Santa Fe City Council Adopts the State’s First PLA Mandate

April 2, 2012 – 12:35 pm

There was a distributing development in Santa Fe, N.M., on Feb. 29, when the city council quietly adopted a policy requiring community workforce agreements (CWAs) on all projects costing more than $500,000. A community workforce agreement is no different than a wasteful and discriminatory project labor agreement (PLA); it just goes by another name.

Washington, D.C., spin doctors created the term “community workforce agreement” in an attempt to get around the much-deserved negative stigma associated with project labor agreements.

Santa Fe is the first government entity in New Mexico to adopt a policy to require or encourage PLA mandates on taxpayer-funded construction. The city council adopted this policy despite very little public commentary and virtually no input from the merit shop construction community. Many merit shop construction firms have a long history of building Santa Fe projects on time and on budget, without having to agree to Big Labor’s terms and conditions.

Here is a press release on the new mandate issued by Associated Builders and Contractors’ (ABC) New Mexico Chapter:

SANTA FE CITY COUNCIL ADOPTS NEW POLICY THAT WILL INCREASE COSTS AND

DISCRIMINATE AGAINST WORKERS

SANTA FE, N.M. – Associated Builders and Contractors’ (ABC) New Mexico Chapter today calls on the Santa Fe City Council to repeal its newly adopted policy requiring contractors to sign a wasteful and discriminatory community workforce agreement with the construction unions in order to work on Santa Fe city construction projects that cost more than $500,000.

A community workforce agreement is a special interest scheme that discourages competition from nonunion contractors and their workers by requiring a construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their nonunion employees will never benefit unless they join a union.

“The Santa Fe City Council adopted this policy after very little consideration and with no input from the merit shop construction community,” said ABC New Mexico Chapter President Roxanne Rivera-Wiest. “These mandates have a long public record of costing taxpayers and hurting the vast majority of the construction workforce in communities from coast to coast.”

“Numerous studies show these types of mandates increase construction costs by as much as 20 percent, which means taxpayers can expect four city buildings for the price of five under this policy,” Rivera-Wiest said. “Additionally, this policy will discriminate against the 97 percent of New Mexico’s construction workforce that chooses not to join a labor union. This means thousands of hardworking New Mexicans will be deprived of the opportunity to work on projects in their own backyard unless they give in to Big Labor’s demands.”

The ABC New Mexico Chapter urges the Santa Fe City Council to repeal this policy. In the meantime, ABC will do everything within its power to ensure Santa Fe residents are guaranteed the best construction at the best price.

###

While aggressive Big Labor bullying is nothing new in New Mexico, this is the most significant public policy win in the state for union bosses since they successfully lobbied the legislature to abandon prevailing wage surveys and simply make the union wage rate the minimum wage for all state funded construction.

There is great concern in the merit shop construction community that union bosses could use the “success” of this requirement as evidence to support PLA requirements in other cities in New Mexico, or even for state-funded construction projects in the future. Readers of this blog know this requirement can never be truly successful because PLAs/CWAs have a well-established history of increasing construction costs and discriminating against the vast majority of the construction workforce that chooses not to join a labor union – 96.5 percent in New Mexico.

Even more troubling, contractors in Santa Fe report that due to budget issues, there are no projects costing more than $500,000 in the pipeline!

With no projects subject to this CWA requirement expected in the near future—and the agreements’ proven track record of failure at achieving their promised public policy objectives—it is clear that this policy is nothing more than a politically motivated handout to Big Labor. It could potentially guarantee that only union workers have the opportunity to perform Santa Fe construction projects in the future. Additionally, this policy could be a springboard for Big Labor’s attempts to secure CWA/PLA requirements on state construction or in other communities.

Aside from being bad policy, ABC and the merit shop community believe this new requirement could have potential legal problems as well.

New Mexico taxpayers deserve the best construction at the best price. Additionally, the 96.5 percent of the state’s construction workforce that chooses not to join a union deserves the opportunity to compete for projects funded by their own tax dollars. The City of Santa Fe can accomplish neither with a CWA/PLA requirement in place.

We call on the Santa Fe City Council to rethink this discriminatory policy to ensure city residents get the most value for their local construction dollars.

By Andy Conlin | Tagged , , , , , , , , , , | Comments (0)

Boston Globe: Patrick Shouldn’t Bar Non-Union Workers on Longfellow Bridge

March 30, 2012 – 12:01 pm

Two taxpayer-funded bridge projects in Mass. illustrates the stark contrast between the benefits of fair and open competition versus anti-competitive and costly government-mandated project labor agreements (PLAs) advanced by well-connected special interests.

The Boston Globe published a scathing editorial opposed to a PLA mandate on the $260 million reconstruction of the Longfellow Bridge in Mass. (“Patrick shouldn’t bar non-union workers on Longfellow Bridge,” 3/30/12):

EDITORIAL | Editorial
March 30, 2012

THE PATRICK Administration is pushing ahead with a costly and unfair policy by imposing a project labor agreement on the $260 million reconstruction of the Longfellow Bridge. The administration’s rationale for the agreement, known as a PLA, falls far short of justifying a union-workers-only pact that would put upward pressure on the project price, while effectively excluding the state’s many non-union construction workers and firms from the project.

Last week, Cyndi Roy, director of communications at the Massachusetts Department of Transportation, confirmed that the department will use a PLA on the project if the Federal Highway Administration says okay. The principal reason a PLA is necessary, contends Roy, is that the MBTA’s Red Line runs over the Longfellow Bridge “and there are concerns that contractor employees that are not subject to a PLA mandated no-strike, no-job-action clause could lead to service issues on the Red Line.’’

