House Defends Principles of Fair and Open Competition with Passage of Amendment Restricting Government-Mandated PLAs on NDAA Authorized Projects

5 May 21, 2012  Federal Construction

It was a historic week for the merit shop contracting community in the U.S. House of Representatives.

Thursday, by a bipartisan vote of 211 to 209, the House passed an amendment offered by Rep. Roscoe Bartlett (R-Md.) and cosponsored by Rep. Jeff Flake (R-Ariz.) to the National Defense Authorization Act (NDAA) for Fiscal Year 2013 (H.R. 4310) that prohibits federal agencies from mandating anti-competitive and costly project labor agreements (PLAs) and using PLA preferences on federal construction contracts authorized by the NDAA.

“This is a victory for the nation’s merit shop construction contractors and the 86 percent of the construction workforce that chooses not to join a labor union,” said Associated Builders and Contractors (ABC) Vice President of Federal Affairs Geoff Burr. “With a construction industry unemployment rate of 14.5 percent, everyone deserves a level playing field to compete for this work, regardless of labor affiliation.

“The amendment passed today will ensure fair and open competition on government-funded construction contracts, as well as give taxpayers and the government the best possible construction product at the best possible price – completed safely and on time,” Burr said. “We thank the members of Congress who voted in favor of this amendment.”

Historic Win
This was the first time the U.S. House passed legislation ensuring fair and open competition in federal contracting. During the first session of the 112th Congress, the House voted three times on similar measures. Each effort failed by a razor thin margin (210-210 , 207-213 and 204-203).

On Friday, construction labor unions benefitting from PLA favoritism in federal contracting cut back-room deals and lobbied furiously for a re-vote on the Bartlett amendment. However, House members supportive of discrimination in federal contracting and their special interest lobbyists were unable to muster enough supporters to ensure a successful re-vote, so they withdrew their effort.

It was another victory for taxpayers, free enterprise and the merit shop contracting community.

The NDAA passed the House 299-120 on Friday afternoon.

House Appropriations Committee Supports Fair and Open Competition
On Wednesday, the House Appropriations Committee passed via voice vote a similar amendment offered by Rep. Jeff Flake (R-Ariz.) prohibiting government-mandated PLAs on federal and federally assisted construction projects funded in the MilCon/VA FY 2013 appropriations bill.

PLA proponents are expected to attempt to push an amendment to strike this language from the MilCon/VA FY 2013 appropriations bill when it is considered on the House floor later this month.

Efforts Restore Government Neutrality in Contracting
Both measures restore open competition and government neutrality toward government contractors’ labor relations on Department of Defense construction projects authorized and funded by these two pieces of legislation.

Provisions in both bills closely mirror language contained in President George W. Bush’s Executive Order No. 13202 and Executive Order No. 13208, which was upheld by the U.S. Court of Appeals for the District of Columbia Circuit decision in the Allbaugh case. The Bush executive orders declared that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on government construction projects.

Allbaugh remains the controlling case on government-mandated PLA law and affirms that governments can mandate a position of neutrality when it comes to a contractor’s use of a PLA, as is the intent of both of these measures.

From 2001 until it was repealed by President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502, President Bush’s executive orders ensured there were no government-mandated PLAs on $147 billion worth of federal construction projects and hundreds of billions of dollars of federally assisted construction projects.

Under the Bush orders, firms were free to enter into PLAs on a voluntary basis. Research found that the government’s position of neutrality toward PLAs fostered fair and open competition and contributed to the completion of safe, on-time and on-budget projects. In short, PLA mandates were unnecessary.

Additional research suggests government-mandated PLAs can needlessly increase costs and typically force nonunion construction workers to pay union dues, join a union and receive reduced take-home pay and no benefits during the life of a PLA project unless they join a union and become vested in union benefits programs.

