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On Jan. 23, the U.S. Supreme Court stayed a district court’s nationwide injunction against the Corporate Transparency Act’s Beneficial Ownership Information reporting requirements, following the U.S. Department of Justice’s request. The nationwide injunction had blocked enforcement of the CTA’s BOI reporting requirements.
However, according to the Financial Crimes Enforcement Network’s website, a separate national injunction issued earlier this month by a different federal judge still remains in place, and thus reporting companies are not currently required to file BOI with the FinCen despite the Supreme Court’s action.
Specifically, as of Jan. 24, the FinCen website states, “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Previously, on Dec. 26, 2024, a panel of the U.S. Court of Appeals for the 5th Circuit Court had reinstated the district court’s nationwide preliminary injunction against the CTA’s BOI reporting requirements. ABC applauded the reinstatement of the nationwide preliminary injunction, which provided small businesses with necessary relief while litigation continued.
“The back-and-forth rulings and legal challenges to the reporting requirements on top of the significant compliance challenges for small businesses places unnecessary burdens on the construction industry, particularly small contractors and subcontractors that form the backbone of this industry,” said Kristen Swearingen, ABC vice president of legislative and political affairs.
Meanwhile, Congress has an opportunity to act by passing the ABC-supported Repealing Big Brother Overreach Act, legislation that would repeal the CTA.
ABC remains committed to advocating for regulatory clarity and fairness for its members. As further guidance emerges from FinCen, ABC will work to inform members on their obligations and continue to support efforts to overturn these burdensome regulations.
ABC members are encouraged to contact counsel with any questions about the recent court actions.
On Jan. 20, ABC celebrated a decision from the U.S. Court of Federal Claims that rules in favor of ABC members that filed bid protests challenging former President Joe Biden’s controversial policy requiring anti-competitive, inflationary, union-favoring project labor agreements on federal construction projects of $35 million or more.
Judge Ryan T. Holte’s Jan. 19 ruling responds to 12 bid protests filed by experienced ABC member federal contractors against three federal agencies that mandated PLAs in solicitations for construction services as a result of a Federal Acquisition Regulatory Council rule effective Jan. 22, 2024, implementing Biden’s Executive Order 14063.
The Biden policy has been widely criticized by the construction industry, taxpayer watchdogs and lawmakers for needlessly inflating construction costs and effectively steering contracts to unionized firms and union labor at the expense of taxpayers and federal laws requiring fair and open competition.
“ABC and its federal contractor members are ecstatic that the judicial system has delivered justice for American taxpayers and the 90% of the U.S. construction industry workforce that is nonunion,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “ABC members were harmed by former President Biden’s costly executive overreach, which violates federal laws and rewards special interests at the expense of fair and open competition.
“As a result of this decision, ABC federal contractors should continue to file bid protests against individual federal agency PLA mandates on a case-by-case basis and expect similar outcomes,” said Brubeck. “This is the best solution to defeat the Biden rule on federal contracts until a court issues an injunction against the rule or the Trump administration rescinds it via executive action.
“Damning evidence procured through market research conducted by several federal agencies was raised in the case’s Jan. 16 oral argument and corroborated plaintiffs’ complaints and ABC’s long-standing concerns,” said Brubeck. “The findings of federal agencies illustrate how Biden’s controversial policy mandating union-favoring project labor agreements stifles competition and raises costs on federal construction contracts nationwide.
“ABC has testified before Congress that, when mandated by government, PLAs increase construction costs by an estimated 12% to 20%, reduce competition from qualified contractors and their employees, steal money from the paychecks of token nonunion workers permitted on PLA projects and exacerbate the construction industry’s worker shortage,” said Brubeck. “Typical PLA mandates discourage competition from some of the best bidders by forcing contractors to sign special union collective bargaining agreements, hire workers from union halls and apprenticeship programs and accept compulsory union representation on behalf of any members of their existing workforces. This exposes those workers to union wage theft of up to 34% of their compensation unless they join a union and vest in union benefits plans.
“ABC will continue to advocate for inclusive solutions that result in cost savings, more jobs and more opportunities for all qualified small, minority- and women-owned businesses and all American workers in the construction industry,” said Brubeck. “This lawsuit did not address additional Biden policies pushing PLAs on federally assisted infrastructure projects procured by local and state governments and private developers, so the fight will go on.”
