The fight for fair and open competition in federal contracting will reach an important milestone today.
This afternoon’s groundbreaking for the U.S. Department of Labor’s (DOL) Manchester, N.H., Job Corps Center is expected to attract a number of federal, state and local public officials, according to a Union Leader article (“Job Corps center to serve state set for groundbreaking today,” 8/20/13):
Mayor Ted Gatsas will be joined today by U.S. Labor Secretary Thomas Perez, Gov. Maggie Hassan and members of the state’s congressional delegation to break ground on the state Job Corps center, the long-awaited but controversial federal project.
New Hampshire is among the last states in country to build one of the facilities, which provide job training to dropouts and low-income young people. The $31 million complex will be built in northwest Manchester, at 943 Dunbarton Road, where the groundbreaking will take place today at 1 p.m.
Among those slated to speak at the event are Democratic Sen. Jeanne Shaheen and Republican Sen. Kelly Ayotte, who had been on opposite sides of a years-long dispute over whether the proposal would include a Project Labor Agreement, or PLA.
The Job Corps contract originally contained a PLA, but Ayotte and a coalition of independent contractors in New Hampshire and Vermont fought to have it removed, and the U.S. Department of Labor in October agreed to put the contract out to bid without the agreement.
In April, the contract was awarded to Bedford-based Eckman Construction, one of the region’s most active builders.
The political leaders, however, appear to be ready to bury the hatchet at the groundbreaking Tuesday. The ceremony “represents a culmination of years of bipartisan work to build the Job Corps Center which will provide young people with job training resources and education,” a congressional press release states.
1st District U.S Rep. Carol Shea-Porter is also expected to attend the event.
Taxpayers are expected to save more than $6 million on the Job Corps Center thanks to the benefits of fair and open competition free from anti-competitive and costly government-mandated project labor agreements (PLAs).
Here’s more on the Manchester Job Corps Center saga from a 4/24/13 blog post and press release from TheTruthAboutPLAs.com:
“The award of this contract to a local contractor demonstrates the benefits of fair and open competition in federal contracting and undermines specious claims made by PLA advocates,” said ABC Director of Labor and Federal Procurement Ben Brubeck. “The apples-to-apples comparison of the Job Corps Center bidding results with and without a PLA mandate proves these special interest schemes reduce competition, increase costs and harm local contractors.”
The DOL’s solicitation for construction services to build the Job Corps Center project was first issued in 2009, but the project was delayed for nearly three years as a result of bid protests filed with the Government Accountability Office (GAO) against repeated efforts by DOL to mandate a PLA.
The first attempted PLA mandate for the project was issued in September 2009 as a result of President Obama’s Executive Order 13502, which encourages federal agencies “to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in federal procurement.”
In response, a federal contractor, with the help of ABC, filed a bid protest with the GAO, prompting the DOL to cancel the Job Corps Center solicitation in November 2009.
“Rather than remove the controversial PLA mandate and proceed with the procurement process using fair and open competition, the DOL waited more than two years to issue a new solicitation, and it still contained a PLA mandate,” said Brubeck. “Public record requests revealed that the DOL spent $428,000 in taxpayer funds to hire a consultant, Hill International, to complete two studies to evaluate the use of PLAs on federal contracts and erroneously justify the DOL’s use of a PLA on the Job Corps Center.”
In March 2012, federal contractors filed another GAO protest against the DOL’s second PLA mandate, again with the assistance of ABC. That summer, the GAO advised the DOL to take corrective action and rebid the project without a PLA. The DOL canceled the solicitation—but after it had already received and publicly unsealed bids that were subject to the PLA mandate.
Finally, in October 2012, the DOL issued a solicitation free from a PLA mandate. Those bids were opened in February. The low bidder, Eckman Construction Company, came in 16 percent less than the low bidder from the first round of bidding subject to a PLA, saving taxpayers $6.2 million. In addition, Eckman is a local firm from New Hampshire, and the first-round low bidder was an out-of-state company.
“When the PLA mandate was removed, the number of qualified contractors bidding on the project increased threefold,” said Brubeck. “Even contractors that submitted proposals during both rounds of bidding lowered their price by an average of 10 percent when bidding on the solicitation without a PLA mandate. Experts familiar with the anti-competitive and costly effect of government-mandated PLAs are not surprised by these results, but taxpayers should be concerned.
“It is time for the Obama administration to stop trying to steer lucrative federal construction contracts to well-connected unionized firms and union members—some of the president’s largest political supporters—through unlawful government-mandated PLAs,” Brubeck said. “The American people deserve the best possible construction project at the best possible price. We can’t afford the increased costs, reduced competition and delays created by these special interest handouts. ABC will continue to fight for fair and open competition, and will challenge federal agencies attempting to impose unjustified PLAs on federal projects.”
Numerous studies show PLAs discourage merit shop contractors and subcontractors from competing for federal contracts, thereby increasing costs to taxpayers and discriminating against the 86.8 percent of the construction workforce that does not belong to a labor union. PLAs typically force contractors to hire most or all of their craft employees from union hiring halls; follow inefficient union work rules; hire apprentices exclusively from union apprenticeship programs; and pay into union benefit plans on behalf of employees, even if they have their own qualified benefit programs. PLAs force employees to pay union dues, accept unwanted union representation, and forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefit plans.
Here is a link to an apple-to-apples comparison of bid results and number of bidders for the project bid with and without a PLA.
The impressive bid results speak to the anti-competitive and costly nature of PLA mandates and preferences.
It’s probably a reason why, according to the Union Leader article, New Hampshire AFL-CIO bosses are sour about the destruction of their monopolistic PLA scheme in New Hampshire, where just 10.7 percent of the construction workforce is unionized:
One party not celebrating the groundbreaking is the New Hampshire AFL-CIO, which had fought to keep the PLA in the contract.
“If we got the agreement, we could have put people in New Hampshire to work on the project. We could have made sure there was training, safety standards, apprenticeships,” said union President Mark MacKenzie. “This could’ve been a premiere project for doing those kinds of things. What we ended up with was more of the same (for New Hampshire).”
Of course, it’s absurd to claim these objectives can’t be achieved without a discriminatory PLA.
Across the United States, approximately $47.6 billion worth of large-scale federal construction contracts from FY 2009 to FY 2012, as well as billions of dollars’ worth of small-scale federal projects, have been safely and efficiently built free from PLA mandates with local, quality and experienced contractors and craft professionals.
Government-mandated PLAs are anti-competitive schemes that steer federal construction contracts and jobs to well-connected unionized contractors and union members. They harm taxpayers, qualified merit shop contractors, skilled nonunion construction workers: and result in less building: and hinder the creation of construction jobs in an industry facinghigh unemployment.
Brave members of New Hampshire’s merit shop contracting community and members of Congress like Sen. Ayotte, and former Reps. Frank Guinta and Charlie Bass deserve praise for fighting this scheme on behalf of all U.S. taxpayers and New Hampshire’s construction industry. Now it is time for the project to be built on time and on budget, with the highest quality and safety possible.
Update: Bloomberg/BNA’s Construction Labor Report (subscription) covered this story here (“Construction Begins on New Hampshire Job Corps Center After Long Debate Over PLA,” 8/22/13).