But disruptive strikes and job actions are not something one commonly associates with non-union firms. Indeed, Greg Beeman, president of Associated Builders and Contractors of Massachusetts, an umbrella group for non-union construction firms, says he can’t recall a single incidence of a strike or job action by a non-union firm on a public job. Asked for examples, Roy failed to provide any, but said, via e-mail, that “there are many instances where union workers have set up picket lines and have disrupted work on non-union contracts.’’

The problem there, however, obviously lies with the union workers, not their non-union counterparts; if that’s really the administration’s big reason for a PLA, then it is letting the prospect of union misbehavior justify excluding non-union firms. That would be an egregiously wrong-headed response.

This is the second PLA that has been imposed under Patrick. The first was on the $750 million renovation and reconstruction of the University of Massachusetts at Boston, which the administration justified by citing the complexity of the project and the need to ensure against disruptive labor disputes.

If those rationales sound rather tinny, well, taxpayers should recall that Patrick pledged to support PLAs on an AFL-CIO endorsement questionnaire when he first ran for governor. And, further, that when he ran for reelection in 2010, he courted trade unions by noting that he had “directed that, going forward, project labor agreements be used when necessary.’’ They are never truly necessary, of course; though the state’s Supreme Judicial Court has said the exclusionary pacts are allowable on certain complex projects, it has also warned that they are anti-competitive.

While the Globe’s editorial is spot-on, it does not address numerous government-mandated PLA projects effected by strikes (some of which are documented in this blog post, Another PLA Myth Busted: PLAs Fail to Prevent Strikes on NYC Projects) despite the main selling point of a PLA is its alleged ability to prevent strikes.

In addition, the editorial does not mention Boston’s Big Dig boondoggle, the poster-child for government-mandated PLA disasters, which you can learn more about at The Most Infamous PLA Job: Lessons From Boston’s Big Dig.

Nor does it hint at the strong likelihood of a PLA mandate soaking taxpayers with additional unnecessary costs.  Research on the effect of government-mandated PLAs on Mass. taxpayer-funded school projects conducted by the Beacon Hill Institute at Suffolk University found:

PLAs increase bid costs by $18.83 (or 14%) per square foot. They increase actual construction costs (which often differ slightly from the winning bid) by $16.51 (or 12%) per square foot.

(Note: see PDF of study here and other studies here)

If you are wondering why Gov. Patrick continues to steer lucrative public works projects to his Big Labor cronies, TheTruthAboutPLAs.com addressed political motives in coverage of his UMass PLA scheme here.

A Free Enterprise Bridge to Savings
Meanwhile, MassDOT has a local example of the benefits of free and open competition repairing dilapidated bridges funded by scarce taxpayer dollars.  According to a story from GoWorcester Local, the state received considerable cost savings by not mandating a PLA on the $89 million Route 9 Burns Bridge project in Worcester (“Exclusive: Unions Frozen Out of $89M Rt 9 Bridge Project, 3/27/12):

The Middlesex Corp. – a non-union, or merit-shop, based in Littleton – won the contract after bidding $89.8 million, almost $30 million less than the $118 million MassDOT had expected. Two union-based companies, Walsh/Barletta Heavy Joint Venture and White-Skanska Koch Joint Venture, bid $93,392,750 and $119,230,000, respectively.

The article describes Big Labor’s outrage after failing to secure the contract without the help of an anti-competitive PLA mandate, which ensures a monopoly for union members and contractors at the expense of taxpayers and quality nonunion tradespeople and their experienced merit shop contractor employers.

A spokesperson for the winning bidder, a merit shop contractor, trumpets the benefits of free enterprise:

Bob Mabardy, president of the Northeast Region for Middlesex Corp., took issue with union opposition to the company’s winning bid.

“[Unions] get upset when we get work,” he said. “It’s quite different when their workers get a job. We believe in a free-enterprise system. You shouldn’t have to be in a union to work in the US.”

The lack of a labor agreement in this case, he said, doesn’t change how workers will be hired. Union employees will be among them, he said.

“We pay the prevailing wage, just like unions do” Mabardy said. “It doesn’t matter whether we are an open shop or union. We hire union subcontractors all the time. If they’re low and qualified, they will get the work.”

It’s time for the Patrick Administration to give government-mandated PLAs the heave-ho. Taxpayers deserve savings through fair and open competition, not special interest handouts at the expense of everyone else.

By Ben Brubeck | Tagged , , , , , , , , , , , , | Comments (1)

“Skip the PLA”

March 30, 2012 – 10:06 am

Last week, we covered the numerous project labor agreement (PLA)-related events that have occurred in Connecticut in recent weeks.

On Friday, March 23, Meriden Record-Journal op-ed writer Eric Cotton authored a strong piece urging the city not to require a wasteful and discriminatory PLA on two future school construction projects.  Here are the highlights from his op-ed “Skip the PLA“:

The local building trades unions are looking for an exclusive deal that would guarantee they receive the lion’s share of $220 million in renovation work, overriding the normal bidding process. In return, the city would get access to qualified union contractors, a guarantee of no work stoppages and assurances that 30 percent of the work would go to local residents, if possible.

But there’s already an abundance of qualified contractors available. With jobs in the construction industry so scarce, it won’t be difficult to find good people — union or non-union — to work on the high schools. Strikes and other work stoppages are also unlikely. And city officials are already looking into other ways of setting goals for hiring local workers.

There’s little need, at least from the city’s perspective, for a project labor agreement, or PLA.

<Snip>

The city has to protect the interests of taxpayers. Residents can hardly afford to shoulder additional costs from the high school projects as they struggle to make ends meet. Controlling costs is a big part of making sure the renovations go smoothly and it starts with the competitive bidding process. But PLAs, by their very nature, eliminate competition.

