This support comes despite union claims that if Proposition A is adopted, the city risks losing future state construction funding due to a new state law signed by Gov. Jerry Brown last week.

Here are the highlights from the Union-Tribune‘s editorial announcing the paper’s support for Proposition A:

We acknowledge that Proposition A puts state construction funding at risk. Former Councilwoman Donna Frye points out that Mayor Jerry Sanders’ administration considered the funding threat significant enough that it was mentioned in a disclosure document for an upcoming bond offering.

But this bullying of local governments and taxpayers should not be accepted as a legitimate tactic, especially when the law used to execute the bullying is so susceptible to a court challenge.

Beyond that, the concern that Proposition A addresses – that union-allied elected city officials could began mandating PLAs – is real. Such a local union power play would be nothing new.

For four years, union-allied City Council members helped stall the implementation of a 2006 voter initiative meant to downsize city government by creating “managed competition” between private companies and government workers to provide city services. Union-allied members of the San Diego school board pushed through a version of a PLA for projects built with the $2.1 billion Proposition S bond approved in 2008 – after never mentioning their intentions during the campaign for the measure.

If we can pre-emptively block such power plays, let’s do so. The U-T San Diego Editorial Board urges a yes vote on Proposition A. Don’t let the bullies win.

Proposition A will help guarantee San Diego taxpayers the best construction at the best price.

To learn more, visit their website www.fairandopencompetition.com or their Facebook page.

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.

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

After sailing through the California legislature via a deceptive gut and amend legislative vehicle originally about tuberculosis screening, Governor Jerry Brown (D) signed SB 922 on Sunday to “prohibit” measures passed by local governments that ban government-mandated PLAs.

Local governments in California like the City of Fresno, Orange County, City of Chula Vista, City of Oceanside, Placer County, Palmdale Water District, San Diego County and Stanislaus County have passed measures prohibiting government-mandated PLAs on construction projects partially or completely funded by their government’s funds.  The measures permit contractors to voluntarily execute PLAs on local projects, as is permitted by the National Labor Relations Act and are intended to increase competition and deliver taxpayers the best possible construction project at the best possible price.

Popular ballot initiatives like San Diego County’s Proposition A, which voters overwhelmingly passed in November 2010 by a 75-24 margin, demonstrate that local taxpayers have had enough with these costly crony contracting PLA schemes. Faced with a threat that the people would put an end to union-favoring government-mandated PLAs, Big Labor called in a favor with Gov. Brown and Sacramento Democrats to pass SB 922.

Today the Wall Street Journal editorial board blasts Gov. Brown and Sacramento Democrats for trampeling the political will of local voters and supporting schemes that steer taxpayer-funded construction projects to prominent donors of the Democrat party (“Shovelling for Labor: California tries to raise the cost of construction projects,” 10/5/11):

We keep hearing that the U.S. needs better roads, bridges and other public works. But then why do politicians keep making it so much more expensive to build them? In the latest example, Governor Jerry Brown signed a bill on Sunday that attempts to prevent California cities from banning government-mandated project labor agreements, or PLAs.

PLAs are pre-hire agreements that contractors negotiate with labor unions. Construction firms must generally agree to play by union work rules, pay workers union wages, and contribute to union health and retirement funds—whether or not the employees they hire belong to a union. Non-union workers usually then have to join the union and pay union dues. According to some studies, PLAs raise costs by 12% to 18%, which explains why cash-strapped governments and tapped-out taxpayers are moving against them.

Arizona, Louisiana, Maine, Michigan and Tennessee have enacted laws in the last year prohibiting local governments and agencies, which often play into the hands of unions, from mandating PLAs. Voters in San Diego County and the San Diego suburbs of Chula Vista and Oceanside approved bans on government-mandated PLAs last November. The cities of San Diego and Sacramento are planning similar ballot measures next year.

Unions hate this trend, so they, er, encouraged Democrats who run the state legislature in Sacramento to pass the bill that Mr. Brown so obligingly signed. Democrats know that the National Labor Relations Act, a federal law, already prevents local governments from banning PLAs altogether. But what states and cities have been trying to do is prevent governments from requiring PLAs. Democrats hope the new law will deter cities from passing laws that keep the doors open to non-union contractors. Cities that ban government-mandated PLAs could face legal challenges and harassment from unions. The state could also refuse to fund their projects.

The California law is the first of its kind, and non-union construction firms fear that other labor-friendly state legislatures will follow Sacramento’s lead. If that happens, taxpayers will lose the limited ability they have to constrain costs and expedite construction. The result? Public projects that cost more and create fewer jobs, though they’ll be the kind of jobs that Democrats prefer—unionized, and thus with dues payable into campaign funds to elect more Democrats.

As usual, the Wall Street Journal editorial board’s analysis is correct.

It is unclear how SB 922 will impact current government-mandated PLA bans enacted by charter cities as well as the progress of ballot initiatives in the City of San Diego and City of Sacramento already underway.

What’s clear is that Big Labor’s chums in Sacramento have no qualms about choking free enterprise, soaking taxpayers with added construciton costs and smothering the will of the people in order to feed their campaign coffers with Big Labor’s campaign contributions.

