Free enterprise is under attack in Maryland and the merit shop contracting community, which employs 88.6 percent of the state’s construction workforce, will be denied a fair opportunity to compete for construction contracts due to the rise of special interest favoritism.
Two recent media reports highlight how Maryland lawmakers and the administration of Gov. Martin O’Malley (D) are capitulating to Big Labor’s lobbyists by advocating the use of anti-competitive and costly project labor agreements (PLAs) on large-scale state and state-assisted construction projects.
It is a concerning shift in policy for Maryland’s taxpayers, job creators and skilled workforce.
A Washington Times op-ed by associates of the Competitive Enterprise Institute exposes how the proposed casino in Prince George’s County is likely to be constructed with a PLA that will lock out Maryland’s nonunion construction industry(“PATTERSON AND BROWN: Unions stack the deck against job creation, gambling on jobs,” 9/21/12):
Unfortunately, as Pless B. Jones, a local construction company owner and president of the Maryland Minority Contractors Association, noted in an Aug. 7 commentary in the Baltimore Sun, “A sixth casino would create jobs, but for whom?” Of the 146,215 construction workers in Maryland, “only 11 percent have chosen to belong to a union.” The result: “Under a PLA, almost 90 percent of our construction work force would not be eligible” for the casino construction jobs.
It’s the same nationwide. According to the U.S. Department of Labor’s Bureau of Labor Statistics, just 15 percent of construction workers are either union members or covered by union contract. PLAs effectively shut out 85 percent of the badly bleeding construction industry.
By artificially limiting the effective labor pool available for construction projects, PLAs dampen the market competition that selects for efficiency and quality: If unions are guaranteed plum construction jobs, what incentive do they have to bring the job in at a reasonable cost and at high quality? The frequent result of PLAs, sadly, is inflated prices and shoddy work…
…If Marylanders want to expand gambling in the state, fine. But every company, union and nonunion, should be able to bid for the jobs in open and fair competition. Hopefully, Maryland casinos won’t subject gamblers to the same odds that non-unionized workers face in finding a job: playing against a stacked deck.
Casino interests and construction trade unions have poured millions of dollars into a media campaign supporting casino construction. The campaign’s print, radio and TV ads – urging the public to vote for the Question 7 ballot measure and targeting lawmakers during this year’s special session to approve gaming legislation – are full of claims the casino will create jobs for Maryland residents.
But as Fact 1 of this mailer points out, the PLA ensures construction jobs will be steered to only construction union members and union-signatory contractors, which compose 11.4 percent of Maryland’s construction workforce and often hire out-of-state union workers for PLA jobsites.
Annapolis insiders have reported Big Labor lobbyists are working hand in glove with the O’Malley administration and Maryland’s Democrat lawmakers to approve the casino and secure a monopoly for unions to build the project.
An article in the Baltimore Business Journal describes how the O’Malley administration rigged bidding to ensure the use of a PLA on a $48.3 million Cheltenham Juvenile Detention Center (“Union-friendly deals could shutter Maryland construction jobs,” 7/27/12):
Gov. Martin O’Malley could be the first Maryland governor in more than a decade to push for controversial union-friendly contracts in state construction projects.
The O’Malley administration is experimenting with a project labor agreement in the construction of a $48.3 million juvenile detention center in Prince George’s County. Depending on the outcome of that project, the state could favor PLAs on other projects, a spokeswoman for O’Malley said.
In PLAs, unions negotiate compensation, work rules and grievance procedures for workers before projects begin.
O’Malley, the first Maryland governor to flirt with PLAs since Gov. Parris Glendening in 2000, likes the contracts because they ensure skilled labor and prevent unforeseen delays such as work stoppages, spokeswoman Raquel Guillory said.
But Mike Henderson, president of the Baltimore chapter of Associated Builders and Contractors, said PLAs increase project costs by narrowing the scope of bidders. And, they make it difficult for nonunion workers to get hired, he said.
If Maryland implements PLAs on state projects, Henderson said, it could slam the door on much-needed jobs to nearly 90 percent of the state’s construction workers because they don’t belong to unions.
“A $40 million project is a huge opportunity for Maryland, but when they tell you that you can’t use your own workforce, then … [contractors] have no choice but to bring people in from outside,” Henderson said.
Democrats are more supportive of PLAs — and collective bargaining in general — than Republicans. However, Henderson said the Democratic O’Malley administration “showed great restraint for the first four or five years, but we’re seeing a number of disturbing signs that make us believe that’s no longer the case.”
Maryland has never mandated a PLA for a state-funded project. The last attempt to do so came when Glendening wanted to negotiate a labor deal on a project to replace the Woodrow Wilson Bridge. That project happened without a PLA.
O’Malley’s effort to implement a PLA does not technically count as a mandate.
When the state Department of General Services solicited bids for a new youth detention center in Cheltenham, it awarded extra points to contractors that included PLAs. All four companies that bid on the project agreed to collective bargaining.
The state in May awarded the project to Turner Construction Co. of New York City.
But the Washington Metro chapter of ABC has challenged Maryland’s authority to favor bidders based on PLAs, tying up the project in the state Board of Contract Appeals.
Guillory said that depending on the board’s decision, the O’Malley administration could replicate that bid process, perhaps as soon as next year when the state bids out two other juvenile detention center projects.
“We are taking this on a case-by-case basis,” she said.
Ben Brubeck, the director of labor for ABC’s national office, called the Cheltenham bidding a “de facto PLA mandate.”
“You can’t overcome the disadvantage you’re put at if you don’t submit a PLA,” he said.
But the point system could become moot if state Sen. Roger Manno, D-Montgomery County, can persuade colleagues to support a bill he introduced earlier this year calling for mandatory PLAs.
According to S.B. 219, which failed to gain momentum during the most recent legislative session, companies would be subject to PLAs on all public works contracts worth $500,000 or more.
Manno said that although PLAs cost more in the short term, Maryland must stop paying contractors to perform shoddy work with undertrained workers.
Read the rest of the article after the jump.
To learn why government-mandated PLAs don’t make sense for Maryland taxpayers and the construction industry, access TheTruthAboutPLAs.com archive of failed Maryland PLA projects here.
TheTruthAboutPLAs.com will be monitoring the assault on free enterprise closely. Check out this blog or our Facebook page at www.facebook.com/TheTruthAboutPLAs.com for updates.