S2425 passed the Senate Jan. 14 and A3679 awaits a full Assembly vote after it passed out of the New Jersey Assembly Budget Committee Jan. 28 following a Jan. 24 hearing. Democrats control the Senate 24-16 and the Assembly 48-32.

However, an alliance of union and merit shop construction industry stakeholders are opposed to this legislation and are taking steps to prevent it from passing the Assembly or getting signed into law by Gov. Christie.

In fact, the New Jersey Laborers Union (LiUNA) testified against the bill, as did an association representing unionized utility and transportation contractors.

At the Jan. 24 Assembly Budget Committee hearing, NJ LiUNA official Joe McNamara submitted an opposition card and testified against the measure at the 39:28 mark of this hearing recording, citing concerns government-mandated PLAs may lead to jurisdictional problems between the various unions assigned work by government-mandated PLAs.

Yesterday, TheTruthAboutPLAs.com posted this column by the CEO of a union contractors association that highlighted how government-mandated PLAs harm union contractors and union members and lead to an increase in jurisdictional disputes, increased costs and other problems.

This Jan. 21, 2013, letter from the New Jersey Utility and Transportation Contractors Association (UTCA) to the New Jersey Assembly Budget Committee describes similar concerns with A3679 and government-mandated PLAs:

…A-3679 hurts union contractors by severely curtailing the control they currently possess over their work, the composition of their workforce, and the overall structure of the jobsite. It is particularly injurious when it comes to a contractor’s bargaining power during labor negotiations which becomes severely limited when a PLA is in place.  Very often, Project Labor Agreements give rise to union jurisdictional battles, bringing new trades onto the jobsite that would otherwise not be involved in infrastructure construction projects.  The unions that are more traditionally found building our roads, bridges, and utilities and that are better trained and accustomed to the type of work that is being performed, would lose a major portion of their work as a result of the PLA.

UTCA/NJ respectfully urges your opposition to this bill.  The legislative intent behind the original statute, and the specific agreement that was reached to exempt infrastructure construction agreed to by all parties, should not be overturned.  Unlike the consensus that characterized the PLA compromise in 2002,  the entire industry is not currently in agreement with the direction of this legislation….

The NJ UTCA is not alone in their opposition to government-mandated PLAs.

Another contractor association representing a large group of unionized contractors, the Associated General Contractors (AGC), opposes government-mandated PLAs. This document (posted below for your convenience) from AGC  explains how government-mandated PLAs harm union contractors (AGC negotiates union collective bargaining agreements with multiple unions across the country):

How Government-Mandated Labor Agreements Impact Union Contractors

• Government mandates for project labor agreements disrupt the often complex relationships between union contractors and the building trade unions, interfering with their efforts to negotiate competitive labor agreements for their common benefit.
• On their members’ behalf, over 50 of AGC’s 100 chapters negotiate local area agreements with the building trade unions. One reason that government authorities cannot demonstrate that mandating a project labor agreement will have any economic or other benefit is that many of these local area agreements are already state-of-the-art. Many of these agreements already provide the benefits that government-mandated labor agreements are said to provide, such as:
  • Common or similar grievance and arbitration procedures among crafts.
  • Common or similar jurisdictional dispute resolution procedures among crafts.
  • Common work rules, hours of employment, holiday and shift provisions.
  • No strike, no lockout clauses.
• The terms and conditions that government officials negotiate with the building trade unions are rarely more competitive or cost-effective than the terms and conditions found in the local area agreements. In fact, government-mandated labor agreements frequently conflict with the local area agreements that they displace. They introduce new and unfamiliar terms and conditions that may increase even union contractors’ costs of performing the work. For example, government-mandated labor agreements frequently:
  • Require contractors to deal with additional or different unions, whether familiar or not;
  • Establish different grievance and arbitration procedures, with their own rules of evidence and the like;
  • Establish different rules and procedures for resolving jurisdictional disputes among the building trade unions, often reviving historical claims not recognized in the local area;
  • Establish new and unfamiliar work rules that contractors cannot use effectively;
  • Add reporting and other paperwork requirements that drive up the contractors’ overhead.
• Government-mandated labor agreements may require labor practices and work assignments that conflict with the Davis-Bacon Act and/or state prevailing wage laws. Any such conflicts can cause not only jurisdictional disputes among the building trade unions but also pay disputes. Such prevailing wage laws have their own job classifications.
• If it disregards the expiration date for the local area agreements, a government-mandated labor agreement can significantly impact the union contractors’ necessary effort to negotiate competitive agreements for the future. Such a mandated project labor agreement may enable union members to continue to work at the site that the agreement covers while the union contractors and their other clients have to deal with labor unrest. The negative effects on the local marketplace can last for many years.

TheTruthAboutPLAs.com agrees with these concerns about the negative impact of government-mandated PLAs on union contractors and union members in New Jersey and across the country.

Besides these groups and ABC New Jersey, the National Federation of Independent Business (NFIB) is also opposed A3679 and have issued this grassroots alert encouraging NFIB members to let Assembly lawmakers know A3679 is widely opposed.

NFIB and AGC are also part of a diverse coalition of construction industry associations and employer groups opposed to government-mandated PLAs on federal and federally assisted construction projects promoted by President Obama’s Executive Order 13502, which encourages federal agencies to mandate PLAs on a project-by-project basis on contracts exceeding $25 million in total cost.

Billions of dollars worth of federal contracts for Hurricane Sandy reconstruction may contain PLA mandates. Coupled with this recent legislative push to use PLAs on additional state projects, government-mandated PLAs will devastate New Jersey taxpayers and the merit shop contracting community.

Hurricane Sandy reconstruction needs to remain competitive and free from federal and state PLA mandates and preferences.

After contacting Assembly officials in opposition to A3679, write Gov. Christie on twitter (@GovChristie) and tell him to veto  S2425/A3679 if it passes the Assembly.

The post Unions and Union Contractors Oppose Government-Mandated Project Labor Agreements in New Jersey appeared first on The Truth About PLAs.

Thursday, by a bipartisan vote of 211 to 209, the House passed an amendment offered by Rep. Roscoe Bartlett (R-Md.) and cosponsored by Rep. Jeff Flake (R-Ariz.) to the National Defense Authorization Act (NDAA) for Fiscal Year 2013 (H.R. 4310) that prohibits federal agencies from mandating anti-competitive and costly project labor agreements (PLAs) and using PLA preferences on federal construction contracts authorized by the NDAA.

“This is a victory for the nation’s merit shop construction contractors and the 86 percent of the construction workforce that chooses not to join a labor union,” said Associated Builders and Contractors (ABC) Vice President of Federal Affairs Geoff Burr. “With a construction industry unemployment rate of 14.5 percent, everyone deserves a level playing field to compete for this work, regardless of labor affiliation.

“The amendment passed today will ensure fair and open competition on government-funded construction contracts, as well as give taxpayers and the government the best possible construction product at the best possible price – completed safely and on time,” Burr said. “We thank the members of Congress who voted in favor of this amendment.”

Historic Win
This was the first time the U.S. House passed legislation ensuring fair and open competition in federal contracting. During the first session of the 112th Congress, the House voted three times on similar measures. Each effort failed by a razor thin margin (210-210 , 207-213 and 204-203).

On Friday, construction labor unions benefitting from PLA favoritism in federal contracting cut back-room deals and lobbied furiously for a re-vote on the Bartlett amendment. However, House members supportive of discrimination in federal contracting and their special interest lobbyists were unable to muster enough supporters to ensure a successful re-vote, so they withdrew their effort.

It was another victory for taxpayers, free enterprise and the merit shop contracting community.

The NDAA passed the House 299-120 on Friday afternoon.

House Appropriations Committee Supports Fair and Open Competition
On Wednesday, the House Appropriations Committee passed via voice vote a similar amendment offered by Rep. Jeff Flake (R-Ariz.) prohibiting government-mandated PLAs on federal and federally assisted construction projects funded in the MilCon/VA FY 2013 appropriations bill.