Expect some legal wrangling, requests for legal opinions and lots of press in the coming weeks.

Update: Fox News covered Jerry Brown’s signing of this disastrous legislation on the October 7 edition of Fox and Friends:

This is also a good opportunity to review the numerous times that California media availed itself of the opportunity to can the entire package.

For those not following this issue, California State Senate Pro Tem Darrell Steinberg and Assembly Speaker John Perez changed two bills unrelated to construction or labor issues and through a “Gut and Amend” process, transformed them into vehicles to overturn the will of both local elected officials and taxpayers in a number of communities throughout the state.

The legislative leadership took a bill about tuberculosis screening (Senate Bill 922) on the Friday before Labor Day and turned it into a bill that nullifies current and future bans on PLA mandates by local governments and cuts off state funds for charter cities that ban government-mandated PLAs.

Two other bills were amended at the last minute and without much public scrutiny to meet Big Labor’s demands.  The first, A.B. 436, requires certain local governments to pay fees to the state for labor compliance, unless these governments require their construction contractors to sign a PLA, in which case they don’t have to pay the fees to the state.

Another, S.B. 790, includes an unrelated tack-on provision that allows utilities to pass through to ratepayers the costs of mandatory payments in PLAs to Labor-Management Cooperative Committees, mysterious and unaccountable slush funds authorized by an obscure federal law from 1978.

These bills are designed to undercut the eight California communities to ban PLA mandates on taxpayer funded projects.  Several of these communities adopted these bans through ballot initiatives that were overwhelmingly approved.

Here at TheTruthAboutPLAs.com, we urge Gov. Brown to veto these bills.  That is pretty obvious.  But we aren’t the only ones.  State and local media has covered these, and other bad bills on their way to the governor’s desk, extensively.  It turns out that other people are concerned about some of the garbage coming from the California Legislature also.

(Cartoon Credit: Bakersfield Californian)

Here is a round-up of media coverage on this issue:

News Media Coverage of Senate Bill 922 Since Passage in the California Legislature:

1.      Raft of labor-backed bills are a challenge for Jerry Brown– Sacramento Bee – September 12, 2011; in Fresno Bee – September 13, 2011

2.      Bills that Need to be Vetoed – Modesto Bee (editorial) – September 12, 2011

3.      EDITORIAL: Meet the boss – North County Times (editorial) – September 13, 2011

4.      Not every bill warrants that signature – Merced Sun-Star (editorial) – September 13, 2011

5.      Four bills need Gov. Brown’s veto– Oakland Tribune, Contra Costa Times, other San Francisco Bay Area local newspapers (editorial) – September 13, 2011

6.      Brown Ought to Use His Veto Pen Without Mercy – Sacramento Bee (editorial) – September 13, 2011

7.      Follow the Yellow Brick Road – www.CalWatchdog.com – September 14, 2011

8.      FORUM: Legislature cares little about local control – North County Times (powerful opinion piece by Oceanside City Councilman Jerry Kern about his personal experience at the state capitol opposing Senate Bill 922) – September 15, 2011

9.      Late amends leave advocates punched in the gut – Capitol Weekly – September 15, 2011

10.   Proposed legislation could cost cities millions – North County Times – September 11, 2011

11.    California Legislators: Gut and Amend is Gutless and Abusive – California Political Review – September 14, 2011

12.     Brown would be wise to veto many of the bills before him – Fresno Bee (editorial) – September 15, 201

13.     600 bills on Jerry’s desk – Sacramento Bee – September 17, 2011

14.     Senseless Bills – Riverside Press-Enterprise (editorial) – September 17, 2011

15.    Four Bills the Governor Should Veto – Woodland Daily Democrat – September 16, 2011

16.    Four for Brown’s veto pen – Vallejo Times-Herald – September 18, 2011

17.   New Initiative Sets Stage for Latest Labor, Business Battle – www.voiceofSanDiego.org – September 21, 2001

Despite the gutting and amending of this bill immediately before Labor Day weekend, numerous construction trade associations, business groups, taxpayer organizations, local government associations, and local government officials went on record in opposition to the bill, starting with a hastily-scheduled Assembly Business and Professions Committee hearing on Tuesday, September 6.

State Senator Michael Rubio (D-Bakersfield), who plans to run for Congress, appeared before the committee to cheerlead for this sloppy last-minute creation of the State Building and Construction Trades Council and its affiliate construction unions. Senate Bill 922 passed this committee and then passed the Assembly Appropriations Committee on September 7 on party-line votes. (All Democrats supported the bill; all Republicans opposed it).

Meanwhile, faxes began pouring into legislators’ offices from contractors, business owners, and ordinary California taxpayers objecting to Senate Bill 922 and its union-backed partners, Assembly Bill 436 (gutted and amended on Wednesday, August 30) and Senate Bill 790.

Assembly Bill 436 requires certain local governments to pay fees to the state for labor compliance, unless these governments require their construction contractors to sign Project Labor Agreements, in which case they don’t have to pay the fees to the state. The state leaves those contractors (and the unions) to do whatever they do when no one with official authority is watching. It passed on the Senate floor on a party-line vote (Democrats in support, Republicans opposed) on September 7.

