Bill Overview
Title: Paycheck Protection Program Fairness for Engineering Services Act
Description: This bill exempts until June 30, 2025, certain contractors that receive federal highway or public transportation funding from having to adjust costs associated with their contracts to account for loan forgiveness through the Paycheck Protection Program (PPP). (The PPP provided small businesses with loans for payroll and other costs to respond to the COVID-19 emergency with loan forgiveness under certain conditions.) Under current law, a contractor with a cost-reimbursable contract must reduce costs or provide cash refunds to the Department of Transportation (or a state department of transportation) if the contractor receives or accrues any income, rebate, allowance, or other credit relating to an allowable contract cost, which includes PPP loan forgiveness.
Sponsors: Rep. Brown, Anthony G. [D-MD-4]
Target Audience
Population: Contractors in engineering services receiving federal highway or public transportation funding
Estimated Size: 800000
- The bill impacts contractors involved in federal highway or public transportation funding, specifically in the engineering services sector.
- It relates to the Paycheck Protection Program (PPP), which provided loans to small businesses during the COVID-19 pandemic.
- The bill changes the financial obligations of these contractors by exempting them from adjusting costs due to PPP loan forgiveness until 2025.
- Engineering services are a significant subsector within the broader professional, scientific, and technical services industry.
Reasoning
- The policy affects contractors involved in federal highway or public transportation funding, specifically those in the engineering services sector. These contractors are likely to benefit from not having to adjust costs or issue refunds due to PPP loan forgiveness, which may positively impact their financial stability.
- The policy aims to provide financial relief to a niche sector of contractors, with a significant number likely based in urban and suburban areas where federal highway and public transportation projects are common.
- The target population, based on U.S. industry data, likely includes small to mid-sized businesses in engineering services that frequently work with transportation contracts.
- This policy is applicable only until 2025, providing a temporary reprieve, and the benefits may vary depending on the scale of loans received and the proportion of their business that involves federal contracts.
Simulated Interviews
Civil Engineer (Kansas City, MO)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- This policy will allow my firm to stabilize financially after the disruptions caused by the pandemic.
- Temporary financial relief will help us focus on completing existing projects without the fear of financial loss.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Transportation Planner (Boston, MA)
Age: 52 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- It's reassuring to know that we won't have to return loan amounts which helps us to reinvest in the business.
- We can focus on innovation rather than worrying about finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Bridge Engineer (Atlanta, GA)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 15/20
Statement of Opinion:
- This policy marginally affects my employer, but it's beneficial for smaller contractors we collaborate with.
- I see how the policy brings stability to the smaller partners in our projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Project Manager (Houston, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- The relief provided can help us allocate more resources towards expanding our services.
- We can now focus on growth without debt pressure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 5 | 3 |
Environmental Engineer (Portland, OR)
Age: 62 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 18/20
Statement of Opinion:
- The policy makes little difference as my engagements are sporadic and contract terms vary.
- However, it might boost subcontractor prospects, indirectly aiding me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Structural Engineer (Chicago, IL)
Age: 40 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- This policy offers us much-needed financial breathing room to manage our projects better.
- The reduction in financial stress will lead to better work-life balance among employees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 3 |
| Year 20 | 5 | 2 |
Civil Engineering Consultant (Phoenix, AZ)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 11/20
Statement of Opinion:
- Exemption from cost adjustments enables me to maintain competitive pricing and attract more clients.
- Such a policy ensures more cash flow which is critical for a consultancy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Transportation Engineer (Denver, CO)
Age: 47 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 14/20
Statement of Opinion:
- The policy supports our ongoing projects by reducing financial burden.
- However, the long-term effect is limited as our funding is largely public.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Urban Planner (San Diego, CA)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- We welcome the exemption, allowing us to focus financial resources on transformative projects.
- Coordination with smaller subcontractors is simplified without the cost adjustment burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Engineering Consultant (Charlotte, NC)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- The policy is good news for many of my clients; it alleviates immediate fiscal constraints.
- Long-term business relationships can stabilize from this temporary policy support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 5 | 3 |
Cost Estimates
Year 1: $250000000 (Low: $200000000, High: $300000000)
Year 2: $250000000 (Low: $200000000, High: $300000000)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The bill provides liquidity relief to contractors by delaying cost adjustments until mid-2025.
- It may lead to short-term fiscal costs for state and federal transportation departments since funds aren’t refunded or costs reduced as initially anticipated.
- The impacts on broader macroeconomic factors like GDP and employment are likely to be moderate due to the specific focus of the bill.