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February 28, 2012

Last week was a busy week for the CAWV at the State Capitol. The West Virginia Buy American Act was debated in House committees and a bill popped up in the Senate which will require fingerprinting for all employees working at any state facility or on state grounds, or who have access to sensitive or critical information. Sunday, February 26, the 47th day of the session, was the last day to get bills out of committees in their house of origin to ensure three full days for reading.  The 50th day is cross over day.  If a bill does not pass its house of origin by February 29, it is dead for this session.  The session wraps up at midnight on Saturday, March 10.


There are 12 days remaining in the 2012 Regular Legislative Session.  There have been 675 bills introduced in the Senate, with 117 of them being passed.  In the House, 1,348 bills have been introduced and 79 have passed the House.  Only 12 bills have passed both chambers.




The House of Delegates is voting on H.B. 4263, the West Virginia Buy America Act, which requires each construction contract made by a public agency to contain a provision that the iron, steel, manufactured goods, coal and timber used or supplied as construction materials shall be manufactured or produced in the United States.  The bill is scheduled for second reading Tuesday on the House Special Calendar.  The bill is patterned after the Buy American Provision that was included with American Recovery and Reinvestment Act (ARRA) projects. Companion bill S.B. 381 is also on second reading in the Senate but it first has to go through the Senate Finance Committee.


There are exemptions in the bill. The section does not apply to contracts where the head of the public agency finds the cost of the domestic product will increase the contract by more than 20 percent, when the cost of such material exceeds the cost of foreign material by more than 6 percent, when the domestic product is not produced in sufficient quantities or is not of satisfactory quality, or the application of the West Virginia Buy American Act would be inconsistent with the public interest.


The bill requires a waiver of the act be published in the State Register with a detailed written justification of why the provision should be waived.  The agency must then take comments on the proposed waiver from any group or person.


Issued raised by the CAWV to H.B. 4263 and S.B. 381 include:


·         West Virginia Code 5-19 currently requires domestic steel, aluminum and glass be used in all public projects.  It has worked well for years.


·         The Buy American Provision (BAP) was in stimulus projects funded by the American Recovery and Reinvestment Act (ARRA) of 2009.  The provision proved very difficult to implement and resulted in projects delays and increased costs.


·         There will probably be very few waivers granted, because the public agency has discretion but they may not have the time nor expertise to properly demonstrate whether a waiver needs to be granted.  The key issues are how “sufficient” quantities and “satisfactory” quality will be interpreted.  By their nature, both terms are subjective and most governmental agencies will not have time prior to the bid to make this determination.


·         Congress finally had to put a “de minimis” waiver in ARRA projects because there were so many parts of construction projects that the projects were getting delayed.


·         H.B. 4263 has no such “de minimis” waiver to help West Virginia projects.


·         In West Virginia’s stimulus projects, it was determined that many of products in water and sewer plants included complex electronic control systems, air blowers and liquid pumps, along with miscellaneous piping, conveyors, mixer and chemical feed systems.  It would be hard to find one single piece of equipment that was completely void of foreign components.  This is why U.S. EPA had to order the “de mimimis” waiver.


·         Any bill passed in West Virginia should have the “de minimis” waiver.


·         BAP will involve every public job in the state.  All highway and building work will have to make sure the nails, lumber, bolts, nuts, screws, etc. incorporated in the project meet BAP.  Agencies will have to set up procedures to ensure compliance.  There will be a cost involved with this.


·         Bidding contractors have limited time and resources to decide whether to apply for a waiver.  Often, the bidder has to rely on the information of a distributor or sales people who may not be aware of a potential violation.


·         Any contractor who violates the act will be ineligible to receive any contract or subcontract with the state or any political subdivision.


The legislation is well intended but creates many problems for public owners, contractors and subcontractors. Members received a Legislative Alert Friday, Feb. 24, urging them to contact their senators and delegates to oppose the bills. The CAWV continues to urge lawmakers to consider the full application of the bill.




CAWV members Friday, Feb. 24, received a Legislative Alert with regard to S. B. 659, a bill that would require fingerprinting of all employees of vendors, contractors and subcontractors working at any state facility or on state grounds, or who have access to sensitive or critical information. Discussions have been held with the West Virginia Division of Protective Services and Sen. John Unger, D-Berkeley, the bill’s sponsor, to determine the purpose of the bill and how it would be implemented.  DPS officials stated there have been incidents at the State Capitol involving outside contractors’ employees.


S. B. 659  requires all vendors, contractors and subcontractors to have all their employees working on  state property complete a background and fingerprint check.  A contractor’s employees criminal records would be shared with the head of the awarding agency who may request that a certain employee not be permitted to work at the site.  Some of the issues discussed at the meeting include: A number of people have criminal records ranging from DUI’s to drug charges.  If these people have served their sentence, should that preclude them from getting gainful employment; what constitutes “sensitive or critical information”; if an agency head says they don’t want a particular employee on the project, does the contractor terminate them if there is no other project for them to work on; what’s the cost of for a fingerprint check and how long does it take to get the results; and will a contractor be required to have all his employees fingerprinted or just those working on state property?


DPS and Senator Unger understand the CAWV’s concerns and amendments are being discussed to clarify the scope and purpose of the bill.  It is on amendment stage (Second Reading) today.




