Construction Union Membership Near Historic Low

January 27, 2012 – 11:38 am

A new report released today by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) indicates that from 2010 to 2011, 874,000 workers in the private construction industry belonged to a union, the second lowest number of construction union members since BLS started tracking this information in 1973.

According to BLS data, the lowest recorded number of union members in the construction industry was in 2010,  when just 801,000 private construction workers belonged to a union.

From 2010 to 2011, union membership grew from 13.1 percent to 14 percent of the U.S. private construction workforce, with construction unions adding 73,000 new members.

The recession has hit the construction industry hard.  The average construction industry unemployment rate in 2011 is 16.4 percent. According to government data, the current industry unemployment rate is at 16 percent, but it was as high as 22.5 percent in Jan. 2011 .

The construction industry has shown little to mild signs of improvement. From 2010 to 2011, the construction industry added 141,000 jobs and grew from 6,103,000 workers to 6,244,000 workers. However, there have not been this few workers employed in the construction industry since 1998, when 5,946,500 workers were employed and 17.8 percent of the workforce was unionized, according to the Union Membership and Coverage Database, available at www.unionstats.com. In addition, government data indicates construction spending has been flat.

Government-Mandated PLAs Create Jobs for Union Members
So how will the decline in overall construction union membership change the public policy debate surrounding government-mandated project labor agreements (PLAs) and President Obama’s pro-government-mandated PLA Executive Order 13502?

In short, there will be added pressure on politicians to pander to Big Labor’s special interests and help keep their political base afloat. As they did in 2009 and 2010, the White House, members of Congress and federal officials beholden to Big Labor’s costly special interest agenda will try to steer federal construction contracts to unionized employers and create jobs exclusively for union members through federal government-mandated PLAs. On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule (pdf), effective May 13, implementing President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 into federal procurement regulations.

While the final rule does not mandate PLAs on all federal construction projects — and it offers agencies some flexibility when deciding whether to mandate a PLA on a specific large-scale construction project — the regulation is nothing but a handout to special interests.

The decision to agree to a PLA should be left up to individual contractors and not forced onto qualified contractors by government agencies as a condition of winning a federal construction contract. PLAs mandates reduce competition, increase costs and steer contracts to unionized firms.

This election year, special interests and their political allies will turn up the heat on federal bureaucrats to ensure more PLAs are attached to federal construction projects and other taxpayer-funded construction projects.

After all, numerous elected officials have a politically motivated self-interest in creating jobs for construction union members.  It’s stating the obvious, but fewer union jobs spells disaster for union institutions, union retirement plans and the politicians that depend on union contributions to get elected and pass public policy favoring Big Labor.

Politicians understand that a lack of union jobs in the construction industry means fewer union dues and “voluntary” political contributions deducted from union members’ paychecks that are funneled into various union slush funds coordinated through Labor Management Cooperation Committees (LMCCs), 527 groups and Political Action Committees (PACs) that support Big Labor’s friends in politics.

This symbiotic mutualism between Big Labor and its political chums cannot continue without healthy union institutions and political contributions from labor unions that fuel the Democrats’ political machine.  

So the latest union membership numbers—coupled with high unemployment in the construction industry and the complex relationship of entities dependent on union revenue—point to a greater push for local, state and federal governments to mandate PLAs at the expense of taxpayers and the merit shop contracting com

There are valid economic and ethical reasons why promoting the special interests of Big Labor, which composes just 14 percent of the U.S. private construction workforce, ahead of the needs of the rest of the construction industry through PLAs is bad public policy.

For example, on prevailing wage projects, PLAs typically increase the cost of construction between 12 percent and 18 percent, on average, compared to similar non-PLA mandated projects.  With the added cost premium of anti-competitive PLAs, there is less construction money available. And less construction money means fewer total construction projects and construction jobs. So union-favoring PLAs could make unemployment in the construction industry even worse.

In addition, there is no compelling reason (other than political self-interest) to create jobs for union members ahead of nonunion employees via government-mandated PLAs. Qualified nonunion employees deserve just as fair a shot to feed their families as union members. Unions should use the ultra-competitive market and tough economy as an opportunity to retool their product and make it more lean and efficient to compete in today’s marketplace instead of relying on government handouts to stay relevant.

The U.S. economy and the construction industry would benefit from free and open competition, without corrupt government-mandated PLAs, where taxpayers can get the best possible construction product at the best possible price.

By Ben Brubeck | Tagged , , , , , , , | Comments (0)

President’s SOTU Remarks About Construction Industry Raise Questions

January 25, 2012 – 11:17 am

In last night’s State of the Union address, President Obama made some remarks about the construction industry:

“Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt. We’ve got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

“During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

“In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

“There’s never been a better time to build, especially since the construction industry was one of the hardest hit when the housing bubble burst. Of course, construction workers weren’t the only ones who were hurt…”

On behalf of the merit shop contracting community, ABC 2012 National Chairman Eric Regelin, president of Granix, LLC, Ellicott City, Md., today reacted to President Obama’s remarks:

“In his speech, the president said ‘we can restore an economy where everyone gets a fair shot, and everyone does their fair share,’” said Regelin. “Yet, one of his first official acts when he took office was to sign an executive order on project labor agreements that discriminates against the 87 percent of the nation’s construction workforce that chooses not to belong to a labor union.

