The U.S. Internal Revenue Service has approved a one-year delay—to Jan. 1, 2013—of a requirement that government agencies must withhold 3% of their payments to contractors. Design and construction groups oppose the mandate. The extension was published on May 9 in an IRS final rule and will apply to federal, state and local agencies' payments. The mandate, part of a 2006 statute, originally was to take effect at the start of 2011. The 2009 economic stimulus act extended the deadline until Jan. 1, 2012. The mandate applies to agencies whose total annual spending on goods and services is $100 million
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.