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E-Verify, a government web-based system that helps employers verify a workers legal status, has been in the news before.  

Originally a George W Bush executive order, E-Verify was slated to become mandatory for federal contractors beginning January 15, 2009.   The change in executive administrations and a handful of lawsuits, however, pushed the requirement back indefinitely.

This week, the Obama administration chimed in on the subject, and announced that it would support the E-Verify requirement, and that it would take effect across the country starting September 8, 2009.   Appropriately, the day after Labor Day.

Any federal projects or businesses receiving money under the federal stimulus program will be subject to the rule, and required to register and use the E-Verify system.

Differences Between Obama E-Verify and Bush E-Verify

When comparing the Obama E-Verify requirement and the Bush E-Verify requirement, one difference stands out:   Obama has ditched the "No-Match" system.

As a result, for better or worse, the requirement going into effect this September will have substantially less teeth.

Ditching the "No-Match" component of the E-Verify requirement will benefit employers because they will not be required to terminate (on such a tight time-line) employees whose social security numbers do not match with the system.

It will benefit workers, too, because Obama will not allow the federal government to use mismatched SSN data to find illegal immigrants in the workplace.

Is It Really Going To Happen This Time?

The short answer:  Yes.

While it has been delayed repeatedly in the past year, and there's always a possibility for more delay, it looks like the latest effective date will stick.  

The Obama administration has reviewed the requirement, and is now standing behind it, and by ditching the most controversial aspects of the rule, there will be fewer legal and political challenges.

Beginning September 8, 2009, therefore, the government will award contracts only to companies in compliance.

Who Needs to Be Prepared?

A lot of people need to be prepared for this E-Verify requirement.  

While the controversial components of the requirement have been removed by Obama, the scope of the rules applicability has actually gotten broader.   The requirement will not only apply to contractors and subcontractors on federal projects, but it will also apply to any business receiving money under the federal stimulus project.

With the influx in federal and state spending on construction projects, and the decrease in private work available, more and more contractors are being forced into bidding and working on public works.  And with the now wider reach of the E-Verify program, contractors and subcontractors need to prepare themselves.

In February 2009, we wrote a post here at the Construction Law Monitor titled "The Stimulus Package and Your Construction Business."  

The post discussed the differences between private and public works, and addressed some of the issues private contractors face when working on its first public project.   

Add the new E-Verify requirement to the list, and the article is still a good read.

Is this Still Controversial?

Even with Obama's backing of the system and some tweaks to its enforcement power, the E-Verify program definitely still has its detractors.

The San Bernardino Sun News just ran an article about how the E-Verify system puts Obama at odds with some democrats.   

Despite the controversy, the E-Verify requirement will take effect on September 8th, and construction companies around the country must be prepared.

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Katrina's Silver-Lining.  Three words New Orleanians didn't ever expect to hear, yet uttered this Sunday in print by both the Seattle Times and the New York Times.

While the rest of the nation's construction industry and real estate market has steadily suffered over the past 12 months, in New Orleans real estate prices hold firm and the construction industry is 'booming.'   Here is a quote from the Seattle Times article about the NOLA construction market, and even a quote from local contractor Landis Construction:

The recovery dollars are paying for projects large and small, including an $800 million replacement of the damaged "twin span" bridges over Lake Pontchartrain and thousands of homes being fixed under the state-administered Road Home program. The Army Corps of Engineers continues to use contractors to strengthen the levee system. In working-class neighborhoods such as the Ninth Ward, laborers are pounding away on small-scale renovations.

"Katrina was a horrible nightmare, but the reality is that, for the construction industry, it's been a blessing," said Theresa Leger, a vice president of Landis Construction, a local firm that has remained busy since the hurricane.

The New York Times article looked at the city's sustaining economy from a different angle; as evidence that a stimulus package can work to improve economic conditions.

The article calls the federal government's $51 billion injection into post-Katrina Louisiana an "unintended trial rune" of the $787 billion national stimulus bill.  

And what are the results?  

