Iowa Governor Culver Issues Executive Order Encouraging PLAs

0 February 3, 2010  State & Local Construction

Iowa Governor Chet Culver (D) today issued Executive Order 22 at the Iowa Building and Construction Trades conference in Des Moines.  This order encourages state agencies to consider wasteful and discriminatory project labor agreements (PLAs) on state construction costing over $25 million.  This order is very similar to President Obama’s Executive Order 13502, issued in February 2009, which encourages PLAs on federal construction costing over $25 million.

As we stated in an earlier post, this is an unfortunate development for the people of Iowa.  Although Gov. Culver claims that this order “fights for working families,” it really means wasted tax dollars and stinks of election year politics.

Iowans have some experience with wasteful and discriminatory PLAs.  In 2002, the Polk County Board of Supervisors signed a PLA with the Central Iowa Building and Construction Trades Council for the Iowa Event Center project.  This project included a 17,000-seat arena and meeting and exhibit halls.  The Board of Supervisors claimed that the PLA was necessary to “keep the project on time, keep it on budget and complete it in a safe manner.”

A 2006 study by the Public Interest Institute, a nonpartisan, nonprofit research and educational institute in Mt. Pleasant, Iowa, found that the PLA failed on all three counts and created unnecessary burdens for local workers, taxpayers and businesses.

Here is an excerpt from the study:

One might think that completing a project on budget, on time and safely would be the goal for each and every construction project, but apparently the Polk County Board of Supervisors felt these goals could not be accomplished on the Iowa Events Center project without a project labor agreement.  Having been granted the PLA, was the Iowa Events Center completed on budget, on time and safely?  No.  Instead, workers were frozen out of the opportunity to work, businesses were not allowed to compete and the taxpayers were forced to pay even more for the Iowa Events Center construction because of the cost overruns of the project.  The project labor agreement for the Iowa Events Center project was an unnecessary burden on the workers, businesses and taxpayers of Iowa.

The failure of the Iowa Event Center PLA is just one of many examples of PLAs increasing construction costs for taxpayers and limiting opportunities for nonunion workers to compete for projects paid for by their own tax dollars.

So what prompted Gov. Culver to issue this order?  Here at TheTruthAboutPLAs.com, we have a guess.

Gov. Culver is facing long odds for re-election this fall against former Gov. Terry Branstad (R).  Recent polling shows Culver trailing Branstad by double digits and although it is still early, this is a troubling sign for an incumbent governor.

This is where Big Labor comes in.  Since Democrats took control of state government in 2006, Big Labor’s priorities have come to the forefront.  In 2007, union bosses and their allies in the General Assembly tried and failed to repeal the state’s Right to Work law.  After seeing the Right to Work repeal effort fail, Big Labor attempted to enact a state prevailing wage requirement in both 2008 and 2009.  Sensible lawmakers from both parties saw that prevailing wage requirements can significantly increase state construction costs and these measures were defeated as well.

Recognizing that Iowans aren’t too keen on changing their state’s Right to Work status, Gov. Culver marched into today’s Building Trade’s convention and told them he would not try to repeal the Right to Work law this year.  But it appears as though the governor thinks that he needs Big Labor’s support to win in November and gave them a parting gift on his way out – an executive order encouraging state agencies to execute wasteful and discriminatory PLAs.

Perhaps Gov. Culver hoped that his Right to Work announcement would overshadow his gift to the construction unions both in the media and in the minds of taxpayers.  He was wrong.  Reactions to this special interest handout have been swift and strong.

Former Gov. Branstad issued an immediate response on his 2010 campaign website.  Here is an excerpt:

This executive order will drive up costs. It will cost YOU, the taxpayer, even more than you are already paying.

What Governor Culver isn’t counting on is the people of Iowa to rise up and say, “Stop forcing costly, job-killing actions!” Whether it’s legislative liberals who push the repeal of right-to-work, prevailing wage, choice of doctor – all VITAL to the Big Labor agenda – to this governor kowtowing to them through election year conversions, we must stand up to him.

Not only that…he’s buttering them up at their own convention!

The Iowa Chapter of Associated Builders and Contractors issued the following news release:

The Iowa Chapter of Associated Builders and Contractors Denounces Executive Order 22 as Wasteful

Des Moines, IA – The Iowa Chapter of Associated Builders and Contractors (ABC) today denounced Executive Order 22 issued by Gov. Chet Culver, which encourages the use of project labor agreements (PLAs) on large-scale construction projects.

“Construction contracts subject to government-mandated PLAs are designed to be awarded exclusively to unionized contractors and their all-union workforces,” said Mike McCoy, ABC of Iowa Chairman.  “PLAs drive up construction costs by as much as 18 percent and discriminate against 8 out of 10 Iowa construction workers who have chosen not to join a construction labor union.”

“In the face of sagging poll numbers, Governor Culver issued an order that is nothing more than a political handout to Big Labor at the expense of taxpayers,” McCoy continued.  “There is no question that PLAs increase construction costs.  Studies conducted on a project here in Iowa found PLAs to be an unnecessary burden on local workers and taxpayers.  The only reason for Governor Culver to issue this order is to satisfy Big Labor after Democrats failed to repeal Iowa’s Right to Work law in 2007 and enact burdensome construction wage requirements in 2008 and 2009.”

A PLA is a contract that requires a construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; pay union wages and benefits; and obey the union’s restrictive work rules, job classifications and arbitration procedures.

PLAs have been hotly contested because they discriminate against nonunion workers.  President Obama signed controversial Executive Order 13502 to encourage PLAs for use on federal construction projects over $25 million.  The order is under government review and is expected to be implemented.

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ABC of Iowa is a statewide association representing approximately 550 merit shop construction and construction related firms. For more information visit www.abciowa.org

It is unfortunate that Gov. Culver decided to make his campaign for re-election a priority over good stewardship of the taxpayers’ money.  TheTruthAboutPLAs.com will do a complete roundup of news and blog coverage of this executive order and a breakdown of the order itself tomorrow.  Stay tuned.

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