On Jan. 9, ABC and 24 other construction and business groups in the Build America Local coalition sent a letter to President Donald Trump requesting an executive order that would restore fair and open competition on federal and federally assisted construction projects that would save taxpayers an estimated $10 billion annually.
On March 28, 2024, ABC and its Florida First Coast chapter filed suit in federal court to block Biden’s PLA final rule on construction contracts procured by federal agencies, asserting it is beyond the scope of executive authority and violates the U.S. Constitution, the First Amendment and the Administrative Procedure Act, among others. The case is fully briefed and plaintiffs are awaiting a decision on the overall case and a ruling on the motion for preliminary injunction filed in April.
ABC members won 54% of the $205.56 billion in federal contracts worth $35 million or more during fiscal years 2009-2023 and built award-winning projects safely, on time and on budget, without unnecessary government-mandated PLAs. Prior to the Biden final rule, when given the option, the federal government decided to mandate PLAs just 12 times out of 3,222 federal construction contracts of $25 million or more.
Learn more at abc.org/bidenplafaqs and BuildAmericaLocal.com.
Dirk Haire with Fox Rothschild LLP and Jake Scott with Smith Currie Oles LLP represented federal contractor bid protestor plaintiffs in the U.S. Court of Federal Claims case, MVL USA Inc., et al., v. United States, Case No. 24-1057.
ABC Analysis of the Decision
Notable language in the decision supports ABC’s arguments against government-mandated project labor agreements and Biden’s pro-PLA policies.
According to Judge Holte’s ruling, the Biden FAR Council rule mandating PLAs violates congressional requirements for full and open competition:
“The agencies’ 2024 implementation of the mandate—ignoring the agencies’ own market research concluding project labor agreements would be anticompetitive—relying solely on executive order presidential policy is arbitrary and capricious. Specifically, the functionality of the mandate as applied to the individual contracts in this case stifles competition and violates the statutory directive that agencies must promote “full and open competition” in federal procurements unless a statutory justification is properly invoked.” [See page 2.]
As outlined in Judge Holte’s decision, the court examined strong evidence presented by plaintiffs from federal agencies that PLAs increase costs and reduce competition, despite the FAR Council’s presumption that PLAs are beneficial. On page 2, the judge wrote:
“Following the 2024 FAR Council implementation of the [Biden PLA] mandate, agencies reversed course and required all solicitations to contain a project labor agreement. By way of example, the 2023 initial market research for one solicitation determined ‘project labor agreements were not recommended’ because ‘there was a shortage of skilled labor in the region of the project,’ and project labor agreements would ‘not contribute to the economy or efficiency of the project’—the agency nevertheless issued the solicitation in 2024 with a project labor agreement requirement. See infra Section VI.A.” [see pages 28-33.]
“Another agency ‘increased the price’ of the contract ‘based on the [project labor agreement] requirement being included’ despite previously concluding a project labor agreement would negatively affect both competition and price. See infra Section VI.A.” Specifically, the GSA hired an outside specialist to conduct a market survey related to whether a PLA was appropriate for the project. After conducting research, the paid consultant said that removing the PLA requirement would result in more contractor interest, and […] a more competitive bid environment. The consultant’s recommendations were ignored and the project did not receive a PLA exception. [See page 32.] In fact, the GSA increased the price of the contract based on the PLA requirements being included.
“Similarly, in another solicitation, initial 2023 market research found project labor agreements ‘not suitable for the project, but the agency ultimately determined in 2024 ‘no exception’ applied and project labor agreements would be required. See infra Section I.E.” [See page 9.]
“Most illustrative, however, was an agency’s decision to ‘delete’ prior 2023 market data indicating a project labor agreement ‘would reduce competition, increase costs, and create inefficiencies for contractors and procurement officials,’ and ‘insert’ a 2024 project labor agreement requirement simply because President Biden and the FAR Council made ‘the policy judgment [that] project labor agreements are generally good.’ See infra Section VI.A.”
“Despite market research consistently showing project labor agreements would ‘reduce adequate competition at a fair and reasonable price’ for the solicitations, the agencies’ only support to justify reversal is the ‘policy determination that’s been made by the President and the FAR.’ See infra Section VI.B.” [See pages 33-37.]
