Future Forward Full Interview: Lobbying for the Future of Engineering
Linda Bauer Darr is president and CEO of the American Council of Engineering Companies (ACEC).
V1 Media: Please briefly summarize the ACEC, what it does, as well as your role in the organization.
Darr: The American Council of Engineering Companies (ACEC) is the voice of the business of engineering. We have approximately 5,500 firms that we represent, mostly in the civil engineering space, infrastructure, buildings, facilities, just a whole range of things that are in the built environment. My job is president and CEO.
V1 Media: What is the ACEC Research Institute? How is it different from the ACEC?
Darr: The ACEC Research Institute is an outgrowth of what was previously the ACEC Foundation, which is separately incorporated but definitely has a close working relationship with ACEC. Our members sit on the board of the Institute and help to direct its program of activity, because we feel very strongly at ACEC that engineering faces the risk of commoditization. In order to raise the understanding of the essentiality and value proposition of engineering, we need to position the profession and the industry as thought leaders. And in order to be thought leaders, you need to make sure you have the research, data and analysis that brings new information and ideas to the table help to inform, educate and shift perspective. So the Research Institute is all about studying the business of engineering, the impact of the business of engineering, and the impacts of things going on around us on the prospects for the business of engineering.
V1 Media: Could you summarize the Institute’s recent five-year engineering industry forecast report? What are its main conclusions and recommendations?
Darr: Like many parts of the economy, the engineering sector has been negatively affected by the COVID-induced downturns. The forecast stated that in 2020, the industry fell about an estimated 7 percent; and in 2021, engineering activities are expected to fall an additional 4 percent. Then they’ll start to recover in the second half of this year. The industry will grow modestly, 3 percent annually from 2022 to 2024, and then it should taper off in 2025.
But it’s a forecast and not definitive. And there’s an upside and a downside to what we’re facing. The upside being that with the infrastructure bill being discussed, both in the media and on the Hill, would bring a tremendous shot in the arm to the industry. Of course, the downside is that a protracted pandemic puts further pressure on consumer and business confidence, and the demand for commercial office and hotel construction as well as the potential for rising interest rates. We are hopeful that with a bill, we can turn this around, that this isn’t a finite forecast.
V1 Media: I have some questions about future legislation, but first I’d like to talk about the recently passed COVID-relief law, the American Rescue Plan. What will be its effects on engineering?
Darr: I think we’ve got the good and the bad. There’s a lot of good. We have $350 billion to state and local governments to help stabilize agencies that in the states have really been in a very bad position with declining revenue in tech space. They need that money, so that’s one of the good things. And that allows our projects to move forward. Second thing, transit agencies will receive $30 billion. Airports will get $8 billion. It will ultimately relieve pressure financially and allow the flexibility to restart and invest in capital projects.
There’s also a $10 billion pot of money for a Corona Virus Capital Projects Fund. States can use that to fund projects responding to the public health emergency, and engineers play a really important role during the pandemic to try to help folks understand how do we make buildings safer, for example, how do we service these hospitals?
You remember the <I>Comfort<I>, the military medical ship that came to help some of the people that were sick in New York; Langan did some of the design work, allowing for the interface between that ship and the city of New York. So we had a lot of work to do at that point. We have more work to do going forward, making sure schools and businesses are ready for this “return to normal,” and that they have the proper air systems in place, water-handling systems in place, that they’ve adapted new technologies in terms of the ability to transfer bacteria by touch. All those types of things are under consideration by engineers. There’s also $1.7 billion for Amtrak, $3 billion for the Department of Commerce’s Economic Adjustment Assistance Program, and there’s $50 billion for FEMA’s Disaster Relief Fund.
Then there are also two tax credits important to engineers that were extended in the law to the end of 2021: the employee-retention tax credit, and the payroll tax credits for emergency sick leave and emergency family leave.
