Construction officials' hopes have risen that Congress will repeal what they view as a financially harmful mandate: a requirement that agencies withhold from contractors 3% of each contract's value. The provision, enacted in 2006, is to take effect in January 2013, and industry executives say it would squeeze or even wipe out their profit margins on government projects.
The 3% mandate is “not good for jobs, [and] it's certainly not good for my company,” says Terry Neimeyer, CEO of KCI Technologies Inc., Sparks, Md. Neimeyer, who also is the American Council of Engineering Cos. 2011-2012 chairman, said at a Sept. 14 press conference that the 3% withholding would amount to a $2 million to $3 million “interest-free loan” to the government and prevent KCI from hiring 100 new engineers.