P3-friendly legislation taking root.

Recently NJ Senate President Sweeney opined the viability of Public-Private Partnerships.

Political and legislative support is also growing  in states that have already started implementing P3-friendly legislation as well as regulations to control the deliverability on partnership construction projects.

The recent Fixing America’s Surface Transportation (FAST) Act could be beneficial for the development of P3s, setting a positive trend in federal legislation.

A number of states have already taken steps to increase the possibilities for using public-private partnerships for transportation and construction projects.

In California, a recent transportation funding bill could set the stage for the Department of Transportation and regional transportation agencies to enter public-private partnerships for transportation projects beyond the current end date of Jan. 1, 2017. It also would allow the Santa Clara Valley Transportation Authority to use P3s for transportation projects. Bill AB-2742 was held in committee in the Assembly in May.

Louisiana Senate Bill 195 is about to allow the Department of Transportation (DOT) to enter into transportation projects P3s. In June, the governor signed the bill.

In Missouri, Senate Bill 861 would change the existing legislation to allow P3s for construction of public buildings, water facilities, waterways, water supply facilities or pipelines, wastewater or wastewater treatment facilities, and vehicle parking facilities. It does not include highway, interstate or bridge construction, but current legislation already allows for using P3s for pipelines, ferries, river ports, airports, railroads and light rail. The bill was signed by the governor in July.

New Hampshire Senate Bill 549 is another piece of legislation joining the trend. It is bound to allow the Department of Transportation to use public-private partnerships for intermodal infrastructure and transportation projects. This bill was also signed by the governor in June.

In the case of New Hampshire and other states, the new legislation also stipulates the creation of a Public-Private Partnership Infrastructure Oversight Commission. Its mission is to administer P3s, setting contract regulations and bidding criteria.

Thus far, it appears that most states are interested and willing to amend their legislation and to create a healthy environment for public-private partnerships. The trend of introducing regulatory changes is a natural step by state legislators to protect  citizens from unsuccessful P3s.

Advantages and Disadvantages of Public Private Partnerships

Advantages and Disadvantages of Public Private Partnerships

There are many advantages and disadvantages of public private partnerships that should be considered before entering such a co- venture. A public private partnership refers to a venture in which funding and operations are run by a government agency or authority and a private sector entity. Over the years, public private partnerships have become increasingly popular internationally.

Public private partnerships are common in different areas including, infrastructure, transportation and gas and oil exploration.

Today, governments at all levels are faced with budgetary constraints yet the public needs them to deliver certain services.  Simply put, partnerships between the public and private sectors are critical in ensuring that a country develops economically.

One of the major advantages of public partnership is efficient management. Efficiency is very important in the management of developmental projects. This is achieved when the public sector and private company work together on a project. Plans as well as strategies are formulated and implemented more efficiently.

Another advantage of public private partnership is the improvement of the quality of the end results of a project. Partnership between a public agency and a private company brings technological advancement. This provides the necessary solutions for the completion of a project. Many private companies have highly advanced technology. When the government partners with such companies technology that is needed to deliver quality results is achieved.

The speed with which projects are executed is also enhanced due to the combined efforts of the government agency and the private company. In addition, the cost of accomplishing developmental projects is reduced through public private partnership. Both the government and the private company provide the necessary capital for development projects.

Nevertheless, there are drawbacks or disadvantages of public private partnerships as well. The difference in the work culture is one of the disadvantages of this venture. Differences in the functioning of a government agency and the private sector company can cause problems in the execution of the project.

Changes in government policies, often caused by changes in the electoral make up,  can also affect the model of the public private partnership. Such changes can affect capital flow or direction to favor the government leading to losses for a private company. This is one of the reasons why some companies fear to get into public private partnerships.

Mismanagement of the project is another disadvantage of a public private partnership. Mismanagement of the involved project is always a threat to the programs that are undertaken by the private and public sector. This is caused by unanticipated or unplanned challenges that lead to loss of resources that can benefit the government.

