U.S. engineers speak to unintended consequences of paycheck protection program

Washington, DC, March 23, 2021 (GLOBE NEWSWIRE) – Owners of small engineering companies today notified lawmakers of federal regulations that could deny them essential assistance under the Paycheck Protection Program in the during a hearing before the subcommittee on markets and infrastructure.

The hearing highlighted an unintended consequence of Federal Acquisition Regulation (FAR) and PPP loans for engineering companies working with state DOTs and other government clients that could put small businesses at risk. The President-elect of the American Council of Engineering Companies, Robin Greenleaf, PE, LEED, AP, FACEC, CEO of Architectural Engineers, Inc., of Boston, MA, and Carlos A. Penin, PE, president of the member firm from ACEC CAP Engineering of Coral Gables, FL, testified at the hearing to share their experiences with the program and the potential impact on the industry.

“The PPP program was created to help small businesses like mine stay afloat during the early days of the COVID shutdown. Our loan allowed us to keep all of our staff on the payroll, even in the face of a significant loss of income, and gave us some time to consolidate our business plan as we adjusted to the job at hand. distance ”said Robin Green Leaf. “Now a little-known FAR clause threatens to do to us what the pandemic has not done.”

“As a small minority-owned business, we have asked for and received help from the PPP program. Having survived multiple hurricanes in our company’s history, the devastation caused by this pandemic has been much worse. The interpretation of the FAR clause would reverse the benefits received from the PPP and could have a negative impact for years to come, ”said Carlos A. Penin, PE, president of CAP Engineering in Coral Gables, FL.

“Congress is starting to work on an infrastructure bill to help America recover from the pandemic. There is no infrastructure unless an engineer designs it first. We need our small engineering companies more than ever to work with their public sector clients, but this policy could force them to step down or work at a loss, ”added Linda Bauer Darr, President and CEO of ACEC.

The “credits” FAR clause (FAR 31.201-5) is interpreted as applying to canceled PPP loans, which would require reimbursement or reduction in costs of the amount of PPP loans attributable to contract costs. For most engineering companies, this will mean a reduction in their future billing rates. Depending on the application of this credit, some businesses could lose more than the loan amount, especially in the case of multi-year contracts.

The impact of this policy will weigh heavily on small businesses, minorities and women who have requested relief from PPPs during the economic shutdown caused by the pandemic. The continuation of this policy deters engineering companies from competing for work with public agencies – depriving the government of skilled engineering services while hampering DOT’s efforts to expand contracting opportunities with small firms and W / MBE when needed most.

“There is a real sense of urgency in solving this problem as small business owners have to make critical business decisions about what to do with their loans.” Green leaf added. “Companies that have already received a PPP loan forgiveness start the annual audit process. Those who have not yet applied reach the 10-month deadline to start repaying their PPP loans. The banks are putting pressure on them to decide whether to ask for forgiveness. The PPP was an emergency aid to support employers, and our businesses should be able to take full advantage of the program.

The key points of ACEC’s testimony, particularly on the need for better implementation guidance by the FHWA, were acknowledged by two other experts who testified at the hearing, Greg Gingham, HKA partner and Ms. Susan Moser, Partner of Cherry Bekaert.

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The American Council of Engineering Companies (ACEC) is the trade association for the country’s engineering industry. Founded in 1906, ACEC is a national federation of 52 state and regional organizations representing more than 5,500 engineering companies and nearly 600,000 engineers, surveyors, architects and other specialists nationwide. ACEC member companies lead the design of America’s infrastructure and built environment.

CONTACT: Jeff Urbanchuk
American Council of Engineering Companies
202-682-4325
[email protected]

Alan Crockett
American Council of Engineering Companies
443-995-6364
[email protected]

Edie Ousley
ACEC/FL
850-251-6261
[email protected]
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