The New York Times says the results are good - and especially for the construction industry.  Here's a quote from the piece:

State economists specifically mention what one called “the ongoing building boom” from federal dollars as a main reason for the numbers. Largely a result of the damage caused by Hurricane Katrina, construction projects have not dried up as they have elsewhere, and a few can even be seen in downtown New Orleans.

Construction has “really hung in there and done very well,” said Loren Scott, an emeritus professor of economics at Louisiana State University. “In most states construction is way down, but in ours it has been up.” The relatively low unemployment rate in Louisiana “tells you that the stimulus can have an effect,” Mr. Scott said.

Read more about the Stimulus Package and how it relates to the Construction Industry on the Construction Law Monitor here.

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This week, some familiar topics were being talked about in the legal blogosphere, from the Employee Free Choice Act to the Chinese Drywall situation in Florida, Louisiana and elsewhere.  Here are some selected articles and posts from around the web this week:

• EFCA - Amidst all of the controversy, three mega-retailers proposed an alternative to the currently pending EFCA act.   Those retailers?   Starbucks, Whole Foods and Costco.
   
• Green building law blogger Shari Shapiro went to a green building conference and asks the question:  Is construction law Where The Boys Are...and The Girls Aren't.
   
• The Business Pundit reports that the Knauf Drywall Fiasco could be the Biggest Home Defect Case In U.S. History.  The question then becomes...are you prepared for that?  Wolfe Law has been blogging on Chinese Drywall here, and they have published an Avvo Legal Guide titled:  What To Do If You Installed or Supplied Chinese Drywall.
   
• The Stimulus is still in the news.  Here is a searchable spreadsheet published by the Contractor's Blog of the 18,000+ Infrastructure projects.
   
• Wolfe Law Group news?   Check out an interview with founding member Scott Wolfe Jr. on New Orleans' Fox 8 about Chinese Drywall.   Also, the firm announced a new practice group to represent, advise and defend builders, contractors, suppliers and other construction industry participants who are implicated by the imported drywall crisis.

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On January 1, 2009, the forecast for the construction industry and the American economy in general was reported grim.  

Since then, however, we've sworn in a new President, Congress passed an aggressive (albeit controversial) "Stimulus Package," and the dead of winter has bowed to a new Spring - typically a more productive time of the year for construction.

So where are we?  

Well, the news for the construction industry carries mixed messages.

Let's start with the bad news:  McGraw Hill Construction reports that February construction dropped 8% from January, and Reuters predicted that construction jobs will continue to report weak throughout 2009.

In an interview with Reuters, Chief Economist for the American Institute of Architects (AIA), Kermit Baker, had this to say about the economy and the stimulus:

The Obama stimulus will put some people to work as soon as next month, but it will not be a major factor until the third quarter, Simonson said. Even then the stimulus will have little visible impact on payrolls, since contractors will use existing workers before they bring back people who have been laid off or start to hire new people.

The good news, of course, is laced within the forecasted bad news: the stimulus. 

No one is certain of how large the impact will be, but many in the construction industry are already sizing up the stimulus opportunities and other available government work.

Ken Simonson, the chief economist for the Associated General Contractors of America, had a positive outlook for business and employment in the construction industry and the benefits of the stimulus.   During a talk to association members, he said:

It’s not going to be enough to bail out construction right away...but it’s a start.

Already stimulus money is being allocated towards real construction projects and creating jobs.  See this story about $101 million in transportation work in Oregon, or the Larose bridge project in Louisiana.  Even Monster.com has published an article about how the stimulus package will spark construction jobs.

The stimulus certainly gives the construction industry optimism, but from all accounts, it appears to be cautious optimism.

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Here is a quote from New Orleans' Mayor Ray Nagin in a recent USA Today article titled "$700M in federal aid finally flowing to New Orleans:"

Construction on jails, police and fire stations, playgrounds, theaters and mixed-income housing developments — all battered by the 2005 floods — has started or will start this year, as public federal funds finally were unleashed from bureaucratic tangles, Mayor Ray Nagin said in an interview with USA TODAY.

