Reject road swap program (IA)

Posted by National Alliance for Fair Contracting on

Quad-City Times Editorial Board
May 26, 2019

On Tuesday, members of the Bi-State Regional Commission’s Transportation Policy Committee are scheduled to decide whether to take part in the federal aid swap program authorized by the Iowa Legislature in 2017.

For months, labor unions and local contractors have been lobbying against the program, which state officials say is a way to deliver projects faster and at less expense. The state says it has the experience managing projects that come with the overhead and regulations that are part and parcel of federal-aid projects.

Unions say this would be a way to avoid federal prevailing wage requirements, and that it will lead to lower-cost, out-of-area contractors winning jobs that previously had gone to local companies. They also say the swap will bypass federal requirements to buy American products and ensure some contracts go to minority- and women-owned businesses.

The swap program basically works like this: The state would give local governments state dollars in exchange for their federal dollars for road and bridge projects. According to the Bi-State Regional Commission, about $15 million dollars in swap-eligible funds are in its four-year Transportation Improvement Program.

Iowa’s Department of Transportation says this concept is not unique. Other states in the Midwest are doing it. And on these pages last week, Mark Lowe, the DOT director, wrote that the same amount of federal money, with all the attendant federal requirements, will be spent in this area – it will just be administered by the state DOT rather than local authorities.

Our concern is the impact this will have on local contractors. Consider Michelle DeCap, chief financial officer of Phoenix Corporation, of Rapids City, Ill. This Quad-City company has done projects on both sides of the river for years. DeCap told us that, even though the same amount of federal money might be spent locally, she believes the funds will be rolled into larger state jobs and there will be a smaller number of projects for her firm to bid on – meaning fewer opportunities for Phoenix, a certified woman-owned business, to win local projects.

A number of area organizations, many of them labor unions, have opposed this move. But so has the Quad-Cities Chamber of Commerce. The chamber worried that participating in the swap program “may allow for more businesses from outside the Quad-Cities region that don’t follow [federal wage and discrimination] guidelines to garner work, which would have a direct negative impact on our region.”

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Bi-State should opt out of swap program (IA)

Posted by National Alliance for Fair Contracting on

March 26, 2019
Tracy Kurowski

Quad City residents are now witnessing the creation of an architectural marvel with the construction of the new Interstate-74 bridge. Two of the world’s largest mobile cranes are employed in the project, along with hundreds of workers, and we are now seeing the concrete base of the center arch rise out from the river bottoms.

This remarkable project is made possible by a federal and state government funding partnership that guarantees a dignified wage to the men and women who have been working throughout this brutally cold winter. Called “Davis-Bacon” protections, they were named after two Depression-era Republican congressmen who wanted to make sure that federal investments in infrastructure projects stimulate local economies and create local jobs.

Federal rules require contracts be awarded to the “lowest responsible bidder.” Cities, schools, and counties also award contracts this way to protect taxpayers and prevent graft and other corruption. Before Davis-Bacon was passed in 1931, members of Congress noticed that many of the contracts they had secured for their home districts were not using local workers. Construction companies undervalued the labor costs in order to meet the lowest bidder standard and land the contract. When the work needed to be done, contractors brought in migrant workers from low-wage states to complete the local projects. This resulted in the opposite of congressional intent of using infrastructure projects to stimulate local economies.

No one then or now would argue that taxpayer funds for public infrastructure projects should be inadvertently used to drive down workers’ wages. Once the Davis-Bacon law was passed, it has since set a wage floor so that instead companies are competing on productivity, efficiency and the quality of work they provide, not on their ability to hire unethical subcontractors who exploit workers.

However, in 2017 the Iowa Legislature passed a law that would remove those protections. Known as the “Iowa DOT Federal Aid Swap Program,” it enables the Iowa Department of Transportation to swap federal money for state money.

It works essentially as a form of money laundering. Federally-funded local infrastructure projects (like Davenport’s $4 million 53rd Street reconstruction and expansion project) would be allowed to skirt the law, pay the lowest wages possible and not hire local workers. The swap also enables localities to avoid “Buy America” requirements attached to federal funds and instead use cheap imported steel rebar. What could possibly go wrong?