PLA proponents are expected to attempt to push an amendment to strike this language from the MilCon/VA FY 2013 appropriations bill when it is considered on the House floor later this month.

Efforts Restore Government Neutrality in Contracting
Both measures restore open competition and government neutrality toward government contractors’ labor relations on Department of Defense construction projects authorized and funded by these two pieces of legislation.

Provisions in both bills closely mirror language contained in President George W. Bush’s Executive Order No. 13202 and Executive Order No. 13208, which was upheld by the U.S. Court of Appeals for the District of Columbia Circuit decision in the Allbaugh case. The Bush executive orders declared that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on government construction projects.

Allbaugh remains the controlling case on government-mandated PLA law and affirms that governments can mandate a position of neutrality when it comes to a contractor’s use of a PLA, as is the intent of both of these measures.

From 2001 until it was repealed by President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502, President Bush’s executive orders ensured there were no government-mandated PLAs on $147 billion worth of federal construction projects and hundreds of billions of dollars of federally assisted construction projects.

Under the Bush orders, firms were free to enter into PLAs on a voluntary basis. Research found that the government’s position of neutrality toward PLAs fostered fair and open competition and contributed to the completion of safe, on-time and on-budget projects. In short, PLA mandates were unnecessary.

Additional research suggests government-mandated PLAs can needlessly increase costs and typically force nonunion construction workers to pay union dues, join a union and receive reduced take-home pay and no benefits during the life of a PLA project unless they join a union and become vested in union benefits programs.

The Government Neutrality in Contracting Act (H.R. 735), introduced by Congressman John Sullivan (R-Okla.) and cosponsored by 176 other House members, essentially codifies into law President Bush’s executive orders ensuring fair and open competition on federal and federally assisted construction projects.  It remains in the House Oversight and Government Reform Committee and was the subject of a subcommittee hearing last year.

Coalition Supports Efforts
A coalition of construction and business groups sent a letter to the full House in support of the Bartlett amendment to the NDAA highlighting concerns with the Obama administration’s anti-competitive and costly pro-PLA policy:

President Obama’s Feb. 6, 2009, Executive Order 13502 encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost on a case-by-case basis in order to “advance the economy and efficiency in federal contracting.”

However, studies of construction projects subject to prevailing wage laws found PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects. Recent government-mandated PLAs on federal projects have resulted in increased costs, delays and discrimination.

In addition, the executive order and related FAR regulations have exposed agency procurement officials to intense political pressure from special interest groups and politicians to mandate PLAs on federal projects even when they are not appropriate.

The Bartlett amendment counteracts potential special interest favoritism by prohibiting federal agencies building projects authorized by this bill from mandating PLAs and implementing PLA preferences. However, it also permits federal agencies to award contracts to businesses that voluntarily enter into PLAs in accordance with the National Labor Relations Act.

During the Obama administration, a number of Department of Defense construction projects have been subjected to PLA mandates, or have attempted PLA mandates (here and here), discriminatory PLA preferences and onerous PLA surveys.

The diverse coalition opposed to government-mandated PLAs includes the following groups representing both union and nonunion employers and employees:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Independent Electrical Contractors (IEC)
Merit Elevator Contractors Association of America (MECAA)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners & Executives, USA (WCOE, USA)

AGC’s letter supporting the Bartlett amendment highlights why union and nonunion contractors are opposed to government-mandated PLAs (emphasis added):

“Government-mandated PLAs – whether mandated in contract specifications or mandated by government rules, regulation or by Executive Order – effectively compel both union and open shop contractors to alter their hiring practices, work rules, job assignments, and benefits in order to compete for, or to perform work on, publicly funded projects. PLAs typically restrict the majority of employment to those workers whom unions are willing to refer to the project. For these reasons, PLA mandates – even when competition is facially neutral and open to all contractors – effectively discriminate against open-shop companies, small companies, and disadvantaged businesses, limiting the number of competitors on a project, increasing costs to the government and, ultimately, the taxpayers. They can also negatively impact union contractors because the PLA supersedes the hard-fought terms and conditions a union has negotiated to achieve in its collective bargaining agreement.

Project owners have many ways to ensure that their construction contractors complete their projects in a timely manner, and there is no reliable evidence that PLAs improve the performance an owner can expect in the absence of such an agreement. In addition, PLAs can give rise to jurisdictional disputes that would not otherwise occur.

The choice of whether to enter into a collective bargaining agreement should be left to the employers and employees who will be subject to the agreement; the choice should not be imposed as a condition to, or advantage in, competing for publicly funded work. In cases where the use of a PLA would benefit a particular project, the construction contractors otherwise qualified to perform the work would be the first to recognize that fact and would adopt a PLA without the mandate.”

The Bartlett amendment is supported by the National Taxpayers Union:

“PLAs diminish the benefits of competitive contracting and, by effectively encouraging unionization, undercut an individual’s right to choose whether or not to be represented by a union.  PLAs are often the source of cost overruns and higher construction expenses, both of which are passed on to the taxpayer.”

The National Right to Work Committee’s letter to Congress in support of the Bartlett amendment explains the negative impact of government-mandated PLAs on nonunion workers and contractors:

“The fact is, union-only PLAs between public entities and contractors discriminate against independent-minded workers and contractors.

Unfortunately, state Right to Work laws don’t fully protect workers from forced-unionism abuse under PLAs. While Right to Work laws protect workers from forced dues and fees, under a PLA, workers are forced under terms and conditions exclusively negotiated by union bosses.

Worse, PLAs often force contractors and their employees to “contribute” to mismanaged union pension and benefit plans even if their workers already have their own plan. And, unless those employees are willing to give up their independence altogether by joining the union, they’ll likely never see the supposed “benefits” they’ve been forced to pay for.

By requiring union-only PLAs on taxpayer-funded projects, the federal government is essentially telling open or merit shop contractors they either turn their employees over to union boss control or forget about applying for the work. In these tough economic times especially, that’s the last thing Congress should allow!

Forbidding non-union contractors and workers from projects their tax dollars help fund amounts to state-sanctioned discrimination, plain and simple. Congress should never allow federal agencies to actively shut out or discriminate against well-qualified workers and contractors solely on the basis of union affiliation.

The fact is, union-only “Project Labor Agreements” are nothing more than an attempt by union officials to take even more power at the expense of workers and taxpayers.

Adoption of the Bartlett Amendment is critical, not just for non-union workers but for taxpayers as well. Contracts for any publicly-funded project should be awarded on merit, not on the basis of union affiliation.”

Learn about government-mandated PLAs and Right to Work here.

Continued:

“…In fact, studies of other union-only PLAs confirm they increase taxpayer expenses by at least 20%.

It is simple. Under PLAs, higher costs are exacted from taxpayers while individual workers are forced under monopoly union control at best and forced to pay dues or lose their jobs at worst.

By adopting the Bartlett Amendment, you would not only be protecting the rights of American workers and contractors but also defending the pocketbooks of the American taxpayers. Only Big Labor gains from union-only PLAs — not the majority of workers and taxpayers, not the majority of businesses, and not our nation’s economy.

The overwhelming majority of American workers, those who are not union members, should certainly not be denied access to the projects paid for by their taxes simply because they choose not to surrender their bargaining rights to a union boss…”

Review studies on the increased costs and reduced competition resulting from government-mandated PLAs here.

TheTruthAboutPLAs.com applauds the House for passing the Bartlett amendment.  It is an important step in restoring fair and open competition in government contracting.

Check back for updates and media coverage.

Further Reading
Language of Bartlett Amendment No. 182
Floor Debate on Bartlett Amendment
Roll Call Vote on Bartlett Amendment
Coalition Letter of Support
ABC Letter of Support
AGC Letter of Support
NRTW Letter of Support
National Taxpayers Union Endorsement
Rep. Bartlett Press Release
Dear Colleague Letter of Support from Rep. Guinta (R-NH)
Building Trades Unions Materials Opposing Bartlett Amendment
Rebutting Misleading and Untrue Statements Union Lobbyists Make about Project Labor Agreements (PLAs)
The Legality of Legislation Restricting Government-Mandated PLAs
Packet Supporting Bartlett Amendment

The post House Defends Principles of Fair and Open Competition with Passage of Amendment Restricting Government-Mandated PLAs on NDAA Authorized Projects appeared first on The Truth About PLAs.