Finally, the court found the U.S. Department of Justice over-redacted market research evidence that showed PLAs increase costs and reduce competition. The judge corrected this error. Had that information been redacted, the public would not have seen this evidence, which is damaging to the heart of the Biden rule. [See pages 3-4].
In short, the decision exposed the Biden PLA rule on federal contracts as a scheme to help unions and union contractors at the expense of competition, cost and timely delivery of taxpayer-funded construction projects.
Evidence before the court illustrates how the FAR rule’s alleged PLA exception process is a dead letter designed to ensure mandatory PLAs on all projects.
The decision gives the three federal agencies (USACE, NAVFAC and GSA) until Feb. 3 “to reassess their PLA decision on an individual basis” and file a “join status report explaining the agencies plan for each solicitation moving forward.”
If the judge is not satisfied with the agency response to the decision, “there remains the question of the scope of the injunctive relief Judge Holte is going to order,” according to Haire in a Jan. 21 Bloomberg article.
ABC expects the U.S. COFC to be flooded with additional PLA bid protests from injured federal contractors as a result of this ruling.
Additional bid protests will result in more project delays and cost overruns and injury to federal contractors and agency contracting officers as a whole until this is fully resolved with a nationwide legal injunction or a Trump policy change.
On Jan. 20, President Donald Trump was sworn in as the 47th president and quickly issued a sweeping set of executive orders aimed at reversing Biden administration policies related to national security, immigration and climate. The orders require enactment through the regulatory process and will not take immediate effect; some have already been subjected to lawsuits that may delay implementation.
Below is a breakdown of relevant Day 1 executive orders. A full list of executive orders and other actions can be found on the White House website.
Trade/Tariffs
President Trump issued an executive order titled America First Trade Policy, which is widely regarded as a "placeholder" while his administration explores longer-term trade strategies and works to build congressional support for proposed actions. ABC’s analysis of the order can be found here.
Regulatory Review/Reform
President Trump issued a memorandum on regulatory review directing all executive departments and agencies to pause and review regulatory actions as follows:
Rule Proposals and Issuance: No new rules may be proposed or issued until reviewed and approved by a department or agency head appointed by the president after Jan. 20. The Office of Management and Budget director may exempt emergency rules or those with statutory or judicial deadlines.
Withdrawal of Pending Rules: Any rules sent to the Office of the Federal Register but not yet published must be withdrawn for review, subject to exceptions.
Delay of Effective Dates: Agencies should consider delaying the effective dates of rules not yet in effect for 60 days to review questions of fact, law or policy. Agencies may open comment periods during this time and reevaluate petitions. If necessary, delays may be extended further.
Postponement Review: Rules posing no substantial questions after the postponement require no further action. Rules raising significant questions must involve consultation with the OMB director.
This order may be connected to the apparent withdrawal of the Occupational Safety and Health Administration’s proposed Infectious Diseases rule. ABC general counsel Littler Mendelson provided an update on this rulemaking.
Executive Order Recission
President Trump signed an executive order to rescind a number of former President Biden’s executive orders on a variety of issues including diversity, equity and inclusion, immigration and climate.
This includes the recission of two executive orders that called on the Federal Acquisition Regulatory Council to implement ABC-opposed rules that affect federal contractors, which are now likely to be repealed through the rulemaking process:
Nondisplacement of Qualified Workers Under Service Contracts Final Rule
Pay Equity and Transparency in Federal Contracting
Immigration
President Trump declared a national emergency at the southern border and plans to deploy armed forces, including the National Guard, to “engage in border security.” He also pledged to deport criminal aliens and is expected to embolden Immigration and Customs Enforcement and Customs and Border Protection officers to carry out deportations. The president also moved to designate the gangs MS-13 and Tren de Aragua as foreign terrorist organizations, as well as Mexican cartels responsible for smuggling drugs across the border.
Inflation Reduction Act
In the executive order titled Unleashing American Energy, President Trump included a section titled “Revocation of and Revisions to Certain Presidential and Regulatory Actions” which revokes several executive orders and abolishes any offices established therein. This section revokes Executive Order 14082 of Sept. 12, 2022, Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022. Of note, former President Biden’s EO 14082 includes many problematic IRA implementation priorities, including: “increasing high-quality job opportunities for American workers and improving equitable access to these jobs, including in traditional energy communities, through the timely implementation of the Act's requirements for prevailing wages and registered apprenticeships and by focusing on high labor standards and the free and fair chance to join a union.”
