Stimulus Package To Hit Sewer/Water Fast

Significant Leeway From Usual Restrictions Make Monies More Accessible
By Stephen Barlas, Washington Editor | March 2009 Vol. 64 No. 3
Water projects should increase with the latest federal stimulus package.

The stimulus package doesn’t put any constraints on the construction companies who win sewer and drinking water contracts, at least not directly. But the “Buy American” provision in the stimulus package could come into play with regard to either pipe or earth moving equipment purchased by a construction company. The “Buy American” provision says that the U.S. must honor its procurement agreements with Canada, the European Union, Japan and a short list of other trading partners to the extent those agreements talk about federal procurement. That appears to mean that pipe can be purchased from those countries, but not from other countries such as China, India, Brazil and Russia, which are not members of an international government procurement agreement. However, there are provisions in the bill which give President Obama significant leeway to issue exclusions leading some observers to believe that the “Buy American” provision in the stimulus bill won’t be any more of a roadblock than the one that has long governed highway grants from the Federal Highway Administration, where foreign suppliers have never been locked out.

Another issue weighing on construction companies is the Executive Order 13502 President Obama issued the week before he signed the stimulus bill. That Order repealed Executive Order 13202 (established by President George W. Bush) which prohibited federal agencies and recipients of federal funding from requiring contractors to sign union only project labor agreements (PLAs) as a condition of performing work on federal and federally funded construction projects. A union only PLA is a contract that requires a federal construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; pay union wages and benefits; and obey the union’s restrictive work rules, job classifications and arbitration procedures.

Obama’s order says federal agencies “may” require PLAs, and they are “encouraged” to do so on projects over $25 million. Gail Raiman, a spokeswoman for the Associated Builders and Contractors (ABC), says each federal agency has 120 days to write regulations implementing the Obama Executive Order. But probably the vast majority of contracts underground pipeline installers will sign under the two SRFs, and certainly the USDA program, will be under $25 million; so they may be minimally affected.

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