The amendment was introduced by Rep. Jeff Flake (R-Ariz.) and is similar to another amendment offered by Flake in 2011 that was approved by the committee but then later stripped out on the floor of the House via an amendment offered by Rep. Steve LaTourette (R-Oh.) in a 204-203 vote.

After today’s committee vote, ABC Vice President of Federal Affairs Geoff Burr urged Congress not repeat the same mistake.

“Merit shop contractors and their employees want nothing more than to give taxpayers and the government the best possible construction product at the best possible price, while performing the work safely and on time,” Burr said. “We call on Congress to oppose any effort that would strike this language from the bill.”

ABC also submitted a letter to the committee before the vote, pointing out that Congress must ensure construction projects funded by the bill are cost effective and administered without favoritism or discrimination. ABC noted that no language in Flake’s amendment would prevent a federal contractor from voluntarily entering into a PLA. Instead it will allow the free market to determine if a PLA is appropriate and will ensure fair and open competition on federal construction contracts.

“Rep. Flake’s amendment will eliminate inefficiencies in the federal contracting procurement process, increase competition, reduce costs and create construction jobs while protecting the public interest,” ABC wrote in the letter.

A coalition of construction and business groups also sent a letter to the committee in support of the Flake amendment highlighting concerns with the Obama administration’s pro-PLA policy:

President Obama’s Feb. 6, 2009, Executive Order 13502 encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost on a case-by-case basis in order to “advance the economy and efficiency in federal contracting.”

However, studies of construction projects subject to prevailing wage laws found PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects. Recent government-mandated PLAs on federal projects have resulted in increased costs, delays and discrimination.

In addition, the executive order and related FAR regulations have exposed agency procurement officials to intense political pressure from special interest groups and politicians to mandate PLAs on federal projects even when they are not appropriate.

The Flake amendment counteracts potential special interest favoritism by prohibiting federal agencies building projects authorized by this bill from mandating PLAs and implementing PLA preferences. However, it also permits federal agencies to award contracts to businesses that voluntarily enter into PLAs in accordance with the National Labor Relations Act.

The diverse coalition includes the following groups representing both union and nonunion employers and employees:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Independent Electrical Contractors (IEC)
Merit Elevator Contractors Association of America (MECAA)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners & Executives, USA (WCOE, USA)

AGC’s letter supporting the Flake amendment can be found here.

The Flake amendment language mirrors critical provisions upheld by the U.S. Court of Appeals for the District of Columbia Circuit decision in the Allbaugh case, which upheld President George W. Bush’s Executive Order No. 13202 and and Executive Order No. 13208. The Bush executive orders declared that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on government construction projects.

The Allbaugh case remains the controlling case on government-mandated PLA law and affirms that governments can mandate a position of neutrality when it comes to a contractor’s use of a PLA, as is the intent of the Flake amendment.

In the 112th Congress the House has voted three times on similar pro-fair and open competition amendments (see Roll Call 126 | Roll Call 369 | Roll Call 413). Each effort to restrict government-mandated PLAs failed by a slim margin (a 210-210 tie, 207-213, and 204-203).

During the Obama administration, a number of MilCon/VA projects have been subjected to PLA mandates, attempted PLA mandates (here and here), discriminatory PLA preferences and PLA surveys.

It is unclear when the MilCon/VA Appropriations Bill for FY 2013 will be considered on the House floor.

Check back for updates.

Update, 5/31/12: Today Rep. Michael Grimm (R-NY) is expected to offer an amendment on the House floor striking Section 517 from the bill. Learn more here.

The post U.S. House Appropriations Committee Passes Amendment Restoring Fair and Open Competition on MilCon/VA Construction Contracts appeared first on The Truth About PLAs.

In October 2010, two construction trade groups affiliated with construction trade unions, the Building Industry Electrical Contractors Association (BIECA) and United Electrical Contractors Association (UECA), filed a complaint against the City of New York (NYC) because of their widespread use of government-mandated PLAs in The Building Industry Electrical Contractors Association et al v. City of New York, in the U.S. District Court for the Southern District of New York, No. 10-8002.

The plaintiffs maintained that NYC violated the National Labor Relations Act, Municipal Law and New York Labor Law because of PLAs mandated by NYC government. The complaint argued that instead of acting to secure the best deal for the taxpayers, the city was using PLAs to handpick favored unions and contractors to perform the vast majority of the work. The plaintiffs also argued the alleged cost savings of $300 million over four years PLA advocates claimed the PLA would deliver to the city were “speculative and illusory” and were calculated using flawed methodology based on erroneous assumptions by Hill International and other consultants paid by city agencies to prepare PLA feasibility studies for various NYC public works projects.

Unfortunately, on August 4, 2011, U.S. Southern District Judge Robert Patterson ruled in favor of the city and PLA opponents.

Reuters reports:

Alan Pollack, who represented the plaintiffs, said his clients will appeal. The ruling will hurt city taxpayers by driving up construction costs, he said.

As the case makes its way through the appeals process, the public, media and elected officials should recognize an important fact from this lawsuit: Union contractors and union employees are often harmed by government-mandated PLAs.

In fact, the union contractors and union employees aided by this suit are opposed to government-mandated PLAs for the same reasons nonunion contractors and nonunion employees loathe government-mandated PLAs. In this case, contractors belonging to the plaintiff associations, the BIECA and UECA, were effectively excluded from the competitive bidding process for NYC contracts subject to a government-mandated PLA because of their existing contracts and relationships with other unions that are not favored or part of the NYC PLAs. The case’s fact pattern is similar to common complaints from nonunion contractors that government-mandated PLAs discourage, if not effectively exclude, nonunion contractors from competing for contracts and deny qualified nonunion tradespeople the opportunity to build a taxpayer funded construction project because they are not affiliated with unions that drafted and promoted the PLA.

This is not an isolated incident. Union contractor associations, contractors and union members excluded from PLA negotiations and PLA contracts have opposed government-mandated PLAs for years.

For example, in 2009, New Jersey’s Bayonne Local Redevelopment Authority was sued by the International Steelworkers Union to get on the list of unions eligible to perform work on a PLA covering a Military Ocean Terminal site.

Associated General Contractors (AGC), a national construction trade association that often negotiates union collective bargaining agreements for its union members, explains how government-mandated PLAs negatively impact their union contractor members (and nonunion members too) in this document.

Finally, here is a link to other examples of union contractors and associations opposing PLA schemes.

Anti-Competitive Favoritism Inherent in NYC PLAs
The City of New York enacted a series of PLAs entered into by and between various NYC agencies procuring contracts to build public works projects and The Building Construction Trades Council of Greater New York and Vicinity and its affiliated Local Unions (known as the BCTC).  Pursuant to the BCTC’s negotiations with NYC, only those unions belonging to the BCTC were permitted to become participating signatory unions to each of NYC’s PLAs and benefit from being recognized as the collective bargaining representative for all persons who perform work on PLA projects.

Consisting of 27 contractors, the BIECA is a trade association that has entered into a collective bargaining agreement (CBA) with Local 363, United Electrical Workers of America, IUJAT.  Local 363 is not a member of the BCTC. Pursuant to Local 363’s CBA with the BIECA, the BIECA and its contractors have agreed to recognize Local 363 as the “sole and exclusive bargaining representative of all electrical workers…who are or may hereinafter become employed” by any BIECA contractor. Their CBA requires employees of BIECA contractors to become members of Local 363 and BIECA contractors must contribute to pension, benefit, welfare and education funds designated by and affiliated with Local 363.  The terms of the NYC PLAs conflict directly with BIECA CBAs.