The Government Neutrality in Contracting Act (H.R. 735), introduced by Congressman John Sullivan (R-Okla.) and cosponsored by 176 other House members, essentially codifies into law President Bush’s executive orders ensuring fair and open competition on federal and federally assisted construction projects.  It remains in the House Oversight and Government Reform Committee and was the subject of a subcommittee hearing last year.

Coalition Supports Efforts
A coalition of construction and business groups sent a letter to the full House in support of the Bartlett amendment to the NDAA highlighting concerns with the Obama administration’s anti-competitive and costly pro-PLA policy:

President Obama’s Feb. 6, 2009, Executive Order 13502 encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost on a case-by-case basis in order to “advance the economy and efficiency in federal contracting.”

However, studies of construction projects subject to prevailing wage laws found PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects. Recent government-mandated PLAs on federal projects have resulted in increased costs, delays and discrimination.

In addition, the executive order and related FAR regulations have exposed agency procurement officials to intense political pressure from special interest groups and politicians to mandate PLAs on federal projects even when they are not appropriate.

The Bartlett amendment counteracts potential special interest favoritism by prohibiting federal agencies building projects authorized by this bill from mandating PLAs and implementing PLA preferences. However, it also permits federal agencies to award contracts to businesses that voluntarily enter into PLAs in accordance with the National Labor Relations Act.

During the Obama administration, a number of Department of Defense construction projects have been subjected to PLA mandates, or have attempted PLA mandates (here and here), discriminatory PLA preferences and onerous PLA surveys.

The diverse coalition opposed to government-mandated PLAs includes the following groups representing both union and nonunion employers and employees:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Independent Electrical Contractors (IEC)
Merit Elevator Contractors Association of America (MECAA)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners & Executives, USA (WCOE, USA)

AGC’s letter supporting the Bartlett amendment highlights why union and nonunion contractors are opposed to government-mandated PLAs (emphasis added):

“Government-mandated PLAs – whether mandated in contract specifications or mandated by government rules, regulation or by Executive Order – effectively compel both union and open shop contractors to alter their hiring practices, work rules, job assignments, and benefits in order to compete for, or to perform work on, publicly funded projects. PLAs typically restrict the majority of employment to those workers whom unions are willing to refer to the project. For these reasons, PLA mandates – even when competition is facially neutral and open to all contractors – effectively discriminate against open-shop companies, small companies, and disadvantaged businesses, limiting the number of competitors on a project, increasing costs to the government and, ultimately, the taxpayers. They can also negatively impact union contractors because the PLA supersedes the hard-fought terms and conditions a union has negotiated to achieve in its collective bargaining agreement.

Project owners have many ways to ensure that their construction contractors complete their projects in a timely manner, and there is no reliable evidence that PLAs improve the performance an owner can expect in the absence of such an agreement. In addition, PLAs can give rise to jurisdictional disputes that would not otherwise occur.

The choice of whether to enter into a collective bargaining agreement should be left to the employers and employees who will be subject to the agreement; the choice should not be imposed as a condition to, or advantage in, competing for publicly funded work. In cases where the use of a PLA would benefit a particular project, the construction contractors otherwise qualified to perform the work would be the first to recognize that fact and would adopt a PLA without the mandate.”

The Bartlett amendment is supported by the National Taxpayers Union:

“PLAs diminish the benefits of competitive contracting and, by effectively encouraging unionization, undercut an individual’s right to choose whether or not to be represented by a union.  PLAs are often the source of cost overruns and higher construction expenses, both of which are passed on to the taxpayer.”

The National Right to Work Committee’s letter to Congress in support of the Bartlett amendment explains the negative impact of government-mandated PLAs on nonunion workers and contractors:

“The fact is, union-only PLAs between public entities and contractors discriminate against independent-minded workers and contractors.

Unfortunately, state Right to Work laws don’t fully protect workers from forced-unionism abuse under PLAs. While Right to Work laws protect workers from forced dues and fees, under a PLA, workers are forced under terms and conditions exclusively negotiated by union bosses.