“When you eliminate competition, prices go up,” Petro said.

The unions argue that non-union companies are welcome to bid on PLA projects, which is true. But those companies would need to abide by the terms of the agreement, which means they have to rely on the unions to provide most of the workers, all but a few essential supervisors. That makes submitting an accurate bid nearly impossible since the non-union companies will be using workers they’re unfamiliar with. Fringe benefits are also handled differently in union and non-union situations, putting non-union shops at a disadvantage when bidding on PLA projects. This effectively eliminates them from the equation.

Since Meriden happens to have a lot of non-union contractors, that could make it more difficult to meet local hiring goals.

<Snip>

At any rate, in this climate, the city will be better off handling the school projects through the normal bidding process and with union and non-union contractors ultimately working side by side at Platt and Maloney.

Mr. Cotton is exactly right.  PLAs have a long history of reducing competition, which leads to increased construction costs, and not guaranteeing a local workforce.

PLA mandates also discriminate against the 80 percent of Connecticut’s construction workforce that chooses not to join an union and won’t have the opportunity to fairly compete for projects funded by their own tax dollars.

We urge the Meriden City Council to stand firm against Big Labor’s pressure and say no to PLA requirements on future school construction.

By Andy Conlin | Tagged , , , , , , , , | Comments (0)

PLA Activity in Connecticut: The Recap

March 21, 2012 – 12:39 pm

Connecticut has seen a buzz of activity and hearings relating to wasteful and discriminatory project labor agreements (PLA) within the last week or so.

Here is the recap.

On March 10, a public forum to discuss whether a PLA mandate is appropriate for two school projects that are expected to cost approximately $200 million was held in Meriden, Conn. Of note, Congressman Chris Murphy and state House Speaker Chris Donovan appeared to speak in support of the PLA mandates. Both officials are candidates for higher office – Murphy is running for the U.S. Senate and Donovan is running for Murphy’s seat in the U.S. House of Representatives.

It should come as no surprise that both have taken union campaign contributions.  Here is an interesting bit of information from the Record-Journal in Meriden:

Through Dec. 31, Donovan had brought in $708,815 in campaign contributions, according to OpenSecrets.org, a website maintained by the Center for Responsive Politics. Of that amount, about $124,000 came from organized labor, including trade unions such as the Service Employees International Union, the International Brotherhood of Electrical Workers, Sheet Metal Workers Union and the Plumbers and Pipefitters Union. In total, industrial unions have contributed more than $30,000 to Donovan’s war chest, while building trade unions have given $22,500. Of his 20 largest donors this year, 12 are unions.

<snip>

Of the $3.4 million Murphy has raised for his Senate campaign, nearly $300,000 has come from unions, with more than $70,000 coming from building trade and industrial unions.

The merit shop construction industry was well represented at this event by Lelah Campo, president of the Connecticut Chapter of Associated Builders and Contractors (ABC), who called this more of a campaign event than an opportunity to learn the facts about PLAs.

This issue has arisen in part because of a petition to the Meriden City Council (initiated by union bosses) seeks a community workforce agreement mandate (a PLA by another name) on the construction of the two school projects. The City Council may not be required to take action on the petition because of a problem with its drafting. Regardless, the unions have successfully brought the issue to the forefront and the council is likely to consider a PLA mandate.

If adopted, this mandate will have a chilling effect on merit shop participation on these projects. In order to work on projects where contractors must agree to a PLA in order to perform work, contractors typically must recognize unions as the sole representative of their employees, hire from union hiring halls, pay into union pension and benefit plans, and follow wasteful union work rules.

From a practical standpoint, PLA mandates unfairly tip the scales in favor of unionized contractors. Merit shop employees, who make up nearly 80 percent of Connecticut’s construction workforce, are deprived of the opportunity to fairly compete for contracts and build projects funded by their own tax dollars.

In addition, these mandates have been found to increase construction costs.  A September 2004 study conducted by the Beacon Hill Institute at Suffolk University in Boston found that the use of PLAs on school construction projects in Connecticut increased the cost of the projects by nearly 18 percent.  The report concludes that the presence of a PLA increased the projects’ final base construction costs by $30 per square foot relative to non-PLA projects.

Unfortunately, the Meriden schools are not the only PLA threat in the state right now.

The Connecticut General Assembly’s Labor and Public Employees Committee held an informational hearing in Hartford on Monday, March 19, to learn more about wasteful and discriminatory PLA mandates.

Here is a great recap from CT News Junkies on what likely prompted the hearing:

The existence of PLAs, an issue that doesn’t come before the legislature very often, has come up in the wake of a January Connecticut Supreme Court decision. The decision gave standing to Electrical Contractors, Inc. (ECI), a nonunion Hartford company, that sued the Hartford Board of Education after winning a bid, but declining to sign a PLA for two school construction projects.

The Superior Court that first heard the trial decided that ECI did not have standing to bring the lawsuit, but the decision was overturned by the Supreme Court. It’s now back in trial court.

While the actual case may not be decided for years, the ruling on ECI’s standing creates the opportunity for other contractors to sue on account of PLAs.

