Issue 2, 2023
Welcome to the second issue issue of the year for The Site Report.
We hope you enjoy this issue and, as always, thank you for reading.
Stephanie U. Eaton - Co-Chair, Construction Group; Vice Chair of Southern Offices, Litigation Department; Editor, The Site Report
and
Julian E. Neiser - Co-Chair, Construction Group; Vice Chair of Northern Offices, Litigation Department
EEOC Increases Scrutiny on Discrimination and Harassment in the Construction Industry as Federal Infrastructure Dollars Start Flowing
By Kevin L. Carr and Chelsea E. Thompson
The Equal Employment Opportunity Commission (“EEOC”) plans to prioritize its efforts to correct discrimination and harassment in the construction industry following a review of data that revealed the construction sector to be one of the most challenging areas in terms of discrimination and harassment cases. As detailed in its draft Strategic Enforcement Plan (“SEP”) for 2023 through 2027, the EEOC believes that the construction industry suffers from a systemic “lack of diversity” and has become an “area of particular concern.” The EEOC’s SEP is a guidance document that establishes the Agency’s priorities over a multi-year period. By identifying the construction industry as a particular focus area in the SEP, the EEOC is signaling its intent to focus its substantial resources on the construction industry over the next several years.
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What You Need to Know about MEB/BD Business Certification Processes
As published in For the Defense by Steven C. Hemric and Marlon A. Primes
Both certifying your business as an MBE, WBE, or DBE and entering into joint ventures with other companies can be powerful tools to strategically grow your experience and client bases. This article provides background and key issues to address when creating joint ventures intended to pursue minority-owned business set aside contracts under the Small Business Administration’s Section 8(a) Program. Several key issues should be addressed in any joint venture, as well, and the Section 8(a) framework discussed in this article can be an excellent starting point when any two businesses are considering forming a joint venture in the construction industry.
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Construction Employers: Beware the Ides of Marc
By Victoria L. Creta
Construction continues to be one of the deadliest industries in the United States, and the Occupational Safety and Health Administration (“OSHA”) is heavily targeting construction workplaces. In 2022, OSHA inspected construction workplaces more than any other industry, and OSHA’s focus on construction employers is expected to continue this year. As such, construction employers should be aware of a recent OSHA press release, and two enforcement memorandums, indicating that construction employers will face a significant increase in penalties for violations and citations.
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The Rise of Union Organizing, Techniques of Organizers and Avoiding Unionization
By Kevin L. Carr
In recent years, there has been a surge in new union organizing efforts and tactics to unionize and organize employers around the country. From Amazon workers in Jacksonville to Starbucks employees in 280 stores and counting, unions are imploring workers to turn to unions to help address issues like low wages, lack of benefits, and poor working conditions. Unionizing has become more heavily publicized, even romanticized, in the media and many employees have bought in to the movement. However, very few employers are as enthusiastic about unionization as their employees.
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White House Details ‘Buy American’ Plan
“The standards would require that projects be built with material manufactured in the U.S.”
Why this is important: During his recent State of the Union address, President Biden stressed that for construction projects funded with 2021 Infrastructure Investment and Jobs Act (“IIJA”), the materials – such as drywall, lumber, and glass – would be supplied by American suppliers. The Office of Management and Budget (“OMB”) is working on proposed standards to replace temporary rules applicable to IIJA projects. These standards are to define “American made” so that project owners, developers, and contractors know whether materials sourced for IIJA projects meet the funding requirements.
The “Buy American” plan is intended to promote job growth, strengthen supply chains, and lower costs. However, given the current post-COVID challenges the construction industry is facing, such as increased costs and material and labor shortages, certain construction groups have lobbied for extended waivers from application of these rules. Notably, the OMB is proposing that the rules would allow federal agencies – such as the EPA, Army Corps of Engineers, Departments of Transportation, Interior and Commerce – that are implementing IIJA projects to waive the American-made sourcing requirements in certain cases, such as if the American-made materials were unavailable or because of high costs. As the OMB develops and implements standards, it will be important for any construction industry participant working on an IIJA project to understand how the “Buy American” rules apply to project materials and whether a waiver of rule application applies and should be requested. --- Stephanie U. (Roberts) Eaton
Morrisey Sees New EPA Proposed Rule as 'Job-Killing'
“’The natural gas, pipeline and construction sectors provide thousands of jobs to hard-working West Virginians.’”
Why this is important: In the last The Site Report, we discussed the anticipated increase in infrastructure construction in West Virginia due to federal funds being poured into bridge construction/repair and the Coalfields Expressway Project by way of the Infrastructure Investment and Jobs Act. With an increase in infrastructure construction comes an increase in construction employment. However, when it comes to infrastructure employment, West Virginia Attorney General Patrick Morrisey (“AG Morrisey”) fears that what one hand of the federal government giveth, the other hand of the federal government may taketh away.