“It is not clear at this point what President Obama meant when he spoke of removing red tape from construction projects, but any sincere effort to do so must involve the elimination of government-mandated project labor agreements and Davis-Bacon wage requirements on taxpayer-funded construction projects,” Regelin said.

“The president’s insistence on a so-called ‘millionaire’s tax’ to fund his various priorities will expose the 80 percent of construction firms that are taxed at the individual rate to a significant tax increase,” said Regelin. “This does not represent a ‘fair share’ that will help the economy and create jobs, but rather the president’s continued use of the nation’s job creators as his personal piggy bank.

“The nation’s construction industry continues to struggle with an unemployment rate of 16 percent – nearly twice the national average,” Regelin said. “However, the president’s only solution to fix the economy is to hand out favors to special interests and punish those who work hard and take risks.”

To view this statement, click here.

So will President Obama’s new executive order cutting red tape slowing down construction projects be helpful, or, will it be another gift to special interests?

Cartoon courtesy of the Boston Globe

It is quite possible President Obama’s new executive order is just repackaging a policy the White House announced in October 2011 to speed along the approval of 14 high priority infrastructure projects. If so, this won’t likely be controversial. It could be something else equally noncontroversial

However, there is concern President Obama will make some changes this election year to federal policy concerning government-mandated PLAs on federal and federally assisted projects. See Section 7 of Executive Order 13502, issued Feb. 6, 2009:

Section 7. The Director of the OMB, in consultation with the Secretary of Labor and with other officials as appropriate, shall provide the President within 180 days of this order, recommendations about whether broader use of PLAs, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects. [Note: Order was issued Feb. 6, 2009, 180 days sets the deadline at Aug. 5, 2009, but a recommendation has not been publicly issued.] 

An expansion of Section 7 could decrease the current $25 million threshold when federal agencies are currently required to evaluate if a PLA mandate is appropriate on a federal construction project. More PLA mandates on smaller projects would help Big Labor at the expense of everyone else. 

Section 7 could also force pro-PLA policies on federally assisted projects built by private owners and state and local governments. An expansion could increase costs for local and state projects already suffering from difficult budget realities. It could also lead to out-of-area union workers taking jobs away from qualified nonunion construction workers in the local economy.

TheTruthAboutPLAs.com explained the concerns with Section 7 expansion here.

Let's hope Section 7 of Executive Order 13502 is not.

TheTruthAboutPLAs.com will be following White House policies impacting the construction industry closely.

By Ben Brubeck | Tagged , , , , , , , , , | Comments (0)

Barack and a Hard Place: President’s Decision to Kill Keystone XL Pipeline Pleases Environmentalists, Riles Unions

January 20, 2012 – 12:26 pm

This week the Obama administration killed Phase 3 and Phase 4 of TransCanada’s Keystone XL pipeline project (for now), which would have connected Phase 1 and Phase 2 of the existing pipeline to new pipeline that would carry crude oil 1,600 miles from Alberta, Canada, to Gulf Coast refineries.  The State Department’s denial of the Keystone XL Pipeline permit prevented the creation of an estimated 20,000 direct jobs (13,000 construction jobs and 7,000 manufacturing jobs) and an unclear number of indirect jobs resulting from the $7 billion project.

Of interest to TheTruthAboutPLAs.com readers, the estimated 13,000 Keystone XL pipeline construction jobs would be created exclusively for labor union members, as TransCanada required a union-favoring project labor agreement (PLA) on this privately financed project, which forces contractors to use union labor and follow inefficient union work rules.

Did Politics or Policy Kill the Project?
Controversy surrounding the project created a schism in the Democrat party’s political base. Environmentalists oppose the project, characterizing it as gift to Big Oil that would destroy farmlands, aquifers and sensitive ecosystems in the pipeline’s path; increase reliance on dirty fossil fuels; and contribute to global warming. 

 

Meanwhile, construction trade unions support the pipeline expansion because the PLA would create new construction jobs exclusively for union members as the construction industry suffers from a 16 percent national unemployment rate.

Congress and some in the business community point to this stalled project as an example of how President Obama and onerous government regulations stand in the way of job creation and decreasing our reliance on foreign energy supplies.

For more than three years, the State Department conducted a “transparent, thorough and rigorous review” of the privately financed project. After increased pressure by all parties to make a decision, the State Department announced on Nov. 10, 2011, that it needed more time to explore alternative pipeline routes prior to approving TransCanada’s permit application. In response, Congress inserted a provision in the temporary payroll tax cut bill passed in December giving the administration until Feb. 21 to decide the fate of the pipeline.

On Jan. 18, the State Department recommended that President Obama deny the permit, but left the door open for future project approval, stating “it could complete the necessary review to make a decision by the first quarter of 2013.” The White House issued a statement and submitted a report to Congress following the denial of the permit, providing some insight into the reasoning behind the decision.

Political pundits characterize this decision as a political calculation by the Obama administration to shore up environmentalist support prior to the election, but keep the side window open for union job creation pending the results of the 2012 presidential election and additional studies.

Keystone XL Pipeline Creates Union-Only Construction Jobs
In September 2010, TransCanada announced it was requiring contractors interested in working on Phase 3 and Phase 4 of the Keystone XL pipeline to sign a PLA with various construction trade unions.