Here is video of a few minutes of testimony by ABC Connecticut Chapter President Lelah Campo:

ABC was not the only group to speak out against PLAs at this hearing.  Connecticut’s Minority Construction Council wrote a strongly worded letter to voice its opposition to PLA mandates.  Here is an excerpt:

Not only do PLAs harm minority contractors who are not union contractors, they also harm non-union employees because if these employees work on a PLA project they must pay union benefits and become union members for each PLA project worked on. It is not fair for employees to pay into a union pension program they will never be able to collect from because they will never vest. This constitutes an unfair windfall for the union. Under current prevailing wage laws, fringe benefits are paid directly to the employee if the contractor he/she works for does not have benefit plans. It is better for employees under prevailing wage laws to be able to directly receive compensation in their paychecks for benefits rather than have their money go to a union’s irretrievable benefits program. The union benefits are payable to the union, even if the non-union employee is covered under the employer’s existing program (i .e., paying twice for the same benefit but only being able to collect to collect on one).

PLAs also harm minority contractors because the contractor has to get some or all of his/her employees from a union hall as opposed to directly hiring all employees. Consequently, a contractor is forced to bid a job without knowing his workforce or their work habits, because there is a great chance the minority contractor’s employees will come from the union hall as opposed to their regular workforce. Under this setup, the employee’s loyalty is to his union hall as opposed to the contractor. I can give you anecdotal evidence to support the harm suffered by minority contractors under a PLA because of union issues.

The merit shop construction community is concerned the General Assembly may take some action to undercut the ECI lawsuit or promote the use of anti-competitive and costly government-mandated PLAs on state and state-funded projects. Doing so would send a clear signal that Connecticut’s lawmakers are in the pockets of union bosses and special interests, and not looking out for the interests of taxpayers and free enterprise.

TheTruthAboutPLAs.com will be following the situation in Connecticut closely.

By Andy Conlin | Tagged , , , , , , , , | Comments (0)

New York Firm Wins Lawsuit Against NYS DOT’s Government-Mandated PLA

March 19, 2012 – 12:25 pm

There was a significant legal victory for taxpayers and merit shop construction firms in New York recently. As we reported in 2011, the New York State Department of Transportation (NYS DOT) implemented a project labor agreement (PLA) requirement on a highway reconstruction and bridge replacement project near Exit 122 on Route 17 in Orange County, NY. This mandate would cost taxpayers an additional $4.5 million, as this mandate disqualified the lowest bidder for this project.

An Albany County Supreme Court ruled March 1 that the government-mandated PLA issued by NYS DOT violated state procurement laws. The court found that the NYS DOT failed to demonstrate that the decision to require a PLA advanced the state’s interests in the procurement of construction services. The court ordered NYS DOT to re-bid the project.

Here are the highlights from the press release issued by the Empire State Chapter of Associated Builders and Contractors (ABC):

“The ruling effectively means the DOT was flawed in its decision to add a project labor agreement to the job, which would cost taxpayers $4.5 million more than necessary,” said Mark Galasso, President of Lancaster Development, Inc. “As a contractor and taxpayer I am pleased by today’s decision.”

The court on Friday ruled the PLA illegal and thus nullified the existing contract. This means the state DOT must rebid the project.

“The ruling shows a failure by New York State Department of Transportation officials to comply with the competitive bidding rules set out by state law,” said Steve Lefebvre, President of ABC. “Thanks to the court’s decision the project will be rebid, to the benefit of the taxpayers. When this project goes out to be rebid, I would caution the DOT not to attempt the inclusion of a PLA, as we have just seen an open and fair bidding process is the best way to maximize cost savings on public work projects.”

Lefebvre further added that the decision rendered by the court confirms what the ABC has said right from the start, that Project Labor Agreements are subjective and subject to questionable insider negotiations.

In this ruling, the judge points out several alarming issues that arose during the court’s examination of NYS DOT’s attempt to implement a PLA mandate.

Throughout the legal process, the courts ordered NYS DOT to hand over correspondence and other documents surrounding the process used to determine that a PLA is appropriate for this project.  In the decision, the judge takes NYS DOT to task for not being able to produce all the documents involved in the decision to require a PLA despite repeated requests by the court.  At best, this is evidence of sloppiness on the part of NYS DOT.  At worst, it could indicate that they have something to hide.  Either way, it is troubling.

The court also criticized the department’s handling of its feasibility study process.  In New York, public entities are required to obtain a feasibility study prior to requiring contractors to sign a PLA as a condition of performing work.  The study must demonstrate that the PLA mandate will promote the public interest through the: “(1) protection of the public finances by obtaining the best work at the lowest possible price; and (2) prevention of favoritism, improvidence, fraud and corruption in the awarding of public contracts.”

The court found the decision to require a PLA was not supported by either the first draft of the feasibility study developed by Arace & Company Consulting, LLC or NYS DOT’s own initial research.  The department relied on the more PLA-friendly second draft of the Arace study to justify the PLA mandate.  This second study was released to the department approximately one month after the first draft and with virtually no new evidence, endorsed the PLA mandate to a degree that the initial draft did not.

Clearly, the department wanted a PLA mandate on this project.  You don’t need to look any further than the fact that they threw out a bid from a qualified contractor for nearly $5 million more than the next lowest bid to determine NYS DOT’s intent.

The project will now be rebid.  We hope fair and open competition will trump Big Labor favoritism this time.

We also hope this incident will prompt lawmakers to take a closer look at The Public Construction Savings Act (S. 4121/A. 7855).  This bill would prohibit government-mandated PLAs on public construction projects.  It would guarantee that PLAs would be used when they make sense and ensure that taxpayers get the best construction at the best price.

By Andy Conlin | Tagged , , , , , , , , | Comments (0)

Victory for Taxpayers – Fair and Open Competition Saved in Ventura County: Disagreements Among County Supervisors Kills Project Labor Agreement Proposed for $250 Million Hospital

March 13, 2012 – 2:45 pm

At a special meeting this morning (Tuesday, March 13), the Ventura County Board of Supervisors rejected (on a 2-2-1 vote) a motion from the board chairman to require contractors to sign a project labor agreement (PLA) oriented toward the demands of the Tri-Counties Building and Construction Trades Council in order to work on a $250 million county hospital project. Fair and open competition is saved on this project!

