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The trouble for construction loans is far from over.  According to USA Today, the percentage of non-current construction loans was at an all-time high of 17 percent last March.  The Congressional Oversight Panel claims that these loans have the highest likelihood of default and are having the most issues with vacancies and cash-flow.Described as the "riskiest commercial real estate loan product" by Deutsche Bank, construction loans became extremely popular between the first quarters of 2003 and 2008, particularly with small and mid-size banks.  These potentially lucrative loans became extremely easy to get and many in-experienced developers were easily approved.  More than ten percent of assets of banks not ranking in the top 1,000 were construction loans, compared to only two percent of assets of banks in the top ten.Experts predict that construction loans will rebound in time.  Federal regulators encourage banks to work with borrowers and wait out the recession with the hope that eventually an improvement in the overall economy will allow existing borrowers or other parties to pump cash into the troubled loans.For the entire article from USA Today, please click here.

Summer construction spending was generally down, reported Reed Construction Data.  Spending decreases in both June and July should be followed by a slight pickup in August based on an increase of 19,000 construction jobs.  Specifically, nonresidential spending also dropped in June and July and a small decline is predicted for the rest of the year.  Heavy construction increased in June and July, but is also expected to weaken during the remainder of 2010.Significant declines in overall spending are not expected, but the construction industry is likely to struggle until 2011.  A spending drop of over ten percent is predicted for 2010, while Standard & Poor's Ratings estimates that spending will decline 14 percent.  Construction is expected to slightly recover and stabilize in 2011, although no major growth is expected until 2012, when the employment market improves.  Since the construction market has had more delay than usual, the industry should expand faster than the rest of the general economy once the recovery is in progress.For more information and a construction spending forecast chart, please click here.For Standard & Poor's estimate from The Wall Street Journal, please click here.Detailed information on nonresidential building construction spending can be found here.  A breakdown of heavy construction spending can be found here.

The Federal Acquisition Regulation Councils have released the final version of the rule governing the Buy American provisions for direct-federal procurements under the Recovery Act. While this rule does not govern the federally-assisted work done through grants and loans (like those administered by the DOT and the SRFs), it does provide a preview of what to expect from those forthcoming regulations.�鶹��ý, in its comments on the interim rule, asked that the federal rule and the federally-assisted rules have the closest possible alignment to minimize the burden on contractors, and the government said "the Councils agree and note that the final rule was developed in close coordination with OMB grant officials." The rule does however concede that the two cannot be completely in sync because the Buy American Act of 1933 (which forms the basis of the rule) does not apply to grants, financial assistance, and loans. Furthermore, trade agreements do not apply uniformly.One clarification that �鶹��ý expects to be carried into the OMB guidance is the proclamation that in cases where there are mixed Recovery Act and non-Recovery Act funds, and the Recovery funds are not segregated by line item, the law requires the mixed-fund contracts to be treated as if they were entirely funded by the Recovery Act. �鶹��ý will continue to watch for the OMB guidance for federally-assisted work and will analyze and disseminate it when it arrives.Click here to read the final rule for federal contractorsFor more information on the interim rule for federally-assisted work or other �鶹��ý analysis on Buy American, visit http://www.agc.org/buyamerican.For more information, contact Scott Berry at (703) 837-5321 or berrys@agc.org.

According to Reed Construction Data's August jobs report, contractors added 19,000 jobs in July.  The job report for the general economy was described as "weak but still positive," as various sectors traded off hiring and cutting jobs.  Over the last five months, the construction job market has lost 1,000 jobs overall which according to Reed's Jim Haughey, indicates that construction's recession may be subsiding.  However, recovery is still to come.For more from Reed Construction Data, please click here.

�鶹��ý of America has transformed the Project Delivery Committee into the Project Delivery Forum.  This new forum will provide opportunities for �鶹��ý members and chapter staff to be informed of and participate in the association's initiatives related to project delivery issues and best practices.The inaugural Project Delivery Forum Steering Committee will be chaired by Doug Maibach of Barton Malow.  The Steering Committee also includes 11 other members representing a diverse group of �鶹��ý's membership, including �鶹��ý chapters.Unlike the old committee structure, �鶹��ý members do not have to be appointed to the Forum.  They simply request to be added.  In the near future members will be able to go sign-up via their online �鶹��ý profile, but in the meantime please email Mike Stark at starkm@agc.org to be added to the Forum.  Letters have been sent to the members of the Project Delivery Committee informing them that they have been automatically enrolled in the Forum.  All �鶹��ý members and chapter staff are eligible and encouraged to participate at all levels of the Forum.If you have any questions about the Forum, please contact Mike Stark, Senior Director, Building Division at starkm@agc.org or (703) 837-5365.