Typical PLAs force contractors to hire construction workers from local trade union halls in each craft, follow pro-featherbedding union work rules, and pay into union pension and benefit programs.  Nonunion contractors are discouraged from competing for contracts to build taxpayer-funded projects when a PLA is mandated by a government entity, such as a local, county, state or federal government in charge of a project, because the terms of the PLA discriminates against their existing nonunion workforce and makes them less competitive against unionized firms.

 

The anti-competitive and discriminatory nature of government-mandated PLAs is why the merit shop contracting community was outraged when President Obama signed Executive Order 13502. The order, signed just a few weeks into President Obama’s term on Feb. 6, 2009, encourages federal agencies to mandate PLAs on a case-by-case basis on projects exceeding $25 million in total cost.

On privately financed projects like the Keystone XL pipeline, a PLA can prohibit nonunion firms from bidding or prevent all nonunion workers from being hired, even if they have the necessary qualifications and experience. In some instances, a PLA allows a limited number of nonunion workers, but forces them to pay union dues and fees and/or join a union as a condition of employment. In short, private sector PLAs can take discrimination to a whole new level compared to PLAs mandated by the government in the public sector of the construction market.

The project’s owner, TransCanada, voluntarily mandated a PLA on this private project. There is no evidence to suggest the Obama administration or federal officials forced TransCanada to mandate a PLA on this private project, nor is there evidence suggesting labor unions extorted TransCanada into requiring a PLA through typical tactics attacking construction owners to win more work for union members.

It is unfortunate that TransCanada elected to needlessly discourage competition from qualified merit shop contractors and discriminate against nonunion employees. It is a shame TransCanada’s PLA is telling 87 percent of the U.S. construction workforce they are not welcome to build the pipeline because they don’t have a union card, even if they have the necessary skills and experience.

The possible reasons why TransCanada mandated a PLA are numerous. Perhaps TransCanada needed Big Labor as an ally to shore up Democrat support at the local, state and federal levels of government. It wouldn’t be the first time a corporation hoped to exploit Big Labor’s cozy relationship with the president and his party, knowing that Big Labor donated hundreds of millions of dollars to Democrats during prior election cycles.  Or perhaps TransCanada felt a PLA gave its project the best chance at all-around success. 

Whatever the reason, it is clear construction trade unions are irate at President Obama for his job-destroying decision. Mark Ayers, president of the Building and Construction Trades Department, issued a statement critical of President Obama, as did Laborers’ Union President Terry O’Sullivan.

Despite Big Labor repeatedly attacking Republicans in the 112th Congress, House Speaker John Boehner says the fight for jobs is not over, and even mentioned they have been working with labor unions to get this project back on track:

What Next?
BNA Bloomberg’s Construction Labor Report says (“President Obama Rejects Keystone Pipeline But TransCanada Plans to File New Request,” 1/19/12):

TransCanada President Russ Girling said he is “disappointed,” although the decision was not unexpected.

“TransCanada remains fully committed to the construction of Keystone XL,” Girling said. The company has spent, or is committed to spend, about $1.9 billion so far on the project.

Girling said the company will reapply for a presidential permit, and he hopes that a new application will be processed “on an expedited basis” that would allow an in-service date by late 2014.

However, State Department Assistant Secretary Kerri-Ann Jones said in a media briefing that a new application would require a new review process. She would not speculate on how long such a review might take and whether existing analysis could shorten the environmental review process.

The original TransCanada permit application was filed in September 2008 and has been under review by the State Department for the past three years.

News reports also indicate Canada may build a new pipeline from Alberta to the West coast of Canada and sell this oil to China and the world.

While it is interesting to see the odd political bedfellows created by this controversy, it is important to remember that the Keystone XL pipeline would not offer any direct benefit to the merit shop contracting community due to the discriminatory PLA voluntarily mandated by TransCanada.

TheTruthAboutPLAs.com will be following this project closely.

UPDATE: The Laborers’ International Union Jan. 20 announced it will leave the Blue Green Alliance, a coalition of labor unions and environmental groups that advocates for environmentally friendly green jobs, over disagreements with other coalition members on the proposed Keystone XL pipeline.

By Ben Brubeck | Tagged , , , , , , , | Comments (0)

Op-Ed: Project Labor Agreements Build Nothing But Unions

January 19, 2012 – 10:43 am

Eric Christen from the Coalition for Fair Employment in Construction penned a new op-ed for the Los Angeles Business Journal in which he calls out Los Angeles area leaders for their love affair with project labor agreement (PLA) mandates.

Here are the highlights:

Project Labor Agreements Build Nothing but Unions

OPED By ERIC CHRISTEN

January 16, 2012

Los Angeles is ground zero in a war raging over exclusionary and monopolistic project labor agreements, commonly called PLAs. Since these “agreements” started popping up 15 years ago, Los Angeles has had more implemented than any other city in America. The almost canine affection elected officials in this region have for doing the bidding of those who put them into power (Big Labor special interests) is quite striking and unmatched anywhere we have been fighting PLAs.

<snip>

Project labor agreements are associated with fiscal irresponsibility and mismanagement, internal corruption and lack of accountability to the people who pay taxes for the government to provide services. Citizens in Los Angeles have abdicated their responsibility to oversee their local governments. As a result, unions fill the resulting political vacuum and attract ambitious people who see unions as a vehicle to attain personal power and position.