It would have been the first government-mandated project labor agreement within the Central Coast counties of Ventura, Santa Barbara, and San Luis Obispo counties.

Before the vote, county supervisors heard a lengthy presentation from county public works staff and county counsel about hundreds of hours of work on negotiations with various stakeholder groups – in particular the Tri-County Building and Construction Trades Council and the Southwest Regional Council of Carpenters – to come to an agreement on provisions concerning core workforce limitations, jurisdictional dispute resolution, and mandatory union initiation fees and dues paid by all workers under the PLA. The county was not able to resolve differences between the Building Trades and the Carpenters concerning jurisdictional dispute resolution.

Supervisor Peter Foy pointed out that the county had spent more than $1 million trying to develop a PLA and made a motion to move forward in bidding the hospital without a PLA, which he regarded as unnecessary and wasteful. He even dared to refer to “the free market” and “the taxpayers” in his statement. That motion failed to get a second.

Supervisor Linda Parks complained that she was being forced to vote on a 33-page contract she hadn’t been able to read because it was provided by staff after 6:00 p.m. on Monday, March 12. Parks asked if anyone on the board had read it, and Supervisors Kathy Long, John Zaragoza, and Steve Bennett said they had read it. Supervisor Steve Bennett said there were no compelling new things in the PLA and it was time to move forward.

Supervisor Kathy Long then made a motion for the board to vote on the staff recommendation to adopt a PLA with a “safe harbor” provision on core workforce and jurisdictional dispute resolution for the Carpenters union, provided all parties sign the PLA by Friday, March 16. Board chairman John Zaragoza instead moved for adoption of the version of the PLA supported by the Tri-Counties Building and Construction Trades Council. That motion failed 2-2-1.

There are three prequalified design-build entities for bidding on the project: Hensel-Phelps Construction, McCarthy Construction, and Clark Construction.

Staff reported that Clark did not object to a PLA because union contractors would perform all of its major trade work and at least 90% of the total work. Staff also reported that Hensel-Phelps noted that it employs its own workers under the jurisdiction of the Carpenters trade (which a Carpenters union official claimed to comprise 30% of the work).

McCarthy was planning to use a large Merit Shop electrical contractor that has Ventura County employees. A McCarthy representative declared that if the county approved a PLA as proposed, it would drop its plan to bid unless the county provided time to prequalify unionized electrical subcontractors. According to Public Works staff, prequalifying more electrical contractors would delay the project for up to 4-6 months at a cost of $400,000 per month. Showing a low priority for open competition and fiscal responsibility, the board chairman John Zaragoza declared that the county would still have two bidders if McCarthy dropped out.

See material provided by staff to the board here.

News Reports:

Board can’t pass labor agreement for county hospital – Ventura County Star – March 14, 2012

By Kevin Dayton | Tagged , , , , , , , , , , , | Comments (1)

Out of Nowhere: Project Labor Agreement and Community Benefit Agreement Tacked on End of Motion for New Sacramento Kings Basketball Arena

March 9, 2012 – 10:28 am

On March 6, when Sacramento City Councilman Robert King Fong made the motion to the Sacramento City Council for approval of a new $391 million arena for the Sacramento Kings professional basketball team, he generally read the posted agenda item verbatim, but then tacked on an additional, obviously pre-prepared provision out of nowhere:

…and lastly, (uh) to direct staff to evaluate and consider options for a Project Labor Agreement and Community Benefit Agreement and discuss those options with the (uh) Entertainment Sports Complex development and operation partners for potential inclusion in the subsequent definitive agreements.

Associated Builders and Contractors of California suspects a violation of the state’s Ralph M. Brown Act (a 60-year old law making California governments accountable to the people when they do the public’s business) when the Sacramento City Council inserted this unannounced directive concerning a Project Labor Agreement (and for a Community Benefit Agreement) into the motion to approve the new Kings arena. (The full motion was approved 7-2, with the debate and votes primarily revolving around funding sources for the arena.)

Nothing about a Project Labor Agreement or a Community Benefit Agreement was included in the agenda or staff report. (See Item 16-Entertainment & Sports Complex (PDF-2279 KB) [Updated 3-1-12 @ 6:30 pm]). Interested members of the public were NOT informed through public notice that the subject matter would include a direction to staff to evaluate requiring contractors to sign a Project Labor Agreement with unions to build the arena, or to require all parties to sign a Community Benefit Agreement.

The city manager and the assistant city manager did not mention a Project Labor Agreement or a Community Benefit Agreement in their opening presentations. They did not indicate having any meetings with labor unions during their public outreach.

While the Project Labor Agreement directive had long been expected, the Community Benefit Agreement was an interesting addition, opening numerous opportunities for mischief from local activist organizations. The Sacramento Central Labor Council, AFL-CIO would presumably want a Community Benefit Agreement to include a “displaced workers” provision requiring the arena developers to retain the employees (such as concession and parking employees) from the current arena. The agreement would likely include “union neutrality agreements” that allow unions to campaign to organize arena employees without allowing the employers to argue against it. It could also include all sorts of costly provisions not even publicly discussed to date. Examples could include (1) a requirement to use steel manufactured in the United States; (2) a requirement not to use contractors that engage in certain business activities or do business with certain corporations or countries; (3) bird-friendly non-reflective windows; (4) large one-time payments to specific community organizations and/or programs; (5) restrictions on building materials; (6) solar panels, waterless urinals, and other energy and water requirements.

Oblique remarks from a few city council members during their statements betrayed their knowledge that this provision was going to be added.

