GCA Construction News Bulletin June 2020

VOL. 61 ISSUE 06 JUNE2020 • GUAM CONTRACTORSʼ ASSOCIATION

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TABLE OF CONTENTS

CONSTRUCTION NEWS BULLETIN

JUNE PRESIDENT’S LETTER

6

S.A.M.E. update

8

Military news

10

Small business notes

11

FEATURE STORY

12

FEATURE STORY

16

Construction headline

20

NEWSLINE

23

12

FEATURE STORY

16

2020

FEATURE STORY

THE GCA OFFICE IS OPEN FROM 8 A.M. TO 5 P.M. And don’t forget you can pay online

2 | JUNE2020

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EDITORIALS

CONSTRUCTION NEWS BULLETIN

THEDIRECTORS

THEEDITORIALS

THETEAM

PRESIDENT James Martinez Guam Contractors’ Association

Guam Contractor’s Association (GCA) in conjunction with Adztech and Public Relations, Inc. publishes the Construction News Bulletin (CNB) monthly.

Reproduction of materials appearing in this publication is strictly forbidden without written permission by GCA.

PUBLISHER: James Martinez

CHAIRMAN Peter Errett Hawaiian Rock Products VICE CHAIRMAN Bill Beery Tutujan Hill Group

While we always strive for accuracy, we will from time to time overlook mistakes. In order to help us improve the quality and accuracy of this publication, we ask that you take the time to look at the information provided and notify GCA or Adztech of any corrections as needed. Opinions and editorial content of this publication may not necessarily be those of the publisher, production team, staff, GCA members, GCA Board of Directors and advertisers.

SECRETARY/TREASURER Grace Jacot SET Pacific PAST CHAIRMAN Jessica Barrett Barrett Plumbing CONTRACTOR DIRECTORS: Don McCann Black Construction Corporation

For more information about advertising in the GCA Construction News Bulletin contact the advertising department at (671) 477-1239/2239 or email at adztech@teleguam.net.

Shoja Rezvani Contrack Watts Contractors John Sage Pacific Rim Constructors Inc.

Distributed to GCA members or can be obtained by stopping by the Guam Contractors’ Association office located at 718 N. Marine Corps Drive, Suite 203, East West Business Center, Upper Tumon, Guam.

Dan Soriano Granite Construction Lucia Wood APTIM ASSOCIATE DIRECTORS: Jose Garcia First Hawaiian Bank

To find out more about how you can become a GCA member contact Guam Contractors’ Association at Tel: (671) 647-4840/41 Fax: (671) 647-4866 or Email: gca@teleguam.net. www.guamcontractors.org

Mark Cruz MidPac Far East Patty Lizama Pacific Isla Life

Postmaster. Send address changes to Guam Contractors’ Association, located at 718 N. Marine Corps Drive Suite 203, East West Business Center, Upper Tumon, Guam.

Camilo Lorenzo Matson Navigation

PRODUCTION TEAM LEAD: Geri Leon Guerrero AD SALES: Jaceth Duenas PRODUCTION: Jason Davis Geri Leon Guerrero Christopher “Taco” Rowland EDITOR: Adztech CONTRIBUTING WRITERS: Al Sampson R.D. Gibson Pete Diaz Jesse Pangelinan Rebecca Gale Ethan M. Brown GCA STAFF: Desiree Lizama Elaine Gogue Francine Taitague Trevor Cruz COVER: As we adjust to the “New Normal” we have to add a few new tools to our repertoire: face masks, hand sanitizer, and gloves to name a few of the more common ones.

While some of us used them more often than others before COVID-19 we all have to be a little more mindful now.

R LEB ATING CE

60 YEARS

GCA

TRADES ACADEMY B u i l d i n g

S k i l l s

F o r

A

L i f e t i m e

Guam Contractors Association

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PRESIDENT’S LETTER

CONSTRUCTION NEWS BULLETIN

June is National Safety Month

President’s Letter

In Construction, Safety Remains the No. 1 Priority In the month of June, Guam and the entire nation is celebrating National Safety Month. Safety is the industry’s number one priority. Guam Contractors Association, an affiliate chapter of the Associated Builders and Contractors (ABC), believe it is our responsibility to ensure all construction workers go home in the same—or better—condition than when they arrived on the jobsite.

That is true when it’s business as usual, but especially during unprecedented circumstances like the COVID-19 outbreak, which completely shifts the paradigm.

During the COVID-19 pandemic, GCA had provided guidelines to both employees and employers in providing a safe and healthy environment for all workers including the American Industrial Hygiene Association (AIHA) guidance document entitled Returning to Work: Construction Environment. As restrictions were lifted for non-essential operations to open, we also provided a checklist and guidelines to ensure the health and safety of our members and their customers when these businesses begin to re-open. GCA also launched, in partnership with ABC, the National Health and Safety Construction Pledge, an industry-wide call to action to reiterate construction jobsite safety commitments under new protocols due to the coronavirus outbreak. Open to all U.S. contractors and industry associations, the pledge calls for prevention, preparedness and response plans to prevent injuries and disease and safeguard total human health. The COVID-19 pandemic has underlined the critical need for leadership commitment to construction worker safety and health by every contractor on Guam. While ABC Guam Contractors Association members are already evaluating and mitigating the risks associated with COVID-19 on jobsites every day, this pledge signals a significant and permanent paradigm shift to raise the bar on safety, total human health and hygiene protocols on construction jobsites in the months and years to come. GCA has also adopted the Safety Training Evaluation Process (STEP) Safety Management System, Founded in 1989 as a safety benchmarking and improvement tool, STEP has evolved into a world-class safety management system that dramatically improves safety performance among participants regardless of company size or type of work. Participating ABC member firms measure their safety processes and policies on 25 key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incidents. There are several Guam contractors who hold various levels of distinguished awards from the STEP program. Also, later this year, GCA will host its Annual Safety Conference. Due to the COVID-19 crisis, the original date was postponed for later in the year. We will make announcements as to when we will hold the conference.

While applying world-class safety processes takes fortitude, it dramatically improves safety performance, according to ABC’s 2020 Safety Performance Report, an annual assessment of STEP Safety Management System data. Based on information gathered from ABC member companies recording nearly one billion hours of work in construction, heavy construction, civil engineering and specialty trades, companies that attained the highest level of STEP performance—Diamond—reduce recordable incidents by up to 88%, making the best-performing companies 827% safer than the U.S. Bureau of Labor Statistics industry average.