Arguments based on reason and common sense have no power in this kind of environment, where only scandals earn public attention. The problem with Los Angeles is that fidelity to Big Labor is so pervasive that the resulting corruption is hard to keep up with. From the hundreds of millions of dollars wasted under the Los Angeles Unified School District and Los Angeles International Airport PLAs to the broken promises of the Port of Los Angeles and the city of Long Beach PLAs, where does one even begin?

Let’s just pick two.

The city of San Fernando was the first municipality in California to require a PLA for all public works projects. On Sept. 19, 2005, the San Fernando City Council voted 5-0 to require all construction contractors to sign a PLA Agreement with unions for prime contracts worth $150,000 or more, and specialty contracts worth $25,000 or more. These project cost thresholds are unusually low, indicating that representatives of the city made little effort to engage in credible negotiations with union leaders to develop the project labor agreement.

Voting for the PLA in 2005 were council members Julie Ruelas, Nury Martinez, Steven Veres, José Hernández, and Maribel De La Torre. So what happened to them?

San Fernando voters recalled Hernández and Ruelas on Jan. 13, 2009.

Martinez was elected in 2009 to the board of the LAUSD, with endorsements from the Los Angeles/Orange Counties Building & Construction Trades Council and the Los Angeles County Federation of Labor.

Veres was elected in 2011 to the board of the Los Angeles Community College District, with endorsements from the construction trades council and the county labor federation.

Only De La Torre remains on the San Fernando City Council. At its Nov. 21 meeting, she was entangled in a spectacle that is bizarre, even by California standards, involving her relationship with the mayor.

Meanwhile, the city continues to require its contractors to sign a PLA to work on taxpayer-funded city construction. Business as usual.

Then we have the Los Angeles Community College District, subject of a multipart series in the Los Angeles Times highlighting the waste, fraud and poor quality of work that took place under the district’s multibillion-dollar PLA.

The latest scandal involves an inquiry that targets two contractors who worked extensively under that PLA. “The D.A.’s probe centers on Los Angeles Community College District allegations that the firms submitted fraudulent billings for Mission College work, part of a $5.7 billion construction program,” reported the Times.

Coincidence? Hardly. These instances are all quite predictable for any entity that purses something as immoral as a PLA. Sadly, it is the taxpayers, school children and the average citizen who continue to pay the price for the status quo in this region that places the interests of union bosses over that of everyone else.

In the end, the voters have no one left to blame but themselves for placing such morally illiterate people into office.

A number of projects in the L.A. area have been constructed with PLA mandates.  Their track record is well documented in the 2011 edition of Government-Mandated PLAs: A Public Record of Poor Performance.  Here are some examples with their page number for citation purposes:

Cost Overruns:

  • The Eastside Reservoir project east of Los Angeles, built under a government-mandated PLA, was the nation’s largest earth moving project in the late 1990s. In October 1998, the project reported a $220 million (11 percent) cost overrun. The increase was attributed to payment of overtime wages under circumstances mandated by the PLA. (p. 9)

Project Delays:

  • In 2006, four Los Angeles Unified School District campuses built under a PLA were forced to open their schools one month late because contractors could not find enough skilled labor to complete the project on time. (p. 23)

Discrimination Against Women and Minorities in the Construction Industry:

  • In 2010, a private audit found violations by 55 contractors working on a $150 million high school under a PLA mandated by the Los Angeles Unified School District. The violations included inadequate supervision of workers and performing work under expired or suspended licenses. (p. 30)
  • The biggest contractor on the union-only San Francisco International Airport PLA project was sued by a Los Angeles transit agency alleging that it used bogus minority subcontractors to get millions in unionized subway work.127 Similar allegations were investigated by the FBI in connection with the San Francisco Airport project. The Los Angeles lawsuit and San Francisco investigation both alleged that white-owned unionized firms set up companies that “either were not qualified or in whom the union companies owned an undisclosed interest.” The lawsuit also alleged that the union joint venture joined with its sham minority subcontractors to present false claims on subway work to obtain millions of dollars in additional payments. (p. 31) 

This is a sample, not a comprehensive list, of the various problems associated with PLA mandates on projects in the L.A. area.

In addition to the examples of problems above, government-mandated PLAs discriminate against the 84 percent of the L.A. area construction workforce that chooses not to join a union and are essentially locked out of construction funded by their own tax dollars.

Mandating PLAs on taxpayer funded work is clearly bad public policy.

By Andy Conlin | Tagged , , , , | Comments (0)

Maryland County Says NO to PLA Mandates

January 18, 2012 – 3:43 pm

State and local leaders continue to say NO to wasteful and discriminatory project labor agreement (PLA) mandates.

The latest to do so is Anne Arundel County, MD, where local leaders adopted a ban on government-mandated PLAs on January 17.

 

Courtesy of Wikipedia

 

Maryland joins California, Texas and Pennsylvania as states in which local government entities have approved bans on these Big Labor handouts.  An increasing number of local leaders are starting to understand how Big Labor promises of PLA success usually lead to only cost overruns and discrimination against the vast majority of the construction workforce that chooses not to join a labor organization.

This ban on PLA mandates was enacted just one county away from the upcoming Cheltenham Youth Facility project in Prince George’s County, where Maryland leaders are attempting to become the first state or local government entity to procure a construction project with the Obama administration’s U.S. General Services Administration (GSA) PLA preference policy adopted in April 2010.

