Engineering Inc - March/April 2018 - 19

What Dave has done is to focus
single-mindedly and relentlessly
on vital issues for our industry,
rather than frittering away time and
resources on a range of side matters.
This rifle-shot focus has allowed
ACEC to play above its weight class
with impressive results.

Eliminating Onerous 3
Percent Withholding-In
2006, ACEC took the lead of a broadbased repeal coalition-representing
more than 100 business and industry
organizations-to defeat a law requiring federal clients to withhold 3 percent of payments owed to contractors,
including engineering firms.
Although the withholding requirement had been designed to combat
tax evasion, ACEC successfully argued
that the provision would unfairly
punish firms that had done nothing
wrong, and create burdensome cash
flow problems for both small and
large firms.
In 2011, after a long five-year battle,
the law was officially repealed.

SERGIO "SATCH" PECORI, ACEC CHAIRMAN

Emphasizing Contracting Out-In 2000, ACEC led the passage of the
Thomas Amendment to the Water Resources Development Act that limited the
ability of the U.S. Army Corps of Engineers to compete with private engineering on
municipal projects. "The Corps had started to become interested in local utilities
work, local school construction and other local projects not within its mission. This
was a challenge to the private engineering industry, and we were successful in
repelling it," Raymond says.
The Thomas Amendment was followed up with other contracting out "wins" with
state and federal agencies. However, defense of contracting out against union and
agency claims that it is cheaper to do engineering work in house is a constant battle
for ACEC.
In August 2016, an ACEC-commissioned New York University study-Engineering
Design Costs: In-House versus Contracting Out-examined the true costs of state
DOTs performing engineering design services in-house versus contracting out to
private sector firms and found that savings from contracting out can be 20 percent
or more. The report is now being used by State Organizations throughout the nation
to educate local lawmakers of the inherent advantages of contracting out.

Raymond (left) discusses industry priorities
with House Transportation and Infrastructure
Committee Chairman Bill Shuster.

JAMES KEGELY

Prohibiting Arbitrary DOT Caps on Firm Overhead-One of ACEC's
most significant legislative accomplishments occurred in 2005 when the Council
secured passage of legislation that restricted the ability of State Departments of
Transportation (DOTs) to impose arbitrary caps on firm overhead. The legislation
also strengthened rules governing the use of Qualifications-Based Selection on
projects involving federal funds.
State DOTs are now required to follow standard procurement requirements under
the Federal Acquisition Regulations for determining overhead rates, as well as the
recognition of a single cognizant audit to apply for all states, thereby prohibiting the
establishment of administrative or de facto caps on indirect costs. Despite strong
opposition from state DOTs, ACEC convinced Congress of the merits of adopting
uniform procurement rules for federally funded transportation projects to ensure
compliance for both industry and government.

or a question about something, Dave takes it seriously. He's really
worked hard to make it so that we're all working together."
A POWERFUL ADVOCATE

In conversations with ACEC stakeholders about the most sig-

nificant changes during Raymond's tenure, the topic of political
influence is always mentioned. The organization has several
specific legislative and regulatory notches on its belt (see "Wins
on Capitol Hill"), but there's also a more general sense that the
organization now has the ear of power brokers in Washington,
MARCH / APRIL 2018

ENGINEERING INC.

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