�鶹��ý has received reports that its members have received a letter from the U.S. EPA directing them to complete a mandatory survey on construction stormwater management practices within 60 days - or face significant fines and penalties of up to $37,500 per day per violation.While EPA claims to have not directed this survey to general contractors, several have received it. If you have received a survey, it is imperative that it be completed and returned before the 60-day deadline to avoid steep penalties. However, most contractors need not continue beyond A5, or the first page of the survey. Unless a contractor has an ownership interest in the properties it builds on, it is unnecessary to complete the detailed financial and technical portions of the survey. For details, visit the  and scroll down to owner/developer questionnaires.EPA has initiated a national rulemaking to reduce stormwater discharges from new development and redevelopment and to strengthen its stormwater program (a.k.a., "post-construction" stormwater rule).  To collect information from entities believed to be owners/developers of residential, non-residential, industrial and commercial sites, EPA mailed out letters (click here for an example) last week to approximately 3,000 companies directing them to complete a lengthy, mandatory questionnaire within 60 days.For more information on �鶹��ý's efforts and the new "post-construction" stormwater runoff rule that EPA is working on, click here.For more information, contact Leah Pilconis at (703) 837-5332 or pilconisl@agc.org.

The U.S. Environmental Protection Agency (EPA) released new "guidance" materials on the practices a contractor "should" follow when conducting the renovation, repair and/or abatement of buildings that have polychlorinated biphenyl (PCB)-containing caulk. Contractors responsible for such activities also must clearly understand the regulatory requirements, and are encouraged to consult the EPA or environmental professionals experienced with PCB cleanup activities.EPA has learned that caulk containing PCBs was used in many buildings, including schools, during building construction, renovation or repair from the 1950s through the late 1970s. PCBs are regulated under the Toxic Substances Control Act (TSCA), which gives EPA the authority to develop, implement and enforce rules concerning the use, manufacture, cleanup and disposal of PCBs.  Note that EPA does not address worker health and safety or workplace exposure; such matters are regulated by the Occupational Safety and Health Administration (OSHA).The PCB regulations (40 CFR Part 302 and Part 761 can be found at http://ecfr.gpoaccess.gov under "Title 40 - Protection of the Environment") define the "generator" as being responsible managing PCB wastes. The "generator" is considered the party that owns the material. For most construction projects, multiple parties will be involved; all may be liable if the PCB-related requirements are not followed. Currently, EPA is conducting research on how the public is exposed to PCBs in caulk and on the best approaches for reducing exposure and potential risks associated with PCBs in caulk.  Earlier this year, EPA published an Advanced Notice of Proposed Rulemaking (ANPRM) that proposes measures to more strictly regulate PCBs and accelerate the phase-out of PCB equipment and other uses that are currently authorized.For more information on PCBs, including cleanup requirements, sources of PCBs, and EPA resources and future rule-making, please click here or contact Leah Pilconis at pilconisl@agc.org.

