ICYMI, the U.S. Department of Labor (DOL) cancelled its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement (PLA). The cancellation came in response to a protest filed with the Government Accountability Office (GAO) by ABC member North Branch Construction of Concord, N.H., with ABC support and representation. North Branch Construction challenged the PLA as unlawful and discriminatory. The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued.
The development is a win for taxpayers and proponents of fair and open competition. However, the cancelled solicitation rendered the pending bid protest before the GAO moot. A GAO ruling on the bid protest may have addressed the legality of federal government-mandated PLAs and Executive Order 13502.
The Labor Department has not disclosed why the solicitation was cancelled but is required by FAR regulations to provide cause.
Here is a summary of media coverage since Friday:
- New Hampshire Union Leader: Job Corps Center Plan Hits Wall in Bid Process
- WMUR 9: Feds Cancel Bidding on Manchester Job Corps Center
- Daily Reporter: Proposed PLA Project Canceled
- National Right to Work Blog: Obama Administration Backs Down (For Now) Rather than Defend Discriminatory Project Labor Agreements
The Union Label Blog post, Victory Against Obama’s Unionism in New Hampshire, provides a practical explanation of the relationshop between PLAs and politics.
A PLA ruling either outright excludes non-union companies… …or forces them to be hobbled under union rules, but PLAs are nothing less than a government payoff to unions. In essence a PLA is a direct transfer of government money to union coffers and that is precisely why President Obama decreed via Executive Order that henceforth all government construction projects would be forced to proceed under PLAs
While the Obama order does not subject ALL federal construction projects to a PLA, it encourages federal agencies to require PLAs on appropriate federal projects exceeding $25 million.
Section 7 of the executive order may expand a PLA encouragement or mandate to local and state construction users receiving federal assistance (grants, loans, tax breaks etc.). Forcing federal special interests onto state and local procurement officials is a recipe for discrimination, corruption and increased costs on local and state budgets already strained by weak revenue due to the sagging economy. States should not be hoodwinked into paying for four schools, bridges and hospitals for the price of five (the federal government shouldn’t tolerate this waste either, but that’s politics).
In addition, in states with low construction union density and/or a tight labor market, out of state union workers will take the jobs of qualified in-state nonunion workers under PLA mandates.
David Denholm’s blog post, Obama/Labor Bid Rigging Scheme Unravels, provides a sharp analogy of PLAs:
PLAs are bid rigging and protection racket schemes under which the construction owner agrees to use only union labor, thus driving up the cost of the project at the public’s expense, while the unions guarantee “labor peace.”
To put this in perspective, picture a thug at a candy store in Chicago telling the store’s owner that for a weekly payoff his windows won’t be broken and his customers will not be molested. The cost of the weekly payoff is, of course, passed along in higher prices to the purchasers of candy. The thug has the additional economic responsibility to impose the same terms on all other candy stores in the area so that his client won’t be at a disadvantage.
Stay tuned for more updates and coverage.