So there’s a whole lot of good, but there were also a couple of things that came up at the last minute that were not anticipated, that were last-minute efforts that have complicated things. There was a provision inserted at the last moment, I believe by Majority Leader Schumer, that prohibits states that accept stimulus funds from implementing tax cuts between now and 2024. That could be a problem depending on how that language is interpreted at Treasury or at the regulatory level. First question is: will this prohibition limit the ability to offset an increase in the gas tax?
Will they have to look for an equivalent decrease in another tax? Because if we are going to have states that want to increase the gas tax to try to invest in infrastructure, they might need to have an offset somewhere. Will they be allowed to do that with this provision in place? The second issue is how will that affect those states that are trying to conform their tax codes internally to the federal code, as it applies to the deductibility of expenses covered by PPP loan forgiveness. So is the tax deductibility considered a tax cut? We’re concerned about that, because we worked hard with some other industries to make sure that PPP loan forgiveness was tax deductible.
V1 Media: Are you optimistic there will be additional infrastructure legislation passed in the near future, why or why not?
Darr: I’m very optimistic actually. I think things have changed a bit. Even in the last few days, we’ve seen a change. You have to look at the political landscape, right? Politically, this is unfinished business of the previous administration–and of the GOP, frankly. The Democrats will want to seize and get a big win in a game that has really gone into triple overtime. This has gone on far too long. So, for the Democrats to be able to pick this ball up and take it over the goal line would really be a big win for them. So I think there is tremendous political motivation and bottled-up desire to move this forward, if they can either work with the GOP on a compromise or figure out a way to do it through reconciliation.
The second thing that’s really critical here is “earmarks.” Earmarks are the lubrication that grease the wheels that create consensus, right? They allow for negotiations and collaboration and for communities to understand what their investments are paying for. And that’s critically important. They don’t just want to dump money into a general fund. They want to know what they’re going to get in return.
I think those things are really important: the earmarks and the motivation of the Democrats. Initially, we see broad agreement between the president and the leadership in Congress with the Democrats being in the majority, both in the Senate and the House. They’re in lockstep on this being the next big agenda item. Those are thin margins, though. And there’s going to have to be some deal-making, but even just in the last couple of days, I’ve heard that some Republicans who were planning on stating their opposition to this moving forward, may be softening up given the prospect of earmarks, because they want to be able to bring these significant projects home to their constituents. And that’s going to be a significant temptation for them.
V1 Media: If there is upcoming infrastructure legislation, what would the ACEC like to see in it? What would be on its wish list?
Darr: Certainly robust investment for some of the core federal programs, surface transportation, aviation, wastewater, drinking water, ports and harbors, broadband deployment, public buildings. Those are all critical markets for us, and frankly critical needs that have gone unmet for too long and also areas that are ripe now for innovation, with new technology that we have available to us and with the changes that we’re seeing going on around us to address those needs. And I would also say on our wish list is a long-term approach, five-plus years. We used to be in the business of having authorizations that would last six years, three years. It seems like these days, we’re lucky if we can get it for one year, and it’s very hard for a project to evolve without that kind of trajectory. We need the design, the planning, the ability to do the environmental assessments and all the code work too, before we get to construction. And that process has been compromised by the possibility that funding could be stripped away from a project on a year-by-year basis. We’re not committing to these long-term funding streams. So we really hope they’re going to pick a long-term approach to make sure we have the time to plan and develop the right projects and get rid of those use-or-lose deadlines.
What you’ll hear engineers talking about now is the last big infrastructure bill was all about shovel-ready projects. They don’t want to have the focus on shovel-ready projects. Engineering is not about throwing a bunch of a gravel down or cement and asphalt. It’s not about that. It’s about having more of a long-term view to meet ongoing needs, to meet sustainability needs, the resiliency needs of an infrastructure that has been crumbling and that we have a lot left to do to advance and to be a shining star of the U.S. economy. So we’re not looking for shovel-ready. We are looking for more vision in the planning and in the mindset and shovel-worthy projects.
V1 Media: In general terms, how much effect does federal legislation have on the engineering industry?
