News from associated
builders and contractors

As the Biden administration faces the challenges of implementing its priority legislation from the 117th Congress, including the bipartisan Infrastructure Investment and Jobs Act (IIJA) and CHIPS and Science Act and the partisan Inflation Reduction Act (IRA), the administration has faced criticism over its policies that will restrict significant funding of these projects to union-only workers.

The $1.2-trillion infrastructure bill, $250-billion CHIPS bill for semiconductor and scientific research and development, and nearly $740-billion reconciliation tax package, which allots more than $300 billion for clean-energy projects, all contain funding for critical construction projects throughout the country. Unfortunately, much of this funding is subject to restrictive labor requirements that will limit the pool of qualified contractors and available workers necessary to complete these projects effectively and efficiently.

These issues were recently highlighted in a March 28 House Transportation and Infrastructure Subcommittee on Highways and Transit oversight hearing to ensure the effective implementation of the bipartisan enacted law to modernize our nation’s most critical infrastructure. Serving as a witness for the hearing was Aric Dreher, an assistant general manager for Cianbro, a full-service contractor that focuses on complex civil infrastructure projects throughout the country.

In his testimony, Dreher called attention to the significant pitfalls facing the construction industry under these recent significant federal investments, citing new regulatory action such as the president’s executive order mandating project labor agreements on federal infrastructure projects of $35 million or more, departing from the congressional intent of the bill and favoring unionized contractors over open-shop contractors.

Further, the hearing highlighted the devastating impact that inflation has had on the implementation of the bipartisan bill. Since President Biden signed the IIJA into law in November 2021, input prices for construction projects have increased on average by 11.1%, and nonresidential construction materials prices are up more than 39% since February 2020.

The construction industry also continues to face significant shortages of skilled labor. However, instead of providing opportunities to expand career pathways into construction, the administration and Democrats in Congress have sought to limit apprenticeship opportunities to the registered system through legislation like the IRA, which requires developers to implement registered apprenticeship requirements to receive a bonus tax credit 500% greater than a baseline tax credit of 6% for clean-energy construction projects.

The pandemic and recent labor disputes have also disrupted global supply chains, causing significant delays in the delivery of construction materials such as steel, lumber and concrete. This has led to longer project timelines and increased costs that are causing project delays and, in some cases, forcing contractors to cancel projects altogether. The supply of construction materials is also being adversely affected by the administration’s “Buy American” policies, which have created a cumbersome waiver process that will worsen delays and increase costs.

With the implementation of new federal funding for infrastructure, energy and semiconductor construction projects, shortages of labor and materials are only expected to worsen as demand increases. While the Biden administration remains focused on union-only jobs and labor policies that eliminate competition from otherwise qualified contractors, taxpayers could be paying more and waiting longer for the completion of meaningful infrastructure and energy projects in their community.