Worse, PLAs often force contractors and their employees to “contribute” to mismanaged union pension and benefit plans even if their workers already have their own plan. And, unless those employees are willing to give up their independence altogether by joining the union, they’ll likely never see the supposed “benefits” they’ve been forced to pay for.

By requiring union-only PLAs on taxpayer-funded projects, the federal government is essentially telling open or merit shop contractors they either turn their employees over to union boss control or forget about applying for the work. In these tough economic times especially, that’s the last thing Congress should allow!

Forbidding non-union contractors and workers from projects their tax dollars help fund amounts to state-sanctioned discrimination, plain and simple. Congress should never allow federal agencies to actively shut out or discriminate against well-qualified workers and contractors solely on the basis of union affiliation.

The fact is, union-only “Project Labor Agreements” are nothing more than an attempt by union officials to take even more power at the expense of workers and taxpayers.

Adoption of the Bartlett Amendment is critical, not just for non-union workers but for taxpayers as well. Contracts for any publicly-funded project should be awarded on merit, not on the basis of union affiliation.”

Learn about government-mandated PLAs and Right to Work here.

Continued:

“…In fact, studies of other union-only PLAs confirm they increase taxpayer expenses by at least 20%.

It is simple. Under PLAs, higher costs are exacted from taxpayers while individual workers are forced under monopoly union control at best and forced to pay dues or lose their jobs at worst.

By adopting the Bartlett Amendment, you would not only be protecting the rights of American workers and contractors but also defending the pocketbooks of the American taxpayers. Only Big Labor gains from union-only PLAs — not the majority of workers and taxpayers, not the majority of businesses, and not our nation’s economy.

The overwhelming majority of American workers, those who are not union members, should certainly not be denied access to the projects paid for by their taxes simply because they choose not to surrender their bargaining rights to a union boss…”

Review studies on the increased costs and reduced competition resulting from government-mandated PLAs here.

TheTruthAboutPLAs.com applauds the House for passing the Bartlett amendment.  It is an important step in restoring fair and open competition in government contracting.

Check back for updates and media coverage.

Further Reading
Language of Bartlett Amendment No. 182
Floor Debate (Video) on Bartlett Amendment
Congressional Record of Floor Debate
Roll Call Vote on Bartlett Amendment
Coalition Letter of Support
ABC Letter of Support
AGC Letter of Support
NRTW Letter of Support
National Taxpayers Union Endorsement
Rep. Bartlett Press Release
Dear Colleague Letter of Support from Rep. Guinta (R-NH)
Building Trades Unions Materials Opposing Bartlett Amendment
Rebutting Misleading and Untrue Statements Union Lobbyists Make about Project Labor Agreements (PLAs)
The Legality of Legislation Restricting Government-Mandated PLAs
Packet Supporting Bartlett Amendment

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5 Responses to House Defends Principles of Fair and Open Competition with Passage of Amendment Restricting Government-Mandated PLAs on NDAA Authorized Projects

Woodmantech May 21, 2012 at 1:47 pm

Uh, 210 to 1 voting Yea is not exactly a “bipartisan vote”.

Ben Brubeck May 23, 2012 at 3:39 pm

It is bipartisan. Certainly not overwhelmingly bipartisan.

Too Many Illinois Republican Congressmen Giving Unions Free Tax Dollars | May 29, 2012 at 6:21 pm

[…] that last vote on NDAA amendments, an amendment sponsored by Rep. Roscoe Bartlett (R, Md.) passed by a slim 211 to 209 margin. This amendment would […]

Too Many Republican Congressmen Giving Unions Free Tax Dollars | PERSUASION IN INK June 2, 2012 at 4:58 pm

[…] that last vote, an amendment sponsored by Rep. Roscoe Bartlett (R, Md.) passed by a slim 211 to 209 margin. This amendment would […]

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