"You're going to be able to see, touch and feel it," Nagin said. "We're really headed into a year of unprecedented construction."

Certainly this is exciting news for contractors in Southeast Louisiana, who experienced a surge of work in the aftermath of Hurricane Katrina, but has since succumbed to the rigors of the national recession.

The news of Katrina-related aid coming to the region is icing on top of the cake for the Louisiana construction industry, who is looking forward to a large amount of stimulus cash being spent in the state's infrastructure.

Just this weekend there was news out of Baton Rouge that despite previous resistance, Governor Bobby Jindal would likely be accepting all stimulus aid.  The state launched a stimulus spending website, http://www.stimulus.la.gov/, and identified the first LA project to use stimulus funds (the long awaited Larose bridge).

How Do You Take Advantage of The Stimulus?

If your company is interested in taking advantage of the planned stimulus projects it must get familiar with public contracting, Davis-Bacon prevailing wage requirements, the public bidding process and more.

A great resource to learn more the requirements and strategies of public contracting is Mike Purdy's Public Contracting Blog.

With more than 29 years of public contracting and procurement experience, Mike helps government agencies and businesses develop contracting strategies, solve contracting problems, and get better informed on a wide variety of public contracting and procurement issues.  His consulting company, Mike Purdy & Associates, is based out of Seattle, WA.

Here at the Construction Law Monitor, we provide commentary and insight on the legal components of government contractor (state and federal).  You can read posts related to public contracting through the category Public Contracting here.

Last month (Feb. 2009), we posted a particularly helpful article for businesses unfamiliar with the public contracting process called "The Stimulus Package and Your Construction Business." 

The article briefly breaks down the legal and practical differences between public and private work, and outlines the basics for contractors interested in preparing their company to bid on public jobs.

Wolfe Law Group Can Help
If your construction company is in Louisiana or Washington, we'd be happy to discuss Public Contracting with you further, and to help your organization position itself to responsibility bid on upcoming stimulus work.   Learn more about our practice at http://www.wolfelaw.com.

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With a weak economy, no jobs in sight and an incessant media frenzy, the White House has gone GREEN! Wouldn’t that make it a Green House? President Obama’s stimulus package aims to put about 20 billion dollars into greening the economy.

“Greening the economy” sounds like the US government is trimming hedges, planting bulbs and whacking weeds.  In all seriousness, the focus is on improving the current economic situation while simultaneously reversing the damage done to the environment. Genius! Obama’s goal is to create 2.5 million new jobs in the green sector of the economy by 2011.

Obama’s green stimulus package will also likely include tax breaks for clean tech projects like solar panels, wind farms, biofuels, and carbon capture and sequestration.  Therefore employment opportunities that are categorized as “green- collard jobs” such as green building, LEED certified construction professionals, wind turbine mechanics and jobs pertaining to energy efficiency and production will be in high demand.

All over the world from London to Hong Kong, governments are coming to the realization that “going green” is a necessity for creating jobs and saving the economy. You can read more about the world wide efforts to “go green” at the UN News Centre.

Right here in the the United States of America, states are adopting laws that provide individuals and developers with tax incentives to incorporate Green Building standards into their homes and/or commercial properties. The more emphasis placed on Green Building in the near future, construction professionals with knowledge and certification in Green Building will find themselves at the forefront of an upturned economy.

There are many opportunities for former construction workers in the green sector. In fact, the number of jobs in “renewable or energy efficient” industries is climbing at a fast rate and government support is only going to boost the speed!  Going green on a construction job encompasses using both renewable resources and energy efficient methods. Wolfe Law Group published a series of blog articles relating to Green Building for contractors. To read the Green Building article series click here.


 

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Around the Web this week, we found lots of commentary and conversation about how the new Stimulus may positively impact the struggling construction industry...and, of course, talk about the upcoming Mardi Gras holiday (celebrated by our New Orleans office).

• Engineering News Record highlights the winners and losers to the stimulus bill.    AGC's SmartBrief reports that the stimulus could mean 670,000 jobs for construction workers.
   