So in celebration of National Safety Month, let us all work safe and provide a healthy and safe environment for everyone by applying world-class safety practices in your businesses. To learn more, visit our website at www.guamcontractors.org Sincerely, James A. Martinez President Guam Contractors Association

Guam Contractors Association

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S.A.M.E. UPDATE

CONSTRUCTION NEWS BULLETIN

Society of

NEWSLETTER JUNE 2020

American Military Engineers

SAVE THE DATE 18 JUN 2020 SAME Guam Post VIRTUAL General Membership Meeting Video Conference Call 1130 - 1300 19 JUN 2020 Pacific Rim Virtual Presentation, “Executing NAVFAC Pacific Programs in Support of War Fighter Readiness” See www.same.org/Guam/ Calendar 0800 - 0900 10-12 AUG 2020 Post Leaders Workshop SAME National Virtual Event 16 - 18 SEPT 2020 Pacific Industry Forum Honolulu Post Honolulu, HI See www.samehonolulu.org 5-7 NOV 2020 SAME Federal Small Business Conference, San Antonio, TX TBD POSTPONED DUE TO COVID-19 Charlie Corn Scholarship Golf Tournament Starts Guam Golf Resort, Dededo

Upcoming June Virtual Meeting

MAIN PRESENTATION

Update on Various Guam Power Authority Projects, Opportunities and Challenges Presented by: John M. Benavente, PE General Manager, GPA

VIRTUAL MAY MAIN PRESENTATION RECAP

HAZARD ANALYSIS CRITICAL CONTROL POINT (HACCP) IMPLEMENTATION PLANS FOR CONSTRUCTION PROJECTS The May 2020 Main Presentation was provided virtually by Kaleb Leon Guerrero and Christopher Rosario, Environmental Scientists with EA Engineering, Science, and Technology, Inc., PBC. Invasive species are often introduced by accident and can cause considerable damage to the ecosystems they introduced into and may have negative impacts on economies, infrastructure and human health. The ecosystems into which invasive species are introduced often lack the conditions that limit range expansion such as predators, pests, or diseases. Other factors such climate, ability to utilize a variety of resources, and high reproductive rates could allow invasive species to spread quickly after being introduced. Tropical islands with their warm climate year-round and lack of pre-existing biological controls are particularly susceptible to invasive species.

Invasive species can arrive through many different pathways. A pathway is an activity or process through which a species may be transferred to a new location where it could become invasive, such as through shipping, hauling or air travel. Another term often used in natural resource activities are “non-target” species, or “non-targets” , which are essentially any organism that is not intentionally moved. Examples of non-targets on Guam include the following:

Coconut Rhinoceros Beetle

Little Fire Ant

Coqui Frog

HACCP planning identifies potential pathways and high-risk activities, and provides a step by step process to establish control points to reduce the movement of non-targets. Understanding pathways and developing control points help prevent introduction of new invasive species and dispersal Mexican Amber Snail Giant African Snail of existing invasive species.

For construction projects, the following are steps and associated activities to be considered in a HACCP plan: Procurement Material source (off-/on-island), containers, transport, and unloading Construction Mobilization of equipment; preparation of the site; construction of wash facility and staging areas Demarcation of project limits, preclearing, earthmoving, use of wash facility, erection of silt fences, staking, and erosion control Construction of facility or improvement Demobilization of the site; removal of equipment, excess materials, personnel, debris containers, temporary office, fencing and erosion control Removal, Recycling, Reuse and Disposal of Material and Trash Recognition and reporting protocol Inspections When: Prior to arrival/departure; What: Clothing, boots, equipment, vehicles, truck bed, undercarriage How: Visual inspection, stop and clean at wash down station, power wash if necessary

• •

• • •

Education and training are important elements in the implementation of a HACCP plan. Employees, suppliers and vendors must be adequately trained in its fundamentals. The HACCP is a living document until the end of the project.

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CONSTRUCTION NEWS BULLETIN

S.A.M.E. UPDATE

UNVERSITY OF GUAM SAME GUAM POST STUDENT CHAPTER UPDATES Fañomnåkan (Spring) 2020

SAME Guam Post Centennial 2020 The UOG SAME Student Chapter participated in this event by volunteering at the registration table, displaying our poster board during the event, networking with engineering professionals, and participating in the receipt of the SAME Guam Post donation check of $20,200.00 to the UOG School of Engineering.

Huge thank you to the Centennial planning committee who produced a memorable event!

UOG Charter Day – Hut Competition The student chapter spent an entire month’s worth of labor towards building a Filipino inspired hut for the UOG Hut Competition during Charter Day. Several phases included material collection, construction, and decoration. Families, friends and mentors outside of the student chapter also helped us construct a beautiful hut.

FE Exam Practice and Review Material Due to the Coronavirus pandemic, the student chapter was unable to execute its planned events for the remainder of the semester. Such events included Bridge Competition, Charlie Corn Golf Tournament, and STEM Camp.

Therefore, the student chapter decided to spend its club funds on FE Exam preparation material to benefit civil engineering majors pursuing to take the FE Exam prior to graduation. The books were donated to the School of Engineering for use of the members in the organization as well as students in the program.

SUSTAINING MEMBER BRIEF HIGHLIGHTS

•

• • •

Contact Info Bob Shambach, Guam Office Manager, rshambach@eaest.com, 671-727-6094 Chip Brown, Pacific Islands Op. Manager, cbrown@eaest.com, 808-589-1455 Headquartered in Hunt Valley, Maryland >500 employees across 26 offices Provide consulting, engineering, and technology solutions to a wide range of public and private sector clients.

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Guam Business Model Full-service environmentally focused capabilities Small Business IDIQ Contracts with NAVFAC, USACE, Guam DPW; Contracts with other Federal and Local Government Agencies Support of Construction Companies working on Commercial and Military Projects www.guamcontractors.org

JUNE2020 | 9

MILITARY NEWS

CONSTRUCTION NEWS BULLETIN

SMALL BIZ NOTES NAVFAC Marianas awarded about $205.4M in contracts from October 2019 through May 2020 on which Small Business (SB) concerns may participate as prime or subcontractors.

Of that amount, about $148.0M was awarded to SB concerns to provide a variety of products and services on Guam.

Socio-economic breakdown of the SB awards are: - $119.8M - Small Disadvantaged Business (SDB) - $111.2M - HUBZone Small Business (HZSB) - $12.1M - Women-Owned Small Business (WOSB) - $11.8M - Service-Disabled Veteran-Owned Small Business (SDVOSB) The sum of the figures above exceed the overall SB awards of $148.0M because some SB concerns qualify for multiple socio-economic categories.

