In a press release and letter to the White House issued Monday, Sen. Ayotte asked President Obama to repeal his pro-union Executive Order 13502 and remove the anti-competitive and costly union project labor agreement (PLA) mandated by the U.S. Department of Labor (DOL) on a $20 million to $50 million DOL Job Corps Center in Manchester, N.H.

The DOL’s Jan. 30 solicitation (DOL121RB20457) for the Manchester Job Corps Center mandates a union-favoring PLA.

Bidding is only open to certified small business contractors willing to agree to the terms and conditions of the union-friendly PLA drafted and mandated by the DOL. 

Qualified federal contractors played no part in creating this government-mandated PLA, which requires contractors to obey numerous union collective bargaining agreements, pay into union pension and benefit plans, follow inefficient union work rules, hire most of their employees through union hiring halls for the life of the project and force unwanted union representation on nonunion employees.The PLA is a direct assault on New Hampshire’s ”Live Free or Die” state motto.

In New Hampshire, 85.5 percent of the construction workforce does not belong to a labor union, according to new government data. The state does not have a history of using government-mandated PLAs and few federal small business contractors are unionized, leading many in the industry to believe out-of-state union contractors and union workers from Boston will steal jobs away from the New Hampshire construction industry, which is already suffering from a grim construction economy.

According to a press release issued by ABC New Hampshire/Vermont President Mark Holden:

The government-mandated PLA has the potential to again delay this project, increase costs, reduce competition from qualified New Hampshire businesses and deny badly needed jobs to skilled New Hampshire construction workers who have freely chosen not to belong to a union.

The Union Leader ran an article about this controversy (“Sen. Ayotte slams bidding for Manchester Job Corps Center,” 2/7/12):

Sen. Kelly Ayotte is calling on the Obama administration to scrap all union-friendly project labor agreements, saying they are the reason the planned Job Corps Center in Manchester has yet to be built.

In a letter to Obama released Monday, Ayotte asked the President to reverse his executive order requiring federal projects over $25 million to consider using project labor agreements, or PLAs. In his State of the Union address, Obama said he wanted to cut government red tape. These agreements would be a good place to start, the Republican senator said.

“Federal government-mandated PLAs needlessly increase construction costs and limit the ability of non-union companies to successfully compete for government construction contracts,” wrote Ayotte. “This Washington mandate also significantly slows down the procurement of construction projects, forcing workers to wait on the sidelines until the PLA winds its way through the federal bureaucracy.”

A Foster’s Daily Democrat editorial also blasts the DOL’s anti-competitive and costly union-friendly PLA mandate on the Job Corps Center (“The union souffle is falling fast,” 2/9/12):

While there is some debate on the actual impact of PLAs on construction costs, PLAs should play no role in a free an open marketplace.

Unions argue that even though union labor — or union labor rates — may increase the cost of constructions projects, their workers bring to the table better skills and quality assurance. These, in the long run, supposedly make the extra costs worthwhile.

If that is true unions should be willing to compete on the merit of their argument. Bidding on such projects as the Job Corps Center should not be delayed by the prerequisite of a PLA. The impact of union labor on a projected should be part of the bid offered by contractors who may of their own free will choose to use union labor — no pre-mandate.

Such dictatorial practices go a long way in alienating the general public. They fuel Right to Work efforts in states such as New Hampshire. And they leave such a sour taste in he mouths of Mr. and Mrs. John Q. Public that union ranks nationally have fallen faster than a souffle after the oven door is slammed shut while baking.

PLA Controversy Delayed Project
TheTruthAboutPLAs.com readers may recall previous media coverage of the Job Corps Center project, which most recently included a Dec. 23  holiday-themed op-ed in the New Hampshire Union Leader  by Holden. It summarizes the long-running controversy surrounding the DOL’s PLA mandate on the Job Corps Center and the absurdity of this gift to Big Labor at the expense of New Hampshire businesses and workers. It was penned in response to the DOL’s Dec. 22, 2011 pre-solicitation indicating the project would be subject to a PLA mandate.

By Mark Holden

It may be beginning to look a lot like Christmas, but many New Hampshire construction workers and businesses are expecting a lump of coal in their stockings from the federal government.

In this case, the Grinch is the U.S. Department of Labor (DOL), which is planning to build a $35 million Job Corps Center in Manchester with federal tax dollars.  Unfortunately, the DOL is poised to ensure the project is built by out-of-state union labor and union contractors, despite the fact that more than 91 percent of New Hampshire’s construction workforce chooses not to belong to a construction labor union.

The DOL is mandating a union-favoring project labor agreement (PLA) on the Job Corps Center.  Created by unions as a way to circumvent the free market and regain lost market share, a PLA typically requires contractors to replace most or all of their existing workforce with unfamiliar union labor, follow archaic and inefficient union work rules, and pay into underfunded union pension and benefit plans if they want to win contracts.

New Hampshire’s skilled nonunion workers are forced to accept unwanted union representation and pay union dues, yet they will forfeit benefits paid into union pension and benefit plans during the life of the project unless they join a union and become vested in these plans. 

Such humbuggery has the effect of discouraging competition from New Hampshire’s qualified contractors and their local employees.

Reduced competition coupled with costly union red tape needlessly increases construction costs.  Studies by the Beacon Hill Institute in Boston indicate projects subject to prevailing wage laws built with government mandated PLAs are 12 percent and 18 percent more expensive compared to similar non-PLA projects subject to government-determined wage and benefit rates. The research comes as no surprise to anyone familiar with Boston’s Big Dig boondoggle, which was built with a PLA mandate.

In short, government-mandated PLAs are a gift to Big Labor at the expense of taxpayers and New Hampshire construction businesses and tradespeople.

If this controversy has the disappointing familiarity of a re-gifted fruitcake, it is because the DOL tried to mandate a PLA on the Job Corps Center in 2009.  In the face of such blatant discrimination, a brave contractor, North Branch Construction of Concord, filed a bid protest against the DOL’s anti-competitive PLA. Instead of proceeding with PLA-free construction subject to fair and open competition – which would result in badly needed local job creation – the DOL canceled the project.

Not to be deterred, the DOL retained the services of a consultant, Hill International, to prepare a report justifying and defending a PLA requirement. The report cost taxpayers $130,000. It was the second PLA report Hill International prepared for the DOL. The first report, which trumpeted the alleged benefits of PLAs on federal construction projects, cost taxpayers $300,000. The latest report is so shoddy and full of pro-PLA bias, taxpayers will wish it came with a gift receipt.

The DOL and the federal government’s discriminatory policy is the product of an executive order signed by President Obama just a few days after moving into the White House in 2009. The measure encourages federal agencies to mandate PLAs on a case-by-case basis on large federal construction projects exceeding $25 million in total cost.

It is no coincidence it steers federal contracts to one of the White House’s and Democrat party’s biggest political patrons: Big Labor.

So while the Grinch has come to town, stealing Christmas hopes and dreams away from The Granite State’s workers and their families, will any of the GOP presidential candidates take a stand against deceptive payback to Big Labor prior to New Hampshire’s Jan. 10 primary?  

All nonunion contractors and their employees want this holiday season is the ability to fairly compete.  Some members of Congress, such as New Hampshire Sen. Ayotte, Rep. Frank Guinta and Rep. Charlie Bass, have stood up for free enterprise and New Hampshire families in support of legislation (S. 119 and H.R. 735) to “preserve open competition and federal government neutrality toward the labor relations of federal government contractors on federal and federally funded construction projects.”

That’s exactly what should happen. The federal government should preserve the right of everyone to fairly compete for jobs, not just a select few.

Congress should pass this legislation or a new president should undo President Obama’s destructive policy catering to well-connected special interests. It’s the only surefire way to keep the federal Grinch at bay.

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Mark Holden is the president of the New Hampshire/Vermont Chapter of the Associated Builders and Contractors. To learn more about anti-competitive PLAs, visit www.TheTruthAboutPLAs.com.

Obama Administration’s First Federal PLA Mandate
The DOL mandated a PLA on this project in 2009. It was the first PLA mandated by a federal agency on a federal construction project following President Obama’s Feb. 6, 2009 Executive Order 13502, which encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. The DOL’s 2009 PLA mandate was especially unusual because it was issued prior to the Federal Acquisition Regulatory (FAR) Council final rule (pdf), issued April 13, 2010, and effective May 13, 2010, implementing Executive Order 13502 into federal procurement regulations (learn more here).

Similar attempts by federal agencies to mandate PLAs before and after the effective date of the FAR final rule were foiled by ABC contractor-led bid protests (learn more here).

Last summer, the project and PLA controversy received attention from the New Hampshire Union Leader (“Jobs Corps Center project going forward,” 8/20/11) and a related press release from Sen. Ayotte (“Senator Ayotte Expresses Concerns about Labor Requirement for Manchester Job Corps Project,” 8/19/11) in response to the DOL’s August announcement they will proceed with construction and mandate a PLA despite previous controversy.

Executive Order 13502 and the related FAR rule remain controversial White House gifts to Big Labor likely to increase federal construction costs, reduce economy and efficiency in federal contracting, reduce competition from quality nonunion contractors and their skilled employees, and deny taxpayers the accountability they deserve from the government.

TheTruthAboutPLAs.com will be following the DOL Job Corps Center project closely in the coming weeks.

According to BLS data, the construction industry recorded the lowest number of union members in 2010, when just 801,000 private construction workers belonged to a union.

