Significant Changes to Federal Design-Build Laws

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Despite two years of partisan gridlock, Congress is on the verge of passing legislation by the AIA to help architects design better buildings.

These efforts represent the culmination of years of work by AIA members like you who have written, emailed and visited with your elected representatives in record numbers, showing the power of the profession to advocate.

Here’s what we know so far:

  • The House has passed and the Senate is about to pass legislation that includes the first significant changes to federal design-build laws in years. The bill would limit the number of finalists in the second stage of a military design-build procurement to no more than five in competitions worth more than $4 million, putting the brakes on a practice that leaves firms spending more and more to win work, with worsening odds of actually winning anything. Although the final provision does not go as far as the AIA had pushed, it puts into U.S. law for the first time protections for firms from increasingly expensive and unwinnable competitions.
  • Congress also is about to send to the White House legislation that restores the 179D energy efficient building tax deduction, along with other tax incentives. The 179D deduction expired at the end of 2013; the bill restores it for projects placed into service in 2014. This enables commercial building owners to claim the deduction for work completed in 2014, and design firms to claim the deduction for public buildings placed into service in 2014 when the public entity allocates it. Although a broad coalition of business groups pushed for a longer extension, there already is talk of Congress taking up these provisions again in 2015.

With Congress about to adjourn and go home, it looks like we’ve managed to stop two bills that would have set us back.

  • The end of the Congress means the end (for now) of legislation repealing federal 2030 targets. Despite a strong lobbying push by the fossil fuel industry, an AIA-led coalition of more than 1000 companies and organizations blocked the effort. Although the provision may come under attack again in 2015, the AIA and its allies showed the power of grassroots engagement in protecting sensible sustainability policy.
  • For the fifth year running, the AIA and its allies knocked down a proposal to raise taxes on architecture and other professional services firms that organize as S corporations. Although the provision may return to life next year, the AIA and its allies have succeeded in building a collation on Capitol Hill that stands with architects against punitive tax increases.’

These victories show that when AIA members like you work together, we can get things done – even in an extremely difficult political environment.

December 15, 2014 UPDATE: Congress has passed this legislation. see this update.

Potentially Sticky Issues Anticipated in Coming General Assembly Session

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Few anticipate General Assembly sessions with glee.  Most approach them with caution.  Architects fall into the latter group.

Why?  Because architects are licensed by the state, regulated by the state, and often find their fate affected by the state.  In the upcoming session, the Joint Legislative Committee and its legislative counsel anticipate a few sticky issues arising.

Among the most likely will be swapping the ever unappealing business, occupational and professional license (BPOL) gross-receipts tax for a tax on services and another attack on the Virginia Public Procurement Act (VPPA) and its provision for qualifications-based selection of professionals.

Early discussions indicated that a tax swap would aim to be revenue neutral.  This means that revenues from a service tax would be designed to equal the revenue raised from the BPOL tax.  The difficulty is that the BPOL tax is a local tax, assessed, collected and allocated as the locality wishes.  The state establishes the maximum rate for each business class — 58 cents per $100 of receipts for architects — and the locality may set its assessment anywhere from zero, as several do, to the maximum.

Through the VPPA, the General Assembly in the early 1980s required for all public bodies a different method for procuring professional services.  For goods and non-professional services, price could be the determining factor.  For professional services, the public body — state agencies; quasi-public authorities; school boards; cities, counties and towns; etc. — must first determine what firms are qualified without consideration of price.

To do this, public bodies are required to request proposals that describe the professional firm’s methods and capabilities for handling a specific project or project type.  The initial request for a proposal cannot ask for fee information.  In this way, the public entity can trim the list of potential providers to only those it believes are most qualified.

At that point, the agency or locality begins to discuss the details of the project, outlining, defining, and refining the specific scope and limitations of what is expected of the professional firm.  When that scope is suitably understood and agreed upon by both the agency or locality and the firms, the firms are ranked.

The public entity then begins negotiations with its top-ranked firm.  If a suitable price cannot be reached, negotiations are formally ended and negotiations begin with the second-ranked firm.

The federal government and most state governments have employed this system for decades as it has proved the best system to provide transparency in the procurement process and lessen the chances of favoritism.

 

 

AIA Summer Advocacy Fellowship Announced

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The AIA has announced a 2013 AIA Summer Advocacy Fellowship to provide Associate Members the opportunity to engage with AIA Advocacy staff regarding legislative issues that influence the profession of architecture. The summer fellowship, which begins in mid-June, 2013, allows recipients to spend eight weeks working at AIA Headquarters in Washington, D.C. gaining experience in the areas of legislative action, regulatory reform, and public advocacy.

All current Associate members of the AIA are eligible for the Fellowship program. At least two fellowships will be awarded in 2013 and each recipient will receive a $6,000 stipend for the period. All housing, meals and other costs will be the responsibility of the recipient. More>>

Legislative Relationships Survey

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The Institute is initiating a first-ever survey to collect key relationship information relative to architects and lawmakers to help organize and strengthen state and federal advocacy efforts.  While every state grapples with different legislative issues, one common thread to success is a unified voice – at both the grassroots and grass-tops (personal relationship) levels.  Once compiled, the AIA State and Local Relations team will provide reports to each state component to use in building their efforts to (1) stave off encroachments into architectural practice by other groups, (2) protect qualifications-based selection (3) maintain and refine appropriate project delivery methods and (4) advance the business interests of the architectural profession.