• The Washington Post is already asking what if this stimulus is not enough?  Will there be a Sequel?
  
  
• Does the Stimulus package impact green building at all?  See what Chris Cheatham has to say in The Stimulus:  Green Building Provisions.
   
• With all the talks of recovery, there is still some talk of recession.  Kean Miller's Louisiana Law Blog reports on How Chapter 11 Can Affect Your Business if a Customer or Vendor Goes Bankrupt.
   
• The celebration of Mardi Gras 2009 is only days away in New Orleans.  Visit Nola.Com's Mardi Gras website, or learn about its history at wikipedia.

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The National Law Journal published an article last week titled "Stage is Set for Legal Labor Brawl," and the opening line of the article sums it up perfectly, stating:

Business calls it "Armageddon." Labor says it's "a modest step."

The article discusses one of the hot topics in labor law these days, the Employee Free Choice Act.  Around the blogosphere and news agencies, discussion of the EFCA is on fire.   A Google Video search of the topic yields propaganda from both sides, and on Chris Hill's Construction Law Musings, I recently published a guest post summarizing argument from both proponents and opponents of the bill.

While the EFCA is certainly on the forefront of the labor law debate, its clear that its not the only argument in town. 

To the contrary, since the recent inauguration of President Obama, there has been a substantial shift in labor law issues facing the construction industry, and it's expected that more is on the way. 

One of the most controversial actions by President Obama in the construction industry is the repeal of Executive Order 13502, which prohibited project labor agreements (PLAs) on federal and federally funded construction.   ABC issued a press release specifically directed at this action, contending that it opposes PLAs because they "eliminate merit shop contractors from competing for and winning construction projects."  The ACG also came out against the repeal of 13502 here.

Another labor-law related act already performed by President Obama is the signing of the Lilly Ledbetter Fair Pay Act of 2009.  The act was signed by the President on January 29, 2009, and extends the time period allowed for employees to seek compensation for unequal pay practices.  The act is retroactive to May 28, 2007, and applies to all claims of pay discrimination on or after that date.  Read more about the act at the AGC website here, or on CNN, which covered the Act as "Obama's First Law."

From the perspective of the construction industry, it's a love/hate relationship with President Obama thus far, just one-month into his tenure.

On the one hand, as the Wall-Street Journal reported in mid-January, the construction industry has counted on Obama to put together a strong stimulus package that invested in federal contracting projects (and he pulled through).

On the other hand, however, President Obama is leading a potentially historic shift in employment and labor law matters that will seriously impact construction businesses.

Time will tell how the relationship between President Obama and the construction industry will fare.  So far, however, it's been a mixed bag.

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Yesterday, we wrote an article on the Stimulus Package and what it may mean to the construction industry.   Today, we're focusing on what it may mean to your specific construction business.

While the private contracting business has suffered setbacks in the current economy, one bright spot has remained:  the growth of public and federal construction spending.

The passing of the new stimulus build with large investments into America's infrastructure and other public works promises to put even more money into the public contracting business.  

ConstructionBusinessOwner.com published two very informative articles about how your business can take advantage of the increased public spending. 

The Differences Between Public and Private Projects
The first article, titled Three Key Steps for Shifting To Public Works Projects, explains some the key differences between private works and public works, and identifies common mistakes made by companies when entering the public sector.

The article encourages companies to consider bidding for and taking on more public work, but warns against doing so without proper preparations.  Here is a revealing quote:

Making the shift to prevailing wage jobs takes preparation. Without proper planning, contractors run the risk of underbidding jobs-and, subsequently, losing money-or getting slapped with steep penalties for improper recording keeping. Establishing protocols for certified payroll and AIA progress billings and having solid audit trails for each transaction are vital if you want to succeed in the government-financed construction market.

So what are the 3 Key Steps to shifting from private to public work?

