The Office of Federal Contract Compliance Programs (OFCCP) announced in the Federal Register that it is renewing and changing the construction compliance review scheduling letter and the Construction Contract Award Notification Requirement Form (CC-314).

OFCCP is responsible for implementing regulations to prevent employment discrimination by Federal contractors and subcontractors based on race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran.

The agency is proposing changes to the construction scheduling letter to increase the effectiveness of its construction compliance evaluations. It also plans to renew form CC-314, which covered construction contractors use to notify the agency when it receives a contract award exceeding $10,000.

Written comments must be submitted in response to the notice on or before April 26, 2024.

Last spring, The Contractors Plan blog shared a table describing important provisions of the SECURE Act 2.0. Since then, many of the key provisions have taken effect. Some recently, with more in 2025. The SECURE Act 2.0, passed in 2022, is meant to improve access to retirement plans and the ability to save for retirement while also easing employer administration requirements.

In addition to the provisions that took effect before this year, several more elective provisions became available for adoption as of January 1, 2024, including:

• An increase in the cash-out limit to $7,000 from $5,000.
• A new exception from the early withdrawal penalty is created for distributions used for emergency expenses. The limit is $1,000 annually, and the participant can repay the distribution within three years.
• An employer without a retirement plan can offer a starter 401(k) plan with lower contribution limits and simplified requirements.
• Allows participants who self-certify that they experienced domestic abuse to make penalty-free withdrawals. The withdrawal is limited to the lesser of $10,000 or 50% of the vested balance.

These are just some changes that became available in 2024 that could impact your plan. Others are on the horizon for 2025, including:

• For plans created in 2023 or later, there is an auto-enrollment and auto-escalation requirement for 401(k) plans.
• An increase in the catch-up limits to the greater of $10,000 or 50% more than the regular catch-up provision for participants who are 60, 61, 62, or 63 years old. After 2025, the catch-up limits will be indexed for inflation.

These are just some of the SECURE Act 2.0’s recent and upcoming changes. For questions about these and other upcoming plan changes and design features, you may talk with your broker or contact The Contractors Plan about how these changes may impact your plan and its participants.

The President has issued two Executive Orders to promote equal pay for federal contractor employees and the federal workforce. To implement these orders, the Biden Administration has introduced measures focused on pay equity and transparency, including proposed revisions to the Federal Acquisition Regulation (FAR). These revisions tackle wage discrepancies by forbidding contractors and subcontractors from requesting or considering applicants’ salary histories for particular roles.

• The FAR Council has suggested a rule that would bar federal contractors and subcontractors from soliciting or considering candidates’ salary histories during recruitment. Comments on the proposed FAR regulation are open until April 1, 2024. If enacted, this regulation would prohibit contractors from using past compensation as a screening factor or basis for salary decisions, regardless of whether applicants provided the information voluntarily. The proposal also includes a mechanism for enforcement, allowing applicants to file complaints against non-compliant contractors or subcontractors, with appropriate actions to be taken by the relevant agency. Furthermore, the proposal requires federal contractors to disclose expected salary ranges in job listings.
• Additionally, the Office of Personnel Management (OPM) has finalized a rule to help ensure that federal agencies will no longer factor in an individual’s current or past pay when determining federal employee salaries. Under the final regulation, federal agencies cannot consider an applicant’s non-federal salary history when setting pay for new employees in the General Schedule, Prevailing Rate, Administrative Appeals Judge, Administrative Law Judge, Senior Executive Service, and senior-level and scientific or professional pay systems. This rule is meant to stop pay discrimination by ensuring that salaries are based on applicants’ skills, experience, and expertise rather than their salary history.

These initiatives aim to promote economy, efficiency, and effectiveness in federal contracting while fostering talent diversity, enhancing job satisfaction, and reducing turnover within the federal contractor workforce. However, the proposed rule raises concerns and uncertainties regarding compliance with existing federal contracting rules. Therefore, contractors are advised to carefully monitor developments, review the full text of the proposed rule, and participate in the notice-and-comment process to ensure their understanding and compliance.

