Regulatory reform that works for the ‘real world’ of construction

This week, hundreds of construction business owners and members of Associated Builders and Contractors (ABC) will be on Capitol Hill to meet face to face with their members of Congress. I have spent the last 23 years in the construction industry, including the last 12 years running my own small business. Our industry and ABC’s membership is filled with stories of apprentices, journeymen, executives and everyone in between who have worked in the industry far longer than me, including many whose families have found successful careers in construction for multiple generations.

We physically build communities, and construction provides among the greatest lasting visual gratification of any industry. You can drive down the street and show off office buildings, stores, schools, hospitals and stadiums. You name it, we have built it.

{mosads}The visual aspect of seeing a job well done is very rewarding, but the camaraderie and continuing education our skilled craft professionals experience also plays a major role in why construction is a fulfilling career. In fact, a recent study found construction workers are the happiest of any industry, and cited the opportunity for advancement as a major factor. The study pointed out that our industry “has a long history of providing new workers with apprenticeships so they can learn the skills required to move on to tackle more challenging work.”

Construction is also among the few industries in which you can begin as an apprentice and end up owning your own business. Many people go to school, master their trade, work and earn a paycheck in their field at the same time. Through their apprenticeship or training program, they gain the knowledge to eventually branch off and start their own business and their own success stories.

However, our industry also faces many obstacles, and unfortunately several of the leading threats to construction come courtesy of the federal government. Power-grabbing federal regulatory agencies have greatly expanded their jurisdiction by exploiting procedural loopholes and establishing rules without proper consideration for affected industries or sound evidence and scientific or cost analysis. The result of such an aggressive approach to regulation is often poorly crafted and needlessly costly and burdensome rules that impact our industry and the economy as a whole.

Increased regulatory compliance costs, permitting costs and lost worker productivity—or in the case of many small businesses like mine, money spent on outside counsel—all limit productivity and result in less money to invest back into the business.

Indeed, regulations that cover everything from the permitting of water that may run near a jobsite to the unsolicited distribution of employees’ personal contact information have been designed far too often without taking into account input from stakeholders.

One of the starkest examples of a federal agency proceeding through the regulatory process seemingly without regard for the industries it affects is the Occupational Safety and Health Administration’s (OSHA) proposed rule to limit silica exposure. Silica is a naturally occurring substance found in sand, quartz and many construction materials including asphalt, bricks, concrete, stone and tile. OSHA has proposed reducing the permissible exposure limit for silica by 80 percent for the construction industry; yet, the agency has failed to demonstrate that its proposal is technically and economically feasible.

In developing its silica rule, OSHA failed to account for the everyday dynamics of construction jobsites, including the potential for rain, wind and cold weather. In addition, OSHA has demonstrated a fundamental misunderstanding of the construction industry in estimating the cost of its proposal. OSHA’s drastically underestimated cost for the regulation is $511 million; however, a Construction Industry Safety Coalition (CISC) report released earlier this year found the cost to be nearly 10 times that amount at almost $5 billion. According to CISC’s report, the increase in the cost of construction materials and building products alone will stand at $1.05 billion—more than double the amount OSHA estimates the entire rule will cost our industry.

The CISC study also estimates that the costs imposed by this proposed regulation on the construction industry and the broader economy will result in the loss of more than 52,000 full time jobs annually. That’s 1,000 jobs lost per week due to one poorly crafted rule from one agency seeking to regulate an industry that it clearly doesn’t understand.

Ultimately, regulations crafted by OSHA or any other federal agency must be feasible to implement regardless of their intended purpose. ABC understands the importance of common-sense regulations based on sound evidence and scientific analysis, and we have provided a tremendous amount of feedback on OSHA’s proposal through hearing testimony, letters and comments submitted by more than 600 ABC members. We hope that OSHA takes the comments into consideration; however, if it does not, as has too often been the case with other federal agencies, it is clear that additional oversight is needed.

We need a reformed regulatory system with accountability from regulators that guarantees the voices of all stakeholders are heard throughout the process. A more transparent and navigable regulatory system will go a long way in developing safer and more productive jobsites that allow industry members to continue to deliver their work safely, ethically, profitably and for the betterment of the communities in which they work.

Volm is president of Annapolis Contracting, Inc., and 2015 national chair of Associated Builders and Contractors.