Reporters and TheTruthAboutPLAs.com readers often question why anti-competitive and costly project labor agreements (PLAs) are placed on federal construction projects when: (1) they are controversial and have a track record of poor performance; (2) the majority of the construction industry is opposed to government-mandated PLAs; and (3) President Obama’s pro-PLA Executive Order 13502 encourages, but does not require, federal agencies to mandate PLAs on federal construction projects exceeding $25 million in value.
The answer is simple: Politics and patronage. We have written about the cycle of corruption surrounding government-mandated PLAs, but here is an actual case study – featuring sitting members of Congress – that illustrates how politicians funnel lucrative federal construction contracts to their Big Labor political patrons through PLA schemes.
Congressman Maurice Hinchey (D-N.Y.) and Congressman John Hall (D-N.Y.) have repeatedly urged U.S. Secretary of the Army John McHugh and U.S. Army Corps of Engineers procurement officials to use PLAs for large federal construction projects at the United States Military Academy (USMA) at West Point in New York (see June 21 letter and press release from the offices of Reps. Hinchey and Hall).
Here is a quote about the supposed job creation benefits of a PLA included in a Sept. 16 press release from Rep. Hinchey’s office:
“I’ve been working to ensure that local construction laborers, carpenters, plumbers, electricians and other tradespeople are employed whenever construction projects are needed at West Point,” said Hinchey. “The use of PLAs at West Point would create local jobs, strengthen our region’s economy and the partnership between the Academy and our local communities, and ensure that major projects are completed on time and within budget. We have a highly-skilled workforce right here in the Hudson Valley and we should not be awarding major contracts to firms from other states and regions of the country.”
Of course, Rep. Hinchey fails to mention that PLAs only create jobs for local union members and make it difficult – if not impossible – for local nonunion construction employees to work on taxpayer-funded construction projects unless they comply with being forced to join a union and pay union dues. This favoritism is especially shocking considering 73 percent of New York’s private construction workforce does not belong to a union.
So why would Hinchey and Hall advocate for such a narrow special interest against the will of a large block of constituents and financially concerned taxpayers? Follow the money.
Of Rep. Hinchey’s top 100 donors in the 2009-2010 election cycle, $35,860 came from building trades union PACs that would benefit from PLAs, according to data compiled by The Center for Responsive Politics from campaign finance reports filed with the Federal Election Commission.
In NY-22, Hinchey’s GOP challenger—former congressional staffer and teacher George Phillips—is giving the 18-year incumbent a tough race.
The Center for Responsive Politics data indicates that of Rep. Hall’s top 100 donors in the 2009-2010 election cycle, $45,000 came from building trades union PACs that would benefit from PLAs.
In order to survive these competitive races, Hinchey and Hall must reward their long-time political patrons with PLAs (obtained by pressuring federal agencies and procurement officials) to continue the flow of political support and campaign cash that lubricates this mutually beneficial relationship.
The fact that Reps. Hinchey and Hall are in the business of picking favorites based on whether constituents carry a union card illustrates the unfortunate influence of money and cronyism in our political system.
If Hall and Hinchey are successful in implementing PLAs on federal projects, this cycle of corruption will continue. Dues deducted from construction employees working on federal PLA projects will go back to construction union political coffers and PACs that support federal candidates who promote PLAs.
Federal agencies and elected officials are obligated to ensure taxpayers get the best possible construction product at the best possible price. They should not be denying hardworking taxpayers a fair opportunity to compete for jobs. They should not push workers into the false choice of deciding between employment or joining a union and paying union dues. They should not turn a blind eye to fairness, economic freedom and good public policy in order to reward political patrons because it is politically beneficial.
Government-mandated PLAs fuel this cycle of corruption and have no place in a free and fair market.
Ending this corruption is why previous administrations have prohibited PLAs on federal construction projects and that’s why legislation (The Government Neutrality in Contracting Act, H.R. 983 and S.90) has been introduced to end these special interest schemes.
Update: Rep. Hall lost to Nan Hayworth (N.Y.-19) and Rep. Hinchey (N.Y. -22) won.
Update: In Feb. 2011, the USACE issued a survey soliciting comments from the construction community addressing the potential use of government-mandated project labor agreements (PLAs) for three large scale construction contracts totaling about $200 million at West Point in Orange County, NY. Here is a blog post about it.