Here at TheTruthAboutPLAs.com, we thank Anne Arundel’s leaders for standing up for taxpayers and the local construction workforce.

By Andy Conlin | Tagged , , , , , , , | Comments (0)

Federal PLA on Navy Project in Washington Will Harm Local Construction Workforce and Procurement Efficiency

January 12, 2012 – 4:04 pm

Naval Facilities Engineering Command (NAVFAC) Northwest has mandated a project labor agreement (PLA) on the construction of a $450 million to $550 million explosives handling wharf #2 (Solicitation No. N4425511R9004) at Naval Base Kitsap-Bangor in Washington.

The PLA mandate harms Washington’s experienced and skilled nonunion construction workforce and will discourage competition from qualified contractors that have successfully built federal projects in Washington and across the country without PLA mandates.  It will also needlessly increase costs.

According to an article in the Kitsap Sun, NAVFAC Northwest mandated a PLA after Sens. Maria Cantwell and Patty Murray, and Reps. Norm Dicks and Jay Inslee (all Democrats from Washington) wrote to the Navy in support of a PLA at the request of construction trades unions (“Navy to hire local workers for second explosives handling wharf,” 1/1/12):

The trades council contacted the area’s federal delegation — Sens. Patty Murray and Maria Cantwell and Reps. Norm Dicks and Jay Inslee — who wrote to the Navy supporting a PLA, Whetham said. Four trade council officials and seven from the Navy met in November to explore the benefits and arrived at cost savings and skilled labor.

According to information obtained from opensecrets.com, construction trades unions have donated the following political contributions totaling $814,375 to the four Washington Democrats who signed the letter:

Rep. Inslee:       $340,000   from 2000 – 2012
Rep. Dicks:       $183,125   from 1998 – 2012
Sen. Murray:     $279,250   from 1998 – 2012
Sen. Cantwell:   $ 12,000    from 2002 – 2012
Total:               $814,375

Is this PLA mandate the product of a crony contracting scheme by federal officials? 

Prior to mandating the PLA, NAVFAC Northwest did not consult with the merit shop contracting community about the negative impact of PLA mandates on qualified federal prime contractors, subcontractors and their skilled local employees.

First Navy PLA Mandate Under Obama Administration
This is the first PLA mandate on a Navy project since President Obama issued Executive Order 13502 on Feb. 6, 2009, just a few weeks after his inauguration. The order strongly encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total costs.

As a result of Obama’s encouragement of federal PLA mandates, NAVFAC has issued several PLA surveys to the contracting community to determine if a PLA mandate will advance the economy and efficiency in federal procurement of numerous large-scale construction projects across the country.  ABC National and ABC members have responded to these PLA surveys.

NAVFAC Northwest did not issue a survey to evaluate if a PLA would be appropriate for this project.

In contrast, NAVFAC directly contacted ABC National and the merit shop contracting community for feedback on possible PLA mandates on other federal projects.

For example, after soliciting comments from ABC National and the contracting community in October 2010 concerning NAVFAC’s potential use of PLAs on billions of dollars worth of construction for Guam base realignment, NAVFAC elected not to mandate a PLA.

NAVFAC’s PLA Mandate Creates Inefficiencies
NAVFAC Northwest’s solicitation instructs qualified contractors invited by NAVFAC to bid on Phase 2 of the solicitation (the short-listed contractors) to negotiate a PLA with specific trade unions and submit an executed PLA within 10 days of the contract award.

NAVFAC supplied short-listed contractors with a pre-drafted PLA containing the terms and conditions NAVFAC already developed with specified construction trade unions and councils.

NAVFAC asked contractors to submit feedback on the pre-drafted PLA by Dec. 28. 

ABC advised short-listed contractors about the numerous problems with NAVFAC’s mandatory PLA language and cumbersome and inefficient procurement approach. Some of these concerns were submitted by short-listed contractors to NAVFAC.

NAVFAC is expected to review and share these comments with unions and provide contractors with a final PLA at a later date that they must use as the starting point in PLA negotiations.

Proposals from short-listed contractors are due Feb. 13. It is unclear when NAVFAC will award the contract, although it should be in early 2012.

Under this inefficient procurement process, it is possible for contractors to not know the terms and conditions of the executed PLA – which impacts labor costs and final bid costs – before submitting a final price proposal to NAVFAC.  If PLA negotiations are stalled by unions or NAVFAC does not supply the final terms of the pre-drafted PLA in time, contractors cannot submit an accurate price proposal.

In addition, the project could be delayed pending the outcome of the post-award PLA negotiations.  The project may have to be re-bid if the final agreement cannot be executed.

In 2010, a General Services Administration (GSA) project, the GSA Headquarters at 1800 F Street in Washington, D.C., suffered delays as a result of labor unions refusing to agree to the terms of a PLA the contractor presented and signed with other labor unions. Congressional testimony from GSA deputy administrator Susan Brita described this scenario, which also required the contractor to present an executed PLA within 10 days post-award.

Even regulatory comments  filed by Frank Dean, NAVFAC’s labor advisor, on the FAR Council’s proposed rule implementing Executive Order 13502 identify concerns with this inefficient post-award PLA procurement approach.

