The Truth About Project Labor Agreements

The merit shop construction community in Southern California again demonstrated this week they can create value for taxpayers without wasteful and discriminatory project labor agreements (PLAs).

On Tuesday, the $1 billion expansion of San Diego’s Lindbergh Field opened to the public.  This project was completed on time, under budget, created thousands of jobs, resulted in an environmentally conscious facility and experienced no significant labor disputes.

Courtesy of the San Diego Airport Authority

Plus, it was built without the unnecessary burden of a PLA mandate.

Here are the highlights from the San Diego County Airport Authority’s press release celebrating the opening of the facility, with our emphasis added:

SAN DIEGO, Aug. 13, 2013 /PRNewswire/ — The Green Build expansion at San Diego International Airport opened to passengers today, marking the completion of the largest project in the airport’s history. The Green Build was completed on schedule and is expected to be $45 million under budget.

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Called “The Green Build” due to the Airport Authority’s commitment to sustainability and the environment, as well as positive economic impact, the project created a role for 7,000 workers, including local, small, disadvantaged and minority-owned businesses. A positive outcome of the Airport Authority’s aggressive small business outreach program was that more than $415 million in contracts were awarded to local businesses, with $118 million going to small businesses.

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The Green Build is designed to achieve Leadership in Energy and Environmental Design (LEED) Silver certification from the U.S. Green Building Council—a testament to the airport’s commitment to sustainability—and may achieve LEED Gold. Official LEED status is currently under consideration and is expected by mid-2014.

The Green Build was funded by user fees, airport revenue bonds, airport cash and FAA grants. The project is expected to finish $45 million under budget at a total cost of $907 million—$820 million for the project and the remainder in financing costs. A portion of the savings was the result of the Airport Authority’s two successful bond sales. The organization was able to secure significantly low true interest cost of 3.92% (2013) and 4.38% (2010), saving millions over the life of the bonds.

Voters in the San Diego area already understand that PLAs don’t work. We know this because the City of San Diego voted overwhelmingly to ban government-mandated PLAs on city and city-funded projects in 2012, and San Diego County voters did the same by an even larger margin in 2010.

This example should be instructive for politicians throughout the nation who buy the outdated union line that the only way to successfully complete large-scale construction projects is through the use of wasteful and discriminatory PLA mandates. The success of this project in attracting both small and local contractors debunks union claims that PLAs are necessary to encourage local contractors and their workers to participate in projects in the communities. It clearly shows these claims are unfounded and that an aggressive outreach program can accomplish the same objectives – without the discrimination guaranteed as a result of a PLA mandate.

Finally, the successful completion of the “Green Build” project shines a bright light on the San Diego Convention Center project.  Despite the obvious will of the voters in the area, local officials responded to a greenmail campaign by local construction unions by encouraging the contracting team on the project to include a PLA.

Here at TheTruthAboutPLAs.com, we will be watching the convention center project closely and comparing the results to the airport expansion. Unfortunately, we suspect local taxpayers and the vast majority of the local construction workforce that chooses not to join a labor organization will not be getting as good of a deal.