AGC delays efforts to require defense contractors to report greenhouse gas emissions, and blocks initiatives to blacklist federal contractors, require local hire mandates, and include state licensing requirements.

On December 14, Congress overwhelmingly approved and sent to the president for his expected signature the annual defense bill: National Defense Authorization Act for FY 2024 (NDAA). Congress has passed the NDAA for the last 62 consecutive years and it is considered must-pass legislation. As such, AGC actively engages at all phases of the NDAA legislative process, which provide opportunities for improvements to federal construction policies as well as harm.

AGC recently led a coalition of associations representing the construction industry to urge action on more than a dozen provisions in the final bill. Among others, AGC successfully advocated for:

• Blocking state licensing requirements on military construction projects;
• Blocking local hiring preferences on military construction projects;
• Blocking the inclusion of an onerous federal contractor blacklisting scheme;
• Prohibiting making permanent the "loser pays" cost for denied bid protests; and
• Prohibiting defense contractors from reporting on greenhouse gas (GHG) emissions for one year.

Regarding the GHG emissions reporting, the FAR Council issued an extensive and onerous proposed rule in 2022 that AGC provided significant input on regarding its impacts on federal construction contractors. The AGC-backed provision in the NDAA will ensure that if the FAR Council finalizes the rule, it cannot apply to Department of Defense (DOD) contracts until one year from when the president signs the NDAA into law.

AGC also succeeded in providing or extending avenues for inflation relief to contractors. These include:

• Extending a temporary, pandemic-era program (50 U.S.C § 1431) for inflation relief for certain defense contractors by allowing the DOD Secretary to issue guidance which will allow agencies to provide relief, if funding is provided; and
• Increased authority to include economic price adjustment in contracts and options for fixed-price contracts. Fixed-price contracts are uniquely restrictive in allowing for economic price adjustments due to contingencies often beyond a contractor's control.

It must be underscored, again, that the extension of the temporary program for inflation relief will require funding through the congressional appropriations process, which is currently mired in a deep stalemate. Nevertheless, AGC continues to press for this funding through that process.

In addition, concerning the increased authority for economic price adjustment as specified by FAR 16.203-3 for fixed-price contracts, DOD must issue additional guidance. AGC will work with DOD to issue timely guidance with substantive directives to maximize its effectiveness for both taxpayers and the construction industry.

For more information, contact Jordan Howard at [email protected] or (703) 837-5368.