Permitting Reform
In the executive order titled Unleashing American Energy, President Trump included a section on “Unleashing Energy Dominance Through Efficient Permitting,” which states:
“To expedite and simplify the permitting process, within 30 days of the date of this order, the Chairman of the Council on Environmental Quality (CEQ) shall provide guidance on implementing the National Environmental Policy Act (NEPA), and propose rescinding CEQ’s NEPA regulations found at 40 CFR 1500 et seq. Following the provision of the guidance, the Chairman of CEQ shall convene a working group to coordinate the revision of agency-level implementing regulations for consistency. The guidance and any resulting implementing regulations must expedite permitting approvals and meet deadlines established in the ABC-Supported Fiscal Responsibility Act of 2023.
It also contains a section on “Prioritizing Accuracy in Environmental Analyses:”
“In all Federal permitting adjudications or regulatory processes, all agencies shall adhere to only the relevant legislated requirements for environmental considerations and any considerations beyond these requirements are eliminated. In fulfilling all such requirements, agencies shall strictly use the most robust methodologies of assessment at their disposal and shall not use methodologies that are arbitrary or ideologically motivated.”
Electric Vehicle Mandates/EV Charging Stations
In the executive order titled Unleashing American Energy, President Trump included a section on “Terminating the Green New Deal,” which states that all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act or the Infrastructure Investment and Jobs Act including but not limited to funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program, and shall review their processes, policies, and programs for issuing grants, loans, contracts or any other financial disbursements of such appropriated funds for consistency with the law and the policy outlined in section two of this order.
This order also includes a section on “Eliminating the Electric Vehicle Mandate,” which terminates subsidies for the vehicles and terminating state emissions waivers “that function to limit sales of gasoline-powered automobiles.”
Federal Workforce
President Trump ordered all department and agency chiefs in executive departments to eliminate work-from-home options and return employees to in-person work “as soon as practicable.” His administration has also issued a hiring freeze for federal employees to make good on his promise deliver more efficiency in the federal government.
ABC will continue to provide updates in Newsline as the Trump administration proceeds with its agenda.
Ending DEI Programs and Initiatives
President Trump signed an executive order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which directs all federal agencies to “terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements,” to enforce “longstanding civil-rights laws,” and to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
The EO lists several other EOs that the Trump administration is revoking. Notably, the Trump EO revokes Executive Order 11246, titled “Equal Employment Opportunity,” which has required federal contractors to have affirmative action plans since 1965. Additionally, the EO orders the Office of Federal Contract Compliance Programs to immediately cease “promoting diversity,” “holding federal contractors and subcontractors responsible for taking ‘affirmative action,’” and “allowing or encouraging federal contractors or subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” The EO claims these actions are meant to streamline the federal contracting process “to enhance speed and efficiency, reduce costs, and require federal contractors and subcontractors to comply with our civil-rights laws.”
This order states that “for 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.”
Additionally, the EO directs each federal agency to include in every federal contract or grant award a term requiring contractual counterparties or grant recipients to agree that it is in compliance with all applicable federal anti-discrimination laws and a term requiring the counterparty or recipient to certify that it does not operate “any programs promoting DEI that violate any applicable federal anti-discrimination laws.”
The EO also includes orders to encourage the private sector to cease DEI programs and initiatives. Specifically, the EO directs the Attorney General, in consultation with other relevant agencies, to promulgate a report with recommendations to enforce civil-rights laws and encourage the private sector to end DEI practices. The report is required to identify “the most egregious and discriminatory DEI practitioners in each sector of concern.” It also requires each agency to identify up to nine potential civil compliance investigations as a way to deter DEI programs or principles.
The White House also provided a fact sheet on the order.
The EO will have widespread implications for federal contractors. Read ABC general counsel Litter's analysis for more information. ABC will share further developments on this EO as they are released.
On Jan. 14, ABC submitted comments to the U.S. Department of Labor’s Occupational Safety and Health Administration on its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule, urging the agency to withdraw the current rule as proposed and revise it to allow greater flexibility for affected industries, and at a minimum develop a separate standard for the construction industry. OSHA’s proposed rule would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. In addition, as a steering committee member, ABC joined the Construction Industry Safety Coalition and the Coalition for Workplace Safety comment letters.