From 2010 to 2011, union membership grew from 13.1 percent to 14 percent of the U.S. private construction workforce, with construction unions adding 73,000 new members.

The recession has hit the construction industry hard.  The average construction industry unemployment rate in 2011 is 16.4 percent. According to government data, the current industry unemployment rate is at 16 percent, but it was as high as 22.5 percent in Jan. 2011 .

The construction industry has shown few signs of improvement. From 2010 to 2011, the construction industry added 141,000 jobs and grew from 6,103,000 workers to 6,244,000 workers. However, this few workers have not been employed in the construction industry since 1998, when 5,946,500 workers were employed and 17.8 percent of the workforce was unionized, according to the Union Membership and Coverage Database, available at www.unionstats.com. In addition, government data indicates construction spending has been flat.

Government-Mandated PLAs Create Jobs for Union Members
So how will the decline in overall construction union membership change the public policy debate surrounding government-mandated project labor agreements (PLAs) and President Obama’s pro-PLA Executive Order 13502?

In short, there will be added pressure on politicians to pander to Big Labor’s special interests and help keep their political base afloat. As they did in 2009 and 2010, the White House, members of Congress and federal officials beholden to Big Labor’s costly special interest agenda will try to steer federal construction contracts to unionized employers and create jobs exclusively for union members through federal government-mandated PLAs. On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule (pdf), effective May 13, implementing President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 into federal procurement regulations.

While the final rule does not mandate PLAs on all federal construction projects — and it offers agencies some flexibility when deciding whether to mandate a PLA on a specific large-scale construction project — the regulation is nothing but a handout to special interests.

The decision to agree to a PLA should be left up to individual contractors and not forced onto qualified contractors by government agencies as a condition of winning a federal construction contract. PLAs mandates reduce competition, increase costs and steer contracts to unionized firms.

This election year, special interests and their political allies will turn up the heat on federal bureaucrats to ensure more PLAs are attached to federal construction projects and other taxpayer-funded construction projects.

After all, numerous elected officials have a politically motivated self-interest in creating jobs for construction union members.  Fewer union jobs spells disaster for union institutions, union retirement plans and the politicians that depend on union contributions to get elected and pass public policy favoring Big Labor.

Politicians understand that a lack of union jobs in the construction industry means fewer union dues and “voluntary” political contributions deducted from union members’ paychecks that are funneled into various union slush funds coordinated through Labor Management Cooperation Committees (LMCCs), 527 groups and Political Action Committees (PACs) that support Big Labor’s friends in politics.

This symbiotic relationship between Big Labor and its political chums cannot continue without healthy union institutions and political contributions from labor unions that fuel the Democrats’ political machine.  

So the latest union membership numbers—coupled with high unemployment in the construction industry and the complex relationship of entities dependent on union revenue—point to a greater push for local, state and federal governments to mandate PLAs at the expense of taxpayers and the merit shop contracting community.

There are valid economic and ethical reasons why promoting the special interests of Big Labor, which composes just 14 percent of the U.S. private construction workforce, ahead of the needs of the rest of the construction industry through PLAs is bad public policy.

For example, on prevailing wage projects, PLAs on average increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA mandated projects. With the added cost premium of anti-competitive PLAs, there is less construction money available. And less construction money means fewer total construction projects and construction jobs. So union-favoring PLAs could make unemployment in the construction industry even worse.

In addition, there is no compelling reason (other than political self-interest) to create jobs for union members ahead of nonunion employees via government-mandated PLAs. Qualified nonunion employees deserve just as fair a shot to feed their families as union members. Unions should use the ultra-competitive market and tough economy as an opportunity to retool their product and make it more lean and efficient to compete in today’s marketplace instead of relying on government handouts to stay relevant.

The U.S. economy and the construction industry would benefit from free and open competition, without corrupt government-mandated PLAs, where taxpayers can get the best possible construction product at the best possible price.

“Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt. We’ve got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

“During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

“In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

“There’s never been a better time to build, especially since the construction industry was one of the hardest hit when the housing bubble burst. Of course, construction workers weren’t the only ones who were hurt…”

On behalf of the merit shop contracting community, ABC 2012 National Chairman Eric Regelin, president of Granix, LLC, Ellicott City, Md., today reacted to President Obama’s remarks:

“In his speech, the president said ‘we can restore an economy where everyone gets a fair shot, and everyone does their fair share,’” said Regelin. “Yet, one of his first official acts when he took office was to sign an executive order on project labor agreements that discriminates against the 87 percent of the nation’s construction workforce that chooses not to belong to a labor union.

“It is not clear at this point what President Obama meant when he spoke of removing red tape from construction projects, but any sincere effort to do so must involve the elimination of government-mandated project labor agreements and Davis-Bacon wage requirements on taxpayer-funded construction projects,” Regelin said.

“The president’s insistence on a so-called ‘millionaire’s tax’ to fund his various priorities will expose the 80 percent of construction firms that are taxed at the individual rate to a significant tax increase,” said Regelin. “This does not represent a ‘fair share’ that will help the economy and create jobs, but rather the president’s continued use of the nation’s job creators as his personal piggy bank.

“The nation’s construction industry continues to struggle with an unemployment rate of 16 percent – nearly twice the national average,” Regelin said. “However, the president’s only solution to fix the economy is to hand out favors to special interests and punish those who work hard and take risks.”

To view this statement, click here.

So will President Obama’s new executive order cutting red tape slowing down construction projects be helpful, or, will it be another gift to special interests?

Cartoon courtesy of the Boston Globe

It is quite possible President Obama’s new executive order is just repackaging a policy the White House announced in October 2011 to speed along the approval of 14 high priority infrastructure projects. If so, this won’t likely be controversial. It could be something else equally noncontroversial

However, there is concern President Obama will make some changes this election year to federal policy concerning government-mandated PLAs on federal and federally assisted projects. See Section 7 of Executive Order 13502, issued Feb. 6, 2009:

Section 7. The Director of the OMB, in consultation with the Secretary of Labor and with other officials as appropriate, shall provide the President within 180 days of this order, recommendations about whether broader use of PLAs, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects. [Note: Order was issued Feb. 6, 2009, 180 days sets the deadline at Aug. 5, 2009, but a recommendation has not been publicly issued.] 

An expansion of Section 7 could decrease the current $25 million threshold when federal agencies are currently required to evaluate if a PLA mandate is appropriate on a federal construction project. More PLA mandates on smaller projects would help Big Labor at the expense of everyone else. 

Section 7 could also force pro-PLA policies on federally assisted projects built by private owners and state and local governments. An expansion could increase costs for local and state projects already suffering from difficult budget realities. It could also lead to out-of-area union workers taking jobs away from qualified nonunion construction workers in the local economy.

TheTruthAboutPLAs.com explained the concerns with Section 7 expansion here.

Let's hope Section 7 of Executive Order 13502 is not.

TheTruthAboutPLAs.com will be following White House policies impacting the construction industry closely.

Of interest to TheTruthAboutPLAs.com readers, the estimated 13,000 Keystone XL pipeline construction jobs would be created exclusively for labor union members, as TransCanada required a union-favoring project labor agreement (PLA) on this privately financed project, which forces contractors to use union labor and follow inefficient union work rules.

UPDATE: A TransCanada representative contacted TheTruthAboutPLAs.com and stated the Southern portion of Phase 3, about 120 miles worth of pipeline, was not subject to the PLA and was awarded to a contractfrom firm in Eunice, LA. He said some of the pumping stations are not subject to the PLA as well. We asked for proof of this claim and an executed copy of the PLA but have not received any supporting evidence.

Did Politics or Policy Kill the Project?
Controversy surrounding the project created a schism in the Democrat party’s political base. Environmentalists oppose the project, characterizing it as gift to Big Oil that would destroy farmlands, aquifers and sensitive ecosystems in the pipeline’s path; increase reliance on dirty fossil fuels; and contribute to global warming. 

Meanwhile, construction trade unions support the pipeline expansion because the PLA would create new construction jobs exclusively for union members as the construction industry suffers from a 16 percent national unemployment rate.

Congress and some in the business community point to this stalled project as an example of how President Obama and onerous government regulations stand in the way of job creation and decreasing our reliance on foreign energy supplies.

For more than three years, the State Department conducted a “transparent, thorough and rigorous review” of the privately financed project. After increased pressure by all parties to make a decision, the State Department announced on Nov. 10, 2011, that it needed more time to explore alternative pipeline routes prior to approving TransCanada’s permit application. In response, Congress inserted a provision in the temporary payroll tax cut bill passed in December giving the administration until Feb. 21 to decide the fate of the pipeline.

On Jan. 18, the State Department recommended that President Obama deny the permit, but left the door open for future project approval, stating “it could complete the necessary review to make a decision by the first quarter of 2013.” The White House issued a statement and submitted a report to Congress following the denial of the permit, providing some insight into the reasoning behind the decision.

Political pundits characterize this decision as a political calculation by the Obama administration to shore up environmentalist support prior to the election, but keep the side window open for union job creation pending the results of the 2012 presidential election and additional studies.

Keystone XL Pipeline Creates Union-Only Construction Jobs
In September 2010, TransCanada announced it was requiring contractors interested in working on Phase 3 and Phase 4 of the Keystone XL pipeline to sign a PLA with various construction trade unions.

Typical PLAs force contractors to hire construction workers from local trade union halls in each craft, follow pro-featherbedding union work rules, and pay into union pension and benefit programs.  Nonunion contractors are discouraged from competing for contracts to build taxpayer-funded projects when a PLA is mandated by a government entity, such as a local, county, state or federal government in charge of a project, because the terms of the PLA discriminates against their existing nonunion workforce and makes them less competitive against unionized firms.