What special interest group provided this provision to add to the final motion? Well, since the State Building and Construction Trades Council of California is now bragging that the Sacramento City Council approved a PLA for the new Kings Arena (see SBCTC – City Council Endorses PLA for Sacramento Arena Project) and provides the exact wording of the motion in its victory announcement, one can guess that the Sacramento-Sierra Building and Construction Trades Council was behind it, probably in coordination with the Sacramento Central Labor Council, AFL-CIO.

In its notice about the motion, the State Building and Construction Trades Council mocks Associated Builders and Contractors for failing to qualify a ballot measure in the City of Sacramento that would have prohibited a Project Labor Agreement requirement on city contracts, including the new Kings arena. The notice describes the vote as “a stinging defeat for ABC, which tried to avert this outcome…”

By Andy Conlin | Tagged , , , , , , , , , , , , , | Comments (0)

County Hospitals Are Prime Targets for Project Labor Agreements: Ventura County is the Latest in California

March 6, 2012 – 11:02 am

The first government-mandated project labor agreement (PLA) in California (following the Boston Harbor decision at the U.S. Supreme Court) was imposed in the spring of 1994 by the Contra Costa County Board of Supervisors for a county hospital construction project. Last year, unions managed to squeak out (on a 3-2 vote) their first PLA for a Los Angeles County project – a county hospital.

Now unions are gunning for their first government-mandated project labor agreement in the Central Coast region (Ventura, Santa Barbara, and San Luis Obispo counties), and the target is again a county hospital.

Ventura County (on the coast between Santa Barbara and Los Angeles) will build a $250 million Ventura County Medical Center Hospital Replacement Wing. Associated Builders and Contractors of California was tipped off in the summer of 2011 that unions were plotting through two members of the Ventura County Board of Supervisors to force contractors on this project to sign a project labor agreement under the guise of “local hire.” Confirmation came from this seemingly innocuous item on the August 2, 2011 board agenda:

27. Recommendation of Supervisors Bennett and Long to Direct the County Executive Office and County Counsel to Report Back to the Board Regarding Incorporating Local Hire Components in the Construction of the Ventura County Medical Center Replacement Hospital Project. (Supervisors Bennett and Long)

We’ve seen this exact same strategy used at other California local governments (such as the City of San Diego) to “innocently” sneak project labor agreements into the discussion. When Supervisor Steve Bennett subsequently announced he was running for the Democrat nomination for the 26th Congressional District seat being vacated by Elton Gallegly (R-Simi Valley), we knew that once again this axiom was fulfilled: behind every push for a project labor agreement is an elected official with ambition for higher office! Shortly afterward, the cat was out of the bag as union officials acknowledged publicly that they were scheming for a project labor agreement.

The controversy reached a feverish pitch on January 24, when the Board of Supervisors held a five-hour meeting with 29 public speakers and more than 200 attendees to discuss the proposed project labor agreement. The meeting concluded with a 4-1 vote to try to negotiate some sort of fair PLA. (Supervisor Peter Foy of Simi Valley was opposed to the whole charade and voted against the directive – thank him at supervisor.foy@ventura.org.)

On February 17, more than 40,000 Ventura County households received a mailer from the Coalition for Fair Employment in Construction (CFEC) warning them that Big Labor Bosses from Los Angeles were expanding their quest for government-mandated union monopolies to Ventura County.

(See: CFEC’s mailer)

On February 28, the Ventura County Board of Supervisors spent three more hours listening to 34 public speakers and discussing the proposed project labor agreement. They also learned from staff that each month’s delay of the hospital project to negotiate the PLA costs the county $400,000. But if you’re gunning for a policy that will increase the cost of the hospital by as much as $50 million, who cares about a silly $400,000 per month from the taxpayers?

The Board of Supervisors is expected to make a final decision at its March 13 meeting.

A question needs to be asked here: why does consideration of what unions claim is a mere “construction management tool” attract so many speakers and take so many hours of public deliberation? Could it be that project labor agreements are actually about UNION MONOPOLIES paid for by the TAXPAYERS?

The Ventura County Star newspaper has thoroughly reported on the PLA controversy for its readers over the past several months:

County board looks for ways to boost employment with hospital project – Ventura County Star – August 2, 2011

Local hiring for VCMC project looks promising despite dispute – Ventura County Star – November 28, 2011

Christen: Unions going for monopoly on new medical center – Ventura County Star – December 3, 2011 – op-ed

County to explore labor agreement to push local hiring for hospital work – Ventura County Star – January 24, 2012

Editorial: County’s push for local hiring requires caution – Ventura County Star – January 28, 2012 – editorial

Leonard: Weighing the options in trying to ensure local hiring – Ventura County Star – February 11, 2012 – columnist

VCMC Expansion – Ventura County Star – February 20, 2012 – letter to the editor against the proposed PLA

Morales: Diverse support for local hiring – Ventura County Star – February 25, 2011 – op-ed by Maricela P. Morales, acting executive director of the Central Coast Alliance United for a Sustainable Economy, also writing on behalf of the Black American Political Association of California (BAPAC) of Ventura County, the League of United Latin American Citizens (LULAC), and the Multicultural Consortium.

Union Monopoly – Ventura County Star – February 27, 2012 – letter to the editor against the PLA from Kevin Korenthal, former official with ABC

Board sets deadline for deal in hospital project – Ventura County Star – February 28, 2012

Construction Jobs – Ventura County Star – February 29, 2012 – letter to the editor in support of the PLA from Bob Balgenorth, head of the State Building and Construction Trades Council of California

Editorial: Ventura County labor agreement an elusive goal – Ventura County Star – March 3, 2011 – editorial

PLA is Good for Us – Ventura County Star – March 5, 2012 – letter to the editor in support of the PLA

By Kevin Dayton | Tagged , , , , , , , , , , , , , , , , | Comments (0)

Scandal-Tainted California Politician Voted for Project Labor Agreements in Two Different Lives!

