A Bridge to Government Waste and Special Interests

0 February 16, 2010  Federal Construction, Transportation & Infrastructure, Uncategorized

Nonunion contractors, their employees and prominent VT and NY construction trade associations are outraged about a proposed government-mandated project labor agreement (PLA) on the Champlain Bridge reconstruction and one group is even considering a lawsuit to stop this special interest handout to Big Labor.
The reconstruction of “The Bridge to Government Waste and Special Interests” – spanning between Essex County, NY and Addison County, VT – is reportedly supported by $88 million in federal dollars from the U.S. Department of Transportation’s Federal Highway Administration (FHWA), $11.05 million from the state of Vermont and $11.05 from the state of New York.
Last week the Empire State Chapter of Associated Builders and Contractors (ABC), Associated General Contractors (AGC) of New York and AGC VT  were in the media speaking out against this PLA (See ABC Empire State’s press release).
From The Burlington Free Press Controversy brewing over Lake Champlain Bridge labor deal,” 2/12.

In its letter to federal officials, the organization wrote, “AGC/VT believes that neither a public owner, government nor its representative should mandate the use of a PLA that would force a firm to change its labor policy or practice in order to compete for or to perform work on a publicly financed project.”

“What really irked us is our congressional delegation went ahead and supported a project labor agreement and didn’t speak to any of us,” added Brent Tewksbury, vice president of F. R. Lafayette Inc in Essex.

Tewksbury may be referring to a letter encouraging the use of PLAs sent from the VT delegation and some NY members of U.S. Congress to the FHWA and/or a statement by VT politicians on 2/11.

The Vermont delegation — Sens. Patrick Leahy, D-Vt., and Bernie Sanders, I-Vt., and Rep. Peter Welch, D-Vt. — issued a statement Thursday disagreeing with the contractors’ assertion that PLAs discourage competition.

“These agreements will not prevent any Vermont contractor from successfully bidding on this project. We stand committed to putting Vermonters to work at decent paying jobs,” the trio said.
Obviously, the VT delegation doesn’t understand how a PLA cuts competition from nonunion contractors and their employees and need to be be held accountable because they are simply regurgitating Big Labor’s talking points supporting PLAs.  What’s strange is that promoting PLAs isn’t even representing their constituents’ best interests as just 4.5 percent of VT’s private construction workforce in 2009 belonged to a labor union.
A story by the Vermont Press Bureau that ran in local papers explains how a PLA will stifle construction job creation and discriminates against VT’s nonunion contracting community (“Bridge agreement concerns Vt. firms,” 2/13).
Adopting such an agreement for the $75 million Lake Champlain bridge replacement project, according to Cathy Voyer, executive vice president of Associated General Contractors of Vermont, would force contractors to play by union rules, and effectively preclude this state’s non-union shops from bidding on the work…
…”If you’re not a union contractor, then you have to agree to change your employment practices to either become a union contractor or allow the union to take control of your employees,” Voyer said. “It basically requires contractors to grant union officials monopoly bargaining power over all their employees.”

Don Wells, president of DEW Construction in Williston, says Vermont firms likely won’t participate in the high-dollar infrastructure project if a PLA is implemented.

“People that run open shops take a lot of pride in what they do and the services and benefits they provide to their employees. Typically what happens in a Project Labor Agreement is you lose your right to negotiate with your own employees.”

Andrew Martin, of Pizzagalli Construction in South Burlington, VT, explains how PLAs harm nonunion employees and put nonunion contractors at a disadvantage in the competitive bid process as PLAs raise costs for nonunion firms.

[Martin] said the PLAs may require non-union workers to pay into union benefit packages from which they won’t reap any rewards.

“You’re going to have to pay as an open-shop contractor into those benefits set up in the PLA, but you’ll [nonunion employees] never see any of those benefits if you’re not in the union.”

In NY, Becky Meinking, president of ABC Empire State, had this to say about PLAs in a 2/12 press release.

“Special interest PLAs result in increased costs and reduced competition,” said Rebecca Meinking, President of the Empire State Chapter of Associated Builders and Contractors (ABC). “PLAs deny taxpayers the accountability in public works projects they deserve from government.”

“We are disappointed that the New York Transportation Department, at the behest of Big Labor is considering use of a PLA on the Champlain Bridge project”, said Meinking. “This area of New York State, Essex and Washington Counties, and the State of Vermont are largely served by nonunion contractors. More than 70 percent of the construction workforce in this area of New York and 95 percent of Vermont’s construction workers do not belong to a construction labor union, according to government data.

The use of a PLA will actually mean that the majority of local labor will be shut out of the opportunity to work on this bridge replacement project in a time when the unemployment rate in the construction industry is 24.7 percent nationwide, and even higher in the areas where this bridge project is located.”

Yesterday The Albany Times Union reported that a member of AGC NY is considering a lawsuit against the PLA, which may delay the project and deny badly-needed jobs to VT and NY workers unless Big Labor’s political cronies are willing to drop the PLA and bid this project using fair and free competition (“Threatened lawsuit could delay Champlain Bridge rebuild,” 2/15).

“I think I’ll be able to delay that project,” said A.J. Castlebuono, president of the 600-member New York State Associated General Contractors. “We will seek injunctive relief in state and maybe federal courts.”

Castlebuono said he’s meeting with lawyers today because the state Department of Transportation appears to be leaning toward requiring “project labor agreements” on the bridge contract that would mean workers would have to be hired out of the union halls or paid union rates. He said the DOT has hired a consultant to do a feasibility study on the use of PLAs on the project, and the secret report likely suggests that savings can be realized by requiring prevailing wages.

Despite the controversy, the media has failed to mention the existing studies on the anti-competitive nature and added costs of government-mandated PLAs on New York construction projects.  Certainly VT, NY and the federal government can’t afford to be wasting tax dollars on special interest giveaways.

A 2006 study conducted by the Beacon Hill Institute at Suffolk University found that the use of PLAs on school construction projects in New York increased the cost of the projects by 20 percent.

As for measuring the impact of PLAs on competition, a 2001 Ernst & Young study, commissioned by Erie County in New York to analyze a PLA on a public construction project concluded that

“bidder participation was diminished because the county chose to utilize a PLA. Further, the use of PLAs adversely affects competition for publicly bid projects to the likely detriment of cost-effective construction… the use of PLAs strongly inhibits participation in public bidding by non-union contractors and may result in those projects having artificially inflated costs.”

TheTruthAboutPLAs.com will keep a watchful eye on this developing story.

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