PLA Will Harm Local Nonunion Workforce and Small Businesses
From 2001 to 2009, when President George W. Bush’s Executive Orders 13202 and 13208 prohibited PLA mandates on federal and federally assisted construction projects, Washington’s skilled nonunion tradespeople constructed large-scale projects for the Navy, Army and other federal agencies absent a PLA mandate with no reported problems.

This union-favoring PLA is sure to serve as a barrier to new jobs for 84 percent of Washington’s private construction workforce and 86.9 percent of the U.S. construction workforce that has chosen not to join a construction labor union.

The Washington State Building and Construction Trades Council, AFL-CIO announced “construction labor on this project will be provided by Olympic Peninsula Building Trades and the Northwest Regional Council of the National Construction Alliance II (NWNCA),” and it is unlikely this project’s PLA will allow nonunion contractors to use few, if any, of the existing skilled nonunion employees they have invested training and resources in while employed at the company.

As this letter to the editor in the Kitsap Sun points out, if the PLA even allows nonunion construction workers to build this project, they will have to join a union and/or pay union dues and pay into union pension plans that they will never benefit from unless they join a union and meet vesting requirements.  The PLA results in a huge financial windfall for Big Labors coffers.

Favoritism for unionized construction workers is especially despicable because the construction industry is plagued by high unemployment in Washington and across the country. The number of construction workers employed in Washington in July 2011 was as sparse as the number of workers employed in Washington in August of 1997. Meanwhile, the U.S. construction industry is suffering from an unemployment rate of 16 percent as of December 2011. 

Don’t nonunion construction workers deserve a fair shot at new federal construction jobs?

Provisions in a PLA that force contractors to swap their existing workforce out for unfamiliar union labor is problematic for short-listed contractors that self-perform specific trade work, as well as subcontractors performing specialty trades.

This PLA mandate will make it difficult for short-listed contractors to meet NAVFAC’s small and disadvantaged business subcontracting targets because small businesses are traditionally not unionized:

  FY2011
SB 65.75%
SDB 16.51%
WOSB  14.7%
HUBZone  8.5%
VOSB 2.62%
SDVOSB 2.62%

Because building trades union membership is traditionally not diverse, a PLA mandate also may make it difficult for short-listed contractors to meet minority and women hiring goals set by the FAR’s Equal Opportunity and the Affirmative Action Compliance Requirements for Construction regulations required in federal construction contracts.

The PLA mandate’s inefficient procurement approach and pro-union language will discourage competition and increase costs to remaining competitors. Studies indicate PLA projects subject to prevailing wage laws increase construction costs between 12 percent and 18 percent compared to similar projects subject to prevailing wage laws not subject to government-mandated PLAs.

ABC Committed to Fair and Open Competition
ABC is opposed to government-mandated PLAs because these agreements typically restrict competition, increase costs, create delays, discriminate against nonunion employees and place merit shop contractors at a significant competitive disadvantage. Typical government-mandated PLAs are nothing more than anti-competitive schemes that end open and fair bidding on taxpayer-funded projects.

ABC has led industry opposition against federal PLA mandates, utilizing a variety of educational, public relations, grassroots, political and legal strategies to ensure fair and open competition on taxpayer-funded construction projects.

ABC has helped ABC member contractors file bid protests against federal PLA mandates during the Obama administration, which resulted in the removal of PLA mandates on a Veterans Affairs medical center in Pittsburgh, an Army Corps of Engineers project in Camden, N.J., a General Services Administration project in Washington, D.C., and a Department of Labor Job Corps Center in Manchester, N.H.     

ABC National also has responded to and helped ABC members participate in more than 50 PLA surveys issued by federal agencies to determine the feasibility of a PLA on a federal project.

ABC supports the Government Neutrality in Contracting Act (H.R. 735/S.119), cosponsored by 31 Senators and 172 Representatives and supported by a diverse industry coalition. The measure would eliminate waste and favoritism in federal contracting by prohibiting federal agencies and recipients of federal assistance from mandating PLAs, yet it would allow contractors to voluntarily enter into PLAs. This bill is good for taxpayers and the principles of free enterprise.

In 2011, House committees held two hearings in Washington and three field hearings on the negative consequences of federal PLA mandates and the benefits of H.R. 735.

Additional hearings and votes are expected in 2012.

Stay current on government-mandated PLAs and “Like” us on Facebook at www.facebook.com/TheTruthAboutPLAs and visit TheTruthAboutPLAs.com often.

To help fight this PLA and other federal PLA mandates, please contact Ben Brubeck or TheTruthAboutPLAs.com here.

By Ben Brubeck | Tagged , , , , , , , , , , , , , , , , | Comments (3)

California Union Boss/Community College District Trustee Not Big on Disclosure

January 12, 2012 – 3:03 pm

It isn’t hard to see that Big Labor is engaged in an organized effort to get union bosses elected and appointed to local governing entities, i.e. school boards, community college commissions, county councils, etc.  This strategy has paid dividends in a number of communities, where labor leaders have pushed these governing bodies into requiring wasteful and discriminatory project labor agreements (PLAs) on their publicly funded construction.

One such example occurred in California, where union efforts helped get Robert Calone appointed to the Governing Board for the Contra Costa Community College District.  Mr. Calone’s day job is Recording Secretary for the Plumbers and Steamfitters Local 159.