The UECA has been engaged in ongoing collective bargaining negotiations with the International Brotherhood of Electrical Workers (IBEW) Local 3. Pursuant to a December 7, 1995 Settlement Agreement with the National Labor Relations Board, UECA contractors are required to contribute to Building Trades pensions and benefit funds. In contrast, the NYC PLAs require contractors to contribute to BCTC’s benefit funds, which violates the BIECA’s settlement agreement with IBEW Local 3.

The facts of the case demonstrate that the terms and conditions in the PLAs used in NYC effectively excluded union contractor members of the BIECA and UECA from winning contracts subject to the PLA.

For instance, the PLA prevented Local 363 journeymen and apprentices members and any existing journeymen and apprentices of BIECA contractors from working on PLA projects because they are not represented by the unions favored in the BCTC’s PLA.  The existing CBA between Local 363 and BIECA contractors forbids contractors from hiring tradespeople represented by other unions, which prevented the plaintiff from bidding on the contracts subject to the BCTC’s PLA.

In addition, the PLA would have forced BIECA and UECA contractors to pay fringe benefits into the plans affiliated and managed by BCTC unions favored in the NYC PLA. Since existing UECA and BIECA agreements require contractors to make benefit contributions into funds managed and affiliated with local unions not favored by the BCTC, these contractors must pay benefits to both the BCTC benefit funds identified in the PLA and the existing benefit funds designated in their current union agreements.

These double benefit expenses increase labor costs and put UECA and BIECA contractors at a severe disadvantage when submitting a competitive bid.  In addition, the union members employed by the plaintiffs would not receive any benefit contributions made to BCTC benefit plans unless they joined these BCTC unions and became vested in these BCTC favored plans. In short, the NYC PLAs would have resulted in a windfall for BCTC plans at the expense of many union members employed by UECA and BIECA contractors.

The fact that certain union members and signatory contractors are excluded and discriminated against by PLAs undermines the false claim that PLAs are needed to ensure a high quality project built by a safe, well-trained and efficient union workforce. Like their nonunion counterparts, the BIECA and UECA contractors and their employees are qualified and experienced, but they are being harmed by the anti-competitive intent of PLA schemes. The real purpose of these agreements is to create a monopoly for handpicked unions to supply labor to construction jobsites and deny qualified contractors and their skilled an employees the right to compete for these contracts and jobs.

Consultants’ Pro-PLA Studies Flawed, Says Complaint
The plaintiffs argue that the pro-PLA studies are flawed. Cost savings the studies say a PLA will deliver to NYC are illusory. According to the plaintiffs brief in opposition to the defendants’ motions to dismiss:

…each study concludes that by obtaining certain union concessions, including standardizing work hours, overtime hours, work shift rules and holidays for each of the various construction trades along with “no strike” provisions and common grievance procedures, the City would realize substantial cost savings on projects covered by these PLAs…However, as detailed in the accompanying Tuerck Affidavit, the PLA studies are based on the flawed and unsupported methodology that only BCTC contractors historically bid on and perform City work.  The PLA studies further conclude that by obtaining certain concessions from the BCTC unions under the City PLAs, the City saves money.

For example, the original complaint explains that the non-BCTC contractors like the BIECA and UECA already have cost saving labor practices promised by the PLA, so a PLA is not needed and the alleged cost savings are bogus:

By artificially limiting the universe of contractors who perform City work to BCTC contractors, the authors of the feasibility studies give false and unwarranted credit to the PLAs for concessionary cost savings that would have been realized in the absence of a PLA and through the competitive bidding process.

For example, when the Local 363 CBA is compared with the CBA of Local 3, which is a BCTC signatory union, it is evident that certain cost savings the City claims can only be accomplished by concessions negotiated by a PLA, are already built into Local 363’s CBA.

Since the signatory unions mandate a seven hour workday, the feasibility study assumes that by adopting a PLA which mandates an eight hour workday, the City is provided with cost savings benefits by saving an hour of overtime pay per day over the course of the project.  Thus, the PLA would reduce costs by 12.5% (1/8) of the total number of hours worked, multiplied by the difference between overtime and straight time pay.

However, this presumed cost savings ignores the fact that Local 363’s CBA, Article 6, Section A (a), stipulates that a “regular week’s work shall consist of forty (40) hours, divided into any five (5) consecutive days between Monday through Sunday inclusive, of eight (8) hours each, performed between the hours of 6:00 AM and 6:00 PM.”  Had the City considered local 363’s CBA as their baseline, or the work rules and practices of a UECA contractors, it would have already realized a savings that would have obviated the need for any cost savings through the enactment of a PLA.

Nonunion contractors are also not restricted by the BCTC’s inefficient CBA rules that the PLA would allegedly address, resulting in cost savings that the plaintiffs call illusory. The brief continues:

What each of the PLA studies fails to address is whether PLAs offer any real cost savings when compared to projects performed in the absence of a PLA, where the actual qualified bidding pool of contractors – including other union and nonunion contractors – is able to bid for City work through the competitive bidding process.

Unfortunately, this is not the first time Hill International and other consultants have produced a flawed study to justify a government-mandated PLA without considering that there is a skilled and experienced alternative to BCTC labor and contractors signatory to BCTC unions.

A number of the firms selected by government agencies to evaluate the feasibility of PLAs have clear conflicts of interest with Big Labor that prevent them from providing an honest and accurate assessment of the impact of government-mandated PLAs on cost, competition and quality.

For example, the in the summer of 2009 Pennsylvania Department of General Services relied on the questionable findings of the Keystone Research Center (KRC) to justify the use of PLAs on hundreds of millions of dollars worth of prison construction even though the KRC board was heavily dominated by construction union members and a portion of the KRC’s annual revenue came from construction trade unions (learn more about this scandal here).

Can the Appeals Process Deliver Justice?
Regardless of how this case plays out in the courts, it is clear that anti-competitive and costly provisions in NYC’s government-mandated PLAs have harmed the plaintiffs representing union contractors and their union employees just as much as these agreements have harmed nonunion firms and tradespeople in the NYC area.

It is also clear that the process used to justify these PLA schemes is rife with errors, corruption and deception.

Anti-competitive and costly government-mandated PLAs have no place in a fair and open market.

Why not let the best contractors and employees with the best skills and experience compete? NYC taxpayers can only best be served via fair and open competition.

Check back with www.TheTruthAboutPLAs.com for updates on this case.

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During the 112th Congress, these groups have sent numerous coalition letters to the House and Senate in support of legislation that will ensure free and open competition on federal and federally assisted construction projects and restrict favoritism, waste and discrimination in federal contracting.

Such legislative solutions, like the Government Neutrality in Contracting Act (H.R. 735/S.119) has broad support from this industry coalition. 

In addition, during the 112th Congress, correspondence to the House on three amendents and House floor votes addressing government mandated PLAs, such as this June 2011 letter to the House, demonstrate their support of amendments to appropriations legislation ending anti-competitive PLA schemes in federal contracting.

Finally, these groups have also provided statements and witnesses to testify at two House Committee hearings against government-mandated PLAs in 2011.

The Following Construction Industry and Employer Groups Support Government Neutrality in Federal Contracting and Oppose Government-Mandated Project Labor Agreements:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Construction Industry Roundtable (CIRT)
Independent Electrical Contractors Association (IEC)
Electronic Security Association (ESA)
Merit Elevator Contractors Association of America (MECAA)
National Association of Minority Contractors (NAMC) – Philadelphia Chapter
National Association of Government Contractors (NAGC)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
National Ready Mixed Concrete Association (NRMA)
National Stone, Sand & Gravel Association (NSSGA)
NUCA Representing Utility and Excavation Contractors
Small Business and Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners and Executives, USA (WCOE)

The post Diverse Coalition of Construction Industry Associations and Employer Groups Oppose Government-Mandated Project Labor Agreements appeared first on The Truth About PLAs.

The subcommittee, chaired by Rep. James Lankford (R-Okla.), heard testimony about the negative impact of President Obama’s controversial Executive Order 13502 and related regulations, which encourage federal agencies to evaluate whether to require project labor agreements (PLAs) on federal construction projects exceeding $25 million in total cost on a case-by-case basis.

UPDATE 12/9/11: Here is a transcript of the hearing.