Significant SB awards in April: • Techni-Con, Inc. was awarded about $520K install a backup • Defense Base Services, Inc. was awarded about $542K to generator on Naval Base Guam. provide housing operations and maintenance services on Naval Base Guam and Andersen Air Force Base.

• Guahan Waste Control Inc was awarded about $2.2M to provide solid waste management services on Naval Base • Modern International, Inc. was awarded about $3.2M to Guam. replace existing standby generators at multiple facilities on Andersen Air Force Base.

• Reliable Builders, Inc. was awarded about $775K to install an Electronic Security System (EHSS) at Naval Base Guam.

• Fargo Pacific Inc. was awarded about $2M to replace a chiller and variable speed pumps on Naval Base Guam Source: Federal Procurement Data System – Next Generation (FPDS-NG)

COMMON EMAIL MISTAKES YOU MAY BE MAKING Covid-19 restrictions have forced many folks to telework resulting in a dramatic increase in the use of email. Email is often the easiest way to communicate with teammates and contractors but you cannot allow the convenience of working from home make you forget your professionalism.

A poorly written email can discredit or impact your professional image. Aside from overlooking careless typos or clicking “reply all” when responses should be sent only to the sender, there are other common mistakes you may be making without realizing it. Here are some of them: - Not reading all your emails before replying: Instead of reading and replying to emails one by one, read all of them first so you have all the facts before you respond.

- Omitting a greeting: When starting an email, always open with a quick greeting — a simple “Hi (name),” will suffice.

Offering such courtesies will help the recipient feel open to the conversation.

- Using “to whom it may concern”: With this greeting, your email will be ignored or deleted. Take time to find out whom your message actually concerns to make your email a more direct call to action.

10 | JUNE2020

- Not replying to your boss’ email: Even if it is a short “Thanks. Will do,” you should always respond to an email from your boss or supervisor.

- Using emojis and textspeak: There is a time and place for LoLs and OMGs/IKRs, which you should generally leave out of your work emails. Use discretion before including emojis and textspeak.

- Not changing the subject line when the topic changes: Oftentimes, the body of an email evolves and writers forget to change the subject line. When the topic of an email thread changes, revise the subject line so it is easier to find and retrieve these messages later.

- Emotional emailing: We all get email that really infuriates us. Oftentimes you will regret any email you send in the heat of the moment. Compose yourself before responding or draft one and send it the next day.

- Overloading the CC line: Do not send an email groups of people unfamiliar with each other in the carbon copy (CC) line. A blind carbon copy (BCC) might be more appropriate.

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CONSTRUCTION NEWS BULLETIN

SMALL BUSINESS NOTES

join our SB Community!

• The GCA Small Business Committee supports small business members of the association to ensure their voices are heard and needs are met within GCA capabilities.

• Do you have an issue or concern that we might be able to assist with?

• Do you have an idea or suggestion that may benefit our small business community?

L-R: James Martinez, Joe Roberto, Adam Baron, Bill Bernardo, Theresa Crisostomo, Tom Roberto, Jaylene Kent, Gerardine Mendiola, Jane Ray, Philip Leddy, Ken Lujan.

HELP US HELP YOU BY JOINING US AT OUR MONTHLY MEETINGS OR CONTACT: Lucia Wood (Chair) Theresa Crisostomo (Vice-Chair)

(671) 777-8425 lucia.wood@aptim.com (671) 588-5972 theresac@jwsguam.com

GUAM PTAC FREE Live Webinars 06/18 2020

06/23 2020

Service Contract Act The Service Contract Act (SCA) requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees prevailing wages.

We will discuss the details of the SCA and how contractors can stay in compliance.

Buy American Act The Buy American Act can be frustrating for government contractors. The Guam PTAC will discuss the BAA and offer some guidance on how to stay in compliance.

The Guam Procurement Technical Assistance Center (PTAC) is offering FREE webinars to the public for May 2020.

Webinars run from 10am-11am and will be conducted via Zoom. Links to the live webinar and the webinar evaluation will be emailed to all registered attendees 15 minutes before the start of the webinar.

Register at: guamptac.ecenterdirect.com

06/25 2020

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Essential Government Websites Much of government contracting is done online. The Guam PTAC will discuss the various, essential websites vendors need to be familiar with to have a better chance for success in government contracting.

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For more information, contact the Guam PTAC at (671) 735-2552 or visit www.guamptac.com

JUNE2020 | 11

ADJUSTING

TO THE

NEW NORMAL by: R.D. Gibson

CONSTRUCTION NEWS BULLETIN

Now, it is important to look back on the last three months. Imagine the stark difference in procedure, protocol, even rhetoric. The words ‘uncertainty’, ‘unprecedented’, ‘pandemic’, ‘coronavirus’, and any other COVID-19 related vocabulary have infiltrated our vernacular; not through any visible marketing tactic, but through the very real conversations about how to deal with the spread of a virus that seemingly has no end in the immediate future. It has given all of us a chance to reflect on not just cleanliness either, but the effects it has on the global population, the economy, and our wallets.

To joke, it is difficult to believe the world is living in a pandemic even though films like Contagion (2011) and Outbreak (1995) have long since been released baffling. The ‘wash your hands’ videos and songs, Netflix marathons, social distancing, half-capacity sitting spaces, and other ‘new norms’ take a backseat though to the unsettling realities of the new norm workspaces and employment. Think about it: three months have passed since the first announcement of cases in Guam; and no, this isn’t a major Hollywood blockbuster.

Scroll through any media outlet’s story being posted on social media, and inevitably a post will up from someone regarding unemployment or lost jobs in the time of COVID-19; moreso now in the wake of reopening the economy and getting people back to work. And, rightly so - people need to eat, people need to feel secure, and people need to provide. Human resources has an integral role with the employees and employers, and on top of that - all of the changes that are being handed down and mandated to maintain things from social distance operations and remote working to cleaning protocols and capacity control.

It goes without saying that a company’s greatest assets are its people, its employees - the ones who run the show, work with clientele, move the product, get the job done, etc. Additionally, it is the ones who are looking out for them who have been at the forefront of navigating the uncharted landscape of a workplace during a pandemic.