Senate Bill 790 includes an unrelated tack-on provision that allows utilities to pass through to ratepayers the costs of mandatory payments in Project Labor Agreements to Labor-Management Cooperative Committees, mysterious and unaccountable slush funds authorized by an obscure federal law from 1978. The bill (about community choice aggregation programs for electric consumers) was uncontroversial and headed toward unanimous approval until this provision (inserted at the request of union lobbyists) tainted the bill. It passed the Assembly floor on September 8, after the presiding chairman of the Assembly denied the request of Assemblywoman Shannon Grove (R-Bakersfield) to show physical evidence of such payments and then cut off her oral statement. See the video here: Assemblywoman Grove tries to discuss a controversial provision of SB 790 and is shut down by opposing leadership before being able to speak.

Then the news media became aware of these bills. Here are articles and editorials about at least one of these bills (and in some cases, all three bills):

1. Editorial: Gut-and-amend bill needs to be stopped – Sacramento Bee – September 7, 2011

2. Legislature moves to overturn bans on local labor friendly agreements – San Diego Union-Tribune – September 7, 2011

3. Kevin Dayton: Construction Unions Set Up State Legislature to Crush Fair and Open Competition Policies at Local Governments – www.FlashReport.org (op-ed) – September 7, 2011

4. Union Bias – Riverside Press-Enterprise (editorial) – September 8, 2011

5. Legislature’s Rhetoric on Jobs is Empty – San Diego Union-Tribune (editorial) – September 8, 2011

6. Labor bills introduced as session nears end – Orange County Register (editorial) – September 8, 2011

7. Banning Project Labor Agreement Bans in California – www.PublicSectorInc.com – September 7, 2011

8. Opinion: SB 922 Undermines Basis of State/Local Government Relationship – www.PublicCEO.com – September 8, 2011

9. Unions attempt to push through Senate Bills by going to puppet legislators – San Diego Daily Transcript (op-ed) – September 6, 2011

10. Dan Walters: Fun, games mark California Legislature’s final week – Sacramento Bee (columnist, run in numerous state newspapers) – September 8, 2011

11. Legislation Boosts Union Trust Fund – www.CalWatchdog.com – September 8, 2011

12. Dan Walters: New legislative bills grow in the dark – Sacramento Bee (columnist, run in numerous state newspapers) – September 9, 2011

13. Union ‘Gut and Amend’ Bills Slice Open California – www.FoxandHoundsDaily.com – September 9, 2011

14. A Bad Bill Sneaks through Legislature – Modesto Bee (editorial) – September 8, 2011

15. Bill OK’d that could expedite stadium (also reports on SB 922 moving through legislature) – San Diego Union-Tribune – September 10, 2011

 16. Senate approve bill boosting NFL stadium in L.A. (also reports on SB 922 moving through legislature)  – Orange County Register – September 10, 2011

UPDATE: All three bills passed the California legislature and wait for Gov. Brown’s approval.

Fax Gov. Brown TODAY and urge him to VETO all three bills.

The Wall Street Journal recently tallied up the growing number of state and local governments that are rejecting demands for project labor agreements on public construction projects.

No surprise, Massachusetts wasn’t on the list.

TheTruthAboutPLAs.com readers can learn more here about recently enacted state legislation, such as Michigan’s S.B. 165, which curtails anti-competitive and costly government-mandated PLAs on state-funded projects in Michigan.  The red states in this map have enacted legislation or similar executive orders curtailing government-mandated PLAs.

More from the Boston Herald editorial:

Project labor agreements steer public construction work to union shops in exchange for a guarantee of labor “harmony.” Union leaders argue that they guarantee skilled workers and safe working conditions on taxpayer-funded projects.

But in practical terms, they box out non-union companies (whose tradespeople are of course licensed by the state and must comply with all workplace safety rules), drive up public construction project costs and allow union-friendly politicians to curry favor with organized labor.

Perhaps the most offensive example in Massachusetts of late is the decision to require a PLA on a 10-year, $750 million capital plan at the University of Massachusetts at Boston, a decision backed by the Patrick administration. No non-union shops need apply for any of that work over the next decade.

As the Journal noted, Louisiana has passed a law prohibiting state entities from mandating PLAs. Tennessee, Arizona and Idaho have passed similar legislation. Maine Gov. Paul LePage this month signed a bill guaranteeing open competition on state building projects through 2015, while Utah, Montana, Missouri and Arkansas already have similar laws.

These measures don’t prohibit the use of union labor, and isn’t necessary to prohibit PLAs altogether.

But by preventing local and state government agencies from making these agreements mandatory, they can level the playing field. We can dream, can’t we?

With PLA-friendly Democrats entrenched in Beacon Hill, the Herald’s editorial board might have to wait until after the results of the 2014 gubernatorial election is announced before they can start whistling Hall & Oates:

Click here to view the video on YouTube.

The editorial is correct, such a measure would benefit Mass. taxpayers, qualifed contractors and their experienced nonunion employees who compose 84.4 percent of the Bay State’s 2010 private construction workforce. It will encourage full and open competition from both union and nonunion firms and permit contractors to use PLAs on a voluntary basis.