Because federal and federally assisted construction projects subject to government-mandated PLAs and preferences discourage competition from qualified contractors and their skilled employees that are capable of performing these taxpayer-funded projects, witnesses and Republican subcommittee members explained how the Obama order has resulted in a dysfunctional federal procurement system rife with favoritism and waste.

“Does requiring a small business with no union affiliation to sign a labor agreement as a condition of doing business with the government increase opportunities for small businesses?” chairman Lankford asked in his opening statement. “Requiring a PLA as a condition to compete serves only to restrict, not increase, competition. The current policy discourages or even excludes nonunion firms, including the vast majority of small businesses, from competing for government projects.”

“Project labor agreements mandated by federal agencies result in increased costs for contractors and taxpayers, unnecessary procurement delays and inject uncertainty and favoritism in the federal procurement process, ” said Associated Builders and Contractors (ABC) member Kirby Wu, 2011 chair of the ABC New Jersey Chapter and president of Wu & Associates, Cherry Hill, N.J.

“Our company and other quality small businesses, general contractors, subcontractors and their skilled employees deserve a fair opportunity to provide the public with the best construction product at the best price.”

Witnesses Say PLA Mandates Are Bad Public Policy
Similar to the testimony at a March 16 House Oversight and Government Reform subcommittee hearing chaired by Rep. Jim Jordan (R-Ohio) on PLA mandates and other regulations harming the construction industry, witnesses described how government-mandated PLAs harm their businesses, employees and taxpayers.

Wu testified about how government-mandated PLAs harm merit shop employees and discourage competition:

“Government-mandated PLAs have the practical effect of creating jobs exclusively for unionized construction tradespeople by forcing union representation or compulsory union membership, inefficient and archaic union work rules, payment of union dues, forced contributions to union pension and benefit plans, and a host of other problems on merit shop employees – like my firm’s employees – that have freely decided not to join a union.

Injecting PLA mandates into the federal procurement process discourages competition from qualified contractors – like my company – who employ 87 percent of the U.S. construction workforce.

It is needless discrimination based on labor affiliation and it hurts merit shop employees as much as it hurts their general contractor and subcontractor employers.”

Wu described his unfortunate experience with a PLA mandated by the U.S. Army Corps of Engineers (USACE) on a 2010 federal project in Camden, N.J., that was eventually the subject of a bid protest filed by Wu with the Government Accountability Office (GAO). In the face of the bid protest, the USACE dropped the PLA mandate and replaced it with an illegal and discriminatory PLA preference that awarded additional credit/points in the best value procurement process to contractors that voluntarily submit a bid containing a promise to utilize a PLA:

“We did not pursue the contract further because we felt it was not worth the investment of additional company resources to prepare the bid and compete against contractors submitting PLA offers in this distorted playing field.

This entire exercise resulted in lost time and money for our small business that we could have invested back into our workforce and company.  It also resulted in needless procurement delays exceeding two months, as the Corp’s bid submission deadline was extended a number of times to accommodate the PLA controversy.

Remarkably, the contract was eventually awarded to a merit shop general contractor at a bid price nearly 15 percent below the $16.5 million estimate without a PLA offer. And today the project is reportedly on time and on budget.  The winning contractor would have been discouraged or eliminated from competing, if not for our efforts to fight the PLA mandate.”

Broad Support for the Government Neutrality in Contracting Act (H.R.735)
Witnesses also advocated for Congressional passage of the Government Neutrality in Contracting Act (H.R. 735), introduced by Congressman John Sullivan (R-Okla.), which prohibits the federal government from mandating anti-competitive and costly PLAs on federal and federally assisted construction projects.

H.R. 735 essentially codifies into law President George W. Bush’s Executive Orders 13202 and 13208, which ensured that taxpayers received the best construction at the best price on more than $147 billion worth of federal construction projects and hundreds of billions of dollars of federally assisted construction projects by prohibiting government-mandated PLAs on federal and federally assisted construction projects. The orders, which maintained fairness and neutrality in government contracting, were repealed by President Obama’s pro-PLA Executive Order 13502 in February 2009, just a few weeks after he assumed the presidency.

“It is clear to us that only Congress can bring a timely halt to the political favoritism in contract awards that is being promoted by the administration in the guise of Executive Order 13502,” ABC General Counsel Maurice Baskin told the subcommittee.  “The bill will prohibit federal agencies once and for all from awarding construction projects based on the willingness or unwillingness of contractors to enter into labor agreements. As the bill states, agencies shall neither require nor prohibit contractors from adopting PLAs as a condition of being awarded federal construction work, nor discriminate on that basis.”

“AGC opposes federal mandates for project labor agreements and supports H.R. 735,” testified Associated General Contractors General Counsel Mike Kennedy.

A diverse coalition of construction industry and employer groups support H.R. 735:

Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Construction Industry Roundtable (CIRT)
Independent Electrical Contractors Association (IEC)
Electronic Security Association (ESA)
Merit Elevator Contractors Association of America (MECAA)
National Association of Minority Contractors (NAMC) – Philadelphia Chapter
National Association of Government Contractors (NAGC)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
National Ready Mixed Concrete Association (NRMA)
National Stone, Sand & Gravel Association (NSSGA)
National Utility Contractors Association (NUCA)
Small Business and Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners and Executives, USA (WCOE)

Congressman Sullivan Testifies in Support of H.R. 735
Rep. Sullivan testified before the subcommittee in support of H.R. 735 and cited examples of federal and federally assisted construction projects that resulted in favoritism and increased costs as a result of a government-mandated PLA:

“Government-mandated PLAs are not only discriminatory, but they are also hurtful to a struggling industry that is already facing unemployment above 17 percent. For example, yesterday The Wall Street Journal reported on a $70 million highway construction contract in New York – funded at least 80 percent by the Federal Highway Administration – that has been scrutinized for the decision to subject it to a PLA. While 27 percent of New York’s private construction workforce is unionized, that means  the employers of 73 percent of New York’s construction workforces, who having been facing steep job losses over the past few years, are discouraged from bidding for this project. Unfortunately, limiting competition comes at taxpayer expense. The article (pdf) mentions that the PLA cost taxpayers an additional $4.5 million because the lowest responsible bidder, a merit shop contractor, was thrown off the project in favor of a union contractor, because the merit shop contractor would not sign a PLA.”

Rep. Sullivan highlighted the added costs to the federal Lafayette Building project in Washington, D.C., a project TheTruthAboutPLAs.com has written about numerous times:

“A U.S. General Services Administration (GSA) renovation project for the Lafayette Federal Building in Washington, D.C. was awarded to a federal contractor without a PLA at $52.3 million.  However, after this contractor agreed to a PLA pushed by the GSA for the project, the contractor added $3.3 million to the cost of the project.  The added $3.3 million isn’t the result of increased material costs, revised blueprints or a more aggressive completion deadline. The contract was awarded to the same contractor with the same proposal, and the only difference was the PLA.

These are just two examples, but there is no doubt that there are many more stories reflecting the true colors of government-mandated PLAs.”

Rep. Sullivan’s office issued this media statement on the hearing:

“In granting my bill, HR 735, the Government Neutrality in Contracting Act, a hearing today, the subcommittee has taken an important step in reestablishing fair and open competition in federal construction contracting. By overturning President Obama’s executive order, which was designed to funnel contracts to unions, this bill will save and create jobs in the struggling construction industry and potentially save taxpayers billions of dollars in inefficiencies.”

“It is simply unacceptable to allow the federal government to discriminate against 87 percent of the U.S. private construction workforce – and the 98 percent in Oklahoma – who seek federal contracts. American tax payers deserve to know that federal contracts are being awarded based on sound, credible criteria such as quality of work, experience and most importantly cost. Government mandated PLAs can drive up the cost of construction projects as much as 18 percent, which is the last thing our economy can afford right now. We owe it to businesses in Oklahoma and across the country whose livelihood depends on their ability to bid on construction projects in a fair and open process.”

(Note: Read a Feb. 16 statement from Rep. Sullivan on H.R. 735 here.)