A survey conducted by Josh Bersin, MIT Sloan Management Review, and CultureX showed HR professionals are concerned about four particular issues: health and well-being; managing remote work; jobs and continuity; and mental health and uncertainty. On his website, it states he is an industry analyst “on the topics of corporate human resources, talent management, recruiting, leadership, technology, and the intersection Like Us On Facebook

FEATURE STORY

between work and life”. In the article published on April 8, he cited how several companies are forging a way into remote workspaces, and how other companies are looking at ways to retain employees but moving them into other roles within the company.

Additionally, the article took a look at survey data from employees and their issues and concerns regarding the pandemic shutdown at the workplace. The data showed how employees are concerned with financial security, health and well-being, family, and productivity and work. A lot of this includes how employees are dealing with managing a household with children who are not in school, making sure everyone is healthy, and helping other family members.

More than anything, Bersin and the surveyors pointed to high scores with “the issues of social isolation, mental health, personal finance, and stress”. Bersin wrote, “These are issues that were problematic prior to the crisis, but now they’re urgent;” and added that companies are now hiring resources to help their employees with these issues, including counselors and online coaches.

What Bersin also discussed in the article are the overall challenges facing HR professionals. These include the effectiveness of communication within the organization, adjusting to help customers in a timely manner, and how well they can respond to a constantly changing issue.. Admittedly, Bersin stated how HR departments aren’t built for agility, but rather for “service delivery functions”. Yet, these are issues we can see throughout the globe, and work to adjust, adapt, and change.

A lot of information came from this article, especially what companies are doing to promote more communication, effectuate remote work, and promote continued health and well-being. These include virtual coffee breaks, providing tools for remote work, checking in with employees regularly, as well as seeking regular feedback from employees.

For Jeffrey Vitkovitsky, General Manager of Pacific Human Resource Services, Inc., “Everyone was worried about employee safety and customer safety - how that would effect (sic) health insurance, workmen’s Compensation, benefits and exit processes” he started.

“And then the lockdown happened, and we [are] now worried about what the job environment would be, proper furlough procedures and all the safety protocols that kept coming and changing almost on a daily basis,” he finished.

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JUNE2020 | 13

FEATURE STORY

CONSTRUCTION NEWS BULLETIN

Vitkovitsky pointed to how “devastating” COVID-19 has been for Guam. “You only need to look out your window and see all the shut downs that occurred,” he stated.

Furthermore, he mentioned how local businesses have closed their doors permanently, and how “on such a small island and tight community, you hear about family members getting furloughed or terminated.”

He stated how his Human Resource and Staffing services company initially furloughed employees “when everything was so uncertain.” Then as the circumstances progressed PHRS attempted to get as many employees back to work. Then, “with the advent of the PPP and PUA programs to name a few, we began to assist employees to recover some of their income as well as reopen operations to try and stabilize the business.” Notwithstanding all that has happened, Vitkovitsky shared how everything is still a work in progress and has the entire HR industry on its toes.

He stated how PHRS has tweaked their official communication or notifications, and how since many of their employees work away from their offices, remote working procedures were already set in place. He does suggest for HR departments throughout should remain as updated as possible with regulations as they change so frequently. But, also look at the issues that are affecting organizations and looking at supports. “Be open to the many programs being offered by the federal government to assist.”

But, the million dollar question may just be what the workforce WILL look like post-COVID? Gartner.com, a research and advisory company, stated in an article there is a shift toward contingent workers for costsaving measures - “32-percent of organizations are replacing full-time employees with continent workers”.

The article highlights nine future work trends after this pandemic, including a change in designing roles for flexibility and resilience and not just efficiency in the chances that things change. Whatever it is will be long-lasting - not just for a company’s success, but for that of its employees, as well.

To be completely honest, as exhausted as many people are about reading about, writing about, talking about, living through COVID-19, inevitably, the world is looking at an overhaul of normalcy across industries, across countries, across so many things. As difficult it may be to grasp, change is inevitable, but finding ways to adapt and helping employees navigate those adaptations is incredibly important. Heraclitus is credited with saying, “The only thing that is constant is change.” And in the wake of COVID-19 - and 2020, for that matter - we have seen a lot of it.

All contracting and construction industry professionals understand that safety is of the highest priorities. It is ingrained in the industry, so it’s even more important to consider how a virus would affect all aspects of the industry. At this point, it is all a matter of staying ahead of the curve, one step ahead, however you want and however you can work with employees and management to make things work.

A lot of what it comes down to is communication.

Having constructive dialogue with employees and leadership about what they are concerned about; working with them to see what is working and what is not; and this can be for a plethora of things, like remote working, health and wellness, communication, and even empathy and understanding in the workplace. According to TSNE.org, an organization providing management, consulting services, and training, in addition to the aforementioned topics states now is the time to show compassion and humanity in article posted on their website. “Business is not as usual’ right now, and it will take time to adjust to a new routine.”

14 | JUNE2020

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PLAN YOUR WORK WORK YOUR PLAN by: Jesse Pangelinan

CONSTRUCTION NEWS BULLETIN

During a meeting a long while back, our leader said to everyone, “Construction is tough! You gotta love it!” He was trying to motivate us in a time when managers and supervisors were facing challenges. It surely resonated with me. I believe he was saying that we have to expect challenges in construction, address the challenge, proceed, and not let it stop our forward progress. Who would have thought it would be a virus?

So, what do we do with the New CoronaVirus, COVID19? Same as any other hazard —identify the hazard, identify control options, select controls (Elimination, Substitution, Engineering, Administrative, PPE), develop and update a hazard control plan, select controls to protect workers during non routine operations and emergencies, implement selected controls, follow up to confirm that controls are effective, as provided on OSHA website. My take?

Plan Your Work. Work Your Plan.

So what’s the plan? As my good friend says, “It Depends.” In the construction industry, generally speaking, can include our suppliers who have warehouses and storefronts, material delivery from shipping consolidators, administrative offices supporting construction sites, and the construction site itself.

There are other related businesses and departments but let’s go with this list.

The more exposure to the public, or people outside our employee core group, the more exposure we have to COVID-19. However, we must keep in mind our exposure to each other with what we share as an employee group. The different scenarios below should be helpful but will carry a common theme of washing hands, keeping distances, and wearing face masks. Remember, the virus enters through your eyes, nose, or mouth.

Try not to touch your face, it is almost impossible. So, we must ensure our hands are safe before we inadvertently touch our face.

Before moving forward, here is my caveat. All employers are responsible for providing a safe and healthful workplace. The article is provided for informational purposes and is not to be used as a reference. Please visit www.osha.gov for all references.

Suppliers could have the most exposure having to do business with the general public. These places would have the most done which may include: signage, furniture re-arrangement, disinfection of common surfaces, plexi-glass shields, distance requirement marking tape, hand sanitizer, etc. We see many vendors instituting many methods of protection and adapt them to our work areas. I applaud those who go the extra mile to protect their employees.

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If in your facility, store, or warehouse, you start re-arranging displays, walkways, traveling routes, please ensure that you are not creating other hazards.

Are you barricading your employee from escape in case of an emergency? Are exits or exit routes blocked? This is a “Novel” virus. We are adapting to a new exposure.

You are researching, learning, applying.

What about protecting employees from other employees? Are employees complacent and assuming that their neighbors are not positive, and not wearing masks, working or gathering in close proximity? Are employees sharing workstations? Let’s not get to that point. We all have to stop somewhere, sometime, to get gas, food, etc. and may make contact, get infected, and/or carry back the virus to our place of work. Worse, we can’t tell if a person is positive or is asymptomatic (not showing symptoms and is positive) without testing. Safety is not sometimes.

A shipping company’s exposure could be from sharing equipment such as forklifts used to move pallets in or out of containers or onto flatbed trucks for delivery. In addition. Truckers have processes, involving the paperwork. How do you eliminate or reduce the exposure? We could reduce the opportunities of many employees touching the same surfaces. Do all the delivery truck operators use the forklift? Or, can the facility assign one employee to load and unload? Are wet signatures required upon delivery? Or, can the shipper send the documents by email to the customer to scan and send back the signed delivery ticket? Ideas and possibilities are endless. Can’t eliminate wet signatures? Then use another process to reduce exposure. Will papers, oh…and pen, have to be handled with gloves? Don’t let that guard down.

Administrative offices? Paper...Paper...Paper. Changing hands all the time flowing from one department to the next. How are department desks arranged? Got space?

Cubicles? Depends right? Can we go paperless? Maybe the situation we are all in, is the nudge we need to get to paperless. Do employee desks have the distance between them meeting the 6 foot requirement? Maybe a little rearranging will do the trick. Supervisors coming back to the office to do their computer work potentially bringing the virus from the worksite or vendor or store along the way back? Maybe a separate work area from other staff would help. Maybe administrative policies to ensure washing hands (20 seconds at least please) upon entering into office reducing exposure.

Wash…wash…wash hands!

Finally, the construction site. Again, it depends right?

What phase of construction is the project? Site preparation? Finishing? There may only be a few employees at a work site during the site preparation phase as compared to finishing a project with the mad rush of

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employees and subcontractors trying to meet the completion schedule, putting production first. The two phases will still require meeting the social distancing and common area protection and administrative policies to ensure worker safety. Site preparation crew of 3 could gather at their little canopy and easily keep their 6-foot distances while eating, drinking, and resting. The operators operate their respective equipment and keep safe working distances from others minimizing exposure to “struck-by” or “caught-between” hazards, enhancing protection from COVID-19.

Now for the mad rush to finish. Yes, coincidently, Taco is waiting for this article too, and am rushing to meet his deadline. How can we eliminate the hazards from multiple employees and subcontractors? Well, that’s why you get the “big bucks!” Okay, employers need to understand that safety is first. How will you plan to get it done? As time ensues, opportunities to make up time and money are lost. Will creating alternate working schedules, days or shifts to minimize employee/ subcontractor overlap? Will creating multiple rest areas be a good idea to minimize social gathering? Will providing/assigning tools and equipment to employees to prevent sharing reduce touching common surfaces?

Whatever the solution, Plan sooner and not later.

The purpose of offering these scenarios and ideas is to get the businesses in the construction industry thinking about ways to eliminate or reduce exposure. Every business and circumstance are different and hazard elimination depends on many factors. With the right intent and right support, your worksite will keep employees safe.

In closing, you’re probably saying right now…Jess, what can I do at my site? You can definitely email me at jesse.pangelinan@dol.guam.gov or call 300-4620 to request for Guam Department of Labor OSHA On-Site Consultation services in the identification of hazards, assistance in abatement, and formal training. All our services are FREE and CONFIDENTIAL. Visit www.dol.guam.gov to learn more about GDOL OSHA On-Site Consultation.

Please visit www.osha.gov for Coronavirus Resources.

Stay informed about COVID-19 to keep yourself safe and healthy.

Jesse Pangelinan is a Program Manager for the GDOL OSHA On-Site Consultation, a 100% Federally Funded Grant.

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DoD Issues Draft Guidance for Contractor Reimbursement Under Section 3610 of the CARES Act

by: Ethan M. Brown

source for source the same for the same Recently,Recently, the Defense the Defense Pricing and Pricing andcontractors contractors get a head getstart a head on this start on this another another costs forcosts which for it which is requesting it is requesting task, we’ve task, summarized we’ve summarized the key takethe key takeContracting Contracting (“DPC”) unit (“DPC”) under unit the under the reimbursement (g., under (g., the under Pay- the Payaways DoD contractors for DoD contractors seeking seeking reimbursement Secretary Secretary of Defense of Defense issued draft issued draftaways for check Protection Program); Program); and and reimbursement reimbursement under Section under 3610.

Section 3610.check Protection implementation implementation guidanceguidance for Departfor Department of Defense ment of Defense (“DoD”) contracting (“DoD”) contracting • Is not requesting reimbursement reimbursement Reimbursement Is Discretionary Is Discretionary• Is not requesting officers tasked officerswith tasked assessing with assessing concon-Reimbursement for a total forofapaid totalwork of paid andwork leave and leave and to Subject Available to Available AppropriaAppropriatractor requests tractor requests for reimbursement for reimbursementand Subject charges charges in excess inof excess 40 hours of 40 per hours per in accordance in accordance with Section with 3610 Section of 3610 oftions tions week forweek any employee. for any employee. the Coronavirus the Coronavirus Aid, Relief, Aid, and Relief, Eco-and EcoAs an matter, initialthe matter, implementhe implemennomic Security nomic Security (“CARES”) (“CARES”) Act and Act and As an initial tation guidance reinforces reinforces that DoDthat DoD Further, contractor Further, contractor reimbursement, reimbursement, applyingapplying the recent thecost recent principle cost principle tation guidance contracting contracting officers officers are authorized, are authorized, when warranted, when warranted, remains remains subject to subject to implemented implemented

by DFARS byClass DFARS DeviaClass Deviabut not mandated, to reimburse to reimburse availableavailable funding. funding.

If neitherIfcontract neither contract tion 2020-O0013—topics tion 2020-O0013—topics covered covered but not mandated, for any (or forall) anyof(or anall) “affected of an “affected funds norfunds CARES norAct CARES appropriations Act appropriations in depth in bydepth this blog. by this This blog. draft This draft contractor’s” paid leave paid costs leave costs are available are available for reimbursement for reimbursement of of guidanceguidance was firstwas alluded firstto alluded in the to in thecontractor’s” incurredincurred to keep its to keep employees its employees or orSection 3610 Section paid 3610 leave paid costs, leave nocosts, no May 1, 2020, May memorandum 1, 2020, memorandum from Kimfrom Kim reimbursement can be made. can be Thus, made. Thus, Herrington, Herrington, the DPC the Acting DPCDirector, Acting Director, subcontractors subcontractors in a ready in state a ready state reimbursement contractor if a contractor believes believes its its to address to address “the reimbursement “the reimbursement proproduring the during COVID-19 the COVID-19 pandemic. pandemic. even if a even cess from cess requesting from requesting the contracting the contracting reimbursement request should requestbe should be Providing Providing the contracting the contracting officer officerreimbursement officer’s officer’s determination determination of an ‘affected of an ‘affected with sufficient with sufficient information information to to granted, granted, it’s ultimately it’s ultimately the cognizant the cognizant contractor’ contractor’ to providing to providing a checklist a checklist to make to this make determination this determination is the keyis the key contracting contracting officer’s officer’s call. call. guide collection[ guide collection[ ] and evaluation ] and evaluation of ofto a successful to a successful reimbursement reimbursement costs from costs thefrom [contractor] the [contractor] seeking seekingrequest. request.

Information Information submitted submitted Finally, ifFinally, a reimbursement if a reimbursement request request reimbursement reimbursement [under Section [under 3610].”

Section 3610].” in a contractor’s in a contractor’s request must request must is granted, is granted, the contract the contract will be modiwill be modiComposed Composed of general of reimbursement general reimbursement ultimately ultimately support support the contracting the contracting fied to include fied toainclude firm-fixed a firm-fixed price lineprice line implementation implementation guidanceguidance along with along with officer’s officer’s determination determination that an that an item for immediate item for immediate invoicing. invoicing. two attachments—a two attachments—a checklistchecklist for for affectedaffected contractor: contractor: review ofreview a contractor’s of a contractor’s reimbursereimburseContractors Contractors Must BeMust Prepared Be Prepared to to ment request ment and request instructions and instructions for for • Provided • Provided paid leave paid to leave its employto its employSubmit aSubmit Significant a Significant Amount Amount of of using theusing checklist—the the checklist—the DPC’s draft DPC’s draftees or subcontractor ees or subcontractor employees employees Information Information to Receive to Receive ReimburseReimburseis, to date, is, the to date, mostthe comprehensive most comprehensivebecausebecause (1) the employees (1) the employees could could ment ment guidanceguidance addressing addressing contractor contractor not perform not perform work on work an approved on an approved requestsrequests for reimbursement for reimbursement under under governmentgovernmentor contractor-owned or contractor-owned As to theAs specific to the specific information information Section 3610 Section since 3610 thesince DFARS theClass DFARS Classor leasedorsite leased due site to COVID-19due to COVID-19- requiredrequired in the contractor’s in the contractor’s request request DeviationDeviation 2020-O0013 2020-O0013 issued on issued April on April related closures related closures or other or restricother restric-for reimbursement, for reimbursement, the DPC’s the draft DPC’s draft 8. The final 8. The guidance final guidance is expected is expected to totions, and tions, (2) their and (2) jobtheir duties job duties checklistchecklist providesprovides details on details this on this be released be released shortly. shortly. prevented prevented telework;telework; significant significant undertaking. undertaking.

Among Among other information other information in the checklist, in the checklist, • Provided • Provided paid leave paid between leave between Janu- JanuAt bottom, At the bottom, draftthe guidance draft guidance makes makes a contractor a contractor must provide must (1) provide infor-(1) inforarySeptember 31 and September 30, 2020;30, 2020;mation on clear thatclear reimbursement that reimbursement requestsrequests ary 31 and mation its corporate on its corporate structurestructure will require willarequire significant a significant amount of amount inof inand affiliations, and affiliations, includingincluding whether whether • Incurred • Incurred and paidand all costs paid all claimed costs claimed formation. formation.

Thus, eligible Thus,contractors eligible contractors the contractor the contractor is seeking is seeking similar similar for reimbursement prior to the prior date to the date (and their(and eligible theirsubcontractors) eligible subcontractors) for reimbursement reimbursement reimbursement from other from federal other federal of the contract of the contract or’s request; or’s request; should begin should compiling begin compiling the requested the requested agencies, agencies, (2) information (2) information regarding regarding the subject the DoD subject contract(s) DoD contract(s) and/or and/or information information in accordance in accordance with the with the • Has not• Has beennot reimbursed been reimbursed from from task order/delivery task order/delivery numbers, numbers, DPC’s guidance DPC’s guidance without delay. without Todelay. help To help 20 | JUNE2020

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of its subcontractor, of its subcontractor, the prime the prime may easemay and (3) identification and (3) identification of similar ofresimilar readministrative ease administrative burdens”burdens” must obtain mustthe obtain samethe information same information imbursements imbursements or credits orreceived credits received on the parties, on the the parties, discussions the discussions about subcontractor the subcontractor from thefrom the under competing under competing relief programs relief programsabout the are nonbinding are nonbinding and, as aand, result, as a result, draft checklist as the prime as the itself prime itselfshouldn’tshouldn’t (e.g., the(e.g., Paycheck the Paycheck Protection Protection draft checklist be seen as be anything seen as anything providedprovided to the contracting to the contracting officer, officer, Program,Program, Division Division G of Public G ofLaw Public Law more than more a dialogue than a dialogue betweenbetween the the including, including, inter alia,inter “a list alia, of “a alllist of all parties. To 116-127).116-127). parties. ensure Tothe ensure enforceability the enforceability affectedaffected DoD andDoD non-DoD and non-DoD Federal Federal of any ofof the any topics of the covered topics in covered these in these contracts and subcontracts, and subcontracts, and anddiscussions, However,However, the mostthe daunting most daunting part partcontracts discussions, contractors contractors will needwill need the subcontractor’s the subcontractor’s commercial commercial the contracting of any contractor’s of any contractor’s reimbursement reimbursement the contracting officer’s officer’s written written work in total workover in total the over period thefor period for decisiondecision request is request likely to is be likely thetorequired be the required on the reimbursement on the reimbursement which Section which 3610 Section reimbursement 3610 reimbursement narrativenarrative justifyingjustifying the contractor’s the contractor’s request. request. is being is requested.” being requested.”

However,However, eligibilityeligibility for reimbursement for reimbursement under under instructions draft instructions accompanyaccompanySection 3610 Section for 3610 all affected for all affected DoD DoDthe draftthe AlthoughAlthough Section 3610 Section was3610 was ing the checklist note thatnote in that in contracts contracts and contractor and contractor employ- employ-ing the checklist implemented implemented to aid federal to aidcontracfederal contracsome instances some instances the contracting the contracting tors affected ees, along ees, with along significant with significant informa-informators affected by the COVID-19 by the COVID-19 officer work may directly work with directly with pandemic, tion regarding tion regarding the contractor’s the contractor’s officer may pandemic, the evolving the evolving guidanceguidance the subcontractor the subcontractor to evaluate to evaluate a rea reclaimed claimed costs forcosts reimbursement. for reimbursement. for the process for the process of requesting of requesting reim- reimimbursement imbursement request. request.

For example, For example, As to theAs cost to the information, cost information, a a bursement bursement may militate may against militate against section of the(g) draft of the checklist draft checklist the potential contractor contractor is expected is expected to provide to providesection (g) the potential monetary monetary recoveryrecovery for for that if the that subcontractor if the subcontractor an exhaustive an exhaustive description description of the of the providesprovides certain DoD certain contractors.

DoD contractors.

Under the Under the does notdoes routinely not routinely provide its provide primeits prime methodology methodology it used toit develop used to develop the the current incarnation current incarnation of the DPC’s of the DPC’s with information with information concerning concerning the the guidance, costs forcosts reimbursement, for reimbursement, including, including, guidance, reimbursements reimbursements under under subcontractor’s other federal otherand federal and inter alia,inter (1) how alia, the (1) how contractor the contractor subcontractor’s Section 3610 Section require 3610contractors require contractors commercial contractcontract work “due work to “due to developed developed the appropriate the appropriate rates rates commercial to develop to develop and submit andasubmit significant a significant competition or proprietary or proprietary data data amount of and whatand thewhat ratesthe include rates (e.g., include (e.g., competition amount information, of information, along with along with concerns,” the subcontractor the subcontractor supporting labor rates, labor overhead, rates, overhead, G&A, butG&A, but concerns,” supporting documentation, documentation, to the to the may the provide prime the with prime onlywith only cognizant not profitnot or profit fee); (2) or information fee); (2) information may provide cognizant contracting contracting officer. This officer. This the amount of reimbursement of reimbursement task is made on the contractor’s on the contractor’s accounting accounting the amount task is exponentially made exponentially more more requested, and submit andthe submit informathe informasystem; system; (3) a breakdown (3) a breakdown of each of each requested, time-consuming time-consuming and daunting and daunting if a if a tion required to support to support its request its request affectedaffected employee’s employee’s length oflength of tion required prime contractor prime contractor is also seeking is also seeking “directly “directly to the contracting to the contracting officer officer paid leave paid and leave average and average number of number of reimbursement reimbursement for one or formore one or more under separate under separate cover.” cover.” hours worked hoursprior worked to the prior COVID-19 to the COVID-19 of its affected of its affected subcontractors. subcontractors. pandemic; pandemic; (4) information (4) information on the on the In sum, that’s In sum, a lot that’s of additional a lot of additional Early Engagement Discussions Discussions work to be contractor’s contractor’s actual, unburdened actual, unburdened Early Engagement work borne to be byborne a contractor by a contractor BetweenBetween the Parties the May Parties Ease May Ease for what for hourly rates hourly forrates all affected for all affected employ- employmay what be amay relatively be a relatively small small Administrative BurdensBurdens ees; andees; (5) identification and (5) identification of the of the Administrative reimbursement, reimbursement, not to mention not to mention contractor’s contractor’s forward pricing forwardand pricing and the risk of thefuture risk of prosecution future prosecution revised indirect revised rates. indirect But rates. that’s But not that’s not under the under Falsethe Claims FalseAct Claims if theAct if the The draftThe instructions draft instructions accompanyaccompanyall—a contractor all—a contractor must also must submit also submit information information in a reimbursement in a reimbursement ing the checklist ing the checklist permit a permit contracta contracta spreadsheet a spreadsheet “showing“showing its calculaits calcularequest intentionally request intentionally or recklessly or recklessly ing officer ingtoofficer engage toin engage “Early in “Early tion of the tion requested of the requested Section 3610 Section 3610 contradicts the contractor’s the contractor’s certifi- certifiEngagement Engagement Discussions” Discussions” with with contradicts reimbursement reimbursement amount”amount” traceabletraceable Of course, Ofthe course, final the draft final draft a contractor a contractor regardingregarding reimbursereimburse-cations. cations. to the other to the supporting other supporting data in its data in itsment requests of this guidance of this guidance and future and edits future edits ment requests under Section under 3610, Section 3610, submission submission package.package. all may the change reimbursement the reimbursement and contractors and contractors should be should readybe ready all may change requirements requirements significantly, significantly, so so for such for an invitation. such an invitation.

Should Should On top ofOn this topsubstantial of this substantial list of list of a contracting contractors should keep should an eye keepout an eye out a contracting officer choose officerto choose to contractors information, information, contractors contractors should should engage aengage for subsequent for subsequent iterations iterations of the of the contractor, a contractor, the contractor the contractor be awarebe that aware the draft that the checklist draft checklist should not DPC’s guidance.

But assuming But assuming no no should be shy notinbe obtaining shy in obtaining an anDPC’s guidance. is not allisinclusive—a not all inclusive—a contracting contractingunderstanding major changes to the DPC’s to the draft, DPC’s draft, understanding of the contracting of the contractingmajor changes officer may, officer at his may, or at herhis discretion, or her discretion, contractors contractors with paidwith leave paid costs leave costs officer’s officer’s expectations, expectations, includingincluding the the request additional request additional information information from from eligible for eligible reimbursement for reimbursement under under expectedexpected type andtype formatting and formatting of the of the the contractor the contractor in addition in addition to the to the information, Section 3610 Section should 3610weigh should the weigh the information, and obtaining and obtaining an under-an underinformation information in the checklist. in the checklist. of benefit potential of potential short-term short-term mon- monstandingstanding of how appropriate of how appropriate rates of ratesbenefit of etary relief etary against relief the against risk of theincurrisk of incurreimbursement reimbursement will be defined will be and defined and Subcontractors Subcontractors Seeking Seeking Reim- Reim- calculated. ring additional overheadoverhead in compilin compilcalculated.

