Weve asked for language to waive the credits clause as it applies to PPP loans for engineering firms and sent the Committee legislative text, and were doing more outreach to members of the Committee to build support for an amendment as the bill goes to the Senate floor
FAQ document that was developed by a group of affiliate ACEC CPA firms and State DOT representatives from Arizona, Georgia, Ohio, and Utah. The FAQ document isnt the complete fix we want, but until we have a legislative solution in place its a step forward to ease compliance for firms, a tool to assist you in engaging with your DOT on implementation (and were working on an additional summary document to help you discuss the key points in the FAQs), and a blueprint for achieving uniformity in how the various DOTs and transit agencies implement the policy. While FHWA has not yet officially endorsed or adopted the FAQs, the agency did indicate that its consistent with their own implementation guidance, and our DOT partners are promoting it to their colleagues around the country. ACEC is organizing a webinar for member firms on the FAQ document and we will notify you once thats scheduled.
- It fails to limit the application of the credit to the appropriate amount to be recovered. We dont believe FHWA and State DOTs will be able to establish guidelines and safeguards to avoid the application of the PPP-credited billing rate beyond what is appropriate. No single agency is managing this process, leaving firms essentially to fend for themselves.
- The decision by State DOTs to apply the credit to state-funded contracts. This goes beyond the scope of FHWAs guidance and puts firms at risk of not only losing their entire loan but potentially even amounts greater than their original loan.
For these reasons ACEC continues to pursue a legislative fix. As you may recall, in March the House Small Business Committee held a hearing where ACEC Chair Robin Greenleaf and ACEC member Carlos Penin of Florida testified, and we also received help from the Chairman of the House Transportation Infrastructure Committee, Rep. Peter DeFazio (D-OR) in outreach to DOT Secretary Pete Buttigieg. Weve done extensive meetings with House and Senate offices since then, in addition to the regulatory engagement described above. Our focus this week has been on the Senate with the surprise release over the weekend by the Senate Environment Public Works Committee of their 5-year $303 billion highway bill.
The House TI Committee should take up their version of the bill in e waiver language, which for your reference is below:
However, FHWAs implementation process and the whole idea of applying the credits clause to PPP loans — has fundamental flaws that cannot be fixed by regulation:
- Notwithstanding 48 C.F.R. -5 Credits, for the purposes of any cost-reimbursement contract initially awarded in accordance with the requirements of 23 U.S.C. 112 or 49 U.S.C. 5325, or any subcontract under such a contract, no cost reduction or cash refund shall be due to the Department of Transportation or to any State transportation department, transit agency or other recipient of assistance, on the basis of the forgiveness of a covered loan pursuant to the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136).
If we cant persuade lawmakers to waive the credits clause completely, we will seek legislative language to restrict the ability of DOTs to apply the credits clause to state funded contracts. That amendment language is below: