APRIL 3, 2020
There is a lot in today's email but all worth the read.

I'm working on questions for an ACECL specific survey. If there is something you would be interested in knowing about how the industry is handling business during this event, please send me an email with the question. See the results of ACEC's third national survey in the meantime.

I hope you find time to enjoy your weekend. Stay well.
SBA issued an interim final rule on the Paycheck Protection Program (PPP) authorized by the CARES Act which became effective today. They also updated the application form. Remember this program is for companies with 500 or fewer employees . Always keep in mind that the intention of this program is payroll protection ...keeping employees paid in the face of the economic uncertainty during COVID19 outbreak. The legislation gave the Administrator of SBA and Secretary of the Treasury latitude in setting the rules implementing the program. That is why you will see some differences from what was reported in the legislation (CARES Act). Consult your CPA and lender for specific guidance. Your need your payroll provider getting you all the required payroll information pronto.

Some important points:

  • The biggest change is that the loans will be based on a fixed 1% interest rate; previous guidance had set it at 0.5%. The legislation mentioned 3.5%

  • The PPP loans can still be converted into grants—negating the interest rate entirely—if businesses follow spending guidance and maintain employee and compensation levels. There is a $100K annual salary cap (can only use the amount of salary under $100K for purposes of calculating your payroll amounts).

  • The amount a firm can borrow is the lesser of $10 million or an amount calculated using a payroll-based formula contained in the rule (it's easy to read). You should apply for the maximum amount because you can only get one loan.

  • 2 year maturity (not 10 years as previously stated in the legislation). You do not have to start paying the loan back for six months but interest will accrue.

  • Get your loan application in now....this is a first come, first served program. Note that some lenders are not yet ready to accept applications since the rules just came out yesterday. Not all banks are going to be lenders. Contact your bank now. If you have problems identifying a lender, let me know.

  • The amount of possible loan forgiveness is full principal and accrued interest if borrower maintains payroll - more guidance on loan forgiveness is forthcoming:
  • 75% of the loan must be used to maintain payroll. The other 25% can be used for mortgage payments, rent and utility payments based on a formula outlined in the rule.
  • To my earlier point, it is safe to assume that the loan, or any part thereof, forgiveness will be based on maintaining your employee and compensation levels.
  • This differs from the legislation that suggested that forgiveness would equal the sum of payroll costs and payments of mortgage, interest, rent and utilities.
  • It is fraudulent to use the borrowed funds for anything other than the authorized purposes.
  • There is $349 billion appropriated for this program (expires Juen 30, 2020)

As a side note, ACEC is working on a webinar with SBA representatives. Be on the look out for something scheduled for next week.

Late yesterday, Governor Edwards issued Proclamation 41 JBE 2020 extending the State of Emergency for COVID19 which continues to exempt workers covered by CISA. The Governor's office confirms to ACECL that engineering is an essential service covered by CISA.

As a project partner of LADOTD and FHWA, ACECL joined AGC, CAAL and LAPA in a plan to stop the spread of COVID19. All ACECL member firms are asked to adhere to these guidelines and share it with your employees who are working on the delivery of transportation projects.
In effort to assist firms, ACECL developed the following Workplace COVID19 Preparation and Response Policy template that can be customized to fit your needs. This is not intended to supplant legal guidance or substitute for your firm's protocols for managing through COVID19. It merely provides a basis for a written policy which may be required by some clients when responding to advertisements during the COVID19 outbreak. Edit as you deem appropriate for your individual circumstances. Once finalized, save your document as a PDF for all the hyperlinks to activate. If you have suggestions on how to improve this template, please share.

  • Baton Rouge confirms they are working on a means to conduct the next engineer selection board meeting electronically to get the MOVEBR program back on track.
  • I'm informed through a third party who had a conference call yesterday with Mayor's office that Baton Rouge permitting office is still operating and not expecting any substantial delays.
  • I'm working with Governor's office and LMA to resolve a difference of interpretation in the language of the Governor's Proclamation that suspended provisions of Title 38 public works procurement (2020-32 and 41). Per the Governor's office, in no uncertain terms is the order intended to stop or delay the state or municipalities from moving forward on issuing, receiving or opening construction bids. It is to provide flexibility from the strict provisions of the law in light of COVID19 limitations such as social distancing and offices closed to the general public. I'll keep you posted on this. Title 39 projects are not part of this issue.
  • The joint A/E/C letter sent to major city and parish leaders last week is being edited to include clarification on the above issue (once resolved) before being more widely distributed to Louisiana's mayors and parishes.
  • 9 out of 10 firms feel the economy at all levels is worse today than it was 30 days ago.
  • 54% feel their firm’s finances and cash flow (58%) are worse today.
  • 8 out of 10 firms feel the economy at all levels will be even worse 30 days from now. 68% feel their firm’s finances and cash flow (72%) will be even worse 30 days from now.

  • Nearly 50% of firms feel the economy will improve six months from now, about 1 out of 4 think it will continue to get worse.

  • While many firms have already taken actions in the past 30 days to shore up their finances, even more expect to do so in the coming 30 days. Actions topping the list include hiring freezes and freezing non-essential purchases.

  • 51% indicate the federal stimulus package passed last week will have a positive impact on their firm, nearly one-third (32%) are not sure yet.

  • Firms are increasingly providing emergency paid leave (now at 34%), instead of unpaid leave. NEW: 25% of firms are allowing their employees to borrow from future leave or go negative on their leave balance.

  • Increase in the percentage of firms (45% up from 40% in Week 2) reporting delays in RFPs/RFQs or Awards due to COVID-19.
  • Increase in the percentage of firms (70% up from 58% in Week 2) reporting project delays or cancellations due to COVID-19.
  • More firms are reporting assistance from their creditors in all areas. Majority of firms still report they have not received or don’t need assistance (72% down from 87%). 
You can click here to stream the recording of the ACEC Webinar: Navigating Your Small Firm Through the COVID-19. 

All updates and resources on COVID-19 (including past recorded webinars) can be found on ACEC’s Coronavirus Resource Center . There webinars have all been top notch.