The anti-competitive and discriminatory nature of government-mandated PLAs is why the merit shop contracting community was outraged when President Obama signed Executive Order 13502. The order, signed just a few weeks into President Obama’s term on Feb. 6, 2009, encourages federal agencies to mandate PLAs on a case-by-case basis on projects exceeding $25 million in total cost.

On privately financed projects like the Keystone XL pipeline, a PLA can prohibit nonunion firms from bidding or prevent all nonunion workers from being hired, even if they have the necessary qualifications and experience. In some instances, a PLA allows a limited number of nonunion workers, but forces them to pay union dues and fees and/or join a union as a condition of employment. In short, private sector PLAs can take discrimination to a whole new level compared to PLAs mandated by the government in the public sector of the construction market.

The project’s owner, TransCanada, voluntarily mandated a PLA on this private project. There is no evidence to suggest the Obama administration or federal officials forced TransCanada to mandate a PLA on this private project, nor is there evidence suggesting labor unions extorted TransCanada into requiring a PLA through typical tactics attacking construction owners to win more work for union members.

It is unfortunate that TransCanada elected to needlessly discourage competition from qualified merit shop contractors and discriminate against nonunion employees. It is a shame TransCanada’s PLA is telling 87 percent of the U.S. construction workforce they are not welcome to build the pipeline because they don’t have a union card, even if they have the necessary skills and experience.

The possible reasons why TransCanada mandated a PLA are numerous. Perhaps TransCanada needed Big Labor as an ally to shore up Democrat support at the local, state and federal levels of government. It wouldn’t be the first time a corporation hoped to exploit Big Labor’s cozy relationship with the president and his party, knowing that Big Labor donated hundreds of millions of dollars to Democrats during prior election cycles.  Or perhaps TransCanada felt a PLA gave its project the best chance at all-around success. 

Whatever the reason, it is clear construction trade unions are irate at President Obama for his job-destroying decision. Mark Ayers, president of the Building and Construction Trades Department, issued a statement critical of President Obama, as did Laborers’ Union President Terry O’Sullivan.

Despite Big Labor repeatedly attacking Republicans in the 112^th Congress, House Speaker John Boehner says the fight for jobs is not over, and even mentioned they have been working with labor unions to get this project back on track:

Click here to view the video on YouTube.

What Next?
BNA Bloomberg’s Construction Labor Report says (“President Obama Rejects Keystone Pipeline But TransCanada Plans to File New Request,” 1/19/12):

TransCanada President Russ Girling said he is “disappointed,” although the decision was not unexpected.

“TransCanada remains fully committed to the construction of Keystone XL,” Girling said. The company has spent, or is committed to spend, about $1.9 billion so far on the project.

Girling said the company will reapply for a presidential permit, and he hopes that a new application will be processed “on an expedited basis” that would allow an in-service date by late 2014.

However, State Department Assistant Secretary Kerri-Ann Jones said in a media briefing that a new application would require a new review process. She would not speculate on how long such a review might take and whether existing analysis could shorten the environmental review process.

The original TransCanada permit application was filed in September 2008 and has been under review by the State Department for the past three years.

News reports also indicate Canada may build a new pipeline from Alberta to the West coast of Canada and sell this oil to China and the world.

While it is interesting to see the odd political bedfellows created by this controversy, it is important to remember that the Keystone XL pipeline would not offer any direct benefit to the merit shop contracting community due to the discriminatory PLA voluntarily mandated by TransCanada.

TheTruthAboutPLAs.com will be following this project closely.

UPDATE: The Laborers’ International Union Jan. 20 announced it will leave the Blue Green Alliance, a coalition of labor unions and environmental groups that advocates for environmentally friendly green jobs, over disagreements with other coalition members on the proposed Keystone XL pipeline.

The PLA mandate harms Washington’s experienced and skilled nonunion construction workforce and will discourage competition from qualified contractors that have successfully built federal projects in Washington and across the country without PLA mandates.  It will also needlessly increase costs.

According to an article in the Kitsap Sun, NAVFAC Northwest mandated a PLA after Sens. Maria Cantwell and Patty Murray, and Reps. Norm Dicks and Jay Inslee (all Democrats from Washington) wrote to the Navy in support of a PLA at the request of construction trades unions (“Navy to hire local workers for second explosives handling wharf,” 1/1/12):

The trades council contacted the area’s federal delegation — Sens. Patty Murray and Maria Cantwell and Reps. Norm Dicks and Jay Inslee — who wrote to the Navy supporting a PLA, Whetham said. Four trade council officials and seven from the Navy met in November to explore the benefits and arrived at cost savings and skilled labor.

According to information obtained from opensecrets.com, construction trades unions have donated the following political contributions totaling $814,375 to the four Washington Democrats who signed the letter:

Rep. Inslee:       $340,000   from 2000 – 2012
Rep. Dicks:       $183,125   from 1998 – 2012
Sen. Murray:     $279,250   from 1998 – 2012
Sen. Cantwell:   $ 12,000    from 2002 – 2012
Total:               $814,375

Is this PLA mandate the product of a crony contracting scheme by federal officials? 

Prior to mandating the PLA, NAVFAC Northwest did not consult with the merit shop contracting community about the negative impact of PLA mandates on qualified federal prime contractors, subcontractors and their skilled local employees.

First Navy PLA Mandate Under Obama Administration
This is the first PLA mandate on a Navy project since President Obama issued Executive Order 13502 on Feb. 6, 2009, just a few weeks after his inauguration. The order strongly encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total costs.

As a result of Obama’s encouragement of federal PLA mandates, NAVFAC has issued several PLA surveys to the contracting community to determine if a PLA mandate will advance the economy and efficiency in federal procurement of numerous large-scale construction projects across the country.  ABC National and ABC members have responded to these PLA surveys.

NAVFAC Northwest did not issue a survey to evaluate if a PLA would be appropriate for this project.

In contrast, NAVFAC directly contacted ABC National and the merit shop contracting community for feedback on possible PLA mandates on other federal projects.

For example, after soliciting comments from ABC National and the contracting community in October 2010 concerning NAVFAC’s potential use of PLAs on billions of dollars worth of construction for Guam base realignment, NAVFAC elected not to mandate a PLA.

NAVFAC’s PLA Mandate Creates Inefficiencies
NAVFAC Northwest’s solicitation instructs qualified contractors invited by NAVFAC to bid on Phase 2 of the solicitation (the short-listed contractors) to negotiate a PLA with specific trade unions and submit an executed PLA within 10 days of the contract award.

NAVFAC supplied short-listed contractors with a pre-drafted PLA containing the terms and conditions NAVFAC already developed with specified construction trade unions and councils.

NAVFAC asked contractors to submit feedback on the pre-drafted PLA by Dec. 28. 

ABC advised short-listed contractors about the numerous problems with NAVFAC’s mandatory PLA language and cumbersome and inefficient procurement approach. Some of these concerns were submitted by short-listed contractors to NAVFAC.

NAVFAC is expected to review and share these comments with unions and provide contractors with a final PLA at a later date that they must use as the starting point in PLA negotiations.

Proposals from short-listed contractors are due Feb. 13. It is unclear when NAVFAC will award the contract, although it should be in early 2012.

Under this inefficient procurement process, it is possible for contractors to not know the terms and conditions of the executed PLA – which impacts labor costs and final bid costs – before submitting a final price proposal to NAVFAC.  If PLA negotiations are stalled by unions or NAVFAC does not supply the final terms of the pre-drafted PLA in time, contractors cannot submit an accurate price proposal.

In addition, the project could be delayed pending the outcome of the post-award PLA negotiations.  The project may have to be re-bid if the final agreement cannot be executed.

In 2010, a General Services Administration (GSA) project, the GSA Headquarters at 1800 F Street in Washington, D.C., suffered delays as a result of labor unions refusing to agree to the terms of a PLA the contractor presented and signed with other labor unions. Congressional testimony from GSA deputy administrator Susan Brita described this scenario, which also required the contractor to present an executed PLA within 10 days post-award.

Even regulatory comments  filed by Frank Dean, NAVFAC’s labor advisor, on the FAR Council’s proposed rule implementing Executive Order 13502 identify concerns with this inefficient post-award PLA procurement approach.

PLA Will Harm Local Nonunion Workforce and Small Businesses
From 2001 to 2009, when President George W. Bush’s Executive Orders 13202 and 13208 prohibited PLA mandates on federal and federally assisted construction projects, Washington’s skilled nonunion tradespeople constructed large-scale projects for the Navy, Army and other federal agencies absent a PLA mandate with no reported problems.

This union-favoring PLA is sure to serve as a barrier to new jobs for 84 percent of Washington’s private construction workforce and 86.9 percent of the U.S. construction workforce that has chosen not to join a construction labor union.

The Washington State Building and Construction Trades Council, AFL-CIO announced “construction labor on this project will be provided by Olympic Peninsula Building Trades and the Northwest Regional Council of the National Construction Alliance II (NWNCA),” and it is unlikely this project’s PLA will allow nonunion contractors to use few, if any, of the existing skilled nonunion employees they have invested training and resources in while employed at the company.

As this letter to the editor in the Kitsap Sun points out, if the PLA even allows nonunion construction workers to build this project, they will have to join a union and/or pay union dues and pay into union pension plans that they will never benefit from unless they join a union and meet vesting requirements.  The PLA results in a huge financial windfall for Big Labors coffers.

