For builders, Trump's wall beckons but is fraught with political risk

President Trump's plan to seal the border poses difficulties for companies that might bid for the job. Divestment or blacklisting legislation has been proposed in seven states. 

This week, a nascent national movement takes to the streets to protest the building of a border wall with Mexico.

But they’re not marching on Washington or in individual state capitals. Instead, they’re showing up on the doorsteps of major engineering and construction firms to persuade them not to help build the proposed wall. 

Those protests, which began May 17, build on a national letter-writing campaign and legislative efforts in seven states and a handful of cities also targeting contractors. These moves are having an effect. Many of the largest and best-known design, engineering, and construction firms – even those with decades of experience overseeing controversial projects in the Middle East and Africa – have decided not to bid on the border wall.

Their absence complicates the bidding process for the Trump administration, which is, after all, the intent of antiwall advocates. But the protests and legislation are also having an unintended effect, pushing partisan politics deep into a government bidding process that typically deals with relatively uncontroversial projects such as roads and bridges. Many in the contracting world worry that partisan politics will spill over into other work.

“This sets a very dangerous precedent,” says Michael Kennedy, general counsel of the Associated General Contractors of America (AGC), an industry group based in Arlington, Va. “Once this genie gets out of the bottle, I’m not sure where it goes…. [And] it’s taking our members hostage.”

Will a company that builds an abortion clinic be shut out from bidding on contracts in conservative states? Will companies that help store nuclear waste be frozen out of bidding on unrelated projects in some parts of the country?

One person's business is another's politics

Even though such blacklisting is probably unconstitutional, just the threat of such action has already had an effect.

In recent days, as US Customs and Border Protection (CBP) has notified the more than 100 bidding companies whether they made it to Round 2, many large contractors are conspicuous by their absence.

So while Dark Pulse Technologies, a small Scottsdale, Ariz., company, will be trying to persuade federal officials its fiber sensing systems can enhance border security, engineering and construction companies with decades of experience overseeing massive infrastructure projects have not bid on the wall. Bechtel Corp., which built pipelines in Saddam Hussein’s Iraq and designed the radiation containment system in the wake of the Chernobyl nuclear disaster in the former Soviet Union, is not participating.

Ditto for Turner Construction (builder of the world’s tallest building in Dubai), international engineering and architectural firm Leo A Daly, and France’s VINCI (the world’s largest construction company). Even companies that previously expressed an interest in the huge border project, which could cost $20 billion or more, have backed off. Mexican cement giant CEMEX shied away after Mexico’s foreign minister said companies should "examine their conscience" when deciding to bid. Granite Construction, based in Watsonville, Calif., has built previous sections of the wall but reportedly did not bid after nearby Santa Cruz voted to divest from border wall companies.

The apparent impact of the political pressure is notable partly because the border wall, so far, isn’t even under way. Congress has not passed legislation to fund it.

In seven state legislatures, bills have been introduced aiming to penalize companies that help build the wall. But none of these states – Arizona, California, Illinois, New Mexico, New York, Rhode Island, and Wisconsin – has actually passed a bill, and time is running out as their legislative sessions end.

Santa Cruz is one of the few jurisdictions that has actually passed antiwall legislation. It has said it will not use money to invest in any company that participates in the construction. Two other California cities, Berkeley and Oakland, have taken even stronger stands. They have agreed not to contract with any company involved with building President Trump’s signature initiative.

'Gun-shy about the risks'

Such blacklisting legislation has also been introduced in four states: California, New York, Arizona, and Illinois. Even the threat that they might lose work in those states has many contractors deeply worried.

“They are gun-shy about the risks of potentially losing state and local business that would outweigh any wall contracts,” David Raymond, president of the American Council of Engineering Companies, writes in an email. “The threatened legislation in California and other states is unprecedented.”

Back in the 1980s, US activists targeted corporations with ties to South Africa as part of their campaign against the apartheid system of government.

But blacklisting measures against a federal project would face huge constitutional barriers if the laws ever get challenged in court, says Breana Ware, an attorney in construction and government contracts group of Alston & Bird, an international law firm based in Atlanta. Under the Supremacy Clause, Congress can preempt state laws that conflict with federal law or create an obstacle to its objectives, such as building the wall, Another hurdle is the “nondiscrimination rule,” which invalidates regulations that discriminate against the federal government or those it deals with.  Also, the Commerce Clause of the Constitution prevents states from inhibiting or discriminating against interstate commerce, she adds.

But the cost to companies to challenge those laws would take time and cost perhaps up to $1 million in legal fees in each state, says Mr. Kennedy of the industry group AGC.

“The mere discussion of a ban sends a message to industry and to state agency personnel about the biases of the legislatures and local governing authorities,” says Robert Tompkins, co-chairman of the government contracts practice at Holland & Knight, in Washington. “Would a wall contractor get a fair shake in a state or local procurement, even if wall blacklisting legislation eventually did not pass? Then again, would such a contractor have fair recourse in a court in the same state if they wanted to challenge that apparent bias?  Sadly, the answer to both may be ‘no.’ ”

It may be that the antiwall movement shifts away from the blacklisting strategy because of the constitutional problems. In March, El Paso City Rep. Peter Svarzbein dropped the idea of a blacklisting wall companies after the city attorney told him it violated state law. The city council later voted unanimously to condemn the border wall. On May 12, a Los Angeles city councilman filed a motion that contractors doing business with the city would have to reveal if they worked on the wall.

Rising price tag for wall?

In some ways, the protesters can already claim victory. The threat of legislation will make building the wall more difficult and costly.

“It reduces competition among the companies,” says Kennedy of the AGC. “It makes it much more difficult for the federal government to attract first-in-class contractors…. You're going to increase the price.”

On the afternoon of May 17, protesters delivered a letter to the Portland, Ore., offices of Louis Berger, urging the company not to participate in the federal project. In a statement, the $1 billion infrastructure and development company said it had already made the decision not to bid on the wall. The protesters plan to target the San Jose, Calif., office of Hensel Phelps, another large contractor, on May 18. Similar events are planned in Pittsburgh, New York, Boston, and Chicago. [Editor's note: This paragraph has been modified to include Louis Berger's statement as well as updated reference to the May 17 protest.]

To Trump supporters, all this is a political attack on an activity they view as a legitimate effort to assert the rule of law along a porous international boundary and improve American security.

But wall opponents see it as a strong and deserved rebuke to Trump's hard-line views and policies on immigration. Rhode Island state Rep. Aaron Regunberg, who has introduced legislation to have the state divest any funds from companies involved in Trump’s border wall, puts it this way: “We're saying he shouldn't be creating this symbol of xenophobia and hate using Rhode Island state dollars.”