The U.S. Census Bureau announced construction spending for December 2023 was at a seasonally adjusted annual rate of $2,096 billion, 0.9% above the revised estimate of $2,078 billion in November. Compared to last year, construction spending in December was up 13.9%. The overall construction value in 2023 was $1,979 billion, 7% above the total construction spending in 2022.

While private construction spending in December was $1,620 billion, 0.7% above the revised November estimate of $1,608 billion, public construction spending was $476 billion, 1.3 % above the revised November estimate of $470 billion. A key contributor to public construction was highway construction at $151 billion, 4.1% above the revised November estimate of $145 billion.

Compared to the previous year, the value of public construction in 2023 was $438 billion, 16.3% above what was spent in 2022. Again, highway construction was a leading contributor of growth with $134 billion, up 18 % above the $113 billion in 2022.

More information may be found at: https://www.census.gov/construction/c30/pdf/release.pdf.

The Department of Labor’s Wage and Hour Division (WHD) will be hosting virtual compliance seminars on the payment of prevailing wages on federally funded service and construction contracts. These seminars are a component of WHD’s continuous efforts to improve compliance and expand awareness concerning the prevailing federal wage requirements.

This year, the WHD has expanded its seminar offerings for contractors, agencies, unions, workers, and other stakeholders. These day-long seminars will offer sessions on various prevailing wage compliance topics, using breakout rooms so that participants can choose the most valuable sessions.

To attend, participants only need to register for their preferred seminar date; individual session registration is not required. The seminars are scheduled for Feb. 27, May 15, and Aug. 29, 2024, from 11:00 am to 5:30 pm EDT.

The tentative agenda in the registration link below will be updated leading up to each seminar date. While seminar attendance is free, registration is required. Participants may click here to register.

The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) have jointly proposed amendments to the Federal Acquisition Regulation (FAR) to enhance suspension and debarment consistency. Recommendations from the Interagency Suspension and Debarment Committee prompted these changes. Currently, the FAR and Nonprocurement systems operate independently, leading to variations. The proposed amendments align the FAR more closely with the Nonprocurement Common Rule (NCR).

While the FAR and NCR systems share core principles, there are disparities. The proposed rule introduces definitional changes, including standardized terms like “suspending and debarring official” and “administrative agreement,” aiming to clarify and promote the understanding of alternative measures.

Significantly, the proposed amendments bring substantive, procedural changes to suspension and debarment procedures by introducing seven new aggravating factors to be considered alongside the existing ten mitigation factors. This change aims to enhance consistency between the FAR and NCR, providing additional guidance for officials making contractor responsibility determinations.

The proposed rule also advocates for increased flexibility by expanding communication modes for notices and extending the time frame for a debarment decision from 30 to 45 days, with the possibility of further extensions for good cause. These changes aim to streamline and improve suspension and debarment procedures, aligning the FAR more closely with the NCR while ensuring clarity, consistency, and enhanced flexibility in the process.

Written comments are due on March 11, 2024.

The Department of Labor (DOL) has issued a final rule under the Fair Labor Standards Act (FLSA) to clarify the distinction between employees and independent contractors. The rule aims to enhance employers’ and workers’ understanding of the distinction and reduce employee misclassification.

This issue affects workers’ eligibility for minimum wage and overtime pay, can create an unfair competitive advantage, and generates broader adverse effects on the economy. Acting Secretary of Labor Julie Su emphasizes the rule’s role in protecting workers and ensuring proper classification.

The Final rule seeks consistency for entities covered by the FLSA. The guidance aligns with established judicial precedent and reinstates a multifactor analysis, considering factors such as profit opportunity, financial investment, work permanence, employer control, essentiality of the work, and worker skill.