ABC’s states in its comment letter:
“ABC strongly supports worker health and safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Throughout the heat rulemaking, ABC has continued to urge OSHA to focus on the key concepts of ‘water, rest, shade’ and provide construction employers the necessary flexibility to make such a standard effective.
“ABC believes employers should equip their employees and leadership teams to develop their own health and safety plans, unique to their jobsites. We also provide tools to employers so that they can equip and empower supervisors to recognize the signs and symptoms of heat illness as well as provide necessary rest, water and shade that is dependent on local conditions. ABC’s members work to ensure that jobsites are safe and strive to implement the most appropriate practices for working in extreme heat conditions that focus on the individual worker.
“Unfortunately, the more than 1,000-page proposed rule imposes prescriptive, complicated requirements on construction industry employers, limiting all flexibility, which could weaken contractor efforts to prevent heat stress for workers. Flexibility is limited because OSHA has imposed rigid requirements, which include heat triggers, the acclimatization schedule for new and returning employees, mandatory rest breaks and the use of a heat safety coordinator, among others. OSHA failed to recognize the practical applications needed on construction jobsites. Employers and employees need flexibility to account for differences among worksites, geographical locations, work responsibilities and available technology. Additionally, construction jobsites vary in size, time, scope and duration, and flexibility is needed to ensure feasibility for compliance.
“As a member of the CISC steering committee, ABC has consistently urged OSHA to develop a separate regulatory approach for the construction industry. To combine all employers conducting outdoor and indoor work in general industry, construction, maritime and agriculture sectors into one regulatory approach is misguided. ABC and its coalition partners urged OSHA to recognize that there are significant differences in the types of job tasks, the work performed and even the environmental conditions in which construction industry employees work. Moreover, there is existing precedent for the agency to develop a separate standard for the construction industry based on previous rulemakings.
“ABC strongly urges OSHA to withdraw the current rule as proposed and revise it to allow greater flexibility for affected industries, and at a minimum develop a separate standard for the construction industry.”
ABC’s comments also state that the proposed rule’s heat triggers are unworkable; rest breaks should be flexible; the proposed rule’s acclimatization schedule for new and returning employees will be particularly onerous for the construction industry; OSHA lacks the statutory authority to define “employee representative”; OSHA should clarify who can serve as the heat safety coordinator; effective two-way communication should be practicable; and the proposed rule’s prescriptive requirements will create challenges for small businesses.
Learn more about ABC’s position on the proposed rule in its comment letter.
ABC will continue to monitor this rulemaking and provide updates in Newsline.
Background:
On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to protect workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.
On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.
On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers. On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.
In December 2023, ABC submitted comments as a steering committee member of the CISC and the CWS in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.
On Aug. 30, 2024, the OSHA published its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule. Read ABC’s release on the proposed rule. The deadline for the public to submit written comments on the proposed rule was extended to Jan. 14, 2025, from the original deadline of Dec. 30.
Elements of the proposal include the following:
OSHA resources on the proposed rule:
On Jan. 17, ABC sent a letter to the U.S. House of Representatives Ways and Means Committee emphasizing the significance of making permanent the provisions of the Tax Cuts and Jobs Act for America’s working families as the committee held a hearing focused on the family and business provisions included in the Tax Cuts and Jobs Act.
In the letter, ABC urged the committee to support the following critical tax policies, which are vital to the continued success and economic prosperity of our industry:
In the hearing, there was increased focus on addressing the looming expiration of the Section 199A deduction, which, if allowed to expire, would result in a 20% increased tax on pass-throughs, while C-corps and publicly traded companies will continue to enjoy their lower, 21% permanent rate.
Chairman Jason Smith, R-Mo.:
“Small businesses are facing a 43.4% tax rate if the 199A small business deduction, as I refer to it, expires. This looming threat impacts decisions they’re making today about whether to invest, grow, hire.”
Rep. Vern Buchannan, R-Fla.:
“As chairman of the Florida Chamber, I can tell you we had 130,000 businesses, 90% to 95% of them were pass-through entities. And you’re dealing with these potential tax hikes, that’s what scares a lot of people.”