Darr: It has a huge impact. Our federal, state and local clients depend on that stream of federal funding to meet their program needs. For a while there, the last go round in the previous administration when they were looking at taking a run at infrastructure, there was discussion about changing the match to the state where the states would have to pay 80 percent of the bill and then the federal government would put up 20 percent. And that really kind of turned the proposition on its head; I think it’s part of what killed the last attempt. The federal government has a tremendous stake in investment in infrastructure across the country at the state and federal level, because we can’t have a patchwork infrastructure that is uneven, disconnected and currently crumbling. We need to have consistency. Things need to be tied together. There needs to be a flow. So I don’t think that role should ever go away and it’s entirely appropriate. It hearkens back to the interstate highway system that Eisenhower and others envisioned that just changed the trajectory of the United States in terms of our economic power around the globe.
V1 Media: So how can engineers get more involved in the political processes that affect their profession?
Darr: I would say first, engineers tend to be “joiners,” and that’s a great thing. Most engineers are either part of an industry association or professional society. And while professional societies don’t always lobby, we certainly lobby, and we are affiliated with those societies, and we are happy to work together to make sure we have that expanded reach in Congress that is necessary to move the ball forward and advance the business of engineering. So get involved with associations, get involved with chambers of commerce, get involved with those interfaces with government. The second thing is, frankly, the members of Congress were elected by you to serve you. So go visit them, call them, tell them what you need. Express concern or interest about a certain project.
You might not end up talking to the member of Congress, but you are going to talk to their staff. And that staffer is going to convey, from a constituent, from a voter, those views to the members. So make yourself heard. I would also put in a plug: ACEC has been talking about this because people want to know how to engage and how they can be advocates throughout the year other than that big “let’s all hit the Hill day for our legislative clients.” We’ve put together a five-part educational seminar on how you can effectively engage with government at the federal, state and local level. We brought in experts from all over to cover some of the practical tools for lobbying and communications. Lobbying is kind of the government form of marketing, I like to say. And these skills are something that can be learned in the government space, just like they can be learned in commerce and business.
V1 Media: How do you see infrastructure and engineering changing in the next five years, including in technology, investment and policy changes?
Darr: We could be talking about that for an hour, but I’ll try to size it up in a nutshell. I think five years from now, engineers are going to find that their skills are more needed than ever. Technology will take us to a whole new place. Investments will be made in new, smart infrastructure that will be paying off. There’s going to be a greater demand for that to expand, whether or not it has to do with automated vehicles, electric vehicles, bus rapid transit that’s enabled by electronic traffic signage and timetables. There’s so much going on right now in this space. In the infrastructure space, in particular. One thing that will continue to grow is the use of technology related to asset management. It will become much more commonplace.
And, importantly, with everything that’s swirling around us right now, in terms of extreme weather and climate change impacts, we need to know when we make a major investment in something like a bridge, how is that bridge holding up? What’s the lifespan, what can we do to increase its lifespan? Where are you finding some potential for failure in the structure? Where is it becoming weak? We’re able to build sensors now into those assets that allow us to monitor, and better manage and maintain these big, expensive and consequential projects. I think there’s going to be a lot more of an interface through the internet of things between the company, the planning agency and the folks that provided the materials to create those structures to begin with. I think engineers are going to play a role in that lifetime maintenance and management of these infrastructure structures.
And then generally I talked about the focus on extreme weather and climate change impacts. We can’t not look at that. All you have to do is drive down the road; in one of the rural areas I visit regularly to experience it first hand. The roads are very close to getting flooded out on a regular basis. And I’m not talking about during hurricane season–just if it happens to be raining for a few days. So we’re looking at elevating spaces that have been impacted by rising waters. Airports may need to be relocated further in from the coast than where they predominantly are now. I think the weather impacts are going to be something to really keep our eyes on. Look at what happens, for example, with the grid in Texas. Huge, huge problem there. And people died as a result of that. That can’t happen again, and engineers can step into that space and fix that.