West Virginia is a leading natural gas producer. AG Morrisey, along with Attorneys General in 23 other states, sent a letter to the EPA expressing their fears that new proposed EPA rules would “establish new standards of performance under the Clean Air Act for new and modified sources of methane in the oil and natural gas sector.” These new standards would have a significant negative impact on the natural gas industry in West Virginia by significantly increasing the EPA’s authority while imposing more regulatory obligations on market participants. This increase in regulatory obligations could not just result in increased costs in the natural gas industry, but also may force natural gas companies to exit the industry altogether because of their inability to comply with the stricter regulatory structure. AG Morrisey worries that the proposed EPA rule will jeopardize thousands of West Virginia jobs in the natural gas, pipeline, and construction industries. If you are involved in the natural gas or construction industries, and you need help navigating this ever-changing regulatory landscape, please contact Spilman’s Energy and/or Construction Practice Groups. --- Alexander L. Turner
North Carolina Poised to Take Huge Step Forward in Building Efficiency
“A proposal advancing in the state’s code council would bring North Carolina’s energy conservation code in line with the latest international guidelines, a major leap forward for a state that has long lagged.”
Why this is important: In 2018, second-term Governor Roy Cooper issued climate-related Executive Orders, which was followed in 2019 by the state’s clean energy plan. North Carolina made a big stride toward making a positive impact on climate change when Governor Cooper signed House Bill 951 in October 2021, which legislation requires the North Carolina Utilities Commission to take steps needed to get North Carolina a 70 percent reduction in carbon emission by the year 2030 and to carbon neutrality by 2050. You can read the press release here and our discussion of this legislation in The Site Report article "Which states could gain the most from energy-saving building codes?" Now, to further push North Carolina toward carbon neutrality, the North Carolina Building Code Council (“Council”) is set to address updates to the state energy conservation code, which is particularly crucial for residential construction.
What kind of changes to the state energy conservation code are we talking about? New efficiency standards would primarily focus on more energy efficient windows and lighting, as well as thicker insulation. These changes, in turn, would result in a reduction of fossil fuels burned for heating and electricity. With approximately 90,000 new housing units built each year, code changes could make a huge impact on reaching climate change goals.
What comes next? The Council voted last December to hold a public hearing this March to evaluate state energy conservation code changes. Before the public hearing, the updated cost-benefit analysis from the Pacific Northwest National Laboratory is expected to be released, and would set forth how new energy conservation standards can reduce energy bills for consumers. The public hearing is scheduled for 9 a.m. on March 14, 2023, at the Albemarle Building, 325 N. Salisbury Street, Raleigh, NC 27603, in the second floor training room, Room 240. Comments on the proposed rules and any financial impacts will be accepted, and the deadline for comments is April 17, 2023. Following the public hearing, the Council votes in June on the adoption of new standards. After that, a rules-review panel evaluates the new standards, and the N.C. state legislature may also weigh in. Code changes, if approved, would take effect the beginning of 2025. We will report updates as this story develops. --- Stephanie U. (Roberts) Eaton
Construction Industry Report Predicts 2023 Materials Pricing
“The report cautions that inflation, a possible economic downturn and China’s stance on COVID protocols will keep prices high throughout the year.”
Why this is important: As key players in the industry remain concerned about material pricing, this article and the underlying report support those concerns. Prices look to remain high and to continue escalating in key areas, specifically projected to hit electrical materials/contracts. While most price escalations are not projected to be as drastic as some changes we have seen over the last few years, inflation, supply chain issues, and transportation costs will keep material prices high with the potential to rise even more. Everyone involved in the construction industry should continue to evaluate their contract forms and actively negotiate their contracts on new projects to ensure owners, contractors, subcontractors, and suppliers all have adequate protections from unanticipated or exorbitant price increases. --- Steven C. Hemric
President Biden Announces First of its Kind Infrastructure Investment for Nine Nationally Significant Mega Projects
"New Mega Grant program, created by the President’s infrastructure law will bring massive economic benefits to communities across the nation."
Why this is important: Federal infrastructure funding is coming to North Carolina and Pennsylvania! Recently, Transportation Secretary Pete Buttigieg announced an award of $1.2 billion in grants for nine projects around the country. This includes projects in North Carolina and Pennsylvania. The funding for these projects is coming from the new National Infrastructure Project Assistance (Mega) discretionary grant program.
In North Carolina, the Biden administration awarded $110 million to the North Carolina Department of Transportation to replace the Alligator River Bridge in Dare and Tyrrell Counties. The Alligator River Bridge is a critical hurricane evacuation route. The bridge will be converted from a swing bridge to modern high-rise fixed-span bridge. Changing the bridge from a swing bridge to a fixed-span is intended to improve travel times because the bridge will no longer have to close the roadway in order to let boat traffic through.
In Pennsylvania, the Biden administration awarded $78 million to the Pennsylvania Department of Transportation for the Roosevelt Boulevard Multimodal Project in Philadelphia, PA. The project is intended to significantly decrease automobile crash rates on Roosevelt Boulevard, which has the highest crash rates in the city. The goal is to improve safety and accessibility, and to prioritize jobs for economically disadvantaged communities. --- Alexander L. Turner