Anti-government-mandated PLA legislation will ensure fairness and neutrality in government contracting and helps taxpayers get the best possible product at the best possible price.

The editorial board at The Wall Street Journal has again come out against wasteful and discriminatory government-mandated PLAs.  Here are the highlights from the editorial (“Project Labor Revolt: The states ban union political bid-rigging. Obama demurs,” 7/19/11):

One benefit of the squeeze on state and local budgets is that politicians are finally having to confront their sweetheart deals with labor unions. The latest reform movement is moving against project labor agreements, or PLAs, that limit bids on construction projects to contractors that agree to union representation.

Only about 13% of construction workers belong to unions, and PLAs are a union invention to use their political muscle to organize more companies. Proponents argue that PLAs ensure the speed and quality of construction plans. But PLAs are one of the reasons that Boston’s Big Dig was estimated at $2.8 billion but eventually cost $22 billion. Studies show that projects under PLA contracts on average cost 12% to 18% more than projects awarded by open, competitive bidding. Taxpayers pick up much of this tab.

[snip]

In response to this evidence, states have been pulling away from PLAs. Louisiana passed a law this month that prohibits state entities from mandating the use of PLAs. Tennessee, Arizona and Idaho passed similar legislation earlier this year, and Iowa’s Governor Terry Branstad, in one of his first acts after inauguration, signed an executive order ending a state PLA requirement. Legislatures in Maine and Michigan recently passed bills along these lines that governors are expected to sign. These states are joining Utah, Montana, Missouri and Arkansas, which enacted bans in recent years.

The new wave of Republican state officials is leading this reform, but the public seems to support the effort even in Democratic-leaning areas. Seven localities in California have passed ballot initiatives to end mandated PLAs in the last decade, including five since 2009. This includes places like Chula Vista, where President Obama received 61% of the vote. As Andy Conlin of Associated Business and Contractors notes, wherever PLAs are subject to popular referendum, they’re rejected.

You may not be surprised to learn that the Obama Administration is not part of this reform trend. In February 2009 Mr. Obama issued Executive Order 13502, which lifted President Bush’s ban on PLAs and explicitly “encourages” them in federal construction projects worth more than $25 million. As the 2012 election nears, the Administration will be tempted to extend the order to include projects that receive any federal funds.

That would raise construction costs across the country, and at all levels of government, because so many public works projects are jointly funded by states and the feds. It would also mean fewer construction jobs overall, though higher pay for those unionized workers lucky enough to get one.

PLAs are a form of political bid-rigging that robs taxpayers even in good economic times. Amid today’s limited fiscal resources, PLAs steal money from the likes of education and law enforcement to reward politically-connected companies and their unions. They deserve to be outlawed.

Here at TheTruthAboutPLAs.com, we couldn’t agree more.

This editorial touches on a couple of key points. In addition to detailing how PLAs increase construction costs and discriminate against the 87 percent of the construction workforce that chooses not to join a labor organization, it outlines what has become a national trend in the last 12 months. In state after state and community after community, Americans are standing up to demand the best construction at the best price for their hard-earned tax dollars. These demands are showing up at the ballot box in places like Chula Vista and San Diego County in California, where voters overwhelmingly approved ballot initiatives banning government-mandated PLAs on local projects. In places like Iowa, Maine and soon Michigan, taxpayers’ desire for fair and open competition is being expressed through their governors and state legislators. Regardless of the method, sensible taxpayers are taking important steps to guarantee value on public construction projects.

The Wall Street Journal also reminds us that the threat of Section 7 of Executive Order 13502 looms large as the 2012 presidential election approaches. Regular readers remember that Section 7 of the order requires: “The Director of OMB, in consultation with the Secretary of Labor and with other officials as appropriate, shall provide the President within 180 days of this order, recommendations about whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance.”

While we have clearly passed the 180-day deadline set by the order, there is still reason to believe that the Obama administration could take action on Section 7 in the next 18 months. It is clear that bid protests, other legal impediments and public pressure have kept the Obama administration from implementing as many government-mandated PLAs as they expected and section 7 of Executive Order 13502 allows the administration to provide a tasty handout just in time for Big Labor to support President Obama’s re-election campaign. We saw this same cycle occur at the state level where embattled incumbent governors in Iowa, Illinois and Massachusetts either issued executive orders encouraging state agencies to require PLAs or used other methods to encourage the use of government-mandated PLAs on high profile construction projects with the obvious intent of currying favor with the construction union bosses.

Corruption: This is how Big Labor Leverages Government-Mandated Project Labor Agreements

Back to the editorial, this is an outstanding read and really breaks down how government-mandated PLAs are bad for taxpayers and the construction industry workforce still struggling to come back from more than 15 percent unemployment.

(See previous blog posts from TheTruthAboutPLAs.com on this project and MWAA’s resolution here).

A letter from MWAA President and Chief Executive Officer Lynn Hampton also provides some interesting economic data, shared publicly for perhaps the first time, pertaining to construction contracts awarded to regional businesses for Phase 1 of the Silver Line.

