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A Win For Taxpayers and Free Enterprise: Wisconsin Is 23rd State to Pass Law Restricting Government-Mandated Project Labor Agreements

0 April 18, 2017  Featured, Federal Construction, State & Local Construction

On April 17, Wisconsin Gov. Scott Walker (R) signed SB 3 into law, which promotes fair and open competition on contracts for construction services funded by Wisconsin taxpayers.

The “Project Labor Agreement Neutrality Bill” now known as Act 10 prohibits the government from mandating controversial project labor agreements (PLAs) on state, state-assisted and local construction projects but allows contractors to voluntarily execute PLAs with unions outside of the government’s competitive procurement process.

Gov. Walker issued this statement at yesterday’s bill signing:

“Accountable government means ensuring our taxpayers receive quality service,” Governor Walker said. “By forbidding state and local governments from requiring contractors to enter into agreements with labor organizations, we’re promoting healthy competition between contractors. At the end of the day, this means the contractor ultimately chosen for the project is the one that has demonstrated excellent service and will work at good value for Wisconsin taxpayers.”

Sen. Leah Vukmir (R-Brookfield), Representative Rob Hutton (R-Brookfield), and Wisconsin Senate and Assembly leadership deserve credit for passing this commonsense legislation that will create a level playing field in the procurement of publicly funded construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of state, state-assisted and local construction contracts throughout all of Wisconsin’s construction industry.

Vukmir Hutton

Senator Leah Vukmir (R – Brookfield) and Representative Robert Hutton (R – Brookfield), authors of this bill, testify at a Senate hearing January 25, 2017. SB 3 passed the Senate with a vote of 19-13 and was concurred by the Assembly with a vote of 64-35.

Wisconsin is the 23rd state to pass this common-sense policy ensuring taxpayers get the best possible construction project at the best possible price.

23 FOCA GMPLA State Map as of 041717

The Wall Street Journal published an op-ed yesterday about this measure and an industry coalition’s request for President Trump to issue a similar executive order restricting government-mandated project labor agreements on federal and federally assisted construction projects.

Here is ABC’s press release on yesterday’s win for free enterprise and Wisconsin taxpayers.

Wisconsin Becomes the 23rd State to Pass ABC-supported Bill to Protect Taxpayers, Workers from Project Labor Agreement Mandates; ABC Urges Federal Action

WASHINGTON, D.C., April 17—Associated Builders and Contractors (ABC) today applauded Gov. Scott Walker (R-Wis.) for signing legislation into law that will promote fair and open competition on contracts for construction services funded by Wisconsin taxpayers. Act 3 will ensure that the government cannot mandate controversial project labor agreements (PLAs) on state, state-assisted and local construction projects, guaranteeing that the almost three out of four members of Wisconsin’s private construction workforce who have chosen not to join a labor union can work on projects funded by their own tax dollars.

“By restricting the use of anti-competitive and costly government-mandated project labor agreements, Gov. Walker and the state legislature have created the conditions for all of Wisconsin’s qualified business and workers—union and nonunion alike—to compete on a level playing field to build publically funded construction projects,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Congress and the Trump administration should follow the lead of Wisconsin and 22 other states by immediately enacting a similar policy that will maximize competition, reduce costs and guarantee the fiscal accountability taxpayers deserve on federal and federally-funded construction projects.

“As Americans consider proposals to rebuild our nation’s deteriorating infrastructure, it is imperative that lawmakers pass measures that support fairness and efficiency in the government’s procurement of construction services to ensure that taxpayers receive the best possible return on investment,” said Brubeck. “Unfortunately, this cannot be accomplished when government agencies cater to special interests by mandating PLAs, which steer contracts to unionized firms and create a labor monopoly for unionized workers, who make up just 14 percent of the construction industry nationally.”

Gov. Walker signed the bill at the construction jobsite of AmeriLux International, a De Pere manufacturer of building materials, which is being built by ABC member Keller Inc., Kaukauna, Wis.

“Wisconsin’s merit shop construction community thanks Gov. Walker, Sen. Leah Vukmir, Rep. Rob Hutton, the legislature and leadership for supporting this common-sense policy, which will create local jobs for the Badger State’s construction industry,” said ABC Wisconsin President John Mielke. “As Governor Walker said today, it’s a great day for Wisconsin taxpayers and open competition.”

When mandated by a government agency on a taxpayer-funded project, PLAs drive up the cost of construction projects between 12 percent and 18 percent, according to a series of academic studies. PLAs typically ensure construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; obtain apprentices through union apprenticeship programs; follow inefficient union work rules; pay into union benefit and multi-employer pension plans workers will never benefit from unless they meet vesting requirements; and force workers to pay union dues and/or join a union as a condition of employment.

In the past week, ABC has argued against PLA mandates in editorials in The Wall Street Journal and The Hill.

In 2009, President Obama signed Executive Order 13502, which strongly encourages, on a case-by-case basis, government-mandated PLAs on federal construction projects and permits state and local governments procuring federally-assisted construction contracts to mandate PLAs. In January 2017, ABC and a coalition of construction and industry stakeholders asked President Trump to issue an executive order similar to President Bush’s Executive Orders 13202 and 13208, which prohibited government-mandated PLAs on $147.1 billion worth of federal construction contracts and hundreds of billions of dollars’ worth of federally assisted projects. 

Wisconsin is the 21st state to adopt legislation or executive action ensuring fair and open competition on state and local projects since 2011. Iowa Gov. Terry Branstad signed legislation on April 13 that codifies his 2011 executive order and guarantees government neutrality toward PLAs on state, state-assisted and local public construction projects (SF 438). In 2015, West Virginia became the 22nd state to ban government-mandated PLAs when Gov. Earl Ray Tomblin signed the bipartisan Establishing Fair and Open Competition in Governmental Construction Act (SB 409). Gov. Tomblin was the first Democratic governor to sign a bill prohibiting PLA mandates.

On March 28, a U.S. House of Representatives committee favorably reported the ABC-supported Fair and Open Competition Act (H.R. 1552) out of committee. The bill, sponsored by Rep. Dennis Ross (R-Fla.), would extend neutrality toward the use of PLAs to federal and federally assisted construction contracts. The bill was also introduced in the U.S. Senate (S. 622) by Sen. Jeff Flake (R-Ariz.).

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