July 2006 Government Affairs Update
IN THIS ISSUE …
1. 3% Withholding Tax on Government
Contracts.
2. Federal Prison Industries Reform
News
3. COFPAES Delegate Meeting
4. Senate Small Business Health Plan
Legislation Appears Lost
3% Withholding Tax on Government
Contracts.
Section 511
in the recently enacted Tax Reconciliation Bill (P.L. 109-222:: H.R. 4297)
which requires tax withholdings at a rate of 3% on all government payments for
products and services made by the federal government, state governments, and
local governments with expenditures of $100 million or more. The tax affects
payments for government contracts as well as those to any person for a service
or product provided to a government entity beginning in 2011. It imposes
administrative costs and information reporting requirements as well.
The
relevant section was in neither the House version of the Tax Reconciliation
Bill nor the Senate version; it was placed in at the last minute before the
bill went to the President. Opponents of Section 511 argue that the tax hurts
businesses by significantly altering business’ cash flow and that companies
operating on tight profit margins will lose vital funds needed to operate day
to day activities and will be forced to pass along the added costs to customers
or finance the additional amount. ACSM has joined 38 other associations in
opposing Section 511 and working for its repeal.
Federal Prison Industries Reform
News.
The Federal
Prison Industries Reform legislation, HR 2965 is scheduled for a Committee
mark-up on Wednesday, July 12. It is expected that a number of amendments will
be proposed which will attempt to weaken the legislation, however those who
support the legislation are working to get the legislation through committee
and on to the House floor for consideration.
ACSM has
long supported Federal Prison Industries Reform legislation since we learned
that FPI offers scanning and digitizing services for the federal government.
We’ve made our concerns known to Members of Congress about federal prisoners
having access to sensitive and private drawings, documents and maps, even for
the purpose of scanning and digitizing them. If ACSM members are concerned
about the passage of Federal Prison Industries Reform, they should call their
Representative and ask them to SUPPORT H.R. 2965, the Federal Prison Industries
Competition in Contracting Act of 2005.
COFPAES Delegate Meeting
COFPAES
recently held its delegate meeting and several important topics were discussed.
One of the topics discussed was the Services Acquisition Reform Act (SARA).
This legislation which is in Public Law 108-136, contains a provision initiated
by COFPAES that calls for the Dept. of Defense, GSA and the Office of Federal
Procurement Policy (OFPP) to develop and implement a plan to ensure that the
Federal government maintains the necessary capability with respect to the acquisition
of architectural and engineering services. When the final directive of the
provision was released, very little of COFPAES’ input was included. COFPAES is
seeking members of their societies who will be willing to work on a white paper
for OFPP and other Federal agencies on this topic. If interested in
contributing to the white paper, contact ACSM and we will connect you with the
appropriate people.
Another
topic discussed was Sending A/E Work Offshore. Representative Robert Andrews
(D-NJ) and a delegation of Members of Congress sent a letter to the Dept. of
Homeland Security asking for an in-depth study of the issue. There has been no
response for DHS. Rep. Andrews is contemplating some form of an amendment to an
upcoming homeland security bill requiring DHS to make the study. The Chairman
of the House Small Business Committee has asked COFPAES to help write a request
for a Government Accountability Office (GAO) study on the issue. That request
has gone forward.
Senate Small Business Health Plan
Legislation Appears Lost.
The
Senate’s best hope for small business health plan legislation appears to be
lost for the remainder of this Congress. The Health Insurance Marketplace
Modernization and Affordability Act of 2006 (S. 1955), sponsored by Republican
Senator Mike Enzi of Wyoming, which would have allowed business association
members to join together to purchase health insurance for their employees;
appeared to have a clear path to passage earlier this year. In early May,
however, the Senate voted to stop consideration of the legislation after a
group of Democrat Senators, including Senators Kennedy, Clinton and Durbin
introduced competing legislation.
Although
Senator Enzi has vowed to continue to push the legislation, it is very much
unlikely that Senate leadership will allow it to come to the floor for
consideration. At the same time, it is unlikely that the Democrat bill will
come up for consideration either.
ACSM is
watching both S. 1955 and the Democrat bill and will take appropriate action as
needed.