NJ Senate President Steve Sweeney and Assembly Speaker Vincent Prieto reach terms on new Transportation Trust Fund Agreement.

Senate President Steve Sweeney and Assembly Speaker Vincent Prieto announced Friday that they had come to terms on a new agreement to replenish the state’s depleted Transportation Trust Fund and gradually phase out the estate tax.

The plan calls for a 23-cent-per-gallon gas tax increase, which Sweeney (D-West Deptford) and Prieto (D-Secaucus) say will generate $1.2 billion each year in new revenue and provide support for approximately $2 billion in annual infrastructure investments. The agreement also calls for several concessions in conjunction with the gas tax hike, such as a plan to gradually phase out New Jersey’s estate tax over the next three to four years.

Details:

  • The attention will now shift to Gov. Chris Christie, who late last month agreed on an 11th-hour plan with Prieto to tie a 23-cent-per-gallon gas tax increase with a decrease in the state’s sales tax from 7 percent to 6 percent. Sweeney didn’t support the agreement, citing budget concerns;
  • the new agreement, the plan to phase out the estate tax is similar to a bipartisan bill cosponsored months ago by state Sens:
  • the exclusion rate on the estate tax, which currently applies to inheritances valued at $675,000 or more, would be upped to $2 million beginning Jan. 1 and then to the federal level of $5.4 million by Jan. 1, 2018. By Jan. 1, 2020, the tax would be completely eliminated;
  • the plan would also increase the threshold for retirement income exemptions for married couples to $100,000 over four years. Exclusion rates would be increased to $50,000 for married couples filing separately and $75,000 for single taxpayers.
  • the plan also calls for offering a $3,000 personal exemption on state income taxes to qualified veterans, a $500 annual income tax deduction to in-state motorists making up to $100,000 per year and an increase in the Earned Income Tax Credit program to 40 percent.

 

How Effective Target Setting Can Impact a Grassroots Campaign

Duane Morris Government Strategies, LLC pic
Duane Morris Government Strategies, LLC
Image: dmgs.com

Attorney and businessman Martin Milita is graduate of the Temple University School of Law, and served as the chief executive officer of Fiore Group Companies, Inc. from 1996 to 2001. Currently, Martin Milita serves as senior director at Duane Morris Government Strategies, LLC, a company that provides a full range of government relations and public affairs services such as grassroots campaigning.

A grassroots campaign is usually undertaken by an organization seeking to impact pending legislation. Because the main objective of a grassroots campaign is to get legislators to take notice of the campaign’s message, some lobbyists may rely on large numbers and loud voices. However, a reliance on these factors may defeat the overall purpose of the campaign.

One of the things that lobbyists must observe in conducting grassroots campaign is effective target setting. Phone calls and mailing in large numbers may be effective if all supporters can actively participate in the campaign, but that is not always the case. Otherwise, lobbyists should target the quality of the legislator connections, not the quantity. In fact, even a small number of phone calls can create a huge impact of they are targeted to people who maintain close relationships with politicians. As such, lobbyists must build these relationships and eventually put them to good use when the need arises.

Overhaul of Small Business Subcontracting Rules

The Federal Acquisition Council published several new contracting rules Thursday, including one designed to increase government subcontracting to smaller businesses.

The new federal acquisition circular adds the terms of a 2013 Small Business Administration rule that made a number of changes to federal small business subcontracting requirements into the Federal Acquisition Regulation, the council said. The rule will go into effect at the beginning of November.

The circular also includes several other changes, such as clarifications meant to reduce confusion for contractors, according to the council, which includes the U.S. Department of Defense, U.S. General Services Administration and NASA.

Contractors will have to assign specific North American Industry Classification System codes — used for collecting statistical data — to subcontracts and to provide socioeconomic status of a subcontractor in notifications to unsuccessful subcontract offerers. In addition, contractors will be barred from blocking subcontractors from discussing payment or utilization issues with a contracting officer.