To complete the 3-minute survey, click here. After you log in using your AIA account username and password, you will click on the “Learn More” button under “Legislator Survey.” Your home address should already be entered for you.  Confirm that the address is correct then click “Search” to find your elected officials.  From there you will be able to enter relationship information with an easy drop-down menu for each of your government representatives.  If you’ve forgotten your password, don’t fret, you can easily click “forgot my password” and the password will be immediately sent to your email address to complete your log in. This type of initiative is what many of you have requested from our National Component so please take a few minutes of your valuable time for this survey

AIA Announces National Legislative Agenda

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“© 2006, The American Institute of Architects. All rights reserved.”
© 2006, The American Institute of Architects. All rights reserved.

The American Institute of Architects recently unveiled an ambitious 2012 legislative agenda that has creating jobs in the hard-hit design and construction industry as its top priority.

“Architects are by and large small businesspeople: ninety-five percent of architecture firms in the United States employ 50 or fewer people,” said AIA President Jeff Potter, FAIA, himself a small business owner. “Meeting the challenges our communities face — lost jobs, outdated and unsafe infrastructure, abandoned buildings and neighborhoods, rising energy costs, and distressed main streets — demands a strong design and construction industry that is ready and able to get back to work.

“If enacted, this agenda would go a long way towards putting our sector back on its feet to do just that,” Potter said.

The AIA’s “Plan for Economic Growth” concentrates its efforts on solving the four key economic challenges facing the profession:

Removing Barriers to Private Sector Lending   Thousands of needed construction projects that would employ millions of Americans are on hold because credit is still frozen. Banks, especially smaller community banks, want to lend but new federal regulations make it difficult. The AIA is doing its part to help make financing available with its Stalled Projects website, launched in 2011, to match building projects to investors. But Congress needs to do its part by passing legislation such as the Capital Access for Main Street Act, which would help prevent large numbers of commercial foreclosures and free up credit to help small business get back to work.

Saving Energy, Creating Jobs   Across the country, building owners, state and local governments and school districts want to lower energy bills by retrofitting their buildings. AIA member firms are answering the call by signing up for the AIA 2030 Commitment to develop plans to ensure their projects and practices meet far-reaching green goals. Congress can spur tens of thousands of more jobs by increasing the value of the Federal Energy Efficient Commercial Building Tax Deduction by increasing it from the current $1.80sf to $3.00sf and by making changes that make the deduction easier to use by more people

Helping Small Firms Grow   Small architecture firms and sole practitioners work in every community in the country to help homeowners and businesses design better buildings. But high taxes and burdensome paperwork hold them back. As Congress looks to reform the tax code and reduce the budget deficit, it needs to ensure that tax rates on small entrepreneurs are cut while preventing efforts to penalize smaller design firms.

Revitalizing America’s Neighborhoods   Crumbling infrastructure, high unemployment and rising traffic congestion have hurt our nation’s communities, reducing safety and increasing pollution. Outdated federal transportation laws and tax policies have slowed projects down, deprived the public of a voice in the planning process, and forced Americans to spend more time in their cars. Congress needs to pass transportation reform legislation this year that gives people the ability to create and sustain prosperous communities with real choices in transportation options. The AIA also urges the administration to ensure that lending standards account for the kinds of mixed-use developments that communities need in order to bring back economic vitality and jobs.

For more information, or to get involved, visit AIA Issues & Advocacy.

National Advocacy Update

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Over the past few months, the AIA has spearheaded an effort to bring the design and construction industry together to press lawmakers to address the challenges that are holding our industry back.  On Dec. 7, 2011, our coalition sent a letter to President Obama and all members of Congress outlining actions they need to take to create stability in the economy and promote growth in the private sector.  (You can read the letter here.) This week, AIA President Clark Manus, FAIA, delivered this message to top White House officials, and AIA National Board members took to Capitol Hill to call on Congress to act.

How can you help? By asking your representatives to support common-sense, bipartisan legislation that will address one of the biggest factors impeding recovery: the lack of financing for worthy design projects.

The AIA is a leading supporter of HR 1356 the Capital Access for Main Street Act of 2011, a bipartisan bill that would help small community banks write off debt over a longer period of time, which would free up capital for lending.  This is an approach that worked following an agricultural crisis in the 1980s to help business recover, and it does not cost the taxpayers a dime in funding.  This bill passed the House in 2010 with strong support, but did not make it through the Senate before the election.

We have a real chance to get this legislation through Congress, but for that to happen it needs more representatives to learn about it and support it. Therefore, we would like you to ask your House representative to cosponsor HR 1356.  The AIA Advocacy Center has a letter for you to send.

Even as we demand Congress and the White House take action to improve the economy, we are not waiting on Washington to act. Last month, the AIA launched its stalled projects campaign.  This site is designed to help connect investors with design and construction projects. Already investors with $7 billion in funding have signed up.  So please take a look and add your projects to the list.

There is no silver bullet to fixing the problems in the economy. But by marshaling the forces of our entire industry, asking our elected leaders to act on common-sense policies, and connecting investors to projects, together we can help to make a difference and get our profession back to work.

Sincerely,

Paul T. Mendelsohn

Vice-President, AIA Government and Community Relations