Favoritism for unionized construction workers is especially despicable because the construction industry is plagued by high unemployment in Washington and across the country. The number of construction workers employed in Washington in July 2011 was as sparse as the number of workers employed in Washington in August of 1997. Meanwhile, the U.S. construction industry is suffering from an unemployment rate of 16 percent as of December 2011. 

Don’t nonunion construction workers deserve a fair shot at new federal construction jobs?

Provisions in a PLA that force contractors to swap their existing workforce out for unfamiliar union labor is problematic for short-listed contractors that self-perform specific trade work, as well as subcontractors performing specialty trades.

This PLA mandate will make it difficult for short-listed contractors to meet NAVFAC’s small and disadvantaged business subcontracting targets because small businesses are traditionally not unionized:

Because building trades union membership is traditionally not diverse, a PLA mandate also may make it difficult for short-listed contractors to meet minority and women hiring goals set by the FAR’s Equal Opportunity and the Affirmative Action Compliance Requirements for Construction regulations required in federal construction contracts.

The PLA mandate’s inefficient procurement approach and pro-union language will discourage competition and increase costs to remaining competitors. Studies indicate PLA projects subject to prevailing wage laws increase construction costs between 12 percent and 18 percent compared to similar projects subject to prevailing wage laws not subject to government-mandated PLAs.

ABC Committed to Fair and Open Competition
ABC is opposed to government-mandated PLAs because these agreements typically restrict competition, increase costs, create delays, discriminate against nonunion employees and place merit shop contractors at a significant competitive disadvantage. Typical government-mandated PLAs are nothing more than anti-competitive schemes that end open and fair bidding on taxpayer-funded projects.

ABC has led industry opposition against federal PLA mandates, utilizing a variety of educational, public relations, grassroots, political and legal strategies to ensure fair and open competition on taxpayer-funded construction projects.

ABC has helped ABC member contractors file bid protests against federal PLA mandates during the Obama administration, which resulted in the removal of PLA mandates on a Veterans Affairs medical center in Pittsburgh, an Army Corps of Engineers project in Camden, N.J., a General Services Administration project in Washington, D.C., and a Department of Labor Job Corps Center in Manchester, N.H.     

ABC National also has responded to and helped ABC members participate in more than 50 PLA surveys issued by federal agencies to determine the feasibility of a PLA on a federal project.

ABC supports the Government Neutrality in Contracting Act (H.R. 735/S.119), cosponsored by 31 Senators and 172 Representatives and supported by a diverse industry coalition. The measure would eliminate waste and favoritism in federal contracting by prohibiting federal agencies and recipients of federal assistance from mandating PLAs, yet it would allow contractors to voluntarily enter into PLAs. This bill is good for taxpayers and the principles of free enterprise.

In 2011, House committees held two hearings in Washington and three field hearings on the negative consequences of federal PLA mandates and the benefits of H.R. 735.

Additional hearings and votes are expected in 2012.

Stay current on government-mandated PLAs and “Like” us on Facebook at www.facebook.com/TheTruthAboutPLAs and visit TheTruthAboutPLAs.com often.

To help fight this PLA and other federal PLA mandates, please contact Ben Brubeck or TheTruthAboutPLAs.com here.

Bidding is open only to certified small business contractors willing to agree to the terms and conditions of the DOL’s union-friendly PLA. The DOL issued a sources sought notice Sept. 23, 2011 (DOL111RI20431), to determine if there were enough interested and qualified small business general contractors to designate it a 100 percent small business set-aside.

Controversy concerning the union-favoring PLA mandate will heighten once the project’s solicitation containing the PLA is issued the second week of January.

Update Jan. 30: The DOL solicitation, issued  Jan. 30, 2012, can be read here. Here is the actual PLA and here are the numerous union collective bargaining agreements (CBAs) contractors will have to agree to in addition to the PLA for the life of the project. Bids are due March 21, 2012.

Update Feb. 6: Sen. Kelly Ayotte (R-NH) issued a press release and sent a letter to the White House asking for President Obama to repeal his pro-PLA Executive Order 13502 and remove the DOL’s PLA mandate on this project. The Union Leader has a piece on the controversy here.

Dec. 23, the New Hampshire Union Leader ran a holiday themed op-ed by ABC New Hampshire/Vermont President Mark Holden. It summarizes the long-running controversy surrounding the DOL’s PLA mandate on the Job Corps Center and the absurdity of this gift to Big Labor at the expense of New Hampshire businesses and workers.

Executive Order 13502: Obama's Gift to Big Labor. Image courtesy of The Boston Globe, "Obama kowtows to labor unions," 10/07/09.

By Mark Holden

It may be beginning to look a lot like Christmas, but many New Hampshire construction workers and businesses are expecting a lump of coal in their stockings from the federal government.

In this case, the Grinch is the U.S. Department of Labor (DOL), which is planning to build a $35 million Job Corps Center in Manchester with federal tax dollars.  Unfortunately, the DOL is poised to ensure the project is built by out-of-state union labor and union contractors, despite the fact that more than 91 percent of New Hampshire’s construction workforce chooses not to belong to a construction labor union.

The DOL is mandating a union-favoring project labor agreement (PLA) on the Job Corps Center.  Created by unions as a way to circumvent the free market and regain lost market share, a PLA typically requires contractors to replace most or all of their existing workforce with unfamiliar union labor, follow archaic and inefficient union work rules, and pay into underfunded union pension and benefit plans if they want to win contracts.

New Hampshire’s skilled nonunion workers are forced to accept unwanted union representation and pay union dues, yet they will forfeit benefits paid into union pension and benefit plans during the life of the project unless they join a union and become vested in these plans. 

Such humbuggery has the effect of discouraging competition from New Hampshire’s qualified contractors and their local employees.

Reduced competition coupled with costly union red tape needlessly increases construction costs.  Studies by the Beacon Hill Institute in Boston indicate projects subject to prevailing wage laws built with government mandated PLAs are 12 percent and 18 percent more expensive compared to similar non-PLA projects subject to government-determined wage and benefit rates. The research comes as no surprise to anyone familiar with Boston’s Big Dig boondoggle, which was built with a PLA mandate.

In short, government-mandated PLAs are a gift to Big Labor at the expense of taxpayers and New Hampshire construction businesses and tradespeople.

If this controversy has the disappointing familiarity of a re-gifted fruitcake, it is because the DOL tried to mandate a PLA on the Job Corps Center in 2009.  In the face of such blatant discrimination, a brave contractor, North Branch Construction of Concord, filed a bid protest against the DOL’s anti-competitive PLA. Instead of proceeding with PLA-free construction subject to fair and open competition – which would result in badly needed local job creation – the DOL canceled the project.

Not to be deterred, the DOL retained the services of a consultant, Hill International, to prepare a report justifying and defending a PLA requirement. The report cost taxpayers $130,000. It was the second PLA report Hill International prepared for the DOL. The first report, which trumpeted the alleged benefits of PLAs on federal construction projects, cost taxpayers $300,000. The latest report is so shoddy and full of pro-PLA bias, taxpayers will wish it came with a gift receipt.

The DOL and the federal government’s discriminatory policy is the product of an executive order signed by President Obama just a few days after moving into the White House in 2009. The measure encourages federal agencies to mandate PLAs on a case-by-case basis on large federal construction projects exceeding $25 million in total cost.

It is no coincidence it steers federal contracts to one of the White House’s and Democrat party’s biggest political patrons: Big Labor.

So while the Grinch has come to town, stealing Christmas hopes and dreams away from The Granite State’s workers and their families, will any of the GOP presidential candidates take a stand against deceptive payback to Big Labor prior to New Hampshire’s Jan. 10 primary?  

All nonunion contractors and their employees want this holiday season is the ability to fairly compete.  Some members of Congress, such as New Hampshire Sen. Ayotte, Rep. Frank Guinta and Rep. Charlie Bass, have stood up for free enterprise and New Hampshire families in support of legislation (S. 119 and H.R. 735) to “preserve open competition and federal government neutrality toward the labor relations of federal government contractors on federal and federally funded construction projects.”

That’s exactly what should happen. The federal government should preserve the right of everyone to fairly compete for jobs, not just a select few.

Congress should pass this legislation or a new president should undo President Obama’s destructive policy catering to well-connected special interests. It’s the only surefire way to keep the federal Grinch at bay.

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Mark Holden is the president of the New Hampshire/Vermont Chapter of the Associated Builders and Contractors. To learn more about anti-competitive PLAs, visit www.TheTruthAboutPLAs.com.

Well said, Mark.

To date, The Government Neutrality in Contracting Act (H.R. 735/S.119) has 170 cosponsors in the House, nearly 30 cosponsors in the Senate, and broad support from industry groups.

Concerned taxpayers can write Congress here to help keep the federal Grinch at bay this holiday season.

Image Courtesy of the Columbus Dispatch

TheTruthAboutPLAs.com readers may recall previous media coverage of the Job Corps Center project, which most recently includes a New Hampshire Union Leader article (“Jobs Corps Center project going forward,” 8/20/11) and related press release from U.S. Sen. Kelly Ayotte (“Senator Ayotte Expresses Concerns about Labor Requirement for Manchester Job Corps Project,” 8/19/11) in response to the DOL’s August announcement they will proceed with construction and mandate a PLA:

MANCHESTER — A project labor agreement, which delayed construction of New Hampshire’s Job Corps Center for 21 months, will be a project requirement according to the U.S. Department of Labor.