Contracting officers will also get expanded authority, including the discretion to require that small business subcontracting goals be defined in terms of total contract spending — not just based on required subcontract spending — and to request a new subcontracting plan if and when prime contractors grow beyond small business status.

Officers can also establish subcontracting goals at the task or delivery order level when making procurements under overarching indefinite-delivery, indefinite-quantity contracts, among other changes.The rule also changes the way credit is assigned to federal agencies for meeting their small business contracting goals, allowing agencies that fund a contract — not just those responsible for awarding the deal — to receive credit.

The council had issued a proposed version of the rule in June 2015, following on from the SBA’s final rule, which had been put in place in July 2013, and received several dozen comments on the proposal.

Responding to those comments, the council made several tweaks in the final measure, including clarifying that although contracting officers can establish subcontracting goals for each task order, they cannot ask for new subcontracting plans.

In another tweak, the council also said that prime contractors won’t be held liable for misrepresentations made by a subcontractor regarding size or socioeconomic status, if the contractors otherwise acted in good faith.

The other changes in the circular include revisions to forms related to contracts involving bonds and other financial protections aimed at clarifying liability limitations and reducing confusion for contractors, and updates to outdated references in the regulation to federal guidance on administrative and audit requirements.

Small Business Administration Mentor-Protege Program Expansion

There are several pending regulatory changes previously designated by the SBA for release this year, including a rule that will clarify the agency’s suspension, revocation and debarment procedures for contracting agents, and another that will ease eligibility requirements for the Historically Underutilized Business Zones Program, which covers businesses located in certain “historically underutilized business” areas.

But the upcoming change that has prompted the most interest for many contractors  is a pending final rule expanding the SBA’s Mentor-Protege Program, first floated in a February 2015 proposed rule.

The program allows small businesses to partner in a joint venture with a larger mentor business that can provide advice and assistance, for instance to help win or implement larger or more complex deals that the small businesses lack the resources to win on their own, while still maintaining eligibility for federal small-business set-aside contracts.

Currently, the program is limited to businesses that participate in the SBA’s 8(a) Business Development Program, which provides assistance for small businesses majority-owned and -operated by “socially and economically disadvantaged” individuals, but is expected to be extended to all businesses otherwise eligible for set-aside contracts under SBA rules.

While the exact shape of the program expansion has yet to be announced, SBA officials have most recently hinted that the rule should be finalized at some point in July, and have indicated that the program’s terms should be effectively identical to the current 8(a) Mentor-Protege Program.

If those prescriptions hold, then the program’s expansion will be overwhelmingly welcomed throughout the small-business contractor community.

Knights of Columbus Breaks Charitable Records 17th Year in a Row

Knights of Columbus pic
Knights of Columbus
Image: kofc.org

Martin Milita has served as a senior director at Duane Morris Government Strategies in Trenton, New Jersey, since 2012. A committed philanthropist, Martin Milita supports the charitable faith-based organization Knights of Columbus.

A fraternal benefit society dedicated to helping people who are poor, ill, or disabled, Knights of Columbus maintains more than 1.9 million members worldwide. In a recent press release, the society announced its success in attaining record-breaking charitable efforts for the 17th consecutive year. As with previous years, 2015 witnessed steady gains in both donations and service hours. Last year’s totals reached $175,079,192 in contributions and 73.4 million service hours—up $1.5 million and more than a million hours in 2014. As expounded in the Knights’ Annual Survey of Fraternal Activity, 2015’s most magnanimous jurisdictions included Texas, California, Illinois, Michigan, and Ontario.

For the 2016-2017 fraternal year, Knights hopes to continue to expand its number of financial gifts and volunteer hours.

