Coalition to House: Champion Bill Reforming Unfair Government-Mandated Project Labor Agreement Schemes

0 March 17, 2017  Featured, Federal Construction

A diverse coalition of construction industry associations and employer groups sent a letter to the United States House of Representatives March 16 opposing government-mandated project labor agreements (PLAs) and anti-competitive PLA preferences used by federal agencies as a result of President Obama’s pro-PLA Executive Order 13502 and related regulations.

The letter asks House members to cosponsor the Fair and Open Competition Act (H.R. 1552), introduced in the 115th Congress by Rep. Dennis Ross (R-Fla.), which has been referred to the House Committee on Oversight and Government Reform. In the 114th Congress, with more than 100 cosponsors and broad industry support, the committee passed the same bill (H.R. 1671), introduced by Rep. Mick Mulvaney (R-S.C.), who now serves as President Trump’s Director of the White House Office of Management and Budget (OMB).

March 16, ABC issued a press release in support of Rep. Ross’ bill:

“The Fair and Open Competition Act will create more construction jobs and help taxpayers get the best possible construction project at the best possible price by increasing competition, reducing waste, and eliminating favoritism in the procurement process. This important bill will create a level playing field where more qualified contractors will compete for public construction contracts because the government cannot encourage or prohibit project labor agreements (PLAs). 

“When mandated by the government, PLAs discriminate against the 86.1 percent of the private U.S. construction workforce that chooses not to join a labor union and drive up the cost of taxpayer-funded construction by 12 percent to 18 percent compared to projects not subject to PLA mandates. ABC supports this bill because it will create jobs for veterans, minorities, women and local workers not affiliated with unions, and will create opportunities for small businesses and qualified contractors hurt by PLA requirements. ABC and a coalition of construction and business groups urge Congress to immediately pass this common-sense legislation and put an end to these anti-competitive and costly contracting schemes.” 

Earlier this week, ABC issued a press release in support of the Senate companion Fair and Open Competition Act (S. 622), introduced March 14 by Sen. Jeff Flake (R-Ariz.), and championed by the construction industry and business coalition supportive of H.R. 1522.

Below is text of the coalition letter urging House lawmakers to cosponsor H.R. 1522 which will “will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of federal and federally funded contracts throughout all of the construction industry.”

FOCA House Box small 031617 green

March 16, 2017

United States House of Representatives
Washington, D.C. 20515

Dear Representative:

The diverse group of undersigned construction and business associations writes in strong support of Rep. Dennis Ross’ (R-Fla.) Fair and Open Competition Act (H.R. 1552), which ensures fair and open competition on federal and federally assisted construction contracts.

H.R. 1552 would prevent federal agencies and recipients of federal assistance from requiring contractors to sign an anti-competitive and costly project labor agreement (PLA) as a condition of winning a federal or federally assisted construction contract. It also would eliminate discriminatory PLA preference policies that discourage competition during the procurement of taxpayer-funded construction projects.

A PLA is a collective bargaining agreement unique to the construction industry that typically requires companies to agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; follow union work rules; and pay into union benefit and multi-employer pension plans that nonunion employees will be unlikely to access. This forces employers to pay “double benefits” into existing plans and union plans, and it places them at a significant competitive disadvantage. In addition, PLAs typically force construction workers to pay union dues or join a union if they want to work on a PLA project and receive benefits.

When mandated by government agencies, PLAs can interfere with existing union collective bargaining agreements and unfairly discourage competition from nonunion contractors and their employees, who comprise 86.1 percent of the U.S. private construction workforce.

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 promote the economy and efficiency in federal procurement.”

However, studies 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 and federally assisted projects have resulted in litigation, reduced competition, increased costs, needless delays and poor hiring outcomes for minorities, women, veterans and local workers not affiliated with unions. Simply put, taxpayers are getting less and paying more when PLA preferences and mandates are required during the procurement of federal and federally assisted construction projects.

Likewise, the Obama 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 and federally assisted projects even when they are not appropriate.

The Fair and Open Competition Act seeks to counteract potential special interest favoritism by prohibiting federal agencies and recipients of federal assistance from mandating PLAs and implementing PLA preferences. However, this legislation would allow federal agencies to award contracts to businesses that voluntarily enter into PLAs before or after a fair and open competitive bidding process, a common industry practice permitted by the National Labor Relations Act.

H.R. 1552 will curb waste and favoritism in the procurement of construction projects and ensure taxpayer dollars are spent responsibly by letting the market determine if a PLA is appropriate. If you would like to take a stand against discrimination and special interest carve-outs in government contracting, please contact Tim Cummings (Timothy.Cummings@mail.house.gov) in Rep. Ross’ office and ask to cosponsor H.R. 1552.

Your support of the Fair and Open Competition Act will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of federal and federally funded contracts throughout all of the construction industry.

Sincerely,

Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
U.S. Chamber of Commerce
National Federation of Independent Business (NFIB)
National Association of Home Builders (NAHB)
National Black Chamber of Commerce (NBCC)
Small Business & Entrepreneurship Council (SBEC)
U.S. Pan Asian American Chamber of Commerce (USPAACC)
American Council of Engineering Companies (ACEC)
American Road & Transportation Builders Association (ARTBA)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Electronic Security Association (ESA)
Independent Electrical Contractors (IEC)

cc: United States House of Representatives

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