The department announced last week it would move forward with the long-delayed $35 million project off Dunbarton Road. A New Hampshire contractor challenged the requirements two years ago, delaying project construction.

U.S. Sen. Kelly Ayotte said in a press release Friday she is concerned that the PLA favors out-of-state unionized contractors over local firms and could drive up the project’s cost.

“The administration’s plan to keep in place the PLA represents yet another senseless government mandate that could put New Hampshire businesses and workers at a competitive disadvantage. A PLA effectively gives unionized firms an unfair advantage over non-union firms, making it less likely that New Hampshire contractors would be able to bid successfully for the work,” said Ayotte. “This is a New Hampshire project, and local contractors should be able to compete for it on a level playing field.”

Project labor agreements usually require companies working on a construction project to provide health care, retirement benefits and apprenticeship programs. And PLAs usually include work rules, safety provisions, dispute resolution and a no-strike clause.

Contractors balked when the Job Corps agreement called for experience with three or more PLAs. North Branch Construction of Concord filed a protest with the Government Accountability Office and that brought the bidding process to a halt.

Manchester Mayor Ted Gatsas said Friday his concern with the original PLA was the prior PLA experience. That meant no New Hampshire firms could qualify to do the work, because no firm had experience with three PLAs, he said.

“My understanding was that was not going to be in there,” Gatsas said. “It should be New Hampshire people doing this project.”

Gatsas said he has not seen the documentation, but noted “This is a project we need to move forward. It’s 300 construction jobs to the city and 135 permanent jobs.”

In response to a request from Ayotte asking to clarify the PLA issue, the DOL wrote that in keeping with a January 2009 executive order by President Obama, construction projects over $25 million should use PLAs. A PLA is appropriate for the $35 million Job Corps project, the department wrote.

Mark Holden, president of the Associated Builders and Contractors of New Hampshire/Vermont said: “It is important for all New Hampshire taxpayers to understand the impact of this decision. Requiring non-union contractors to execute union agreements for the project, agreeing to replace their employees with union workers, pay into union funds and abide by union work rules and conditions creates unknown costs that are impossible to plan and bid for and are conditions that make it non-competitive for non-union contractors.

“To suggest that a non-union contractor’s ability to compete would not be impacted by this PLA is untrue. A PLA requirement will have a chilling impact on competition from non-union contractors and will dramatically inflate the construction cost of this taxpayer funded project. At a time when a challenging economy is dependent on real solutions for job creation and accountability for every taxpayer dollar, this decision is unbelievable.”

Joe Casey, president of the New Hampshire Building and Construction Trades Council, said Ayotte and Holden are making a lot of assumptions about the PLA and what it will require. “It all depends on what the project labor agreement is and I have yet to see one for this project,” Casey said. “This is a debate we should have once the Department of Labor releases the project (documents).”

He noted the DOL hired an independent group, Hill International, to determine if a PLA is feasible for the project, but he had not seen the study. “We should all take a step back and see the actual contents of the project labor agreement,” Casey said. “The provisions could benefit New Hampshire contractors and New Hampshire workers.”

He noted the last major federal construction project in New Hampshire was the Berlin prison and the contractors and almost all of the workers came from out-of-state. That prison has yet to open because the federal government has not released operation money.

“That is the type of thing the project labor agreement addresses,” Casey said. “If federal money is coming to the state of New Hampshire, why shouldn’t it stay in New Hampshire with the New Hampshire workforce. At the end of the day, that is what we are looking for.”

Dick Anagnost, a Manchester developer who is chairman of the Job Corps Task Force, told the New Hampshire Union Leader last week that the project will take about 18 months.

He said the Labor Department should take a month to prepare bid specifications. Another month will be needed to solicit bids, and a final month will be needed to review them.

A Job Corps Center will help train economically disadvantaged youth to enter high-growth industries. New Hampshire is among the last states to have a Job Corps Center. The state began efforts 10 years ago to land a center of its own.

The DOL’s 2009 PLA mandate was the first PLA mandated by a federal agency following President Obama’s Feb. 6, 2009 Executive Order 13502, which encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. The DOL’s 2009 PLA mandate was especially unusual because it was issued prior to the Federal Acquisition Regulatory (FAR) Council final rule (pdf), issued April 13, 2010, and effective May 13, 2010, implementing Executive Order 13502 into federal procurement regulations (learn more here).

Similar attempts by federal agencies to mandate PLAs before and after the effective date of the FAR final rule were foiled by ABC contractor-led bid protests (learn more here).

However, Executive Order 13502 and the related FAR rule remain controversial White House gifts to Big Labor likely to increase federal construction costs, reduce economy and efficiency in federal contracting, reduce competition from quality nonunion contractors and their skilled employees, and deny taxpayers the accountability they deserve from government.

TheTruthAboutPLAs.com will be following the DOL Job Corps Center project closely in the coming weeks.

The United States Army Corps of Engineers (USACE) also issued a PLA survey for a project at Cannon Air Force Base in New Mexico.

All ABC members and construction professionals are encouraged to respond to the requests for information and tell the NAVFAC and USACE that government-mandated PLAs harm competition, increase costs, and impede economy and efficiency in government contracting.

Details on the three surveys along with submission dates are below but please review response instructions by clicking the links:

• Responses for the NAVFAC survey for Potable Water Conveyance Systems and Waste Water and Recycled Water Conveyance Systems at Camp Pendleton, Calif., must include a cover letter and be completed on the PLA Inquiry Form and submitted by 2:00 p.m. (PST) on Friday, Dec. 16, either by mail to NAVFAC or by email to Gregory.sies@navy.mil.
• Responses for the NAVFAC survey for the Rotary Aircraft Deport Maintenance Facility near San Diego must include a cover letter and be completed on the PLA Inquiry Form and submitted by 2:00 p.m. (PST) on Monday, Dec. 19, either by mail to NAVFAC or by email to georgina.perry@navy.mil.
• Responses for the NAVFAC survey for HVAC and Ductwork Repairs, Building 1H, Naval Medical Center San Diego must include a cover letter and be completed on the PLA Inquiry Form and submitted by 2:00 p.m. (PST) Jan. 3, 2012, either by mail to NAVFAC or by email to larry.romig@navy.mil.
• Responses to the USACE Market Survey in the Clovis Micropolitan Statistical Area near Cannon Air Force Base in New Mexico must be submitted by Friday, Dec. 23 to diana.m.martinez@usace.army.mil. There is no form to fill out for this survey.

NAVFAC, which manages construction of U.S. Navy shore facilities, recently issued surveys for four federal construction projects, exceeding $25 million in total costs, in Maryland and Virginia.

During the past several months, NAVFAC and other federal agencies like the USACE and Veterans Affairs have issued PLA surveys as a result of President Obama’s pro-PLA Executive Order 13502 and federal regulations implementing the discriminatory and costly order. The order and regulations encourage federal agencies to mandate anti-competitive and costly PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. ABC has taken the opportunity to respond to all PLA surveys as they are issued and encourages its members to do the same.

If you need help responding, please contact us and we can provide you with some helpful tools and information.

Responding with accurate and timely information is critical and effective at removing federal agency PLA mandates. For example, in 2010, the USACE removed government-mandated PLAs from the Army Reserve Center in Los Alamitos, Calif. and the Patrick Air Force Base in Brevard County, Fla. after a strong grassroots response and survey participation from the contracting community. The USACE removed a PLA mandate on the Armed Forces Reserve Center in Camden, N.J. following a legal challenge and robust grassroots response from the construction stakeholders.

Thanks for taking the time to respond to these surveys. Your responses will help maintain an open and competitive environment that will allow all qualified contractors to fairly compete for contracts to build the best possible construction projects at the best possible price.

Update 1/1/12: Sen. Mark Obenshain introduced companion legislation in the Virginia Senate, SB 242 (pdf). It is cosponsored by all 20 Senate GOP members. The Virginia Senate has 20 GOP and 20 Democrat Senators. Lieutenant Governor Bill Bolling (R) casts deciding votes. 

Click here to write your legislators and encourage them to support HB 33/SB 242.

HB 33/SB 242 ensures Virginia taxpayers get the best construction project at the best price and 96 percent of Virginia’s construction workforce (those who choose not to belong to a labor union) have a real shot at working on taxpayer funded projects.  It will also help stretch scarce tax dollars to meet Virginia’s transportation and infrastructure needs.

In 2011, Michigan, Maine, Tennessee, Arizona,  Louisiana, Iowa and Idaho enacted similar legislation and executive orders ensuring taxpayers get the best possible product at the best possible price. 

In July, 2011, the Wall Street Journal and the Boston Herald editorial boards applauded states for enacting fair and open competition measures that end “sweetheart deals with labor unions,” and “limit bids on construction projects to contractors that agree to union representation.”

State budget deficits and a 2009 President Obama executive order encouraging PLAs on federal projects and allowing their use on federally-assisted projects pushed states to take steps at preventing waste and discrimination in public contracting.

A total of 11 states have enacted legislation or executive orders prohibiting government-mandated PLAs on state and state-assisted projects to some degree.

This year, Democrats controlling Illinois and California state government enacted legislation encouraging the use of government-mandated PLAs. New Jersey and New York have existing laws enacted by Democrat legislatures and administrations encouraging anti-competitive and costly PLA mandates, while Washington has a pro-PLA executive order.  