Rep. Kevin Hern, R-Okla.:
“Certainty is important. And we’re getting ready to see the largest tax increase in American history starting January 2026 if we don’t do something. … [Section] 199A, it puts parity between small business pass-throughs and C corporations, and 99% of businesses in America are pass-throughs. Are there some larger than others? Absolutely. Are we going to be punitive to those who have fought and grown their businesses as I did, from one person to 1,200 employees? Are we evil because we created jobs?”
Rep. Beth Van Duyne, R-Texas, referencing the 199A roundtable ABC participated in last year:
“As part of my work on the Main Street Tax Team, we were able to get out of D.C. and talk to real business owners. We heard about the successes of policies such as Section 199A, which created over $66 billion in savings for Main Street businesses. One of the businesses I met with was Republic National Distributing Co., where I held a roundtable including 25 small businesses, including roofers, community banks and realtors. These are the businesses across the United States who are benefiting from this, and this is why Congress must act.”
ABC will continue to advocate for the extension of the pro-growth policies of the Tax Cuts and Jobs Act, as lawmakers consider legislative action in the 119th Congress.
In a win for federal contractors, on Jan. 13, the Federal Register published notification of the Federal Acquisition Regulatory Council’s withdrawal of a controversial ABC-opposed proposed rule, Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk.
At the direction of President Joe Biden’s Executive Order 14030, on Nov. 14, 2022, the FAR Council issued a proposed rule to amend the Federal Acquisition Regulation to require contractors awarded at total of $50 million in federal contracts annually to disclose their direct and some indirect greenhouse gas emissions and set GHG emission reduction targets.
Under the proposed rule, certain federal contractors would be required to inventory the annual GHG emissions of their operations, supply chain, employees and final products in certain circumstances. The proposal required federal contractors to disclose this information to the federal government and set targets for reducing GHG emissions. Federal contractors that failed to comply with these requirements would have been deemed nonresponsible and ineligible for federal awards.
On Feb. 13, 2023, ABC submitted comments opposing the proposal’s overly burdensome, costly and punitive approach to regulating GHG emissions of federal contractors.
“The withdrawal of the FAR Council’s GHG proposal is welcome news for federal contractors that cited its burdensome compliance requirements as untenable for the construction industry,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Many ABC federal contractor compliance professionals are committed to reducing carbon emissions, but expressed concerns about the ability of contractors to accurately calculate the GHG emissions of a project’s workforce and its construction materials and supply chain.” While ABC understands the need for sensible environmental policies that balance the protection of the environment with the objectives and costs of regulatory compliance, ABC’s comments outlined how the proposed rule failed to strike that balance.
Citing a lack of sufficient time to finalize the proposed rule, “particularly given the large volume of public comments and the policy issues they raised,” the FAR Council said in a notice that it is withdrawing the proposal on Jan. 13.
In that notice, the council said, “[T]he agencies’ overall analysis of public comments indicates evolving practices and use of standards in industry, and since the publication of the proposed rule, differing domestic and international regulations covering greenhouse gas disclosures have been created.”
A final FAR Council GHG rule would have likely run into legal challenges by federal contractors and trade associations. For now, the rule is dead, but it is possible certain blue states and communities may pursue similar GHG disclosure requirements for state and local contractors.
ABC will continue to monitor and provide feedback on this issue.
In a win for ABC and its members, on Dec. 26, a 5th Circuit Court panel reinstated the nationwide injunction against the Corporate Transparency Act’s beneficial ownership information reporting requirement.
On Dec. 3, a federal judge in the U.S. District Court for the Eastern District of Texas issued the nationwide preliminary injunction against enforcement of the BOI reporting requirements, but upon appeal by the government, the 5th Circuit Court granted a stay on the injunction. The reinstatement of the injunction provides small businesses with necessary relief while litigation continues.
The same panel announced that it would hear arguments on March 25 on whether to keep the injunction in place while the case is heard by the full court, guaranteeing that the injunction will remain in place through at least the end of March 2025. As a result, covered entities do not need to file their beneficial ownership information reports prior to that proceeding.
“A nationwide injunction of the CTA’s reporting requirements will allow small business contractors to breathe easy as we await a decision from the court,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “The CTA’s onerous reporting requirements would impact small business operations, forcing companies to dedicate time and resources to comply or risk lofty penalties. ABC applauds the decision by the 5th Circuit Court panel and urges the court to keep the injunction in place and side with the small business community when delivering its final decision.”
