The Senate on Nov. 10 overwhelmingly approved legislation to repeal a federal mandate that government agencies withhold part of their payments to contractors.  Construction industry groups and other business organizations, which had been lobbying heavily for the repeal, applauded the 95-0 vote.

The withholding requirement, scheduled to go into effect in 2013 , would have required federal, state and certain local agencies to withhold 3% of the dollars they owe to their contractors.

The House had approved a  version of the repeal bill on Oct. 27  with bipartisan support.

But the Senate added a non-controversial amendment to the bill to provide tax credits to companies that hire veterans, so the Senate's amended version now must go back to the House for a vote.

The House is expected to pass the Senate-approved measure, perhaps as early as the week of Nov. 14, and President Obama already has indicated that he will sign it.

The mandate was enacted in 2006 and originally was to take effect in 2011, but was delayed twice. Construction and engineering firms say that if the requirement had kicked in, it threatened to reduce or eliminate their profit margins.

“We’ve been working on this since 2006,” says David Raymond, American Council of Engineering Companies president and CEO. He added that the withholding requirement "would have caused cash-flow nightmares for engineering firms and for all other honest taxpaying businesses that serve public-sector clients."

Stephen Sandherr, Associated General Contractors of America CEO, said, “Without a doubt, [the Senate] vote helps to correct a fundamentally flawed policy that would have severely hampered the nation’s economic recovery effort."

Sandherr added, “With construction activity down by $400 billion and the industry’s unemployment rate at 13.7%, the last thing construction employers need is to be forced into giving interest-free loans to the federal government.”