Serving as the chief lobbyist for the Sheet Metal and Air Conditioning Contractors' National Association (SMACNA), Stanley E. Kolbe Jr. didn’t “rest on his laurels” after the passage of the American Rescue Plan, Bipartisan Infrastructure Law, CHIPS and Science Act, and the Inflation Reduction Act.
The landmark pieces of legislation, passed in short order in the first two years of the Biden Administration, received more than a thousand pages of public comments from SMACNA’s team. Kolbe and allied partners actively played a role encouraging regulatory revisions and suggestions that ultimately landed in the final draft, in addition to hundreds of thousands more from other government and political affairs teams across the country.
What may now seem like old pieces of legislation are still generating headlines for several reasons, not least of which is that the 118th Congress is shaping up to hit a new historic low in passing legislation. While the legislative landmark’s sprawling impacts provoke occasional legal challenges, addressing the logistical and administrative challenges of properly implementing these laws are what fill Kolbe’s schedule.
“We’re entering a new Great Works era with these laws, and our members are looking around and asking, ‘where will we find and how can we train all the skilled workers we need?’” Kolbe said of a rise of not just federal works, but federally leveraged private investments like data centers with the CHIPS Act. These are jobs that lend themselves to the expertise of registered apprenticeship programs and their alum. These historic acts changed the dynamic.
“Passing these bills is only half the battle. We’ve got to see them through implementation, we’ve got to recruit and then educate more skilled workers in registered apprenticeship programs,” he said, noting there’s more than enough work to go around, more than in decades, due to infrastructure and IRA leveraged private work – retrofits, renovations and new projects.
For example, while Taiwan Semiconductor’s new chip plant in Chandler, AZ, was recently delayed, the reason is because the 10,000 union tradespeople they need to build the factory are busy on another chip plant, the second Intel mega project, also in Chandler.
“Companies who have an experienced and highly skilled team, they are winning contract after contract,” Kolbe said. “That’s why there’s so many mergers and acquisitions in our industry. If already large firms are going to build a new chip or EV plant, it’s not really possible to train up 400 or 4000 more people in a hurry or compromise on training quality. Firms often have to acquire a competitor or partner with other companies.”
A Return to Federalism
Given the current climate, Kolbe and SMACNA more generally have taken up a strategy focused on the local as well as regional administrative levers of government, as well as the states themselves, as opposed to the Congressional-focused agenda that dominated 2020 to 2022.
Kolbe said funds the federal government gave to states in the American Rescue Plan and Inflation Reduction Act for K-12 ventilation retrofits are sitting unused across too many states awaiting distribution to school construction authorities. While some states have shared the funds locally for long overdue school projects, many school districts across the country are still facing desperate need – with schools routinely failing indoor air quality standards and ductwork fire damper inspections.
That’s why it’s a priority of SMACNA and its ally, the Sheet Metal, Air, Rail, and Transportation Workers (SMART), to help upgrade and prepare state and local facilities and infrastructure for ventilation verification. This will open the retrofit funding door further for districts to measure or audit the severity of their building system problems and apply for funds from the state to fix them once and for all. SMART Local Union 85 in Georgia and Alabama for example is now building a Testing and Balancing Lab, allowing their workforce to be trained in the high demand skillset locally.
Prevailing Wages and the Inflation Reduction Act (IRA)
Developers working on public projects can benefit from generous tax breaks found throughout many sections of the Inflation Reduction Act (IRA) that benefit employers investing in registered apprenticeship programs or hiring firms with registered apprentices on their workforce rolls, a policy Kolbe said he and colleagues at SMART, as well as other responsible employer organizations, advocated for strongly.
But the Capitol Hill sheet metal lobby saw historic, long advocated policy wins as well, with developers of privately funded commercial retrofits also requiring high quality construction labor standards. And more importantly, even mega project manufacturing plants buoyed by the CHIPS and Science Act now require contractors to pay a prevailing wage and have a registered apprenticeship program or hire firms with registered apprentices in their ranks.
“If you are bidding Davis-Bacon public works, you need to have registered apprentices, as they can be paid a lower than journeyperson’s rate because you're investing significant resources to train them. But if a contractor without registered apprentices wants to come in and bid public works without a registered apprenticeship program, contractors have to pay everybody on the job the prevailing rate for a journeyperson,” Kolbe said, adding “it’s really not a punishment as much as it's an incentive to create a registered apprenticeship program and improve the workforce, which is experiencing a skilled labor shortage that will only get worse.”
Kolbe said prevailing wage and training standards and its associated Davis-Bacon Act for federal contractors haven’t historically received significant support from more conservative leaning members from mostly rural districts. But the lack of supply of skilled workers to meet the growing demand for CHIPS and Science projects, EV plant construction and ever more complex defense industry work compelled bipartisan support for the CHIPS Act amendments and a more extensive change in law for the Infrastructure and IRA laws.
The historic win in the CHIPS Act added private wage and apprenticeship standards, but it was a close win. After a long debate, it tied in committee and moved to the Senate floor where it passed. Kolbe praised labor and management allies working late into the night and early morning hours to educate Senators about the skilled labor crisis to secure votes for the historic amendment boosting private sector prevailing wages and registered apprenticeship on CHIPS work.
The CHIPS and Science Act hit the high-water mark of support in the Senate, with the minority leader voting in its favor as well, passing with 58 yeas, including members Kolbe said “had never supported us on the prevailing wage and Davis-Bacon nexus before. I was shocked as the gavel went down when counting and recounting the roll of our new fans of prevailing wages.”
Davis Bacon Act Reforms Led by DOL’s Wage and Hour Division
On the administrative side, SMACNA and their Capitol Hill office have been vocal and persistent supporters for Jessica Looman, the new Administrator of the Wage and Hour Division of the U.S. Department of Labor. She served as the appointed but unconfirmed head of the division and principal deputy, where she was instrumental in reforming the Davis-Bacon Act, restoring the 30% rule that had been paused for 40 years, promoting the use of project labor agreements and enhancing registered apprenticeship standards.
Kolbe noted SMACNA’s support for her was based upon her decades of extraordinary experience and deep knowledge of labor law, prevailing wages and how they impact construction quality on highly complex public projects in Minnesota and across the nation. Based on a reasoned and balanced policy approach, he said she has proposed more quality enforcement standards for apprenticeship programs on top of Davis-Bacon Act reforms. Kolbe said SMACNA has also advocated for administrative reforms in other agencies like the IRS, allowing for tax deductions and credits to be monetized and directly paid to building owners/developers instead of just writing the incentives off over years of investment and income – a cash flow boon for all construction firms on public and private work.
“This is a monumental shift and potentially a game-changer for SMACNA members, for those already doing federal work,” Kolbe said. And for those who are not, he concluded it’s an opportunity to jump into a fairer bidding market.
“I'm often surprised and occasionally astounded that the logic that we have offered and advocated on many of these rules, has been not only embraced, but built upon by first rate labor law policy makers,” Kolbe said, concluding the flurry of activity over the last two years of legislative and regulatory engagement has been a team effort between management and labor across the board. “This has been the culmination of decades-long efforts and thousands of letters, thousands of meetings by contractors and policy experts as well as advocates. For half a century SMACNA’s slogan has been, “Together, we do it better.”