The new rule rescinds the 2021 Independent Contractor Rule, which was deemed inconsistent with the law. Stakeholder feedback from the 2022 forums and the October 2022 comment period informed the development of the rule. It becomes effective on March 11, 2024.

The National Defense Authorization Act (NDAA) for Fiscal Year 2024, signed into law on December 22, 2023, introduces significant changes to federal contracting, focusing on Service-Disabled Veteran-Owned Small Businesses (SDVOSBs).

Highlights of the changes include:

• Prime Contracting Goal Increase: Congress has increased the prime contracting goal for SDVOSBs from 3% to 5% of total prime contract spending. Section 863 of the 2024 NDAA replaces the previous 3% goal with the new 5% target, effective immediately upon the President’s signature.
• Prohibition of Self-Certified SDVOSBs: Section 864 of the 2024 NDAA prohibits the government from counting awards to self-certified SDVOSBs towards prime and subcontracting goals. Awards must be made to SBA-certified SDVOSBs to contribute to meeting goals.
• Grace Period for Section 864: Unlike the immediate effectiveness of the goal increase, Section 864 includes a grace period. The SBA has 180 days to prepare regulations, and until October 1 of the fiscal year following the publication of these regulations, the government can continue counting awards to self-certified SDVOSBs.
• Goal Impact: The new 5% goal challenges the government to improve its SDVOSB performance. In Fiscal Year 2022, the government awarded 4.57% of prime contract dollars to SDVOSBs. Achieving the 5% goal would have meant over $2.5 billion in additional SDVOSB prime contracting.
• Clarifies Previous Legislation: Section 864 explains that, despite prior legislation and SBA regulations in 2021 that say the government could claim credit for prime contracts awarded to self-certified SDVOSBs, the new rule closes this gap and emphasizes the importance of awards going to SBA-certified SDVOSBs.

In conclusion, the 2024 NDAA brings about a substantial increase in the SDVOSB prime contracting goal, accompanied by measures to ensure that only SBA-certified SDVOSBs contribute to meeting these goals, eliminating the previous practice of counting awards to self-certified SDVOSBs.

On December 18, 2023, the General Services Administration (GSA) introduced a final rule enforcing Executive Order 14063, requiring federal agencies to implement project labor agreements (PLA) on large-scale federal construction projects. PLAs are pre-hire collective bargaining agreements with construction trades unions, establishing terms and conditions for all workers on specific federal construction projects.

The rule amends the Federal Acquisition Regulation, stipulating that federal construction projects exceeding $35 million must adopt a PLA to govern terms and conditions for construction workers. All involved parties must negotiate and establish these terms. The Biden Administration asserts that this expansion aims to ensure a predictable supply of skilled workers and eliminate construction delays caused by labor unrest.

The rule is set to affect around 200,000 workers on federal construction projects and will be effective  January 22, 2024. Opponents argue that the requirement may discriminate against non-union contractors and substantially raise costs for federal construction projects.

The Department of Labor (DOL) has announced a final rule to enact the provisions of Executive Order (EO) 14055, titled “Nondisplacement of Qualified Workers Under Service Contracts.” This EO, issued by President Biden, mandates that contractors and subcontractors engaged in federal service contracts must extend the right of first refusal for employment on the successor contract to service employees previously employed under the predecessor contract.

The final rule establishes comprehensive standards and procedures for implementing and enforcing EO 14055. The rule outlines the obligations of contracting agencies and contractors under the executive order, creating a robust investigation process designed to safeguard workers from displacement. Additionally, it clarifies how the executive order applies to subcontracts and enumerates potential sanctions and remedies that the Department of Labor may impose.

The final rule takes effect on February 12, 2024. However, it will apply exclusively to solicitations issued on or after this effective date as stipulated by regulations from the Federal Acquisition Regulatory Council (FAR Council). For more information, please visit Final Rule: Nondisplacement of Qualified Workers under Service Contracts.