The 3 Main Engineering Industry Priorities Highlighted by the 2022 ACEC/NC Member Reception
Recently, the American Council of Engineering Companies (ACEC) of North Carolina hosted a member reception with the NC congressional delegation at the ACEC townhouse. This delegation included NC representatives like Dan Bishop, Patrick McHenry, Richard Hudson, Deborah Ross, Kathy Manning, Virginia Foxx, and Senator Tom Tillis. Due to the importance of staying on top of the most pressing trends in the engineering industry, Thinc Strategy also attended the reception.
Here are the top three priorities the ACEC highlighted as crucial for the engineering industry’s success going forward.
1. Successfully Implementing the Bipartisan Infrastructure Law
The recent enactment of the bipartisan Infrastructure Investment and Jobs Act (IIJA) gives engineering, construction, and architectural firms the opportunity to play a major role in upgrading our nation’s infrastructure. To ensure the bipartisan infrastructure law is successfully implemented and engineering firms thrive, the conference highlighted the following priorities:
- Strengthening domestic manufacturing and supporting flexible procurement policies: Currently, the engineering industry is united in supporting the growth of the domestic manufacturing base. However, the conference also underscored the need for flexible procurement policies for materials or technologies necessary for infrastructure projects that aren’t available in the U.S.
- Tackling inflation and workforce issues: Due to the current shortage of engineers, the conference made it clear that engineering companies should consider increasing benefits and salaries to attract more talent. Besides attracting new talent, they also stated these incentives should be offered to currently employed engineers who are vital to completing infrastructure projects funded through the IIJA. The ACEC also promoted fixed-fee contracts to give firms flexibility and the Federal Acquisition Regulation (FAR) based regulations designed to ensure salaries reflect current economic conditions.
- Meeting infrastructure and environmental goals: The ACEC is strongly supportive of the One Federal Decision provisions in the IIJA, as they reform the NEPA process to coordinate between agencies. They also support this reformation by advancing public interest protections that deal with environmental and social equity justice concerns, as well as promoting environmental performance.
- Funding supporting revenues and commitments: Due to the IIJA providing long-term funding to state and local agencies, the ACEC noted that these agencies now have the stability they need to plan and deliver on complex infrastructure projects. The ACEC also stated that they strongly oppose reducing or suspending motor fuel taxes and fees, as they could undermine long-term financial assistance for infrastructure programs and don’t sufficiently lower consumer prices.
As the industry attempts to address these priorities, the ACEC advocated the following actions:
- Facilitate more efficient regulatory reviews and reduce obstacles by protecting the new law’s project delivery reforms.
- Reject user fee reductions and keep strong funding commitments in the law.
- Follow reasonable Buy America policies with accommodations for accessing vital materials.
- Comply with federal procurement rules to promote value-based contracting adoption and ensure contract rates and terms represent actual costs.
2. Prioritizing the Growth of the Engineering Workforce
Recent Bureau of Labor Statistics data shows that engineering and architecture occupations are projected to grow six percent between 2020 and 2030, with this rise meeting demand. However, the ACEC’s analysis of the IIJA found that the new program will require an additional 82,000 engineers and other professionals to complete the IIJA’s newly funded programs. Due to the rising demand for engineers and the aging workforce of the engineering industry, prioritizing the growth of the engineering workforce is crucial.
Some ways the ACEC suggests the industry and lawmakers grow the engineering workforce include:
- Recapturing unused employment-based green cards: Approximately 140,000 employment-based green cards are available each fiscal year, as well as other green cards for countries with low U.S. immigration and families. Despite this number of green cards, the ACEC highlighted the fact that many have gone unused over the past 20 years due to processing issues. The ACEC conference championed legislation like H.R. 7374, as it addresses the engineering industry’s workforce needs by focusing on people who are still waiting for work authorization.
- Greater investments in STEM Education: Another way the ACEC hopes to increase the number of engineers in the workforce is to prioritize STEM education. The conference also discussed how various House and Senate-passed competitiveness legislation aims to better align workforce needs with undergraduate and graduate education demands.
- Lifting the cap on H-1B visas: According to the American Society for Engineering Education, international students earned over half of U.S. universities’ engineering master’s and doctoral degrees in 2019. Due to the high amount of international talent, ACEC supports lifting the cap on H-1B visas available via a lottery system. For the fiscal year 2023, there were approximately 483,000 registrations but only 85,000 H-1B visas available, underscoring the need to make more visas available to drive international talent acquisition.
To make sure these priorities are addressed, the ACEC suggests the following actions be taken:
- Increase the number of H-1B vias
- Pass legislation designed to recapture any unused employment-based green cards
- Enact stem provisions in America COMPETES Act/USICA by passing HR 4521/S 1260
3. Ensuring Fairness for Paycheck Protection Recipients
While the Paycheck Protection Program (PPP) was crucial to the survival of many small engineering firms during the pandemic, a regulatory change made months after these loans were received may force some businesses to give some of that assistance back. This threat to engineering firms centers around the “credits” clause under FAR 31.201-5, which has been applied to emergency PPP loans. The credit could mean engineering firms have to reduce billing rates or provide a refund to the federal government based on their forgiven PPP loans allocable to contract expenses.
As a result of this clause, some engineering firms could even lose more money than the original amount of their PPP loan. The main points the ACEC highlighted in criticizing this regulatory change included:
- The unfairness of the policy: Since other businesses conducting public agency or STATE DOT work aren’t impacted by these changes and can keep all their forgiven loans, the regulatory change unfairly punishes engineering firms. Besides the unfair impact on engineering firms, businesses weren’t told about this requirement when applying for PPP loans, with clarification on the FAR credits clause coming months after the program’s launch.
- Its disproportionate impact on small firms: The ACEC believes this regulatory change will impact small firms and women and minority-owned firms the most. Since these firms tend to need this assistance more than others, it will make it harder for these firms to compete with larger firms.
- The lack of future incentives for engineering firms: The FAR credits clause disincentivizes engineering companies from competing for public agency work. This disincentive will have ripple effects on the DOT efforts to expand contracting opportunities to WDBE and small businesses as the infrastructure investment law gets into full swing.
Due to all these points, the ACEC supports passing legislation that waives the FAR credits clause for forgiven PPP loans on transit and State DOT transit projects. By waiving this clause, the government can ensure fairness for PPP recipients.
Choose Thinc Strategy for Professional Business Services
If you’re a construction, architecture, or engineering firm looking to stay on top of the issues highlighted by the ACEC NC reception, turn to Thinc Strategy. Our strategic business planning consultants can help you evaluate the current market and public-policy trends before gearing your strategy to manage change for better performance. Our performance services include feasibility studies, financial assessments, organizational performance reviews, and leadership training, ensuring you can rise to meet any challenge.
Learn more about our performance services today. If you have any questions or want to schedule a free consultation, please contact us. We’d also like to thank the ACEC of NC for providing us with information and guidance on their main priorities for the engineering sector.