In a win for taxpayers and Virginia’s merit shop construction industry, on April 9, Gov. Bob McDonnell (R) signed the Fair and Open Competition in Government Contracting Act (HB 33) into law.
H.B. 33 prohibits the Commonwealth of Virginia and recipients of state assistance from mandating project labor agreements (PLAs) and enacting PLA preferences discriminating against bidders unwilling to execute PLAs.
Seven states passed similar legislation in 2011; Virginia is the first state to do so in 2012. A total of 12 states have enacted measures restricting the use of anti-competitive and costly government-mandated PLAs, and additional states may pass similar laws this year.
“H.B. 33 is commonsense legislation that will guarantee competition and a level playing field for all Virginia workers and businesses. This bill protects the 96 percent of Virginia workers who are nonunion. It commits that Virginia workers won’t be robbed of jobs through crony contracting and makes sure that Virginia’s tax dollars are spent wisely and stretched to respond to our transportation and infrastructure needs.”
The issue of government-mandated PLAs and PLA preferences has been hotly debated in Virginia and the greater Washington, D.C., area as a result of the PLA mandate controversy on Phase 2 construction of the Metropolitan Washington Airport Authority’s (MWAA) $2.8 billion Dulles metro rail project known as the Silver Line.
In April 2011, MWAA mandated a PLA on Phase 2 of the project. In the face of months of PLA mandate opposition by Phase 2 funding partners, stakeholders, lawmakers, taxpayers and Virginia’s construction industry, MWAA abandoned the PLA mandate in February. However, MWAA was heavily criticized by stakeholders for substituting the PLA mandate with a preference policy that amounts to a de facto PLA mandate. (Note: Here is a copy of the draft PLA circulated by MWAA board member and Laborers Union Vice President Dennis Martire. Learn more about MWAA and the PLA mandate and preference controversy here).
“Passage of this legislation should send a wakeup call to the Metropolitan Washington Airports Authority Board (MWAA) that they need to work with all of their funding partners who seek a level playing field for all Virginia workers,” said Comstock. “With passage of this legislation, MWAA can no longer stack the deck for union contractors. Instead of pushing union mandates and union preferences, they should do what is best for Virginia and comply with the law and our right-to-work tradition that treats all employees equally.”
Virginia’s Budget Targets MWAA’s PLA Preference Scheme
Last week Virginia passed a budget containing language from Delegate Hugo that prevents Virginia from giving money to projects implementing a PLA preference, such as Phase 2 of the Silver Line.
While the Republican-controlled House passed a budget three times, Senate Democrats delayed passage of the budget for nearly 40 days. They held out for an additional $300 million of funding for Phase 2 of the Silver Line, but the evenly divided Senate approved the budget without additional funding when Sen. Charles J. Colgan (D-Prince William) voted with Senate Republicans.
According to the original Silver Line funding agreement, the project is financed by MWAA (4.1 percent), Fairfax County (16.1 percent), Loudoun County (4.8 percent) and the Commonwealth of Virginia ($275 million total). Toll revenue generated from the MWAA-owned and operated Dulles Toll Road will fund the remainder of Phase 2.
MWAA Can Do the Right Thing
The passage of H.B. 33 and the Virginia budget containing language prohibiting MWAA’s PLA preference schemes will force MWAA to choose between abandoning their discriminatory PLA preference policy benefiting special interests, or forfeiting Virginia’s planned $150 million contribution to Phase 2 costs.
Virginia Secretary of Transportation Sean Connaughton’s letter to Silver Line stakeholders in Northern Virginia establishes a list of conditions MWAA must meet in order to receive Virginia’s pledged $150 million this year and possible future funding from the Commonwealth.
In addition, Loudoun County has until July 1 to decide if they want to fund their share of the Silver Line. Loudoun County Board of Supervisors have repeatedly told MWAA that they must eliminate a PLA preference and mandate if they want Loudoun to fund the project and have raised additional concerns about maintenance costs.
MWAA said the loss of hundreds of millions of dollars of Loudoun and Virginia contributions to Phase 2 would simply be passed on to Dulles Toll Road motorists via increased tolls. Stakeholders are concerned that raising tolls in excess of the already expensive toll projections needed to finance Phase 2 will decrease traffic and related revenue, which will disrupt already tenuous Silver Line financing models.
Last week, MWAA announced Phase 1 was expected to finish at least $150 million over budget and it has delayed the release of the Phase 2 RFQ until July, when funding commitments are expected from Loudoun County.
U.S. Department of Transportation Secretary Ray LaHood is meeting with stakeholders on Wednesday to get this project back on track.
Phase 1 was built with a PLA voluntarily entered into by the Phase 1 prime contractor, Dulles Transit Partners (DTP). However, it did not apply to Phase 1 subcontractors. A DTP report revealed that the majority of construction workers employed by DTP on Phase 1 are union members from Maryland dispatched through union hiring halls under the rules of the PLA, despite the fact the project is in Virginia and 97.4 percent of Virginia’s construction workforce does not belong to a union (see coverage in “Maryland workers outnumber Virginians on Dulles Rail project,” 2/17/12).
“This legislation will enhance competition, protect and expand opportunities for qualified Virginia employers and their skilled workers, and help ensure Virginia obtains the best product and service at the best price.”
Earlier this year, TheTruthAboutPLAs.com urged taxpayers to contact their legislators and encourage them to support H.B. 33 and Sen. Mark Obenshain’s companion legislation in the Virginia Senate, S.B. 242 (pdf). Kudos to everyone who contacted their elected officials and participated in this legislative process.
TheTruthAbouPLAs.com applauds the passage of H.B. 33 and a Virginia budget ensuring fair and open competition on all taxpayer-funded construction projects. We thank Virginia Delegates Comstock, Hugo, Ramadan, Sen. Obenshain, the McDonnell administration and all of the local and state stakeholder groups for their leadership on this important issue.
It is time for MWAA to eliminate the PLA mandate and preference schemes and ensure fair and open competition for Phase 2 construction contracts. Doing so will ensure critical funding from Phase 2 stakeholders, create jobs for Virginia’s construction industry and the community served by the Silver Line, and help deliver to taxpayers the best possible project at the best possible price.