If enacted, HB 33/SB 242 will prevent special interst handouts like the mandated PLA on Phase 2 of the $2.8 billion Dulles Metrorail Silver Line project Virginia is partially financing. TheTruthAboutPLAs.com covered this controversial project in great detail yesterday. It will increase competition, reduce costs and create job for Virginia’s construction industry.

The measure prevents the state and those procuring projects with state dollars from MANDATING PLAs.  Contractors would be free to voluntarily enter into PLAs, as is permitted by the National Labor Relations Act.

Update 12/15 and 12/19:
The Virginia Chamber of Commerce issued this press release Dec. 14 in support of HB 33.

Del. Comstock and Del. Hugo issued a Dec. 19 press release on HB 33.

Virginia Construction Industry Supports Legislation Ensuring Fair and Open Competition On Public Construction Contracts

Contact:      Angie Gutenson, Vice President, ABC-VA (703) 968-6205                     For Immediate Release
                     Ben Brubeck, PLA Expert, ABC National (703) 812-2042                        December 13, 2011

DULLES, VA – On behalf of its 660 Virginia merit shop employers, Associated Builders and Contractors (ABC-VA) supports the Fair and Open Competition in Government Contracting Act (HB 33) introduced on Monday by Virginia Delegate Barbara Comstock (R-34^th) and GOP Caucus Chairman Virginia Delegate Tim Hugo (R-40^th). HB 33 prohibits Virginia and recipients of state funding or assistance from requiring or prohibiting contractors to enter into union agreements, such as a project labor agreement (PLA), as a condition of winning state and state-assisted construction contracts. 

“This commonsense legislation will reduce costs, increase competition and create jobs for qualified Virginia businesses and their skilled local employees on state and state-funded construction projects,” said ABC-VA President Patrick Dean. “It will ensure Virginia’s infrastructure dollars are spent wisely and support projects subject to fair and open competition, which ultimately will benefit taxpayers by funding more construction projects and creating more jobs for Virginians.

“Unfortunately, unaccountable political appointees controlled by special interests have been steering taxpayer-funded construction contracts to their political supporters by mandating union-favoring PLAs on projects funded by the state,” said Dean. “This special interest favoritism has no place in Virginia.

“If enacted, this measure would prohibit state-assisted construction projects, such as Phase 2 of the multi-billion dollar Dulles Metrorail Silver line project, from mandating unwanted anti-competitive and costly PLAs on contractors,” said Dean. “Why should Virginia’s financial stakeholders pay for the majority of this project when the PLA mandated on the prime contractor by MWAA ensures discrimination against 96 percent of Virginia’s construction workforce – those who have freely decided not to join a union? Local workers will lose jobs to out-of-state union members given hiring priority via the PLA.”   

“HB 33 simply ensures the government remains neutral with respect to a qualified contractor’s relationship with labor unions and gets the government out of the business of picking winners and losers through cronyism,” said Ben Brubeck, ABC National’s Director of Labor and Federal Procurement. “To date, 11 states have enacted similar measures, resulting in reduced costs, increased job creation and a level playing field encouraging robust competition from qualified nonunion and union contractors.

“HB 33 allows contractors to voluntarily enter into union agreements like PLAs,” said Brubeck. “Unlike a government-mandated PLA, it gives contractors a real choice, which can only increase competition and help taxpayers get the best possible product at the best possible price.”

Learn more about anti-competitive and costly PLAs and the Silver Line Metrorail controversy at www.TheTruthAboutPLAs.com.

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About ABC — Associated Builders and Contractors is a national association with 75 chapters representing more than 23,000 merit shop construction and construction-related firms with nearly two million employees. Founded in 1972, the ABC Virginia Chapter is the only association in Virginia dedicated to representing the interests of merit shop contractors. ABC VA represents all firms in the commercial construction industry equally. Membership represents the full range of contractors, from small family-owned subcontractors to global general contracting firms, as well as, materials suppliers and industry professionals. The ABC Virginia Chapter has offices in Chantilly, Richmond and Hampton Roads. 

What level of protection will Virginia’s right-to-work law offer to the state’s nonunion construction workers?

Virginia taxpayers, public officials, businesses and construction workers deserve answers and public officials haven’t offered much clarity.

TheTruthAboutPLAs.com has monitored this project closely since the Metropolitan Washington Airports Authority (MWAA) passed an April 6, 2011, resolution requiring prime contractors to agree to a PLA similar to the agreement voluntarily entered into by the Phase 1 prime contractor, Dulles Transit Partners.

About the Silver Line
The Silver Line is a $6 billion project involving the construction of 23 miles of new Metro track.  

Phase 1 of the Silver Line is under construction and runs from the Orange Line’s existing West Falls Church station through Tysons Corner to Reston. It is expected to open late next year, but contractors and MWAA officials have said it could be delayed and is as much as $150 million over budget.

Phase 2 of the Silver Line will run from Wiehle Avenue in Reston to just past Dulles International Airport in Loudoun County. 

According to the original funding agreement, Phase 2 is financed by MWAA (4.1 percent), Loudoun County (4.8 percent), Fairfax County (16.1 percent) and the Commonwealth of Virginia ($275 million). Toll revenue generated from the MWAA-owned and operated Dulles Toll Road will fund the remainder of Phase 2.

MWAA says estimated revenue needed to fund Phase 2 construction will be similar to the toll schedule published in the July 2009 Wilbur Smith Associates traffic and toll revenue report commissioned by MWAA, which predicts Dulles Toll Road motorists will pay $16.75 each way in 2047 (see table 6-3 on p. 124). An updated study is expected to be completed in the next few months.

Broad Opposition to the Phase 2 PLA Mandate
Opposition to MWAA’s PLA mandate include the Loudoun County Board of Supervisors; Fairfax County Board of Supervisors; local, state and elected officials; The Washington Post editorial board; The Washington Examiner editorial board; Fairfax Chamber of Commerce; Dulles Regional Chamber of Commerce; Purcellville Business and Professional Association; a coalition of 13 of Northern Virginia’s leading business groups and associations; Women Construction Owners and Executives; and former Virginia Governor and U.S. Senator George Allen, who is running for the U.S. Senate in Virginia (see summary of entities opposing the Phase 2 PLA mandate here and here).

They know a PLA mandate will ensure discrimination against Virginia’s nonunion construction workforce (96 percent of Virginia’s construction workforce does not belong to a union) and reduce competition from qualified prime contractors opposed to PLA mandates.

An April 21 letter from ABC Virginia to MWAA explained how reduced competition and costly pro-union rules and fees within the proposed Phase 2 PLA circulated by MWAA earlier this year will increase Phase 2 bid costs by hundreds of millions of dollars and discriminate against Virginia’s construction workforce.

 
Unanticipated costs are problematic because financial stakeholders balked at Phase 2’s rising expenses, which ballooned to $3.825 billion – an increase of more than $1.8 billion (53 percent) compared to Phase 2’s initial $2.5 billion budget. This summer, U.S. Department of Transportation Secretary Ray LaHood was called in to negotiate an agreement between MWAA and state and local stakeholders to reduce costs and get the project back on track.

Is the Silver Line Back on Track?
On Nov.16, 2011, MWAA signed Resolution No. 11-33 approving a new Memorandum of Agreement (MOA) between the project’s financial stakeholders modifying the Phase 2 scope, financing structure and budget. It trims the Phase 2 costs from $3.825 billion to an estimated $2.8 billion, although these are only rough estimates at this stage in the project.

The MOA says the Commonwealth of Virginia agreed to contribute an additional $150 million, provided the funds are appropriated by the General Assembly and allocated by the Commonwealth Transportation Board in 2012.

The MOA places Loudoun County in charge of financing and building parking garages included in the original Phase 2 project plan. Likewise, Fairfax County must build two garages and a new Route 28 Metro station. These cost shifts from the original Phase 2 plan will be subsidized by federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loans the localities can apply for in the coming months. 

Loudoun County and Fairfax County recently agreed to the MOA, which gives them 90 days to opt out of the project after Phase 2 preliminary engineering, financing and cost estimates are released in early 2012. 

In short, Phase 2 will face many financial hurdles in the coming months, although the project is in better shape now that costs have been trimmed and the local stakeholders have been given a larger role in planning the project.

The Facts About the Phase 2 PLA Mandate
Section 3.9 of the MOA refers to a “separate agreement on the matter of Project Labor Agreements for Phase 2” reached by MWAA and the Commonwealth of Virginia. While the PLA agreement (known as the PLA MOU) clarifies a PLA will not be mandated on Phase 2 subcontractors, it will not discriminate against nonunion contractors, and it will comply with Virginia’s Right to Work and contracting laws, Section 3 clearly states the prime contractor is subject to a PLA mandate: 

“(3) no prime contractor working or seeking to work on Phase 2 shall be required, in order to secure or maintain a phase 2 prime contract, to become a party to any labor agreement other than the Phase 2 PLA; and” [emphasis added] 

However, there remains great confusion about whether Phase 2 prime contractors are subject to a PLA mandate. 

The confusion may be fueled in part because it is unclear if the Commonwealth of Virginia understands the PLA MOU. Thelma Drake, director of the Virginia Department of Rail and Public Transportation, signed the PLA MOU along with Commonwealth Secretary of Transportation Sean Connaughton. She said this about the Phase 2 PLA: 

“The PLA is not mandatory,” Drake says. “You cannot require your prime to sign a PLA.” 