March 1, 2012 – 8:19 am

This story is not unusual in California nowadays: an ambitious elected official is tangled up in a bizarre personal incident (see Supervisor Nadia Lockyer, Wife of California Treasurer, Acknowledges Substance Abuse, Affair – Contra Costa Times/Bay Area News Group – February 14, 2012).

But this case is noteworthy from the perspective of TheTruthaboutPLAs.com because the elected official voted for Project Labor Agreements ten years apart on two different local government boards in two completely different geographic regions.

In 1998, Nadia Lockyer (then named Nadia Davis) was elected to the board of trustees of the Santa Ana Unified School District in Orange County. In March 2000, she was part of the 4-1 board majority that voted to require contractors to sign a Project Labor Agreement for $145 million in school construction funded by the district’s Measure C. As reported in the March 15, 2000 Los Angeles Times:

The bricks and mortar for the largest school building project in Orange County history will be laid exclusively by union hands, Santa Ana Unified board members decided Tuesday night. In a controversial decision that continues a spate of victories for labor interests, all but one of the five board members voted to support a Project Labor Agreement, which would open bids to the $145 million in school-building plans only to union companies or nonunion contractors who hire through union hiring halls.

Despite this accomplishment for union special interests, Ms. Davis lost her re-election campaign in 2002 as the district was caught up in numerous controversies, including mismanagement of the district’s construction program. Eventually she ended up in the San Francisco Bay Area, and in 2010 she was elected as Nadia Lockyer to the Alameda County Board of Supervisors.

Different place, different year, but same contempt for the taxpayer and the merit shop contracting community. Her accomplishments to date on the Alameda County Board of Supervisors were described on February 17 by a San Francisco Chronicle columnist:

… largely an unknown, even after her election. Since her arrival on the Board of Supervisors, Lockyer has worked on general assistance policy issues and helped craft a project labor agreement for the construction of a new Superior Court building.

Remember the axiom: behind every push for a Project Labor Agreement is an elected official dreaming of higher office.

With her second victory in using a local government to force contractors to sign union Project Labor Agreements for taxpayer-funded construction, Supervisor Nadia Davis Lockyer is again locking in future labor union endorsements and preparing for a fine career in the California State Legislature, or maybe even U.S. Congress or statewide office.

Her climb to the top will simply happen in Alameda County rather than in Orange County.

By Kevin Dayton | Tagged , , , , , , , | Comments (0)

Airport Authority Continues Big Labor Favors on Dulles Metro Silver Line

February 23, 2012 – 5:52 pm

Last week, the Metropolitan Washington Airport Authority (MWAA) gave Big Labor Bosses a generous Valentine’s Day gift.

On Wednesday, MWAA passed a resolution adopting a new policy needlessly favoring contractors that submit proposals promising to use a union project labor agreement (PLA) to construct Phase 2 of the $2.8 billion Silver Line metro extension project in Northern Virginia. (Learn more about the project and PLA controversy here.)

Big Labor, Be My Valentine. Love, MWAA

Obtained from MWAA staff, here is a copy of the unofficial language the MWAA board approved unanimously, with the exception of MWAA board members Dennis Martire and Michael Curto. They recused themselves from the vote, presumably because they have come under fire for cronyism related to their active promotion of a PLA mandate on Phase 2 (learn more about this controversy here).

MWAA’s new policy discriminates against contractors unwilling to enter into a PLA on Phase 2 construction work and puts them at a significant competitive disadvantage.  It awards contractors willing to build the project under a PLA a 10 percent bonus in the Phase 2 procurement process.

It is a de facto PLA mandate because it will be virtually impossible for contractors that do not want to build the project with a PLA to make it to the next phase of the procurement process, where technical and price proposals will be evaluated.

Explanation of the Phase 2 Procurement Process
At the end of February, MWAA is expected to release a request for qualifications (RFQ) to all contractors interested in bidding Phase 2. The presentation on Phase 2′s procurement process, given at January’s MWAA meeting, suggests contractors will be evaluated on the following factors contained within the RFQ: Performance History, Management Plan, Qualifications of Key Personnel, Description of Project Challenges, and Safety Plan.

MWAA will evaluate and score each factor in the contractor RFQ response. (The public won’t know whether each factor is given equal weight and if these are the final evaluation categories until MWAA releases the RFQ). Each contractor response to each evaluation category will be assigned a point value out X possible points. A contractor’s aggregate point score will receive a 10 percent bonus if it agrees to build Phase 2 with a PLA.

The five highest scoring firms will be selected to participate in step two of the procurement process, where they will be invited to respond to a request for proposal (RFP) to be issued by MWAA in May. Each of the five firms will receive a $1.5 million stipend because it will cost between $5 million and $6 million for each firm to compete in the procurement process from start to finish. The five finalists, or short-listed contractors, will be evaluated based on their response to the RFP’s technical proposals, due in September 2012, and price proposals, due in December 2012.

For arguments sake, let’s assume each of the five RFQ evaluation categories is worth 20 points for a total of 100 points. If a contractor receives an aggregate score of 85 and agrees to a PLA, it will receive an additional bonus of 8.5 points (10 percent of 85 points), for a final total of 93.5 points. If an equally qualified  contractor receives an aggregate score of 85 and does not agree to a PLA, it will only receive a final total of 85 points.