In response to a Washington Post editorial that urged MWAA to abandon the Phase 2 PLA mandate in order to trim “skyrocketing price projections” that threaten to derail the project (“Containing Costs on the Silver Line,” 6/23), MWAA chairman Charles D. Snelling wrote (“A labor pact that would help Dulles Metro construction,” 7/2):

The editorial misrepresented our planned PLA by expressing concern that such an agreement could increase the project’s costs partly because it would impose “cumbersome union rules.” For the record, a PLA will most likely set wages based on rates established by the Labor Department under the Davis-Bacon law. But construction will be done at Davis-Bacon prevailing wage rates regardless of whether there is a PLA, because federal law requires such rates for construction projects that receive federal assistance.

Snelling argues a Phase 2 PLA will have no impact on labor or construction costs because the payment of Davis-Bacon prevailing wage and benefit rates to construction workers is already required on the project, regardless of whether a PLA is mandated on the project.

Clearly, Snelling is either confused or misrepresenting the facts to Washington Post readers.

While Snelling is correct that Phase 2 bid documents can require payment of Davis-Bacon wage and benefit rates to craft professionals with or without a PLA (assuming MWAA voluntarily includes this rule or the project receives federal dollars), the inclusion of such government-determined rates is not why a Phase 2 PLA mandate will increase costs.

PLA opponents have never argued that the applicability of Davis-Bacon rates is the source of anticipated cost increases resulting from the Silver Line’s Phase 2 PLA mandate.

Rather, the “cumbersome union rules” contained in PLAs – such as requirements that contractors hire most or all employees from a union hiring hall, follow archaic and inefficient union work rules, pay into union-controlled slush funds, and pay benefits to union trust funds their employees will never benefit from unless they join a union and become vested in these plans – are the key reasons why PLAs increase costs and discourage competition from qualified nonunion contractors and their skilled local workforce.

The ABC Virginia Chapter sent an April 21 letter (pdf) to Snelling and MWAA highlighting specific provisions in the Phase 2 PLA Heavy Highway Agreement/PLA circulated to the public by MWAA staff that will reduce competition, increase costs, harm Virginia’s construction industry and result in out-of-state union members receiving what amounts to a discriminatory monopoly supplying labor to build the Phase 2 project. The letter never listed Davis-Bacon wage and benefit rates as an area of concern.

Finally, the Beacon Hill Institute studies, often cited as the basis of the estimate that a Phase 2 PLA mandate will increase construction costs between 12 percent and 18 percent ($300 million to $450 million of $2.5 billion in Phase 2 construction costs), sampled construction projects built with government-mandated PLAs and without PLAs in three states subject to state prevailing wage laws (Mass., Conn. and NY). This demonstrates that the added costs resulting from a government-mandated PLA occur on projects subject to prevailing wage laws.

In short, Davis-Bacon rates are a non-issue, so why is Snelling suddenly raising this argument?

Is it because Snelling is intentionally deflecting legitimate criticism of the Phase 2 PLA mandate by fusing these two issues because the special interest contracting scheme cannot be defended?

Or, do Snelling and the MWAA board members need additional education about how a PLA will increase costs and discourage competition from the experienced employers of 94 percent of Virginia’s construction workforce (those who choose not to belong to a construction union)?

MWAA needs to either shoot straight with the public or learn the facts about PLAs before executing another poor and costly decision that has the potential to derail the Silver Line and harm Virginia taxpayers, job creators and stakeholders.

In a June 8 letter responding to objections to the Phase 2 Silver Line PLA mandate from Congressman Andrew Harris (R-Md.), Hampton issued a similar defense of the Phase 2 PLA as Snelling:

Your concern that a PLA will cause a substantial increase in Phase 2 costs appears to be based on the view that wages paid by Phase 2 contractors operating under a PLA will be significantly higher than the wages contractors would pay absent a PLA, and that these higher wages will cause a significant increase in Phase 2 labor costs. I want to respond to these concerns.

A PLA on Phase 2 will likely provide for wages to be based upon either the prevailing wage rates established by the U.S. Department of Labor pursuant to Public Law 107-217 Davis-Bacon) or, like the Phase 1 PLA, comparable wage rates established pursuant to local Collective Bargaining Agreements (CBA). However, Davis-Bacon prevailing wage rates will be applied to Phase 2 even without a PLA. As you know, federal law requires that construction projects receiving federal financial assistance must apply Davis-Bacon wage rates. Along with our funding partners, the Airports Authority has been actively pursuing federal assistance for Phase 2. In particular, we are working to obtain federal credit assistance under the Transportation Infrastructure Finance and Innovation Act (TIFIA). The receipt of a TIFIA loan, or any other federal assistance on Phase 2, would require utilization of Davis-Bacon wage rates. It is the Airports Authority’s intent to require the use of such rates by Phase 2 contractors, irrespective of a PLA.