Are PLA Mandates a Solution in Search of a Problem?
Professor David Tuerck of the Beacon Hill Institute (BHI) at Suffolk University in Boston summarized BHI’s extensive research on government-mandated PLAs, which found that on average, government PLA mandates add an additional 12 percent to 18 percent in construction costs when compared to similar construction projects without a PLA.

Tuerck discussed 2009 research by BHI on federal contracting from 2001 until early 2009, when President Bush’s Executive Orders 13202 and 13208 prohibited government-mandated PLAs on federal and federally assisted construction contracts.

If President Obama and PLA proponents’ claims that PLAs are needed to advance the economy and efficiency in federal contracting are true, “President Bush’s ban on mandatory PLAs should have produced many instances of the delays, strikes and cost overruns against which PLA advocates frequently warn,” said Tuerck.

Tuerck testified that BHI’s research found no federal agencies “could substantiate the occurrence of any delays or cost overruns on Bush-era projects costing $25 million or more that were attributable to the absence of a PLA.”

GSA Witness Admonished for Agency PLA Preference Policy, Questioned About GSA’s Study Critical of PLA Mandates
Susan Brita, deputy administrator for the GSA, provided testimony (pdf ) about the GSA’s experiences with PLA mandates and PLA preferences since President Obama signed Executive Order 13502.

Brita described the GSA’s pilot program, launched in August of 2009 according to this GSA memo, which is in the process of evaluating the performance of PLAs on seven of 10 large-scale federal construction projects managed by the GSA:

“During the implementation of our Recovery Act Spend Plan, GSA conducted a pilot program with Recovery Act projects to consider the use of a PLA. For this pilot program, GSA selected projects with budgets of more than $100 million. Ten projects met this criterion and were selected for the pilot. Of these ten projects, seven have PLAs and three do not.”

Rep. Tim Walberg (R-Mich.) questioned Brita about the GSA’s negative experiences with PLAs on two of the GSA’s PLA pilot projects in Washington, D.C.: the GSA HQ at 1800 F Street (40:55) and the Lafayette Building previously mentioned by Rep. Sullivan (44:13), which experienced added costs and procurement delays.

Brita also explained the GSA’s PLA preference policy, launched April 30, 2010, according to this GSA memo, which applies to all GSA projects exceeding $25 million in total cost.  The GSA’s anti-competitive and discriminatory PLA preference policy awards 10 points in the best value procurement process only to contractors that voluntarily submit a bid containing a PLA agreement.

Drawing from his experience bidding on projects in the private sector prior to becoming a Congressman, Rep. Mike Kelly (R.-Pa.) argued that the GSA’s PLA preference discourages some contractors from competing for federal contracts by tilting the RFP process in favor of contractors submitting PLA offers.

“A 10 percent bonus doesn’t level the playing field, that totally tilts it,” said Kelly. “You set those type of parameters [in GSA RFPs], you are setting them to get one type of a bidder to get the award.”

“I see it as exclusionary,” said Kelly. “I don’t see it as increasing the field of bidders, I see it as narrowing it down.”

Chairman Lankford and Kelly questioned Brita about the findings of a consultant’s report funded by the GSA that was critical of government-mandated PLAs on construction projects in the GSA’s PLA pilot program in various construction markets across the country.

Brita’s testimony indicated the consultant’sJan. 27, 2010, report was “suspended” and only remains in draft form. Brita said it was shelved to “let the marketplace determine the applicability of PLAs rather than rely on the report.”

Chairman Lankford and Kelly suggested the report was suspended because its initial findings contradicted the GSA’s existing PLA pilot program, which had already been well underway since its launch in August 2009.

“It seems to me that the information they [the GSA] got back is not consistent with what they were looking to find,” said Kelly.

In addition, subcommittee members and witnesses raised objections to the GSA’s April 2010 implementation of the anti-competitive and discriminatory PLA preference policy that awards additional credit to PLA offerors since the GSA’s report was critical of PLAs in various markets across the country.

Note: This exchange between Kelly and Brita pretty much sums up the problems with the GSA’s PLA preference policy.

Brita and Office of Management and Budget’s Office of Federal Procurement Policy administrator Dan Gordon defended the GSA’s PLA pilot program and PLA preference policy.

Gordon explained that in the GSA’s pilot program, there were instances where bidders submitting a PLA offer won the project and there were instances where a bidder submitting a non-PLA offer won. He maintained that the GSA was not “tilting it one way or another” but did not provide any data or meaningful analysis to support this claim.

TheTruthAboutPLAs.com has long argued that the GSA’s PLA preference policy reduces competition and is a de facto PLA mandate when a PLA offeror submits a PLA bid.

Brita explained there would be a future report issued on the results of the GSA’s 10 PLA pilot projects, but that the initial findings indicated there was no evidence of reduced competition or increased costs resulting from PLAs on these projects.  However, Brita did not provide the subcommittee with any evidence to support this claim.

Of course, it would be fallacious reasoning to jump to broad conclusions about the impact of federal PLA mandates on competition and cost from the GSA’s bidding results when the GSA is skewing the participation of qualified and available bidders by awarding additional credit to voluntary PLA offerors through their PLA preference policy.  It is also unlikely that this flawed experiment will perform any meaningful analysis about the added costs resulting from reduced competition from the pool of qualified and experienced federal subcontractors.

In any case, because the hearing exposed the GSA’s track record of suppressing data that conflicts with their existing politically-motivated policies, the GSA should present the results and raw data of their bidding experiment to an independent evaluator and make the raw data available to the public in a transparent manner.

Susan Brita (22:14)
Deputy Administrator
General Services Administration

Note: Panel II concludes at 16:00 of second video:

Click here to view the video on YouTube.

David Tuerck (22:13)
Executive Director
The Beacon Hill Institute

Kirby Wu, AIA, LEED AP (28:40)
Wu & Associates, Inc.

Mike Kennedy (34:50)
General Counsel
The Associated General Contractors of America

Further Reading:

• GSA’s Policy of Big Labor Favoritism Draws Congressional Inquiry (12/18/10).
• ABC News Release: ABC Testifies on Problems with Project Labor Agreements before House Committee (06/03/2011) (pdf)

The post ABC Members Testify in Support of Legislation Restoring Fairness in Federal Contracting appeared first on The Truth About PLAs.

Here is an excerpt from “Local PLAs bite the hand feeding the beast,” 9/24:

Prejudice at the lunch counter may have disappeared, but other types of discrimination remain alive and well in America – and have surprising supporters.

For example, President Barack Obama signed an executive order last year creating Project Labor Agreements (PLAs) on large public-construction projects.

Labor unions love PLAs. They impede non-union contractors by forcing them to change their entire approach to business – no matter how successful their operations – if they want to compete for PLA jobs.

PLA agreements often require non-union workers to join unions, be hired through union halls, pay union dues and they or their companies must donate to union pension funds — even though they will never benefit from such “contributions.”

“These are blatantly discriminatory rules against non-union shops,” wrote Michael Thompson, president of the Thomas Jefferson Institute for Public Policy.

The discrimination is widespread, since – according to the Bureau of Labor Statistics – 85 percent of construction workers don’t belong to a union.

Shouldn’t America’s first black president be especially sensitive about such unfairness?

The most famous PLA racket to date — uncoincidentally the most expensive highway project in America’s history — was Boston’s “Big Dig” project. It replaced Boston’s six-lane elevated Interstate 93 and included a tunnel under the harbor. The project, initially estimated at $2.2 billion, ended up costing more than $14 billion.

Kentucky’s local Big Labor lackeys, uh, I mean, “politicians” salivate at the chance to reduce competition for big ticket, local school-construction projects and steer the work toward their union pals.

Associated General Contractors of Kentucky filed suit after the Carter County school district signed a PLA with a union group for construction of a new $10 million Tygart Elementary School.

The association is defending its hundreds of member companies, which would get shut out of contracts before any bids were even accepted. It also sees as unfair the fact that some school-board members who voted to approve the deal with the Tri-State Building and Construction Trades Council are members of the 14 unions that form the council.