DOT has published a final rule effective October 1, 2010. Below is a summary of the rule, and you can find the complete rule here.  DATIA will provide the fully revised 49 CFR Part 40 in the September Red Book Update to all Red Book update subscribers. If you have not signed up for the update service, please do so here. The Department is required by the Omnibus Transportation Employees Testing Act (Omnibus Act) to follow the HHS requirements for the testing procedures/protocols and drugs for which we test. Primary laboratory requirements in this final rule include:Testing for MDMA (aka. Ecstasy);Lowering cutoff levels for cocaine and amphetamines;Conducting mandatory initial testing for heroin; The Department brought several testing definitions in-line with those of HHS. Each Medical Review Officer (MRO) will need to be re-qualified - including passing an examination given by an MRO training organization - every five years. The Final Rule eliminated the requirement for each MRO to take 12 hours of continuing education every three years.An MRO will not need to be trained by an HHS-approved MRO training organization as long as the MRO meets DOT's qualification and requalification training requirements. MRO record-keeping requirements did not change from the five years for non-negatives and one year for negatives. The Final Rule does not allow the use of HHS-Certified Instrumented Initial Testing Facilities (IITFs) to conduct initial drug testing because the Omnibus Act requires laboratories to be able to perform both initial and confirmation testing but IITFs cannot conduct confirmation testing.Please note IITFs (Instrumental Initial Test Facilities) will NOT be incorporated into 49 CFR Part 40 as the Ominbus Act prohibits the DOT from from following HHS' new rule regarding IITFs. The Ominbus Act requires, "that all laboratories involved in the controlled substances testing of any individual under this section shall have the capability and facility, at such laboratory, of performing screening and confirmation tests. Since IITFs do not have any confirmation testing capabilities, the Department must not use them in part 40."Please contact Kevin Cannon for any questions and comments at cannonk@agc.org.

The Occupational Safety and Health Review Commission has upheld OSHA's multi-employer citation policy in a reversal of a decision the Commission made during the previous administration. Under the policy, OSHA inspectors may cite employers on multi-employer worksites for violations that do not expose their own workers to occupational hazards. For example, a general contractor who controls the worksite may be responsible for violations created by a subcontractor whose workers are exposed to safety or health hazards. In reaching its Aug. 19 decision,* the Commission agreed with an earlier decision by the Eighth Circuit Court of Appeals, which had rejected the Commission's previous contrary view that employers are only legally responsible for protecting the safety and health of their own workers. The case under consideration involved Summit Contractors Inc., a general contractor constructing an apartment complex in Lebanon, Pa., in 2005. An OSHA compliance officer cited Summit for a safety violation after observing workers of a subcontractor using electrical equipment that lacked ground fault circuit interrupters and which had been brought onto the worksite by Summit.For questions and comments, please contact Kevin Cannon at cannonk@agc.org.

The U.S. Environmental Protection Agency (EPA) has abruptly decided to abandon the first nationwide numeric limit on the amount of sediment that can cloud the water running off of construction sites.  Citing evidence that both �鶹��ý and the National Association of Home Builders (NAHB) included in their comments on EPA's original proposal - and in direct in response to a lawsuit that NAHB subsequently filed - EPA has admitted that its new "Effluent Limitations Guidelines"  for the "Construction and Development Industry" (C&D ELG) are fundamentally flawed.  Click here to read the August 13 motion that EPA filed with a federal court of appeals asking it to declare that its numeric turbidity limit is void and to send that limit back to the agency for reconsideration.  EPA also has asked the court to put the pending lawsuit on hold until it completes the rule review process.Courts of appeals generally prefer to allow agencies to correct their own mistakes rather than wasting the courts' and the parties' resources reviewing an admittedly incorrect rulemaking record.  In this instance, EPA has concluded that it improperly interpreted the data underlying the numeric limit it adopted.  All parties to the pending lawsuit agree that EPA's request to vacate and remand the rule is appropriate.  However, the other requirements of the ELG remain in effect: The rule also specifies the exact types of erosion and sediment controls that contractors must use, at a bare minimum, to control stormwater runoff on all construction sites that disturb one or more acres of land.Over the next 18 months, EPA plans to re-examine its numeric turbidity limit through a "narrowly-tailored notice-and-comment rulemaking and, if necessary, revise [it]."  EPA will gather and review additional materials, including the applicability of the numeric limit to cold weather sites and to small sites that are part of a larger project.  EPA also may take further action specific to linear gas and electric utility projects.  EPA is expected to issue interim stormwater management guidance for construction site operators as the agency works to refine the rule.Throughout the rulemaking process, �鶹��ý worked with and supported NAHB, contributing to the research that ultimately formed the foundation for the lawsuit.  �鶹��ý and NAHB also combined forces to submit detailed comments demonstrating that EPA had significantly underestimated the cost and impact of a nationwide numeric turbidity limit.  Independently, �鶹��ý also participated in the small business review of the originally proposed limit, and �鶹��ý continues to coordinate with the Small Business Administration - which has also called on EPA to reconsider its numeric turbidity limit.For more information, please visit �鶹��ý's Environmental Observer here.