As a result, the use of a PLA in Phase 2 is not expected to have any significant impact on wage rates, labor costs or overall Phase 2 costs.  It is possible that a Phase 2 PLA, were it to utilize local CBA rates, (as does the Phase 1 PLA), might add a slight premium to comparable Davis-Bacon wage rates. If so, that premium would not cause an appreciable increase in overall Phase 2 costs. Morever, the benefits associated with a PLA i.e., by ensuring the ability to attract and retain a skilled workforce, access to well-established training programs, and providing a mechanism for resolving all workplace disputes and eliminating workplace disruptions and work stoppages that may occur — are, viewed as outweighing any such marginal increase in labor costs.

Once again, an MWAA official ineptly defends the Phase 2 PLA, as Rep. Harris never identified Davis-Bacon rates as the source of increased costs resulting from a Phase 2 PLA mandate. Hampton doesn’t understand that there is a competitive advantage to using nonunion contractors independent of whether a project requires prevailing wage and benefit rates and a PLA mandate typically discourages participation from qualified nonunion contractors.

In addition, Hampton fails to understand that you don’t need an anti-competitive and costly PLA to achieve the benefits MWAA is hoping to achieve.

Hampton rattles off some interesting economic data about first-tier contracts awarded to nonunion contractors under the voluntary Phase 1 PLA Dulles Transit Partners signed, but completely ignores the fact that nonunion/merit shop subcontractors did not have to sign the Phase 1 PLA. (See paragraph 8 of Dulles Corridor Metrorail Project Labor Agreement Final Addendum, Heavy and Highway Construction Project Agreement, Construction of Phase 1 – Fairfax County, Virginia. “Subcontracting:…It is further understood that in the event any covered work is awarded to a merit shop contractor the contractor shall not be required to sign this agreement or sign any other agreement as a condition of performing work on this project.”):

Second, the Project’s experience to date in Phase 1 with the Dulles Transit Partners, LLC, (DTP), the firm under contract with the Airports Authority to design and construct Phase 1, has demonstrated that, notwithstanding the existence of a PLA, non-union local contractors have achieved a high level of participation in Phase 1 contracts.  For example, of the first-tier contracts executed to date by DTP – contracts with a value of $460 million – 58 percent of the contract’s value, or $266 million, has been awarded to non-union contractors, while 42 percent of the value, or $194 million, has been awarded to union contractors.

Further, of the first-tier contractors executed to date by DTP with contractors and suppliers of equipment and materials, including contracts in the area of utility relocations – contracts with a value of $880 million – 60 percent of the contracts’ value, or $528 million, has been awarded to contractors and businesses based in the Commonwealth of Virginia, the District of Columbia, and the State of Maryland (VA/DC/MD), with the remaining 40 percent of the contracts’ value, or $352 million, awarded to contractors and businesses based outside of VA/DC/MD.  This Phase 1 experience shows that the Phase 1 PLA has not had any significant negative effect on the ability of non-union local contractors to successfully bid on and obtain Phase 1 work.

However, the data supplied by Hampton confirms that nonunion contractors played an integral role in building Phase 1 of the Silver Line. Yet Hampton does not promise an exemption for nonunion subcontractors in the Phase 2 PLA, nor acknowledge the truth that nonunion/merit shop contractors did not have to sign the Phase 1 PLA.

While the terms and conditions of the Phase 2 PLA have not been finalized, evidence suggests that MWAA board members oppose a provision similar to the language in Phase 1 exempting nonunion subcontractors from signing the Phase 2 PLA.

For example, the Washington Examiner quoted Laborers union (LiUNA) senior official and MWAA board member Dennis Martire insulting the workforce of PLA opponents and nonunion contractors (“Airport agency’s pro-union pact angers Va. Officials,” 4/14):

“All this does is establish worker rules and where you get your workers from,” said Martire, vice president of Laborers’ International Union of North America. “They’d rather get a guy off of a bar stool and give him a tool and a lower wage. I don’t know how productive that is.”

MWAA’s April 6 resolution mandating a Phase 2 PLA directs the Dulles Corridor and Business Administration committees, to approve and implement the final Phase 2 PLA with the assistance of MWAA staff. Michael Curto, who introduced the resolution, and Martire sit on these committees. The employers of Martire and Curto have a strong and existing financial relationship and both would directly and/or indirectly financially benefit from a Phase 2 PLA mandated by MWAA.

Curto’s employer, Patton Boggs, has received between $1.25 milion and $1.44 million per year since 2005 from Martire’s employer, LiUNA, according to union financial disclorure reports filed with the U.S. Department of Labor.

Snelling’s Washington Post letter to the editor said this:

The benefits associated with a PLA include the ability to attract and retain skilled workers, access to training programs and a mechanism for resolving workplace disputes to avoid disruptive work stoppages.

Both quotes from Martire and Snelling insinuate that it is difficult to have a plentiful supply of skilled workers building projects without a PLA. This is offensive to nonunion tradespeople in Virginia and the greater metropolitan area, and undermines the long and rich history of local, state, federal and private construction projects built without special interest government-mandated PLAs.

These statements are just as illogical as they are factually inaccurate, as subcontractors that performed hundreds of millions of dollars worth of construction work on Phase 1 of the Silver Line did not have to sign the PLA. The arguments used by MWAA officials to defend a Phase 2 PLA have no merit.