Can anyone say “conflict of interest?”

Perhaps the worst discrimination involves local companies.

When the Tygart project was first bid, JMK Electric Co. LLC in Grayson – which has worked on Carter County school projects for a quarter-century – offered a bid “more than $200,000 lower than the lowest bid,” said Kelly Newland, who along with brother Bob Newland, owns JMK.

“We are Carter County residents,” said Kelly Newland. “We are property owners. Me and my family pay our taxes here.”

Yet if this PLA stands, his company gets shut out — unless it agrees to union scales.

The school board’s PLA vote “just knocked us off our feet,” Newland said. “I was so intimidated by the 50 or 60 union members that showed up with their (union agents).”

The civil rights movement was as much about eliminating such intimidation as it was ending discrimination. The two go hand in hand – in both the civil rights and the “labor rights” movements.

Do we really want policies that discriminate against local companies whose owners and employees pay taxes that support the school district that bids out the project?

Do we really want labor agreements that add millions to new school buildings just because a minority of the construction industry doesn’t want to compete?

Martin Luther King Jr. once dreamed his children would “live in a nation where they will not be judged by the color of their skin, but by the content of their character.”

We’ve gotten rid of prejudice at the lunch counter. Now, let’s do the same in the workplace by judging workers based on their skills rather than their union status.

[Note: Links added by TheTruthAboutPLAs.com.]

[Update: Here is a great resource on the case and lawsuit and a Journal-Times (Grayson, KY) article about the PLA being rejected "School board rescinds PLA after latest Tygart bids rejected," 10/8/10.]

While it is true that union membership (or lack of union membership) isn’t a status covered under the same legal protections as someone’s sex, race, religion etc., the issue of PLAs needlessly harming and discriminating against a group of people is a sad reality.

In addition, the link between government-mandated PLAs and actual racial discrimination is very real. 

A number of minority and women construction contracting groups oppose PLA schemes and argue that government-mandated PLAs result in de facto discrimination against the construction industry’s Minority/Woman Owned Business Enterprises (MWDBEs) and their employees.  See related blog posts here.

Harry Alford, President of the National Black Chamber of Commerce has long maintained that there is a discriminatory element (along racial lines) to government-mandated PLAs:

“PLAs amount to de facto segregation … African-American workers are significantly underrepresented in all crafts of construction union shops … this problem has been persistent during past decades and there appears to be no type of improvement coming … PLAs are anti-free-market, non-competitive, and, most of all, discriminatory.”

- National Black Chamber of Commerce

“Show me a PLA and I will show you Jim Crow employment plus a locking out of most Black-owned firms that happen to be nonunion most of the time. A Project Labor Agreement is a license to discriminate against Black workers.

Anywhere a PLA pops up, the National Black Chamber of Commerce will be there to scrutinize, challenge and call out any discrimination. Eventually our leaders and the unions will realize that it is 2009 and doing the right thing is the only thing they can do.”

- Harry Alford, “A Great Opportunity to Integrate the Construction Unions”

“PLAs greatly reduce the number of minorities, women and minority businesses working on a project.”

- Harry Alford, “Economic Apartheid, Construction Unions and the City of Philadelphia”

“It is the policy of the National Black Chamber of Commerce, Inc. to oppose Project Labor Agreements. This opposition is based on the fact that African American workers are significantly underrepresented in all crafts of construction union shops. This problem has been persistent during the past decades and there appears to be no type of improvement coming within the next ten years.

There have been rouses of diversity pre-apprenticeship training programs during the past twenty years but no increase in diversity at the apprenticeship to journeymen levels. The higher incidence of union labor in the construction industry, the lower African American employment will be realized. This is constant throughout the nation.

Also, and equally important, the higher use of union shops brings a correlated decrease in the amount of Black owned businesses being involved on a worksite.”

- NBCC Policy Statement on Project Labor Agreements

“The National Black Chamber of Commerce, Inc. is firmly against union-only Project Labor Agreements. Such agreements result in anti-small business activity which is predatory to Black owned businesses and curtail the potential for employment opportunities within urban areas. No company or individual should be forced to sign a union agreement before given the opportunity to participate in our capitalistic system. PLAs are anti-free market, non-competitive and, most of all, discriminatory.”

- NBCC Testimony before the U.S. House Committee on Small Business for “How Union-Only Labor Agreements are Harming Women- and Minority-Owned Businesses” hearing, August 6, 1998

Some PLAs acknowledge the inherent discrimination against MWDBEs in typical PLAs - because most MWDBE construction businesses are not signatory to unions – by exempting MWDBEs from being covered by a PLA or specific provisions that would injure participation from MWDBE businesses. Often, these unique “carve outs” fail to entice MWDBE participation for a variety of reasons.

When deciding whether to support or oppose a government-mandated PLA on a construction project, it is important for the construction community and public officials to understand the discriminatory impact of PLAs on MWDBEs and their employees as well as the non-protected group of nonunion contractors and their employees. It is the first step of getting rid of discrimination in the workplace and judging construction industry professionals on their skills and not their union status.

The post Think Tank Attacks Project Labor Agreement Discrimination appeared first on The Truth About PLAs.

• Nice overview of the final rule and related impact on federal procurement from Federal Times.
• House GOP Leader John Boehner’s Blog had this to say about PLAs and the Obama final rule.
• The irony of requiring labor on federal construction projects is not lost on Peter List in his post at Red State.
• Concrete Products notes that both ABC and the Associated General Contractors (AGC) ”pull no punches” when it comes to PLAs. Yeah, there is a lot at stake for the construction industry.
• We agree with AGC’s analysis and reaction to the final rule.
• Here are hits from NAM’s ShopFloor blog and the U.S. Chamber of Commerce’s blog, Chamber Post.
• Wisconsin’s Daily Reporter explains how this order will impact the Badger State’s contractors and construction craft professionals.
• Bloomberg’s story will be syndicated in a number of local papers, including this San Francisco publication.
• National Right to Work Foundation calls New Obama Administration Contracting Policy “Nothing More Than Payback” to Big Labor.

Apologies for the link dump, but it’s been a busy day here at TheTruthAboutPLAs.com.

We will pull out quotes from our favorites later this week.  Expect more media coverage tomorrow.

Project owners, contractors and construction professionals, keep sending in your anecdotes about your poor experiences with PLAs. The public needs to know the truth.

The post More Required Reading: April 13 Media on Obama’s Project Labor Agreement Final Rule appeared first on The Truth About PLAs.

Jeffrey J. Zogg, CEO of Associated General Contractors of NYS makes some compelling arguments against Jones:

Of course there is a swift need for construction of this bridge. Nobody wants progress on this project more than we do. Contractors and their employees need the work.

A government-mandated project labor agreement was proposed by the building trades unions. PLAs are a highly controversial subject in the construction industry. Did they expect that wouldn’t be the case here?

Yes, prevailing wages will be paid on this work. They are required on all public work in New York and by law they are the union wage rates. Why then do we need a PLA?…

…Yes, all capable contractors can bid on PLA projects, but those who do not employ union labor usually don’t. The PLA precludes them from using most of their own long-standing employees. The unions argue that all can bid, when they know that most open shop bidders will not, which is really their goal.

Yes, this project should be built by skilled tradespeople from upstate New York and Vermont. But the PLA will deny those very local workers who are not unionized the opportunity. In the project region, there are more open shop workers than union workers. Which public official is going to tell them they can’t work on this project?

The best solution to ensure that all interested contractors can compete for the project, all available local workers can have the opportunity to work on it and the taxpayer can achieve the best price is to bid the project both ways. If the PLA is truly more economical, we will find out.

TheTruthAboutPLAs urges the NYSDOT to reject the special interest PLA on this project. Free and open competition will deliver the best construction product at the best price and create jobs for all construction employees, regardless of labor affiliation.

The post AGC Letter to the Editor Calls for Fair and Open Competition on Lake Champlain Bridge appeared first on The Truth About PLAs.