• Get Educated
• Automate Your Accounting Practices
• Bid on Projects Based on your Strengths

How To Get Federal Work
The second article, Claim Your Share Of Rising Federal Construction Spending, was published immediately after passage of the new stimulus package, and really explains how businesses - and especially small businesses - can intervene in the federal works bidding process and claim some work.

In its discussion of why small or minority owned businesses have a dog in the federal contracting fight, the article states as follows:

Unfortunately, far too few small businesses take advantage of federal contract opportunities, even though the federal government is required by Congressional mandate to direct 23 percent of its contracts toward small businesses. Despite this mandate, the latest figures from the Small Business Administration indicate that the federal government fell short of this figure.

Although there are various factors behind this shortfall, two things are pretty clear. First, if more small businesses were competing for these contracts, more would win them. And second, small business owners who are savvy about the process of securing government contracts are the ones most likely to land them.

Summary of the article's tips for preparing to bid on federal projects:

• The government will want basic information and methods of Identification.   Get a DUNS number (free from Dun & Bradstreet), a Federal Tax ID number (EIN), understand your NAICS and SIC classification, and have accurate financial routing information for your business available.
   
• Create a profile on the Central Contractor Registration database. The CCR is where all government agencies and prime contractors turn when they are looking for potential vendors.
   
• The federal government is obligated to award a certain percentage of its contracts to various underrepresented and disadvantaged groups. If you think your business may qualify, you should register with the U.S. Small Business Administration (SBA), whose Small Disadvantaged Business (SDB) and 8(a) programs are designed to help specific groups secure federal contracts and subcontracts.
   
• Consider Subcontract work.  Getting your foot in the door is sometimes the hardest part in landing government contracts. First-time bidders can be at a disadvantage because the government often relies on established relationships when selecting contractors. Fortunately, large construction projects often depend on a host of subcontractors, which could be your ticket in.

See also Industry Week's article, Your Best New Customer May Be Uncle Sam, for other helpful information.

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It's official:  The Stimulus package has passed Congress and is expecting the President's signature early this week.   

Now that the parameters of the "economic recovery" package have been set, the construction industry can step back to determine whether and how the stimulus can help.

It's no secret that the construction industry has been closely monitoring the economic stimulus legislation.    With residential construction spending sinking to new lows each month, organizations like the Associated General Contractors of America have been lobbying the legislature to "invest in the country's infrastructure" as an attempt to equalize some of the woes of the private sector with growth in the public sector.  

Notwithstanding the lobbying efforts of trade organizations and the monitoring of the stimulus bill, it's nearly unanimous among commentators on the subject that construction companies will likely be the biggest beneficiaries of the stimulus deal.

The clear next question, of course, is "how?"

Frost Brown Todd, LLC published a blog article about "What Contractors Need To Know" about the House version of the stimulus package.  While not a direct analysis of the final bill, the article is still very relevant to it, explaining a number of details about the bill, where stimulus money will be allocated and why the construction industry may benefit from the spending.

Perhaps the best break-down of information comes from The Associated General Contractors of America website, which provides a state-by-state stimulus impact chart. 

The AGC's website also provides PDFs for each state, with a detailed status-briefing of the construstry industry and an explanation of how the stimulus package may help.   You can download the reports on Washingon here, and Louisiana here.

The AGC's summary of the Economic Impact of the Stimulus Investment in Louisiana is as follows:

An additional $1 billion in nonresidential construction spending would add about $2.2 billion to the state’s Gross Domestic Product (GDP), about $698 million to personal earnings and create or sustain 23,000 jobs.

The AGC's summary of the Economic Impact of the Stimulus Investment in Washington is as follows:

An additional $1 billion in nonresidential construction spending would add about $2.4 billion to the state’s Gross Domestic Product (GDP), about $753 million to personal earnings and create or sustain 20,000 jobs.

This article has discussed the stimulus package and how it may impact the construction industry.  Tomorrow, we'll discuss how the stimulus package may affect your construction business....and give you tips on how to take advantage of the increase in public construction spending!

Now, for some comic relief, here is a clip of Mr. Stephen Colbert's discussion of the Stimulus debate:

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