The PLA mandated by MWAA on Phase 2 must be removed and MWAA members should devise a plan to encourage full and open competition that will help all qualified contractors deliver to taxpayers the best possible construction project at the best possible price.

Update: This Aug. 22, 2011 correspondence between MWAA and the Purcellville Business and Professional Association again indicates that nonunion contractors built a significant potion of Phase 1. It also indicates that MWAA incorrectly argues (again) that PLA opponents have attributed the predicted additional costs resulting from the Phase 2 PLA to the application of federal prevailing wage and benefit rates (determined by the U.S. Department of Labor under the Davis-Bacon Act) on Phase 2. Of course, these rates would be used regardless of whether a PLA is used. In reality, PLA opponents oppose the Phase 2 PLA because it will increase costs due to reduced competition, archaic and inefficient union work rules, and fees imposed on nonunion firms and employees they must swallow to work on a PLA project.

(See previous blog posts from TheTruthAboutPLAs.com on this project and MWAA’s resolution here).

Originally estimated to cost $2.5 billion, Phase 2’s price tag has ballooned to more than $3.5 billion and the project has not even broken ground yet. Financial support from Virginia stakeholders (Loudoun County, Fairfax County, the Commonwealth of Virginia and Dulles Toll Road users) footing the bill for this project is unraveling because MWAA has not done enough to control escalating project costs.

The controversy has grabbed headlines and forced local, state and federal officials to develop cost-cutting solutions and investigate the questionable decision-making and planning of MWAA.

On Saturday, a Washington Post editorial suggested MWAA should abandon the Phase 2 PLA mandate as a solution to trim “skyrocketing price projections” that threaten to derail this project (“Containing Costs on the Silver Line,” 6/23):

One focus should be the airport board’s insistence that any general contractor bidding on the project be bound by a pro-union labor agreement. Already, Ken Cuccinelli II, Virginia’s attorney general, has threatened to sue if the deal turns out to violate the state’s labor laws.

The airports board was pushed to adopt the “project labor agreement” by board member Dennis Martire, who, in his day job, is a senior official in the Laborers’ International Union of North America, which represents hundreds of thousands of construction workers. Mr. Martire had an obvious conflict of interest, as his union would be a direct and major beneficiary from a labor deal. He should have had the common sense to recuse himself from the decision, even if his vote did not technically violate the board’s narrowly drawn ethics policy.

There is serious debate about whether a labor pact would drive up expenses. The airports authority says a similar pact for the project’s first phase, under construction from Falls Church to Reston, has helped contain costs and enhance efficiency by ensuring a steady supply of workers and avoiding labor trouble. But that agreement was adopted voluntarily by the contractor. There are concerns that a mandatory labor agreement for the second phase could dampen competition and drive up costs by discouraging bids from some large contractors, and by imposing cumbersome union rules. In an era of belt-tightening, the airports authority must go the extra mile to ensure that the Silver Line’s construction is managed as frugally as possible.

Attorney General Ken Cuccinelli’s expressed opposition to the Phase 2 PLA during this June 3 radio interview on WMAL 630 (listen to discussion of the Phase 2 Silver Line PLA at 2:49 of the clip) when he said the Phase 2 PLA mandate may be subject to a legal challenge if it violates Virginia’s Right to Work law.

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

Martire’s possible MWAA ethics violations have drawn interest from other sources, including the Chantilly and Oakton Patch and the Bacon’s Rebellion Blog. (Check out the nice piece at Bacon’s Rebellion on the Silver Line PLA controversy (pdf).

The Washington Post reported that Secretary of Transportation Ray LaHood has been called in to mediate the dispute between Virginia’s key financial stakeholders and MWAA (“Transportation Secretary LaHood to try to mend rift over Dulles Metro station,” 5/31) where he has already delivered some reality checks to MWAA board members, according to this WaPo editorial (“Reality check for Dulles rail,” 6/1):

FOR THE PAST couple of months, the handful of unelected officials in charge of building Metro’s $6 billion Silver Line extension to Dulles International Airport and beyond have pushed the idea that federal loans — not serious cost-cutting — will make the project’s numbers work. On Wednesday they got a harsh reality check.

It came in a meeting called by Transportation Secretary Ray LaHood, who convened project stakeholders, including members of the Metropolitan Washington Airports Authority, which is in charge of building the 23-mile extension. In response to suggestions from the airports board that the feds could shore up the Silver Line’s shaky finances with a huge loan, Mr. LaHood delivered an unusually blunt message, according to several people who attended the meeting. The federal government “is not a cash cow,” he said; it’s not going to ride to the project’s rescue.

The Fairfax Times reported that the U.S. Department of Transportation announced it will audit MWAA (“Inspector General will audit MWAA,” 6/24):

U.S. Inspector General of the U.S. Department of Transportation Calvin L. Scovel III announced Tuesday that his office will audit the Metropolitan Washington Airports Authority.

The audit, according to a letter to MWAA from Scovel, will determine if the authority’s policies and procedures comply with the law and whether its board of directors has been transparent and accountable in its decisions related to the now controversial Dulles Rail Project.

U.S. Reps. Frank Wolf (R-Dist. 10) and Tom Latham (R-Iowa) asked for the investigation earlier this year.