On Feb. 12 the Vermont Senate Transportation Committee held a hearing on the Lake Champlain Bridge PLA where Associated General Contractors of Vermont testified against the PLA and ABC National submitted this statement against the Lake Champlain Bridge project PLA. ABC Empire State also issued this press release.

On Feb. 17, the Vermont House referred a joint resolution opposing the Lake Champlain Bridge PLA, J.R.C. 40, to the committee on General, Housing and Military Affairs.

The New York State Department of Transportation (NYSDOT) is evaluating whether a PLA is appropriate for this $75 million project, of which 10 percent is being funded by the state of New York, 10 percent by the state of Vermont and 80 percent by a grant from the U.S. Department of Transportation’s Federal Highway Administration (FHWA).

New York Executive Order 49 on PLAs
A 1997 New York executive order (E.O. 49), signed by Gov. George Pataki, requires all state agencies to consider a PLA for state-funded projects but they must show a proper “business purpose” and they must follow “the interests of the State’s competitive bidding statutes” established in AGC v. NY State Thruway Authority.

“…agencies should be mindful that, in the past, the courts of the State of New York have struck down any such agreement wherein a contracting entity was unable to show a proper business purpose for entering into such agreement.

No project labor agreement shall be approved by an agency unless the decision to enter into a project labor agreement has, both as its purpose and likely effect, the advancement of the interests of the State’s competitive bidding statutes.”

A consequence of Executive Order No. 49 is that public agencies considering the use of PLAs prior to large public works projects authorize “studies” in order to determine the cost-effectiveness of a PLA. The studies often justify the need for a PLA and have been criticized by the construction community because they tend endorse the use of PLAs without any accurate analysis of costs, labor market forecasts, construction density and other factors that may vary from region to region. The arguments of PLA opponents are rarely acknowledged or addressed in these studies.

Frequently, firms with an existing bias in favor of PLAs, and/or a clientele of construction labor unions, union contractors and union-only construction owners produce these studies – which adds yet another reason to question their objectivity and importance in determining sound public policy (not to mention the added cost to taxpayers of a farcical study with a pre-determined outcome).

Lake Champlain Bridge PLA Feasibility Report
The NYSDOT hired Arace & Company of Warwick, NY to draft a feasibility report on the PLA for the Lake Champlain Bridge project. As you can see from their website, they strongly support PLAs.

A reader recently sent TheTruthAboutPLAs.com a Jan. 27 version of the report (it is unclear if it is a final version and if it has been submitted to the NYSDOT yet) and not surprisingly, it recommends a PLA.  The draft we reviewed contains numerous errors, faulty logic and baseless assumptions that support the author’s assertion that PLAs offer cost savings to taxpayers.

The report was circulated with this “Standard Project Labor Agreement” by the New York Construction Trades Council.  The the sample PLA contains provisions that force union representation on nonunion workers without a secret ballot election, prevent nonunion employers from hiring most of their existing workforce on the PLA project, and mandates that employers contribute benefits to labor and management run union health and pension plans that nonunion employees will never benefit from unless they join a union. All of these provisions discourage competition from merit shop contractors as outlined in more detail at ”Project Labor Agreement Basics: What is a PLA?” 4/24/09.

Article 4
SECTION 1
PRE-HIRE RECOGNITION

The Contractors recognize the Unions as the sole and exclusive bargaining representatives of all craft employees who are performing on-site Project Work, with respect to that work.

SECTION 2
UNION REFERRAL

A. The Contractors agree to hire craft employees for Project Work covered by this Agreement through the job referral systems and hiring halls established in the Local Unions’ area collective bargaining agreements (attached as Schedule A to this Agreement). Notwithstanding this, Contractors shall have sole right to determine the competency of all referrals; to determine the number of employees required; and to select employees for layoff (subject to Article 5, Section 3). In the event that a Local Union is unable to fill any request for qualified employees within a 48-hour period after such requisition is made by a Contractor (Saturdays, Sundays and holidays excepted), a Contractor may employ qualified applicants from any other available source. In the event that the Local Union does not have a job referral system, the contractor shall give the Local Union first preference to refer applicants, subject to the other provisions of this Article. The Contractor shall notify the Local Union of craft employees hired for Program Work within its jurisdiction from any source other than referral by the Union.

B. A Contractor may request by name, and the Local will honor, referral of persons who have applied to the Local for Project Work and who meet the following qualifications:

(1) possess any license required by New York State law for the Project Work to be performed;
(2) have worked a total of at least 1000 hours in the construction field for the Contractor during the prior 3 years; and
(3) were on the Contractor’s active payroll for at least 60 out of the 180 calendar days prior to the contract award.

C. No more than twelve per centum (12%) of the employees covered by this Agreement, per Contractor by craft, shall be hired through the provisions of this paragraph B. Under this provision, name referrals begin with the eighth employee needed and continue on that same basis.

Learn how the following pension provision in typical PLAs harms nonunion employees and employers here and here. 

Article 11
SECTION 2
EMPLOYEE BENEFITS

A. The Contractors agree to pay promptly contributions on behalf of all employees covered by this Agreement to those established jointly trusteed employee benefit funds designated in Schedule A (in the appropriate Schedule A amounts).

B. The Contractor agrees to be bound by the written terms of the legally established jointly trusteed Trust Agreements specifying the detailed basis on which payments are to be paid into, and benefits paid out of, such Trust Funds with regard to Project Work done under this Agreement for those employees to whom this Agreement requires such benefit payments.

If the NYSDOT evaluates the feasibility report and finds it sufficient to justify a PLA and comply with existing state law, the NYSDOT will have Big Labor draft a similar PLA for this project, approve the PLA and then present the study and the draft PLA to the FHWA to make sure the PLA complies with federal competitive bidding laws and other federal strings attached to the FHWA’s federal assistance.

But the report and PLA will meet fierce opposition and perhaps a legal challenge according to some of the recent media coverage listed below and in a recent article in The Post-Star (Glens Falls, NY) (“Lawsuit Could Delay Bridge Construction,” 2/19).

General Contractors President AJ Castelbuono said the goal is to prevent a PLA from being mandatory on the $75 million job.

“If this is such a great document and if a union contractor wants to sign it then great, but if a non-union contractor thinks he doesn’t need it that’s great, too. Why impose it on everybody?” he said.

Although Castelbuono said the people in and around Crown Point are in a dire need of a fix for their transportation woes, he said he can’t let the project move forward if a PLA is going to be used.

“A lot of the bridge builders in the community and surrounding communities happen to be non-union, open shop. This effectively means they really can’t bid the job without changing their labor policies and without giving up their crews. After all that’s how contractors bid work, based on their historical productivity of their crews,” he said.

…Castelbuono wouldn’t release his source, but said he received a copy of the study and said it recommends a PLA for the bridge project.

“I literally personally negotiate the labor agreements that cover that bridge and the consultant never talked to me about the agreement or the cost of the agreements. He’s only spoken to organized labor. The study is skewed and vacillated from fantasy to fabrication,” he said.

In a Feb. 12 letter to FHWA Administrator Victor Mendez, Associated General Contractors Chief Executive Officer Stephen Sandherr asked FHWA “to deny New York’s request to mandate a project labor agreement” on the Lake Champlain Bridge project.

ABC, AGC, and their respective chapters in NY and VT, concerned taxpayers, construction employees and other groups will continue to oppose a special interest government-mandated PLA and promote free and open competition on the Lake Champlain Bridge project. We want this project built immediately by local employees and qualified companies that can build the best possible quality project at the best possible price.

Additional coverage:
ABC Empire State’s press release opposing the Lake Champlain Bridge PLA
The Times of Ti (Contractors oppose possible union deal on bridge,” 2/23).
WNZB.com (“Senators, Organizations Spar over Bridge Project Labor Agreement,” 2/22).
North County Gazette (“Myths Dispelled About PLAs & Champlain Bridge,” 2/20).
The Press Republican (“New Champlain Bridge Could See Lawsuit,” 2/16).
Albany Times Union (“Threatened lawsuit could delay Champlain Bridge rebuild,” 2/15).
Albany Times Union (“Blowup over a blowup,” 12/28/09).

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