In Congress: Post Independence Day Recess

After adjourning abruptly on June 23 due to the Democratic protest on the House floor over gun control, the House returns to legislative business on Tuesday, with votes expected on 16 bills under suspension of the rules. Included in this suspension package is H.R. 5210, the Patient Access to Durable Medical Equipment Act, sponsored by Rep. Tom Price, R-Ga., bipartisan legislation to preserve patient access to durable medical equipment (DME) after severe cuts to Medicare DME payment rates were scheduled to take effect on July 1, 2016. If allowed to take effect, these cuts are expected to have a negative effect on patients’ access to DME, particularly in rural areas. Other measures to be considered under suspension of the rules include seven bills reported by the Natural Resources Committee, three bills reported out of the Financial Services Committee, and three reported out of the Foreign Affairs Committee.

The House:

On Wednesday, the House is expected to turn to consideration of H.R. 2646, the Helping Families in Mental Health Crisis Act. This legislation, proposed by Rep. Tim Murphy, R-Pa., and reported by the Energy and Commerce Committee, would reform the nation’s mental health system by focusing programs and resources on psychiatric care for patients and families most in need of services. The bill when introduced sparked partisan disagreement, but the sponsor and committee leaders worked to bridge those disagreements, and the bill as revised was reported unanimously by the committee last month, demonstrating its broad and bipartisan support. The potential that the bill could provoke further debate over gun rights and gun control during floor consideration (Energy and Commerce Committee Democrats attempted unsuccessfully to attach gun control amendments to the legislation during the committee markup, but H.R. 2646) is likely what led House leaders to bring the bill up under suspension of the rules, which precludes amendments during floor debate. The Senate Health, Education, Labor and Pensions Committee has been working on its own version of mental health legislation. Press reports indicate that key senators involved in the issue are seeking to attach the Senate version of the bill to the conference report on the opioid-abuse legislation, the Comprehensive Addiction and Recovery Act, passed in differing versions by both chambers and scheduled for consideration by a conference committee on Wednesday of this week. Either way, the broad recognition that the nation’s mental health system is in deep crisis could produce a legislative success before Congress adjourns this year, although funding issues may prompt Democrats to oppose a final bill if it does not include increased resources.

Also on Wednesday, the House is expected to take up H.R. 5611, the Homeland Security and Safety Act, sponsored by House Majority Leader Kevin McCarthy. The so-called “anti-terrorism” package would establish within the Department of Homeland Security a new “Office for Partnerships to Prevent Terrorism” to assist with the prevention of violent extremism and radicalization associated with terrorists and terror networks. The new legislation also contains a provision related to gun control. In the wake of the Democrats’ demands and the apparent shift in public opinion on the issue following the San Bernardino and Orlando shootings, the bill includes a provision that would allow the attorney general to delay for three days the sale of a gun to either an individual on the terrorist watch list or an individual who has been investigated for terrorism during the past five years, and prohibit the sale of a firearm if there is sufficient evidence that the purchaser poses a credible threat to homeland security. The language is reportedly based on a proposal authored by Sen. John Cornyn, R-Texas, in the Senate, which would also give the Justice Department 72 hours to delay the sale of a gun to any suspected terrorist on the watch list. The proposal failed to achieve the necessary support for passage in the Senate due to Democratic opposition, and House Democrats have already denounced its inclusion in the House anti-terrorism package as not doing enough to keep guns out of the hands of terrorists. Despite the likely Democratic opposition to the bill, the inclusion of the provision, which is not likely to become law, is a marked step forward for gun control advocates and may portend limited success for them in the next Congress. Consideration of H.R. 5611 will be subject to a rule.

It remains to be seen whether House Democrats will again employ protest tactics on the House floor over gun control as they did during the week of June 23, or how they will attempt to amend the Homeland Security and Safety Act during floor consideration this week. House leadership will be working to maintain order on the House floor in order to continue functioning effectively and proceed on legislative business prior to the summer recess.