It will be virtually impossible for non-PLA contractors to overcome the 10 percent disadvantage because only the top five firms will be invited to the second phase of the project, where they will respond to the RFP. The “spread” between the highest and lowest scores of the top five likely will be very small. The 10 percent point bonus is a significant handicap and likely will lead to only PLA contractors being invited to submit a cost offer in step two.

In short, MWAA is rigging the competitive bidding process to produce a result that will guarantee the contractor building Phase 2 will do so with a PLA.

Non-PLA contractors will not waste their time and money chasing this work, which will reduce competition and increase project costs because everyone will be stuck with the same expensive union rules contained in the PLA.  The public will never know how much cost savings MWAA left on the table to satisfy their pro-union de facto PLA mandate policy.

MWAA’s new policy replaces the controversial April 6, 2011, resolution No. 11-08, which permitted MWAA staff to include in Phase 2 construction contract procurement documents a PLA similar to the PLA voluntarily entered into by the Phase 1 prime contractor, Dulles Transit Partners.  However, the Phase 2 PLA was mandatory.

In November 2011, a proposed MOU between MWAA and the Commonwealth of Virginia - although not signed by Virginia – clarified that MWAA intended to require the Phase 2 prime contractor to negotiate and execute a PLA with construction labor unions in order to win Phase 2 construction contracts. The MOU exempted subcontractors from signing the mandatory Phase 2 PLA, just as Phase 1 subcontractors were exempted from signing the voluntary Phase 1 PLA.

Discriminatory Preference Policy Under Fire
Virginia’s construction industry and lawmakers are not happy about MWAA’s PLA preference/de facto PLA mandate policy.

“MWAA has once again demonstrated they are determined to ensure their cronies benefit from some type of anti-competitive and discriminatory contracting scheme on this multi-billion dollar construction project,” said Patrick Dean, president of the Virginia Chapter of Associated Builders and Contractors.  (Take a look at ABC-VA’s press release below).

The Washington Times covered opposition to the PLA preference policy from Virginia lawmakers (“Labor pact for Dulles Metrorail opposed,” 2/21/12):

“I think we’ve had grave concerns,” Mr. Hugo said. “And we’ve expressed it repeatedly that we want a level playing field. I think, point blank, that the actions of the … authority are on the verge of killing this project.”

Mr. Hugo added he supports the project, but “thinks the board’s actions are going to kill it.”

The Fair and Open Competition in Government Contracting Act (HB 33/SB 242), which would prohibit the state from mandating PLAs and giving state assistance to projects mandating or giving preference to PLAs, is close to becoming law in Richmond (TheTruthAboutPLAs.com covered this legislation here). Update: The bills are headed to Gov. McDonnel’s desk.

Is a PLA Mandate or Preference Bad for Virginia’s Construction Workforce?
Lawmakers and representatives of Virginia’s construction industry, where 97.4 percent of the state’s construction workforce do not belong to union, have good reason to be concerned about the impact of a PLA on local job creation and the overall cost of the project.

A report presented at last week’s MWAA meeting by a representative from the Phase 1 prime contractor, Dulles Transit Partners (DTP), revealed that the majority of DTP construction workers employed on Phase 1 are union members from Maryland, despite the fact the project is in Virginia.  (See coverage in “Maryland workers outnumber Virginians on Dulles Rail project,” 2/17/12).


DTP provided a snapshot of its workforce building Phase 1 from December 2011. Data showed that 304 of 602 DTP construction workers came from Maryland, 18 of 602 came from DC, 27 of 602 were from other states and 253 of the 602 were from Virginia.

DTP gets almost all of its craft workers exclusively from union hiring halls, as required in the Phase 1 PLA it voluntarily entered into.

Data in the report only represents DTP employees who were building the project under the terms of the PLA.  The data does not include close to 400 employees of subcontractors, which are not required to operate under DTP’s Phase 1 PLA.

If Phase 2 has mandatory or bid-rigged PLA preference, Virginia public officials should be concerned about similar local job creation results.  Is it fair for other states to benefit from this project considering it is slated to be supported by Fairfax and Loudoun Counties, the state of Virginia and Dulles Toll Road users (likely mostly Virginia drivers)?

Will a PLA Mandate or Preference Increase Costs?
It is unclear how much a PLA mandate or preference will increase Phase 2 construction costs. Studies have demonstrated that PLAs increase the costs of construction between 12 percent and 18 percent because they reduce competition and shackle contractors with expensive union work rules.

However, those studies do not pull from a sample size of large projects such as Phase 2.

The cost increase also may depend on how much work prime contractors would be forced to self-perform under the PLA and if subcontractors are subject to the PLA.

In addition, it is important to know how MWAA intends to implement a PLA mandate or preference in the procurement process, if contractors are bound by the same PLA, and if firms have the chance to review the terms and conditions of the PLA before submitting a final bid with their price.

Finally, the only way to know if a PLA mandate or preference increases the cost of construction on Phase 2 is a direct comparison of bids submitted with and without a PLA mandate or preference.

The only way to ensure that project financers receive the best bang for their buck is for MWAA to abandon its PLA scheme altogether. Why not let contractors decide if a PLA is appropriate without giving contractors a dramatic incentive to use a PLA? Why not take steps that will increase competition and reduce costs?

Speaking of costs, here is a link to a report given at the last MWAA meeting on Phase 1 Costs (note an expected $150 million cost overrun) and here is copy of their consultants’ Toll Rate Study, which lays out the projected toll rates needed to finance Phase 2.

Stay tuned, TheTruthAboutPLAs.com will be following this closely.

ABC Virginia Press release after the jump.

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By Ben Brubeck | Tagged , , , , , , , , , , , | Comments (0)
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