Union Giveaways That Will Hit Your Wallet

0 January 26, 2010  Federal Construction, Uncategorized

The Washington Times ran an Op-Ed by Brett McMahon, vice-president of ABC member Miller & Long Concrete Construction, documenting a number of backroom deals that the White House and Congress cut with Big Labor that will harm private sector job creation and small businesses while giving Big Labor a big advantage (“Yet Another Reason to Oppose Obamacare: Union Giveaways That Will Hit Your Wallet,” 1/26/10). 

McMahon highlights President Obama’s pro-project labor agreement (PLA) Executive Order 13502 as a prime example of a special interest giveaway that will hit your wallet (along with the misnamed Employee Free Choice Act (EFCA) and some pro-Big Labor language in the health care reform legislation).

McMahon on potential PLAs on three federal projects in Washington, D.C. selected in the GSA’s Procurement Instructional Bulletin 09-02:

So, the District of Columbia is about to witness one of those unhappy occasions where local events become a symptom of the nation’s policy problems We’ll learn the cost of pandering to Big Labor’s agenda through the construction and renovation of three federal buildings in Washington managed by the U.S. General Services Administration (GSA) and funded by stimulus dollars.

These projects will be large, sought-after and likely require bidders to follow pro-Big Labor guidelines set forth in discriminatory and costly project labor agreements (PLAs) that will lock out the 92 percent of the District construction workforce that doesn’t belong to a union.

PLAs give Big Labor a big advantage over nonunion contractors competing for lucrative federal contracts. Those agreements have a public record of poor performance and extra costs (see the Massachusetts Big Dig, running $14 billion over budget and counting).

In fact, the only reason PLAs are even being considered on these projects is that President Obama’s first gift to Big Labor last February included his signature on Executive Order 13502, encouraging agencies like the GSA to require PLAs on all federal jobs over $25 million. The president marketed PLAs as a way to prevent labor unrest and keep federal jobs on-time and on-budget. But a recent study by the Beacon Hill Institute in Boston undermines the claims, finding no evidence of labor unrest from 2001 to 2008 when PLAs were prohibited on federal and federally-assisted projects. In short, the report found that PLAs are a solution in search of a problem.

But Federal agency officials also don’t seem to be familiar with the extensive research showing that PLAs add an average 10-18 percent cost to every job they touch. If your community needs five schools and now you can only afford four, thank the president and his Big Labor pals.

Still who can blame the GSA? Government-mandated PLAs were virtually nonexistent during the last administration when a presidential order prohibited wasteful PLAs on such projects. And there have yet to be any government mandated-PLAs executed under Mr. Obama’s watch because the Federal Acquisition Regulatory (FAR) Council has yet to finalize his order.

Eighty-five percent of the nation’s construction workforce has chosen to work without belonging to a union. We will have to sit and wait on the FAR Council to learn the fate of open competition on job-preserving federal contracts.

As a D.C.-area nonunion contractor, I worry that the GSA’s decision to flirt with PLAs on those three projects – without waiting for the FAR Council to issue a rule – will cause chaos for area construction. Chaos in the form of litigation, badly-needed projects delayed, job-creating opportunities wasted and taxpayers cheated.

The bidding process the GSA uses is riddled with problems that decrease the number of qualified bidders and increase costs. The Washington Times, in fact, recently covered the controversy already brewing.

The truth is that all of us have a vested interest in preserving open competition in the construction industry – whether we’re a contractor or a taxpayer hoping to see our paycheck contributions used wisely. I think District residents are smart enough to know what’s in their best interest – it’s just a shame we’re being undermined by Mr. Obama’s debt to Big Labor.

Give the Op-Ed a read to learn more about giveaways to Big Labor in the health care plan, EFCA and government-mandated PLAs.

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