For example, an article in Leesburg Today reported the PLA was optional and the controversy was resolved: 

As part of the MOA, the state government also will be contributing more money, as has been pushed by many local leaders, up to $150 million, now [sic] controversy over MWAA’s plan to require a Project Labor Agreement has been resolved. The project plan, as originally created, had a requirement for labor workers to be used for the entirety of the second phase of the project. In Phase 1, the option is left to the individual contractor, something some leaders pushed for in the second phase. 

In an agreement worked out directly between the state and the MWAA, the use of union contractors will be optional. “Neither will be discriminated against and will allow for all to participate in the bidding on the project,” York said, noting it was similar to the approach used in Phase 1. 

The Loudoun Times reported the MOU “remove[d] the use of mandatory project labor agreements,” and “Virginia Gov. Bob McDonnell also agreed to give $150 million to help finance the rail extension as long as mandatory project labor agreements were eliminated.”

The truth is that it is a PLA mandate. A prime contractor must sign a union PLA in order to win Phase 2 construction contracts as a prime contractor.

A Nov. 16 Washington Times article, “Dulles Metrorail Phase 2 is right to work,” examines the impact of MWAA’s PLA mandate and PLA MOU with respect to Virginia’s right-to-work law:

Still, union-friendly labor agreements are a thorny issue in states such as Virginia that have right-to-work laws, under which workers cannot be required to join a union as a condition of employment. 

“This agreement ensures that Virginia’s right-to-work laws will apply to every aspect of Phase 2,” said Secretary of Transportation Sean Connaughton. “It also will ensure that no one — contractors or subcontractors — will be forced to take on unions. It will also subject [Phase 2] to Virginia law. So we think it’s a major step forward from Phase 1.”

While Virginia believes the MOU offers prime contractors a measure of protection against forced unionism, Virginia has still given the green light for MWAA to mandate a PLA. This is problematic.

The public doesn’t know the final terms and conditions of the PLA now and may not know these terms until Virginia and local financial stakeholders have committed funding to the project. By then it may be too late to ensure Virginia taxpayers, workers and contractors maximize their investment in this project. 

Right to Work and PLAs
The truth is that the PLA MOU and Virginia’s right-to-work law do not eliminate all of the anti-competitive and costly provisions of the draft Phase 2 PLA identified by ABC Virginia’s April 21 letter to MWAA. Virginia’s right-to-work law grants all employees the right to refrain from being a full union member and to pay either no or reduced union dues. Second, if the PLA requires all employees to be hired through an exclusive union hiring hall, the hiring hall may not discriminate between union and nonunion workers. However, typical union hiring hall rules give preferential treatment to out-of-work union members from all over the country ahead of qualified nonunion workers from Virginia seeking jobs on Phase 2. Officials don’t understand how this process works and allows unions to police themselves. It is rife with discrimination. 

In addition, despite a right-to-work law, the PLA may still force contractors to pay into union slush funds used to harm merit shop contractors, force contractors and employees to follow archaic and inefficient union work rules, require contractors to only use union apprentices, and force unwanted union representation on employees for the life of the project.

The biggest concern most contractors have about PLA mandates is how these agreements typically require contractors to pay into underfunded multi-employer pension plans, exposing their businesses to significant financial liability (e.g., the Sheet Metal Workers National Pension fund is in critical status, according to the U.S. Department of Labor) and preventing workers from receiving retirement benefits rightfully earned. Employees will never benefit from fringe benefit contributions employers make to union pension and benefit plans unless the employee joins a union and meets vesting requirements. In order to ensure employees accumulate benefits they can eventually keep, contractors pay into their own existing benefit plans, artificially inflating their labor costs and making their bid uncompetitive against union firms free from double benefit costs. (This 2009 report by Dr. McGowan explains the anti-competitive and costly impact of pension contribution mandates in PLAs.)  

Learn more about PLAs and right-to-work laws at TheTruthAboutPLAs.com blog post, Understanding PLAs in Right to Work States.

In short, Virginia’s right-to-work law does not make this government-mandated PLA any less offensive, nor will it increase competition.
 
Reduced Competition Will Increase Costs
Unfortunately, when faced with a government-mandated PLA, nonunion contractors and their existing workforces are presented with a false choice of agreeing to the union-favoring PLA in order to win a contract and perform work on Phase 2, or not pursuing work at all.

A reduction of two or three bidders because of MWAA’s PLA mandate could increase costs by hundreds of millions of dollars, depending on the final Phase 2 construction costs.

With strong evidence demonstrating that reduced competition increases bid costs, why would MWAA mandate an anti-competitive scheme that undermines the spirit of Virginia’s right-to-work law and has the potential to needlessly increase bid costs?

The answer, of course, is politics. 

Politics and Corruption at MWAA
Unions overwhelmingly give campaign contributions to Democrats, which is a key reason why MWAA members appointed by Democrats or affiliated with the party supported MWAA’s PLA mandate. The public officials who appointed them know they will eventually benefit from union political contributions resulting from union job creation through this PLA. It is not surprising that MWAA board members with union ties orchestrated MWAA’s PLA mandate.

The Washington Examiner reported that Virginia GOP delegates Tim Hugo, Barbara Comstock and Thomas Greason sent a letter requesting that Virginia Attorney General Ken Cuccinelli (R) investigate the Phase 2 PLA mandate and possible ethics violation of MWAA board member Dennis Martire because he advocated for the Phase 2 PLA mandate that financially benefits his employer, the Laborers International Union of North America (LiUNA), (“Virginia lawmaker calls for probe of Dulles Rail labor pact,” 5/28).

Martire, appointed by Virginia Gov. Tim Kaine (D), is chairman of MWAA’s Planning and Construction Committee. He also is employed as the vice president and Mid-Atlantic regional manager of LiUNA with an annual salary of $266,000, plus a generous benefit and pension package totaling $336,270, according to the most recent financial disclosure filings by LiUNA.

According to the Virginia Public Access Project, the Laborers Mid-Atlantic Regional Organizing Coalition has donated $419,050 to candidates and political action committees since 2007 — overwhelmingly to Democratic candidates. Creigh Deeds, unsuccessful candidate for governor, scooped up $250,000. Moving Virginia Forward, Tim Kaine’s PAC, garnered $55,000. LiUNA kicked in another $200,000 to the Democratic Party of Virginia in 2008. Martire was appointed by Gov. Kaine (D), in July 2009.

Martire’s employer, LiUNA, and its local affiliates (such as LiUNA Local 657, which bused in protestors to disrupt the April 18, 2011, press conference held by U.S. Rep. Frank Wolf and other local politicians to address concerns about Phase 2 of the project) will receive a significant financial windfall from the Phase 2 PLA that could easily exceed millions of dollars. 

The PLA mandate will likely require the prime contractor to hire primarily union labor dispatched from LiUNA hiring halls (and union members performing labor in other trades from their respective union hiring halls) and force contractors to contribute into union slush funds and pension and benefit plans.

Martire’s MWAAA bio lists him as “a former Trustee to the National Heavy and Highway Alliance” (the same group that drafted the proposed Phase 2 PLA and the Phase 1 PLA voluntarily signed by DTP). Martire is also chairman of the Mid-Atlantic Laborers’ Employers Cooperation and Education Trust (LECET), which is a union fund contractors/employees are forced to pay into under the current LiUNA collective bargaining agreement that contractors would have to follow under the PLA.

The wage and benefit schedule contained in the current LiUNA collective bargaining agreement for LIUNA Local 657 and Local 11 (the LiUNA locals with jurisdiction over this project) highlight the benefit rates and plans contractors must pay into on behalf of their laborer employees if they are party to this agreement. Appendix A (page 20) lists the following hourly contributions contractors are required to pay to union funds by contractors (after collecting the hourly deductions from each laborer’s paycheck):

Pension: $1.99
Health and Welfare: $3.01
Training: $0.25
LECET: $0.10
CCC Industry Fund: $0.08
Total:  $5.43 per hour

When Martire pushed for the PLA to apply to Phase 2 prime contractors and subcontractors earlier this year, this excel worksheet estimated the following financial windfall LiUNA and various LiUNA-affiliated funds will receive from a Phase 2 PLA mandate:

Pension: $21.544 million
Health and Welfare: $32.587 million
Training: $2.706 million
LECET: $1.082 million
CCC Industry Fund: $833,113.22
Dues: $8.081 million
Contractors Pay to CILM: $937,500 max.

This calculation doesn’t factor in benefits other unions besides LiUNA will receive as a result of the PLA mandate.

The amount of jobs created for union members and money flowing into union funds likely will be less because the recently executed PLA MOU states the PLA does not apply to subcontractors. However, MWAA will require the prime contractor to self-perform a significant amount of Phase 2 work, meaning a large portion of the Phase 2 project would be subject to a PLA. Spokespeople for DTP said they have self-performed 65 percent of Phase 1. 

(Note: Merit shop subcontractors were exempted from signing the Phase 1 PLA agreement and MWAA has reported 60 percent of Phase 1 contracts have been awarded to nonunion shops that did not sign the Phase 2 PLA. This means the strong or poor performance of Phase 1 construction cannot be attributed to the voluntary PLA.) 

In short, the total number of Phase 2 construction jobs created for union members and money paid to union funds is unknown until the project is completed, but they will certainly benefit from this PLA mandate.