MWAA was the subject of a 2002 report from the Government Accountability Office (GAO) that investigated MWAA’s controversial contracting policies.

Virginia Delegates Tim Hugo, Barbara Comstock and Jim Lemunyon sent a letter June 11 to MWAA Chairman Charles Snelling objecting to the $330 million in additional costs resulting from MWAA’s decision to build an above ground metro stop at Dulles Airport. The letter also strongly opposed the Phase 2 PLA:

We also find it fiscally reckless for MWAA to adopt the unnecessary resolution directing MWAA staff to include a PLA in the procurement documents for Phase 2 of the project. As you know, we raised the issue of PLAs in a hearing of the House Transportation Committee, held by Chairman May, in March.  We never received satisfactory answers about the added costs from PLAs.  Instead, this decision was made hastily with little discussion.  If MWAA mandates a PLA in the specifications of Phase 2 bidding documents, it will harm local and Commonwealth taxpayers, increase costs for Dulles Toll Road users, and discourage competition from Virginia’s qualified construction firms.  It will also put the funding path for this project on an unsustainable path that our constituents simply will not accept.

Further, the logic MWAA board members used to mandate a PLA on Phase 2 is based on misinformation provided by special interests serving on the MWAA board. MWAA member Dennis Martire is the Vice-President of The Laborers International Union of North America (LiUNA). A Phase 2 PLA mandate will result in LiUNA, the labor organization employing Mr. Martire, receiving a financial windfall worth tens of millions of dollars resulting from an estimated 10 million man hours of labor supplied by LiUNA members. What are the potential conflicts of interest here?  The public needs to know more about this situation.  MWAA board members and staff cannot ignore such an appearance of conflict.

What’s worse, is the potential economic consequences for Commonwealth taxpayers. Studies estimate PLA mandates increase the cost of construction by 12 percent and 18 percent compared to similar non-PLA projects, and these could very well be low estimates.  MWAA’s financial stakeholders can’t afford the $300 million to $450 million in crony contracting costs added to the $2.5 billion construction budget.

In addition, this is unfair to Virginia workers.  Virginia can’t afford the job losses resulting from this PLA, as 96 percent of Virginia’s private construction workforce does not belong to a union, and they deserve a fair shot at these high paying jobs. Pro-PLA Board Members claimed that a PLA provides a steady workforce, implying that there was some type of worker shortages in today’s economy. This has no basis in fact. A PLA mandate will ensure that the majority of construction jobs created by Phase 2 will go to out-of-state businesses and union members, yet Virginia stakeholders are picking up the tab.  Of course it is no small irony that the majority of those voting for this option that puts the tab on Virginia taxpayers don’t live in the area that will be impacted. Such an outcome simply will not stand.

Perhaps MWAA board members have been misled into believing a PLA mandate is needed for Phase 2, as the Phase 1 PLA is credited for positive Phase 1 construction performance. But the fact remains that the PLA on Phase 1 was a voluntary PLA entered into by Dulles Transit Partners after they were awarded the Phase 1 contract, and it specifically exempted merit shop (nonunion) subcontractors. In short, it is fallacious reasoning to assume that the Phase 1 agreement and a PLA mandated on Phase 2 will produce the same results.

On June 23, a coalition of 13 of Northern Virginia’s leading business groups and associations held a press conference highlighting a letter they sent to MWAA that offers solutions to reduce costs and get the Phase 2 project back on track.

The five areas where Northern Virginia business leaders are seeking cost reductions are:

1. Eliminate the requirement that the primary contractor implement a mandatory Project Labor Agreement (PLA) on Phase II.
2. Approve the aboveground station at Washington Dulles International Airport, cutting more than $300 million, with minimal inconvenience to airport passengers.
3. Reduce the scope of the Dulles Airport rail yard and seek ways to finance it separately or in conjunction with WMATA, saving $50 million to $100 million.
4. Ask Fairfax and Loudoun Counties to assume responsibility for funding and construction of the parking structures, similar to the public-private partnership at the Wiehle Avenue station.
5. Seek additional financial help from Virginia and the Federal Government, neither of which has any meaningful financial participation in Phase II.

TheTruthAboutPLAs.com reported May 20 that the following Northern Virginia groups and elected officials publicly opposed the government-mandated PLA on Phase 2 of the Silver Line:

Herndon Mayor Steve DeBenedittis
Loudon County Board of Supervisors
Fairfax County Board of Supervisors
Fairfax Chamber of Commerce
Dulles Regional Chamber of Commerce
Women Construction Owners and Executives, USA (WCOE)
Washington Examiner

Finally, the Washington Examiner reported that former Postmaster General John E. “Jack” Potter has been named CEO of MWAA (“Former postal chief to oversee airports,” 6/22).

Expect more headlines and controversy this summer.

As ABC Virginia wrote to MWAA in April, TheTruthAboutPLAs agrees that MWAA should abandon the PLA mandated by MWAA for construction of Phase 2 of  the Silver Line. Virginia taxpayers, businesses, employees and metro riders would benefit from fair and open competition.

Check TheTruthAboutPLAs.com for updates and feel free to contact us if you would like additional information.