Fortunately, Iowa’s Road Swap law permits metropolitan planning organizations like the Bi-State Regional Commission to opt-out of the swap and continue to comply with the federal standards.

…

Like the name of the commission that gets to vote to protect our local economy, this is indeed a bi-state issue. About $30 million is currently earmarked to be swapped. Failure to take action will affect contractors, workers and local economies on both sides of the river.

Laws like Davis-Bacon helped us recover from the nation’s worst economic disaster. If indeed the Bi-State Regional Commission is acting in the interests of community, workers and our tax dollars, it will opt-out of the Iowa Swap Program and maintain Davis-Bacon Act protections on local infrastructure projects.

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Evers would eliminate ‘swap’ mandate for federal transportation money (WI)

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By: Nate Beck March 8, 2019

Gov. Tony Evers’ proposed budget would undo a bill passed during the Legislature’s lame-duck session that would concentrate federal money into fewer highway projects to curtail prevailing-wage requirements and other federal regulations.

The provision tucked into Evers’ biennial budget request would waive a requirement passed during the Legislature’s December extraordinary session calling for federal money to make up 70 percent of the funding of large highway projects, or highway rehabilitation jobs worth less than $10 million. Packing federal money into fewer projects has long been a goal for some GOP lawmakers, who argue that doing that will save money by decreasing the number of projects that fall under federal Davis Bacon prevailing-wage requirements and other rules.

“It is frustrating that Gov. Evers wants to repeal a pro-taxpayer reform in order to pay back the special interests who championed his election,” said Duey Stroebel, R-Cedarburg. “Allowing the DOT to spread federal funds across numerous projects only increases the number of projects subject to costly federal mandates. If Gov. Evers wants to win support for increased transportation taxes, proposals like this that reduce efficiencies are not a good way to make that case.”

Evers’ budget, which Republicans derided as a liberal wish list, would undo many of the laws that the GOP-controlled legislature passed in a lame-duck session just before he took over as Governor in early January. The budget would also reinstate a number of policies eliminated during the Walker administration, repeal the state’s right-to-work law and bring back prevailing wage on state projects.

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Iowa MPOs Should Opt-Out of “Federal-Aid SWAP” Program (IA)

Posted by National Alliance for Fair Contracting on

PUBLISHED NOV 27, 2018 AT 3:38 PM

In 2017, the Iowa General Assembly passed legislation that authorized the Iowa Department of Transportation to create a “Federal-Aid SWAP” program (Iowa DOT, 2018). This legislation essentially eliminated federal requirements on public infrastructure projects, including the historically bipartisan Federal Davis-Bacon Act which creates a level playing field for all federal construction contractors by ensuring that public expenditures maintain and reflect local area standards for wages and benefits. Under Iowa’s “Federal-Aid SWAP” program, federal dollars that were designated for local construction projects are now retained through the state and fail to include Davis-Bacon Act standards. Local metro planning organizations in Iowa should opt-out of participating in the program.

The main purpose of the Davis-Bacon Act is to support middle-class American families by protecting local standards for compensation and craftsmanship in the competitive public bidding process. Federal construction bidding is not like the private sector. Government procurement agents are required to select the lowest bidder. In the low-bid model used on federally-funded construction projects, contractors aim to lower their bid however possible, including by lowering wages and by reducing apprenticeship training. The Davis-Bacon Act levels the playing field, allowing local contractors and local workers a fair shot at these government projects and incentivizing competition based on core competencies in construction (Duncan et al., 2017).

The Davis-Bacon Act boosts local economies and provides great value to taxpayers. The Davis-Bacon Act protects work for local contractors and construction workers, supports training programs, and provides pathways into the middle class for all blue-collar workers– keeping them off government assistance programs. Local metro planning organizations in Iowa should opt-out of participating in the “Federal-Aid SWAP” program and instead choose to maintain Davis-Bacon Act standards on taxpayer-funded construction projects.

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