Additional items that may be considered in the House this week include H.R. 1270, the Restoring Access to Medication Act, reported out of the Ways and Means Committee. This legislation would allow for disbursements from health savings accounts, medical savings accounts, and health flexible spending arrangements for over-the-counter drugs. Current rules under the Affordable Care Act only allow these disbursements for the purchase of prescription drugs and insulin. Also pending a floor vote this week is H.R. 4361, the Federal Information Systems Safeguards Act of 2016, legislation to restrict federal employee access to personal accounts on platforms such as Facebook and Gmail at work in order to provide greater security for government information technology and systems. The legislation clarifies that federal agencies have the sole and exclusive authority to take appropriate and timely actions to secure their information technology and information systems. Among its provisions is one clearly barring access to pornographic or explicit materials from a government IT system. Consideration of both measures will be subject to a rule.

Finally, the House may also consider H.R. 5845, the FY 2017 Financial Services and General Government Appropriations Act, after postponing its consideration following the Democratic sit-in on the House floor in June. The $21.7 billion funding bill provides appropriations for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission, and other agencies. As discussed in a previous column, the Financial Services and General Government spending measure is considered one of the more controversial of the 12 annual appropriations bills because of policy riders that are opposed by most Democrats and the administration. Consideration of the Financial Services and General Government Appropriations Act for FY 2017 will be subject to the same structured rule process that governed consideration of the defense spending bill last month in order to avoid votes on controversial amendments.

The Senate:

The Senate resumes legislative business on Wednesday, when a vote is expected on a district court nominee. Senate Majority Leader Mitch McConnell, R-Ky., filed cloture on proceeding to four bills at the end of last week. Votes are expected on these cloture motions this week. Among these four measures are two pieces of legislation related to so-called “sanctuary cities,” which are those communities that have policies in place declining to assist or actively defying federal immigration laws and orders. These communities have been a focus of Republicans for many years and a hot-button issue on the presidential campaign trail, particularly since the fatal shooting of a San Francisco woman over the Fourth of July holiday in 2015 by a person in the country illegally after having been deported from the U.S. five times. The first cloture vote will be on a motion to proceed to S. 3100, the Stop Dangerous Sanctuary Cities Act, sponsored by Sen. Pat Toomey, R-Pa. This bill would limit federal funding to cities that do not comply with federal immigration law. The second vote scheduled in the Senate is cloture on the motion to proceed to S. 2193, a measure sponsored by Sen. Ted Cruz, R-Texas. This bill would increase mandatory minimum prison sentences for undocumented immigrants who repeatedly enter the United States illegally. The Senate voted on similar proposals last October when they were coupled together as a single piece of legislation, but the bill failed to pass. Both measures are subject to a 60-vote threshold for consideration on Wednesday, and neither is expected to garner the necessary support due to Democratic opposition.

If these first two motions on sanctuary cities are defeated, Leader McConnell has also lined up a cloture vote on a bipartisan bill sponsored by Senate Agriculture Committee Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich., that would establish a national guideline for the labeling of foods with genetically modified organisms. While the proposal under consideration has bipartisan support and is the product of careful and lengthy negotiations, some strong opposition to the bill remains, including that of Sen. Bernie Sanders, I-Vt., whose home state passed its own strict GMO labeling mandate in 2014 that went into effect on July 1, 2016. Several industry groups, which argue there is no scientific evidence that GMOs are harmful and prefer a single federal labeling standard over a patchwork of state laws, have sued to block the Vermont law and the litigation is currently pending. Should the Roberts-Stabenow measure pass, it would preempt and nullify the Vermont law and create a federal standard for the packaging of GMO foods. The cloture motion must achieve the 60-vote threshold in order to limit debate on the bill. The House has already passed a bill on GMO-labeling, but whether it would accept the Senate bill or insist on its stronger bill is not yet clear. Ultimately, the issue is of such importance to the food industry that if the Senate bill passes, as is likely, the House can be expected to accept it as well, perhaps even before the start of the summer recess.