While Martire’s conflict of interest is obvious, others have raised questions about a possible conflict of interest by MWAA board member Michael Curto, who was appointed by Maryland Gov. Martin O’Malley (D) in January 2011. MWAA board members recently elected Curto as their 2012 chair. Curto’s employer, Patton Boggs, has received between $1.25 million and $1.44 million per year since 2005 from Martire’s employer, LiUNA, according to recent union financial disclosure reports filed with the U.S. Department of Labor. Curto’s bio says he is a member of the firm’s Management Committee and head of the firm’s ERISA and Employee Benefits practice, representing corporate, nonprofit and government sponsors of pension and welfare benefit plans, including the type of union Taft-Hartley pension plans contractors would be forced to pay into under this PLA.

Curto introduced the PLA resolution, and Martire and Curto advocated for the resolution at the April, 6 2011, MWAA board meeting. Curto and Martire sit on the MWAA committees in charge of implementing the Phase 2 PLA, which is to be authorized by MWAA’s CEO and director. Both Curto and Martire voted for the resolution on April 6, 2011, when it passed 11-2. Both spoke to other MWAA board members and staff in support of this measure outside of MWAA meetings.

Martire authored this paper encouraging the use of government-mandated PLAs.

Despite all of these direct and indirect conflicts of interest, MWAA continues to defend Martire’s advocacy of a government-mandated PLA and denies he violated MWAA’s code of ethical responsibilities.

As the evidence demonstrates, at the very least, Martire should have excused himself from engaging in this decision, as this self-dealing undermines the public trust given to MWAA. MWAA should reveal to the public documents exonerating Martire and Curto from any wrongdoing.

Recent efforts to reform the MWAA board and an ongoing U.S. Department of Transportation Office of Inspector General audit of MWAA may prevent future ethical conflicts, but the damage is already done.

Taxpayers Benefit From Free and Open Competition
Taxpayers win with open competition free from anti-competitive and costly PLA mandates. Just look at taxpayer-funded projects free from government-mandated PLAs like the Wilson Bridge, the post- 9/11 renovations to the Pentagon, the Air Force memorial and many other high-profile projects in Virginia and the Washington, D.C. metro area.

The Commonwealth of Virginia, Loudoun County and Fairfax County would benefit from knowing the final terms and conditions of the Phase 2 PLA and its impact on competition and cost before agreeing to fund this project. Phase 2 of the Silver Line already has the potential to be Virginia’s Big Dig. Why not take the appropriate measures to protect taxpayers, create jobs for Virginians, increase competition, reduce costs and eradicate corruption at MWAA by ditching this dreadful PLA mandate policy?

Yesterday, the Free Enterprise Coalition released this press release (see below) about documents recently obtained from the San Diego Unified School District (SDUSD). They prove government-mandated PLAs reduce competition and increase costs. (Note: SDUSD calls these union agreements Project Stabilization Agreements (PSAs) instead of Project Labor Agreements (PLAs). There are a number of alternative names used to describe union agreements that are essentially PLAs, such as Community Workforce Agreements, Site Stabilization Agreements, etc. but they will continue to be referred to as PLAs in this post.)

The press release says union-favoring PLA project bids were 9.7 percent less than the SDUSD’s budget. However, the projects bid without the imposition of the union-only PLA were 31.6 percent below budget…a 21.9 percent difference. If this trend continues, the imposition of the union-favoring PLA could cost taxpayers more than $200 million in unnecessary construction costs on planned projects.

The PLA reduced competition too. For union-only PLA projects, SDUSD was able to interest an average of five responsive general contractor bidders, compared to 10 responsive general contractor bidders on school projects where contractors were not forced to agree to a government-mandated PLA.  General contractors complained projects received only about 50 percent of the subcontractor bids that the non-PLA projects received.

It is no surprise the SDUSD-mandated PLA reduced competition and increased costs.

It will be interesting to see how local Big Labor bosses and school district officials beholden to special interests try to spin these numbers at today’s press conference, where officials were expected to engage in the deceptive manipulation of taxpayers in support of their anti-competitive pro-PLA agenda. (The press conference was planned prior to the public release of these damaging documents. A consultant was expected to present a report in support of the SDUSD PLA policy.)

Opposition to government-mandated PLAs on the $2.1 billion bond measure funding SDUSD projects, Proposition S,  has been covered numerous times here at the TruthAboutPLAs.com. In 2009, the SDUSD sneakily introduced the PLA-mandate policy, which passed May 26 by a 3-2 vote. A number of projects funded by Prop S did not have PLAs mandated on them because of an inter-union dispute. In July 2009, AGC filed a lawsuit against the SDUSD PLA mandate policy. A second lawsuit was filed by the National Right to Work organization in October.  The AGC lawsuit was dismissed in California Superior Court in December 2009. An appeal was rejected in California’s 4th District appeals court in May 2011. The California Supreme Court declined to review the case in September 2011 . In February 2010, bids for the first project subject to the new PSA-mandate policy came in 35 percent more than initial estimates.  In July 2011, SDUSD documents revealed the PSA policy has failed to meet its local hiring goals.

The San Diego region has been a hotbed of government-mandated PLA controversy with Californians taking action in opposition to government-mandated PLAs.

San Diego County voters approved a Fair and Open Competition charter amendment with 76 percent of the vote in November 2010.

In June 2010, 56 percent of voters in the City of Chula Vista approved a Fair and Open Competition ordinance, and 54 percent of voters in the City of Oceanside approved a charter containing a Fair and Open Competition provision.

In response to the passage of similar local fair and open competition measures passed throughout California in 2011, Big Labor pushed the California legislature and Gov. Jerry Brown (D) to pass SB 922, which was signed into law Oct. 2, 2011, under odd circumstances through a gut and amend bill. It is a fine example of how Big Labor’s control of California’s elected officials is harming taxpayers and attacks the will of the people. Learn more here.

We will be following this San Diego story closely. Here is the press release.

Internal Documents Show San Diego Unified School District’s Union-Only Construction Program Costing Taxpayers Millions of Dollars

San Diego, CA – In documents obtained from the San Diego Unified School District’s Facilities Department, the construction industry has found that the District’s union-only Project Stabilization Agreement (PSA) for construction projects financed by the $2.1 Billion Proposition S bond measure has been a dismal failure. The document, prepared at the request of the firm hired by the District to “conduct a study of the impact and effect of the Projects Stabilization Agreement (PSA),” covers the bidding results of all construction projects bid utilizing Proposition S funding since its inception in 2009.

The PSA was negotiated between the San Diego Building and Construction Trades Council and the District in 2009. The first project imposing the terms of the PSA was bid in February 2010. Ten Proposition S projects were bid in 2009 before the PSA was implemented, and six other projects were bid in 2010 and 2011 that were not covered by the terms of the PSA. 17 projects were bid under the terms of the PSA in 2010 and 2011.

One of the documents, “Proposition S Construction Contracts Bidding Review,” shows that on average the District is paying a 21.9% premium for projects bid under the union-only terms of the PSA. This 21.9% premium amounts to approximately $16 million in additional construction costs that the District has incurred in the two years in which they have imposed the union-only condition on the projects. The document shows that while PSA project bids were 9.7% under the District’s budget, the projects bid without the imposition of the union-only PSA were 31.6% under budget…a 21.9% difference. If this trend continues, the imposition of the union-only PSA could cost taxpayers over $200 million in unnecessary construction costs.

Jim Ryan, Executive Vice President of the Associated General Contractors of America, San Diego Chapter, Inc., stated that “the reason for the 21.9% premium is obvious. On the union-only Prop S PSA projects, the District has only been able to interest an average of 5 responsive general contractor bidders, compared to 10 responsive general contractor bidders on Proposition S projects in which the PSA was not a condition of the contract. General contractors also tell us that the union-only PSA projects receive only about 50% of the subcontractor bids that the non PSA projects receive. When there are more bidders, the District receives better construction bids. It’s that simple.”

Scott Crosby, CEO of the Associated Builders and Contractors, San Diego Chapter, noted that “the District has also spent several hundred thousand dollars to administer the PSA. This includes additional staff to administer the numerous grievances and jurisdictional disputes on the union-only PSA projects, pay consultants to conduct seminars to explain the complex provision of the PSA to the industry, and market the bid opportunities to contractors in areas throughout the Southwest. These expenses were incurred because the local contractors have shown little interest in bidding the union-only PSA projects.”

Eric Christen, Executive Director of the Coalition for Fair Employment in Construction, expressed hope in the unlikely chance that the school board may use this as an opportunity to rid themselves of the PSA. “We now have two years worth of data in which every metric the district set forth has failed to be met. This disastrous study now gives the school board one more opportunity to put the interest of students and taxpayers ahead of Big Labor special interests who fund their campaigns.”

Another failure of the union-only PSA relates to local workers. The Building Trades promised that 70% of the craft workers would be residents of the San Diego Unified School District. As of December 1, 2011, only 40% of the craft workers working on the projects reside in the District.

The District will hold a “closed to the public” news conference Friday, December 9 to detail the results of a study by Rea & Parker Research, which was commissioned by the District’s Board of Trustees at the cost of $71,825.

The news conference will be held at Hoover High School’s Woodshop Building, which was the first Proposition S project bid under the union-only terms of the PSA. The project had to be bid twice. Only five bidders bid the first time, and the low bidder from Stanton, California was 35% over the District’s budget. All bids were rejected, and the District rebid the same project. This time there were only four bidders, and the low bid was about 26% over budget. A comparable project was bid about the same time by another school district that does not impose a union-only PSA on its projects. 17 bids were received, and the low bid was about 25% under budget.

Source Documents: Proposition S Construction Contracts Bidding Review & Project Specific Budget/Estimates/Bids

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CONTACT: Brad Barnum
858-731-8158