While it’s possible that civic duty motivated Mr. Calone to apply for this office, it is also pretty clear that the construction unions have a revenue stream to develop.  And thanks in part to Mr. Calone, Big Labor will have a virtual monopoly on community college construction for the next five years.

But in all of the excitement over securing nearly all of the community college’s construction work in the next five years for Big Labor, it appears that Mr. Calone may have forgotten to take care of a small detail – properly completing his ethics disclosures.

Here is the press release from the Golden Gate Chapter of Associated Builders and Contractors issued on January 10:

FPPC Complaint filed against Contra Costa Community College District Trustee for Failure to File Form 700 Timely and Report Income

The Fair Political Practices Commission has confirmed receipt of a complaint filed for possible violations relating to Robert Calone, who holds the office of Governing Board member for the Contra Costa Community College District.

California Government Code §87202(a) states that “Every person who is elected to an office specified in Section 87200 shall, within 30 days after assuming the office, file a statement disclosing his or her investments and his or her interests in real property held on the date of assuming office, and income received during the 12 months before assuming office.”

Robert Calone failed to file a statement within 30 days (he did it 200 days after assuming office, after the public requested his Form 700 from the college district). When he filed his statement, he failed to report income.

Finally, by filing his Form 700 late and then omitting a source of income on the late Form 700, Robert Calone concealed his financial interest in a controversial contract that was approved on December 14, 2011 by the Governing Board of the Contra Costa Community College District. Only the intervention of the public in exposing Robert Calone’s failure to submit a Form 700 and his failure to report his employment income prevented him from voting on a contract for which his loyalties and allegiance were divided and influenced by his paid employment as an instructor for an organization that was signatory to the contract.

“Mr. Calone, the Recording Secretary for the Plumbers and Steamfitters Local 159, was appointed to the Board for the sole purpose of enacting a union-only Project Labor Agreement for District construction projects, thereby creating a monopoly on District work that will result in reduced competition and increased costs for public contracts funded by taxpayer dollars” stated Matt Heavey, a local citizen who filed the complaint.

A copy of the complaint can be viewed here.

Here at TheTruthAboutPLAs.com, we believe sunshine and transparency are the best medicine for public corruption.

Regardless of whether Mr. Calone violated the letter of the law, this one doesn’t pass the smell test.

By Andy Conlin | Tagged , , , , , , , | Comments (0)

Bill to End Union Abuse of Environmental Laws Fails in California Assembly Committee

January 11, 2012 – 5:13 pm

On January 9, 2012, the California State Assembly’s Natural Resources Committee considered Assembly Bill 598, a bill sponsored by ABC of California and introduced by Assemblywoman Shannon Grove (R-Bakersfield) that would give authority to file lawsuits under the California Environmental Quality Act (CEQA) solely to the California Attorney General.

The hearing was an opportunity for the committee to discuss how certain parties, particularly labor unions, exploit public participation in the CEQA process to achieve objectives unrelated to environmental protection. Assemblywoman Grove cited four specific recent examples of different unions (the Teamsters, the California Nurses Association, the United Food and Commercial Workers, and the Service Employees International Union) filing CEQA lawsuits to delay projects as leverage to extract labor concessions from businesses. She also noted that some businesses use CEQA to try to block potential competition.

Testifying on behalf of the sponsor, ABC of California Government Affairs Director Kevin Dayton discussed how certain construction trade unions abuse CEQA as a weapon to delay projects until the owner agrees to require contractors to sign a Project Labor Agreement with unions. The Western Electrical Contractors Association (WECA) and the Chambers of Commerce Alliance of Ventura & Santa Barbara were the other public supporters of the bill.

Assemblywoman Linda Halderman (R-Fresno) cited a specific example of a union using CEQA to try to force a contractor to sign a Project Labor Agreement to install solar panels at Fresno-Yosemite International Airport. Assemblyman Steve Knight (R-Palmdale) adeptly exposed the Attorney General’s double standard of opposing the additional responsibilities assigned in AB 598 while remaining silent about adopting additional responsibilities through other legislation.

Legitimate environmental organizations such as the Sierra Club and the Planning and Conservation League opposed the bill. The Teamsters and United Food and Commercial Workers (UFCW) union opposed the bill in writing but did not speak at the hearing. Democrats on the committee opposed the bill, but some of them (along with the Attorney General’s office) acknowledged that some parties abuse CEQA. Assemblyman Bill Monning (D-Santa Cruz) said nothing about how the Carpenters union used CEQA in a recent high-profile campaign to delay and ultimately derail the proposed La Bahia Hotel in Santa Cruz.

The committee defeated the bill on a 5-3 party-line vote: Democrats opposed, Republicans in support.

You can thank the following state legislators at these email addresses:

Assemblywoman Shannon Grove: Contact

Assemblywoman Linda Halderman: Contact

Assemblyman Steve Knight: Contact

Background on Assembly Bill 598: text, committee analysis

Some Recent News Media Coverage of CEQA Abuse: Bad Environment for Development? (Los Angeles Business Journal, July 18, 2011, via Central City Association of Los Angeles); Firms Turning to Environmental Law to Combat Rivals (Los Angeles Times, November 14, 2011).