Department of Transportation Secretary Paul Mattox suggested asking voters to approve a $1 billion to $1.5 billion road bond during a joint hearing of the House and Senate transportation committees. The Secretary presented a list of 18 projects that could be completed with the additional funds.  The CAWV continues to urge lawmakers to focus on a long-term funding solution for West Virginia’s highway system. The funding proposal, despite not moving in the Legislature, generated a plethora of discussion on the needs of our state’s highway system. Lawmakers understand the dire consequences of not investing in transportation and are showing a willingness to study the issue and find solutions.  In a related issue, the House Constitutional Revision Committee may hold a hearing Thursday on the road bond proposal.




S.B. 630, introduced in the Senate Transportation and Infrastructure Committee, directs the Commissioner of Highways to conduct a study on alternative revenue mechanisms for the development and maintenance of state roads and highways. S.B. 630 asks for the DOH’s recommendations by November 1, 2013 on the design for a pilot project or projects and suggests study of a Vehicle Mile Tax.


The bill did not advance but the committee passed Friday a resolution to study highway financing.




S.B. 390, the West Virginia Infrastructure Modernization and Development Special Revenue Fund, introduced by Gov. Earl Ray Tomblin, passed the Senate and has been referred to the House Finance Committee.  The Governor’s bill provides additional highway funds, as noted in his State of the State address.  “It is essential that we don’t forget the importance that modern infrastructure plays in West Virginia’s economic future,” he said.  “We must find innovative ways to invest in safe water and sewer systems, invest in new and improved schools, in roads and broadband access.”  S.B. 390 calls for 50 percent of surplus revenues to be placed in an infrastructure fund once the Rainy Day Fund reaches 15 percent of the General Revenue fund.  “We have to invest in ourselves if we expect others to invest in us,” the governor stated.




S.B.36, as originally drafted, required contractors to submit a list of their subcontractors within two hours of a bid opening to the contracting agency or risk being declared irregular. The bill now requires “the disclosure of subcontractors within one business day of the opening of bids for certain public construction contracts by the apparent low bidder when any subcontractor is providing over $25,000 of services on the project.”   The bill is a one year pilot project and only covers building projects awarded through the state Purchasing Division.  The bill is on passage stage Tuesday in the Senate.




S.B. 76, which requires new public facilities to be designed and constructed to comply with the International Energy Conservation Code and the ANSI / ASHREA / IESNA Standard 90.1 - 2007, passed the Senate and moves now to the House.  CAWV members provided input on what impact implementation of the 2009 version will have on construction costs, on contractors preparing bids, and on contractors performing the construction contract.  CAWV contractor and architect members stated it appears that contractors would not see much change in bidding a project, as architects and/or engineers would prepare plans and documents based on the 2009 code and contractors would price their bid accordingly. It also appears there would be no additional administrative or hidden costs in constructing the project. It was anticipated that the 2009 version would increase construction costs in the 5 percent range in the short term while manufacturers upgrade their production process.  The effective date for implementation of the code is July 1, 2012.




S.B. 468 will give the West Virginia Courthouse Facilities Improvement Authority the ability to issue bonds to raise funds for paying costs of approved modifications or construction of courthouse facilities. Currently, courthouse improvements are funded on a pay-as-you-go basis. S.B.468 allows bonds to be issued to pay for improvements.  The bill passed the Senate and is referred to House Finance. To learn more about the West Virginia Courthouse Facilities Improvement Authority and their construction program, click here to see the September/October 2011 issue of West Virginia Construction News.




S.B. 652, introduced in the Senate Transportation and Infrastructure Committee, would have extended the effective date from June 30, 2013 to June 30, 2016 for the Department of Transportation to enter into a public-private partnership for construction or operation of a transportation facility. The bill also allows the Department of Transportation Secretary to approve the agreements, rather than the Legislature. 


The bill did not pass but the committee has introduced a resolution to study public/private partnerships.




H.C.R. 72, introduced by Delegate William Hartman, D-Randolph, names the Big Tee Bridge at Crystal Springs in Elkins, the “Tim Belt Memorial Bridge.” Tim was the vice president of C.L. Belt Construction, Inc., Ivydale, (now ACCAD Corporation) before passing in December at the age of 43 following a courageous battle with cancer. The bridge was the last structure he bid and built.




H.B. 4592 would have required all public building contracts over $500,000 to have multiple prime contracts. The bill was modeled after a School Building Authority procedure. The CAWV explained that the SBA uses multiple prime contracts on large projects when it is prudent to do so, but it is not mandated.  The CAWV also noted the SBA has had much experience in managing multiple prime contracts but many state agencies, counties and cities don’t do many construction projects and don’t have much construction experience.  The bill did not progress out of the House Government Organization Committee.




S.B.37, the bill requiring public works construction employees complete the 10-hour OSHA safety program, did not make it out of the Senate Government Organization Committee. H.B. 2545 suffered a similar fate. The bills would have required every worker on public works projects to complete the OSHA 10-hour safety program prior to starting work, and carry a card showing successful completion of the program. The bills would also have required contractors to submit a copy of each employee’s card with their first certified payroll.  The bill allowed the Commissioner of Labor to assess a civil penalty of up to $3,000, and, an employer be assessed a civil penalty of $500 per employee for each day of noncompliance.