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Engineering fee hike and GOP caucus insights

The big picture: This week brings encouraging news regarding an increase in fees for engineering services procured by military departments and progress in our campaign against R&D amortization, as well as the upcoming first-in-the-nation Iowa GOP caucuses.


First up: President Biden, right before the holidays, signed the FY'24 National Defense Authorization Act into law. The new law includes ACEC-backed language that raises the existing 6% fee cap for work with the Corps of Engineers and other Defense Department agencies to 10%.

  • This long-awaited reform, replacing a decades-old cap, will provide more negotiation room for firms working with the DOD to secure fees that reflect their value to federal clients.

The bottom line: While this reform needs an extension to civilian agencies, it's a significant stride forward and should be a welcome update for all firms operating in federal defense markets.


Last October, we launched a full-scale campaign encouraging lawmakers to reverse the short-sighted and punitive R&D amortization policy. The campaign has included paid media through our nationally aired television ad and earned media in targeted markets.

  • By the numbers: We have secured 33 earned media hits, reaching a total audience of more than 900,000.

  • The bottom line: We are making the case that R&D amortization isn’t “just” about tax policy. It’s about real people, real jobs, and real consequences.

What’s next: Action on relief legislation could happen early this week – stay tuned!

Focus on Iowa GOP caucuses: The Iowa GOP will hold its first-in-the-nation caucuses next Monday.

  • At stake: 40 delegates will vote at the Republican National Convention in July.

  • Digging deeper: The total number of delegates needed to win the GOP nomination is 1,245, so the Iowa caucus is less about gathering delegates and more about gathering momentum.

  • Former President Trump is leading in Iowa, with polls indicating over 50% support.

  • If this continues, next week's caucus will likely see Nikki Haley and Ron DeSantis vying for second place. DeSantis has dismissed rumors of withdrawing post-Iowa.

Why it matters: The Iowa caucus is crucial for campaign momentum and media narratives, but it's just the beginning. New Hampshire is next, followed by the Democrats' first primary in South Carolina, testing President Biden's electoral strength.

Have a great week,

Linda Bauer Darr

President & CEO

American Council of Engineering Companies | ACEC


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