 

By Andy Conlin | Tagged , , , , , , , , , , , , | Comments (0)

Pennsylvania County Passes Resolution Banning PLA Mandates on County Projects

January 11, 2012 – 8:46 am

Leaders in yet another county have decided to stand up against wasteful and discriminatory project labor agreement (PLA) mandates.  This time, it is Westmoreland County, PA, where the county board of commissioners resolved on January 9 not to require PLAs on county funded construction.

This is an important step toward ensuring that taxpayers get the best construction at the best price for their hard earned tax dollars.  This will also help guarantee that merit, not union affiliation, will determine how construction contracts are awarded in Westmoreland County.

 

Courtesy of Wikipedia

 

The Western Pennsylvania Chapter of Associated Builder and Contractors issued the following press release, in which they thank commissioners for standing up for taxpayers and the 73.5 percent of Pennsylvania’s private construction workforce that chooses not to join a labor union.

Tax Payers in Westmoreland County Win as Project Labor Agreements Are Banned

Pittsburgh, PA – The Associated Builders and Contractors of Western Pennsylvania (ABC) praises Westmoreland County Board of Commissioners Chuck Anderson (R) and Tyler Courtney (R), who today passed a resolution banning project labor agreements (PLAs) in Westmoreland County.

This resolution follows a PLA that former County Commissioners Tom Balya (D) and Tom Ceraso (D) passed in 2009. The resolution benefits the tax payers of Westmoreland County, relieving them of the higher costs, unmet deadlines and reduced competition that PLAs are notorious for.

Keith Impink, Chairman of ABC and President of Westmoreland Electric commented, “With the economy struggling, it is illogical to support PLAs that drive up costs 25-30%.” Impink continued, “The mission of the Westmoreland County Board of Commissioners is to represent the residents with prudence and fairness; they accomplished that mission today.”

The County Commissioners asserted that all work should be awarded and performed on the basis of merit, regardless of labor affiliation, echoing ABC’s pro-competition beliefs. Eileen Watt, President of ABC stated, “PLAs not only cut out competition, but discriminate against women and minority workers as well. That is unacceptable for the tax payers of Westmoreland County.”

Watt continued “We cannot praise the efforts of County Commissioners Chuck Anderson and Tyler Courtney enough; they have the interests of Westmoreland County residents in mind.”

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This is a huge win for taxpayers, particularly considering that the Westmoreland County Board of Commissioners approved PLA mandates as recently as 2009.  This policy is likely to result in real cost savings for local taxpayers, and that is a good thing.

By Andy Conlin | Tagged , , , , , , , , | Comments (0)

ABC Empire State Chapter Urges Gov. Cuomo to Unshackle the Economic Power of Public Construction

January 8, 2012 – 4:12 pm

Stephen Lefebvre, president of the Empire State Chapter of Associated Builders and Contractors (ABC) had some thoughts on New York Gov. Andrew Cuomo’s state of the state address last week.  The ABC Empire State Chapter issued the press release below on January 5, where he wished Gov. Cuomo the best in 2012 and asked him to unshackle New York’s construction industry from costly and unnecessary government mandates and regulations.

As the release goes onto say, one of the mandates hindering job growth in the construction industry in New York is government-mandated project labor agreements (PLA).  PLA mandates on both state and local projects have been a regular problem for the construction industry in New York – particularly for the 72.5 percent of the workforce that chooses not to join a labor union.

These mandates have also been a problem for New York taxpayers.  A blatant example of how these Big Labor handouts hurt taxpayers occurred in the spring of 2011, where the NYS Department of Transportation tried and was ultimately successful in implementing a PLA mandate on an infrastructure project that disqualified a qualified contractor’s bid and cost taxpayers an addition $5 million in unnecessary construction costs.

As America climbs out of recession, it is vital that government entities use taxpayer funds as wisely as possible.  As far as we are concerned, rewarding union bosses for their political support by giving union contractors a leg up against their nonunion counterparts doesn’t seem like the best use of public money.

Like the ABC Empire State Chapter, we urge Gov. Cuomo to support the Public Construction Savings Act and put an end to government-mandated PLAs in New York.

The ABC Empire State Chapter press release from January 5 is below.

STATEMENT FROM ABC PRESIDENT STEPHEN LEFEBVRE ON GOV. CUOMO’S STATE OF THE STATE ADDRESS

I want to applaud the governor on his first year in office and wish him the best on the start of the 2012 Legislative Session. The plan he laid out today in his annual State of the State provided some bold initiatives to enhance government and improve the economy through investment in many areas that the construction industry is sure to help build. With any discussion of development I encourage the governor to seek out the best value possible for the money paid by New York’s hard-working taxpayers.

I urge Gov. Cuomo to unshackle the full economic potential of any government funded construction work from the unnecessary use of restrictive measures such as mandatory Project Labor Agreements (PLAs) that time and again have driven up the cost of public work projects in the Empire State. The governor should seek construction mandate relief in the form of the Public Construction Savings Act (S.4121/A.7855) which would allow government entities to bid public construction in a way that promotes unfettered competition among contractors seeking public work to the benefit of taxpayers.

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The Empire State Chapter of Associated Builders and Contractors (“ABC”) represents over 550 merit-shop construction contractors and subcontractors employing thousands of workers throughout the State of New York.

By Andy Conlin | Tagged , , , , , , , , , , | Comments (0)
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