Background on the Corporate Transparency Act
On Jan. 1, 2021, Congress enacted into law the Corporate Transparency Act, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable critical national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity.
ABC, along with a coalition of small business organizations, submitted a letter to congressional leadership expressing concerns on the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street businesses.
ABC responded to Treasury’s Financial Crimes Enforcement Network notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN’s maintenance and disclosure of reported information in comments. ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.
ABC also argued that America’s small businesses—which make up most of ABC’s members—are typically not staffed or equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.
According to a notice from the S-Corp Association posted on Dec. 23, an appellate court ruled in favor of the federal government in reversing a nationwide injunction against the Corporate Transparency Act. The decision means that the CTA’s reporting requirements are now back in full effect, giving the approximately 20 million entities who have not yet submitted their filings just a few days to do so.
The injunction that’s currently in place was ordered by a Texas court, which found that the CTA is “likely unconstitutional” and that Congress went beyond its authority in enacting the statute. The government quickly requested that the injunction be stayed pending a final ruling.
According to the U.S. Department of Treasury’s Financial Crimes Enforcement Network webpage, in light of the Dec. 23 federal Court of Appeals decision, the Beneficial Ownership Information Reporting Requirements are now in effect, with deadline extensions: “Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)” Further information on BOI reporting requirements can be found on FinCEN’s website.
In response, S-Corp, in addition to more than a dozen organizations and 25 states, filed amicus briefs urging the 5th Circuit to keep the injunction in place. Our argument was that doing so would give millions of businesses more time to learn about their new filing obligations while giving the courts time to make a final ruling. As a practical matter, lifting the injunction this close to the filing deadline also presents a logistical nightmare for countless businesses.
That nightmare is about to become a reality. At of the start of December, federal regulators estimated that just a third of the entities required to file under the CTA had done so. Given the massive education gap we know exists, there’s little doubt that most of the remaining 20 million entities will not be in a position to comply with the filing requirements before the end of the year.
This fight is not over. Next step on the advocacy side will be to work with the incoming Trump administration to delay the filing deadline administratively. This won’t help existing companies which already reported their BOI, but it will help new incorporations and those businesses that failed to file.
Over at the courts, we expect the NFIB to appeal the 5th Circuit Court decision. Word is an expedited appeal hearing on the stay is already in the works, but that hearing is unlikely to take place before the end of the year.
Meanwhile, on the merits, today’s court order argues that the government is likely to succeed in its defense of the CTA, but that decision was written by two Democratic judges, so it may not reflect the views of the full 5th Circuit or the U.S. Supreme Court.
Finally, we have yet to hear from the 11th Circuit, which is considering the government’s appeal of the North District of Alabama District Court decision that the CTA is unconstitutional. That decision could come down any day now.
So bad news right before Christmas, but lots more to come on the CTA. Looking forward to better results next year.
ABC encourages members and small business owners to consult counsel about the Dec. 23 decision.
On Dec. 11, the U.S. Department of Labor’s Occupational Safety and Health Administration announced its final rule on Personal Protective Equipment in Construction, which adds specific language requiring that employers provide PPE that properly fits construction industry workers. The change aligns the construction industry standard with the standard already in place for general industry. The final rule is effective on Jan. 13, 2025. To learn more about the final rule read OSHA’s Frequently Asked Questions.
Tim Irving, acting director of the directorate of construction at OSHA, wrote about the final rule, stating that, “Unlike the general industry standard, the construction industry standard did not clearly state that PPE must adequately fit each affected employee. The revision requires that equipment fit each affected employee properly to protect them from occupational hazards.”
On July 20, 2023, OSHA issued a proposed rule clarifying the requirements for the fit of personal protective equipment in construction. Read the DOL’s press release. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments to OSHA in response to the PPE proposed rule on Sept. 18.
Learn more about personal protective equipment in construction.
On Dec. 2, the U.S. Department of Labor’s Occupational Safety and Health Administration announced that it has extended the public comment period for its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule until Jan. 14, 2025, from the original deadline of Dec. 30. ABC will be submitting comments on the proposal, and public stakeholders can submit comments as well.
OSHA published the proposed rule on Aug. 30. It would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. Read ABC’s release on the proposed rule.
In December 2023, ABC submitted comments as a steering committee member of the Construction Industry Safety Coalition and the Coalition for Workplace Safety in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.
ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.