Post-Election Predictions: “Shovel Ready” Biden Era?

Nov 18, 2020

WASHINGTON, D.C. – In the wake of a contentious presidential election, certain industries are bracing for change. And yet, for the mostly non-partisan world of construction, the level of disruption is likely to be somewhat muted. “Everyone loves construction,” says Wayne H. Kalayjian, PE, SE, CFE, director at El Segundo, Calif-based Secretariat. “Construction means jobs for trained people, untrained people, young, old, men, women—of all ethnicities—so it’s a winner.”

Still, there are various projects that sparked passion, not to mention billions of dollars, which could be ended under a Biden presidency. “It’s likely there will be T for C claims concerning the southern border wall,” says Douglas E. Johnston, Jr., CEO of 227, Inc., Santa Monica, Calif and Houston. “Indeed the wall project would probably be first on Mr. Biden’s list of projects that he would like to end…Generally the industry is likely to see quite a lot more infrastructure work, and the construction industry is going to do darn well.”

Others see the possibility of more regulations under a Biden administration. Third Thursday sat down with Mike Heitman (pictured), attorney with Nason Yeager, Palm Beach Gardens, Fla., to get a better sense of how a Biden administration might affect the industry. Heitman was a civil engineer for a decade prior to getting his M.B.A. and his law degree.

Greg Thompson, editor, Third Thursday: How much will construction regulations increase under Biden?
Mike Heitman: We can look back to the Obama administration’s rules and regulations, and the most amusing thing about that administration was the “shovel ready projects.” None of those projects could get off the ground because of all the regulations that were imposed. 

My expectation is that the Biden administration will be heavy handed when it comes to not just project labor agreements, but other agreements that govern the construction industry, such as OSHA. Rules regarding minority participation in construction projects and disadvantaged business entities might be expanded and more strictly enforced.

Thompson: How likely is it that the Biden administration will roll back construction-related rules created by Trump? 
Heitman: During the past four years of the Trump administration, the main rule relaxation we have seen related to the construction industry has been the environmental permitting process. I see a Biden administration bringing back the rigorous environmental permitting that will tend to delay projects.

I heard this morning that the Trump administration is trying to get leases issued for drilling in the Arctic National Wildlife Refuge before the close of the administration. I’m sure Biden will put a stop to that. My clients did not complain to me about any new regulations imposed by the Trump administration, which would subsequently be relaxed by Biden. 

Thompson: How might Project Labor Agreements (PLAs) be affected by a new administration?
Heitman: In the broadest philosophical sense, the labor unions have been hemorrhaging membership for years. The only labor unions that are thriving are public sector labor unions. The democratic party in general has been striving to keep the labor unions under its umbrella. They want to do whatever is necessary to keep the labor unions voting for democrats. 

In general, these sorts of agreements [PLAs] put non-unionized outfits essentially on the same playing field as unionized outfits. They remove the competitive advantage of non-union shops. They also impose union rules in places that are right-to-work states. With a new administration, these will be much more in favor in projects that are issued during the next four years—much more in favor.

Thompson: How much does the construction industry, historically speaking, care about who is in office?
Heitman: It is true that politicians love massive construction projects, particularly if they can be used for earmarks in a particular congressional district. I’m thinking about the “train to nowhere” in California. The Biden administration has been talking about a coast-to-coast high speed rail. I think those projects are favored by politicians on both sides of the aisle. 

The question more is one of funding. Republicans tend to be more deficit hawks. They tend to have less of a tolerance for pork barrel politics. However, it was the Eisenhower administration that initiated the interstate highway system, and he was a republican. Either party is going to want to build different sorts of projects, and neither party has successfully dealt with the aging of America’s infrastructure.  Ultimately we’re going to be looking at P3 projects—public / private partnerships—in order to fund and maintain these infrastructure projects. Both parties are very fond of largess when it comes to construction projects, particularly in districts where legislators are up for reelection.