To the extent To thepossible, extent possible,ring additional bursement bursement Are Subject Are Subject to Similar to Similar ing and drafting a reimbursement a reimbursement contractors contractors considering considering requestsrequestsing and drafting Informational Informational Requirements Requirements For smallFor contractors small contractors or or for reimbursement for reimbursement under Section under Sectionrequest. request. contractors contractors minimally minimally affectedaffected by by 3610 should 3610take should advantage take advantage of and of and In the event In the a prime event contractor a prime contractor invite this the COVID-19 pandemic, pandemic, the “juice” the “juice” invite earlythis dialogue. early dialogue.

But it’s But it’s the COVID-19 is requesting is requesting reimbursement reimbursement be worth not be the worth squeeze. the squeeze. important important to recognize to recognize that while that whilemay not may under Section under 3610 Section on 3610 behalfon behalf the Earlythe Engagement Early Engagement Discussions Discussions Like Us On Facebook

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NEWSLINE ABC Report: Safety Best Practices Can Make Construction Companies 827% Safer Associated Builders and Contractors released its 2020 Safety Performance Report, an annual assessment that furthers the construction industry’s understanding of how to achieve world-class safety through its STEP Safety Management System.

Published in conjunction with National Safety Month, the report documents the dramatic impact of using proactive safety practices to reduce recordable incidents by up to 88%, making the best-performing companies 827% safer than the U.S. Bureau of Labor Statistics industry average.

“Based on real contractors doing real work, ABC’s annual Safety Performance Report outlines how safety best practices and performance measurement can drastically improve jobsite safety,” said Greg Sizemore, ABC vice president of health, safety, environment and workforce development. “During unprecedented circumstances such as the COVID-19 outbreak or when it’s business as usual, and no matter the size of the company or scope of work, the information and tools in this report will help contractors create the conditions that help ensure our workers go home safe and healthy every day.”

Among the findings:

• Tracking and reviewing activities

carried out to prevent and control injury, such as safety training,

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new hire safety orientation and behavior-based safety observations, leads to a 70% reduction in TRIR and a 71% reduction in DART rates.

• Companies that conduct daily toolbox safety meetings reduce TRIR by 82% compared to companies that hold them monthly.

• Having a written personal protection equipment policy that is consistently and universally enforced, conducting an annual needs assessment and continually investing in new equipment leads to a 62% reduction in TRIR and a 65% reduction in DART rates.

• A new leading indicator for 2019, a comprehensive emergency response/fire elimination plan that tiered contractors are contractually bound to follow leads to a 61% reduction in TRIR and DART rates.

• One-third of all incidents on construction jobsites are drug- or alcohol-related. Robust substance abuse programs/policies with provisions for drug and alcohol testing where permitted lead to a 66% reduction in TRIR and a 67% reduction in DART rates.

• The Safety Performance Report is based on data gathered from ABC member companies recording nearly one billion hours of work in construction, heavy construction, civil engineering and specialty trades. It tracked 35 data points from companies that deployed STEP in 2019 to determine the correlation between leading indicator use and lagging indicator www.guamcontractors.org

performance, which is measured by the Total Recordable Incident Rate and Days Away and Restricted or Transferred rate. Each of the data points was sorted using a statistically valid methodology developed by the BLS for its annual Occupational Injuries and Illnesses Survey, and then combined to produce analyses of STEP company performance against BLS industry average incident rates.

Founded in 1989 as a safety benchmarking and improvement tool, STEP has evolved into a world-class safety management system that demonstrates safety leadership and cultural transformation to clients.

Participating ABC member firms measure their safety processes and policies on 24 key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incidence. Applying world-class processes dramatically improves safety performance among participants regardless of company size or type of work.

June is National Safety Month, a national initiative to promote workplace safety best practices, especially amid the COVID-19 pandemic.

Read the report at abc.org/spr.

JUNE2020 | 23

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OSHA Releases Guidance on Limiting Workplace Exposure to the Coronavirus As states begin to ease lockdown restrictions, many businesses are looking for ways to reopen while maintaining social distancing guidelines and protecting their employees.

To help businesses prevent outbreaks in their workplaces, the Department of Labor’s Occupational Safety and Health Administration has issued an alert listing ways employers can limit worker exposure to the coronavirus.

According to OSHA, safety measures businesses can implement include: Encouraging workers to stay home if they are sick; • Isolating any worker who begins to exhibit symptoms until they can either go home or leave to seek medical care; • Establishing flexible worksites (e.g., telecommuting) and flexible

work hours (e.g., staggered shifts), if feasible; • Staggering breaks and rearranging seating in common break areas to maintain physical distance between workers; • In workplaces where customers are present, marking six-foot distances with floor tape in areas where lines form, using drive-through windows or curbside pickup and limiting the number of customers allowed at one time; • Moving or repositioning workstations to create more distance and installing plexiglass partitions; and • Encouraging workers to bring any safety and health concerns to the employer’s attention.

These measures aim to address concerns many employees have about safely returning to work and provide a roadmap for employers to implement the necessary measures to alleviate these concerns and provide a safe and healthy work environment.

OSHA has also published Guidance on Preparing Workplaces for COVID-19 and other recommendations to educate workers and employers on how to protect themselves and their workplaces during the ongoing pandemic.

For more comprehensive coronavirus resources, visit abc.org/coronavirus.

The new alert is available for download in English and Spanish.

IRS Ruling on PPP Forgiveness On April 30, the Internal Revenue Service issued Notice 2020-32 which clarified that “no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act. It is ABC’s view that this ruling is at odds with the legislative text of the CARES Act, which included Section 1106(i), which says that, with regard to the “taxability” of the loan forgiveness

24 | JUNE2020

available to PPP recipients, any amounts forgiven by a PPP loan “shall be excluded from gross income.”

On May 7, ABC and other associations sent a letter to Grassley and Neal regarding this ruling.

The IRS’s stance would eliminate some of the critical economic benefits of the PPP program, and both Senate Finance Chairman Chuck Grassley (R-Iowa) and House Ways and Means Chairman Richard Neal (D-Mass.) objected that the IRS wasn’t following congressional intent — with Neal going so far as to say he’d seek a legislative fix.

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