailed overview of the company and its fabrication operation. UA Training Director Chris Haslinger and International Representative Mark Buss shared their expertise about issues affecting fabrication operations, including new equipment, such as “Mega Stir” and other technologies that are changing the way jobs are managed in the field.

Sessions led by Amanda Comunale of Victaulic (Easton, PA) andDutch Martinez of Harder Mechanical (Portland, OR) and Lean consultant Dennis Sowards (Mesa, AZ) provided more perspectives and insights on managing fabrication processes effectively and profitably.

Attendees also had an opportunity to see the latest technologies during an exhibit presented by Autodesk, BD SysQue, Pentair, DeWalt, Eaton B-Line Series, Get the Point, Milwaukee Tool, Pipe Fabrication Institute, Team Industries, Trimble, Victaulic and Zurn.

Mid-Atlantic MCA Contributes to MCERF

The Mechanical Contracting Education & Research Foundation (MCERF) recently received a $5,000 donation from the Mid-Atlantic MCA, raising its total contributions to $41,000.

The Foundation’s Board of Trustees greatly appreciates the contribution and the support of its ongoing education and research programs. Find out more about MCERF’s programs.

PCA Plumbing Podcast Tackles Service Truck Inventory

If keeping your plumbing service trucks stocked with the right equipment for the right jobs has proven to be more challenging than it should, then check out this week’s Plumbing Pod podcast.

Ed Gormley of Gormley Plumbing & Heating (McMinnville, OR) shares tips for inventory management, standardized tools, and software that can be used to help service calls run more smoothly. Visit PCA’s homepage to download this and other podcasts.

Plumbing Podcast

Boost Your Safety Leadership Skills

As part of 2016’s Safety Week celebration, MCAA is presenting a webinar on Building Safety Engagement: How to Get Everything You Want at Work (and in Life) on May 5 at 2:00 p.m. Eastern Time.

Led by Dr. John Austin, an internationally recognized coach of business leaders on safety and human performance, the webinar will address common causes of low attention and interest in safety.

You will learn about the primary drivers of behavior and which of those you may be able to influence, proven ways to change behavior and actionable ideas that will help you enhance your employees’ engagement in safe work practices.

This webinar is free to MCAA/MSCA members as a benefit of membership.

It’s too late now to view it live, but please visit our Resource Center to listen to the archived recording.

MCAA President Tom Stone Addressed UA’s Tripartite Conference, Honored General President Bill Hite

During the United Association’s Eighth Annual Tripartite Conference in Chicago April 26, MCAA President Tom Stone highlighted the best-value proposition MCAA employers and UA labor present for construction owners nationwide.

President Stone’s remarks also included a video of the MCAA Lifetime Achievement Award presentation to General President Hite at the association’s 2016 convention.

U.S. Labor Secretary Tom Perez addressed the group and lauded the labor/management collaboration between MCAA and the UA nationally and locally as a model for widespread deployment in other U.S. industries. Secretary Perez commended the UA for its leadership in helping address and remedy the water contamination crisis in Flint, MI. He expressed strong support for prevailing wage law enforcement efforts and the Department of Labor’s efforts to crack down on widespread wage fraud nationally perpetrated by worker misclassification.

North America Building Trades Union (NABTU) President Sean McGarvey also addressed the conference, highlighting a new NABTU initiative to promote the deployment of pension plan investment policies that would yield high returns in projects using union labor.