The final item in the queue is a vote on cloture on the motion to proceed to the FY 2017 Department of Defense appropriations bill, also subject to a 60-vote threshold, which is expected to pass. The funding measure, advanced unanimously by the Senate Appropriations Committee, provides over $515 billion for the Pentagon base budget and $58.6 billion for Overseas Contingency Operations (OCO) for the upcoming fiscal year. The legislation does not shift OCO funding for base budget increases, a procedure the House Appropriations Committee pursued in its bill for FY 2017, which makes the bill more satisfactory for Senate Democrats to provide their support. The Senate is likely to continue its consideration of the Defense Appropriations bill into next week.

Leader McConnell has indicated there will also be another opportunity for Senators to take up the House-passed FY 2017 Military Construction and Veterans Affairs appropriations conference report, which also serves as the vehicle to provide funding to combat the Zika virus. The Senate attempted a vote prior to the Fourth of July recess, but Senate Democrats blocked its consideration over the Zika funding restrictions and offsets, and called for a new negotiation on the legislation. Senate leadership has rejected the demands for a renegotiated proposal, indicating that the current House-passed proposal is the only means of moving forward before the upcoming recess. Leader McConnell has not yet scheduled the vote on the conference report.

Even with the shortened week due to the Independence Day holiday, there is an active hearing schedule on both sides of Capitol complex.

As mentioned above, the conference committee charged with negotiating opioid abuse legislation is scheduled to meet on Wednesday. One of the major remaining hang-ups to the bill involves funding for programs that are authorized in the legislation. Democrats argue that the authorization bill is ineffective without providing the necessary appropriations and that emergency funding should be allocated; Republicans oppose emergency funding that would likely not be offset and argue that funds should be provided through the annual appropriations process.

The House Appropriations Committee is getting closer to completing its work on the 12 annual appropriations bills for FY 2017. The State and Foreign Operations Subcommittee is scheduled to mark up its bill on Wednesday morning while the Labor, Health and Human Services, and Education Subcommittee meets on Thursday morning to mark up its bill. The full committee is likely to consider both bills next week.

Two House hearings scheduled this week will be focused on the Affordable Care Act cost-sharing reduction program. The House Ways and Means Subcommittee on Oversight meets on Thursday morning to discuss the program, while the full Energy and Commerce Committee will meet on Friday morning.

The Senate Homeland Security and Government Affairs Permanent Subcommittee on Investigations will be meeting on Wednesday afternoon to discuss the threat posed by online recruitment by ISIS and other terror networks. Representatives from the FBI, Department of Homeland Security and Department of State are among the witnesses that will provide testimony before the subcommittee.

Also on Wednesday afternoon, the House Judiciary Subcommittee on Regulatory Reform will hold a hearing on President Obama’s regulatory impact on the U.S. economy.

The Joint Committee on Taxation will hear from Treasury Department representatives on Wednesday regarding the administration’s proposed regulations under Internal Revenue Code section 385 to combat inversion transactions, those in which U.S. businesses merge with foreign firms and move their headquarters overseas to lower their tax rate. The Treasury Department issued the proposal in April. The proposal has drawn criticism from many domestic and multinational businesses, and members of both parties have joined in the criticism that the proposal sweeps too broadly and will capture many innocent transactions, thereby depressing domestic economic activity and job creation. Treasury Assistant Secretary for Tax Policy Mark Mazur and Deputy Assistant Secretary for International Tax Affairs Robert Stack are scheduled to appear before the joint committee.

A joint subcommittee hearing by the Committee on Foreign Affairs’ Subcommittee on Asia and the Pacific and the Committee on Armed Services’ Subcommittee on Seapower and Projection Forces is scheduled for Tuesday afternoon regarding maritime disputes in the South China Sea. Representatives from the Departments of Defense and State will provide testimony on the escalating territorial disputes between China and its neighbors in Southeast Asia.