• Wall Street Journal (“Unions Win Public Contracting Row,” 4/12)
• Statement from House Education and Labor Committee Senior Republican Member Rep. John Kline (R-MN)
• Workforce Fairness Institute (WFI) (“Obama Administration Continues To Reward Big Labor At The Expense Of Small Businesses,” 4/12)
• Portfolio.com (“New Obama Rule Benefits Unions,” 4/12)
• Statement from White House Middle-Class Task Force’s economist Jared Bernstein (“Project Labor Agreements: A Better Deal for Big Labor All,” 4/12).

From the Wall Street Journal (“Unions Win Public Contracting Row,” 4/12):

“The executive order, which will become effective next month, is the latest in a series of moves by the administration that are favorable to unions, whose members could play a critical role in the upcoming midterm elections as Democrats try to hang on to seats in Congress.”

“This is the latest win for unions in their tug-of-war with employers. Unions recently welcomed Mr. Obama’s recess appointment of former union lawyer Craig Becker to the National Labor Relations Board after the nomination failed to win enough Senate votes. But unions have expressed frustration that their most important legislative priority, a bill that would ease unionization, is stalled in Congress. Unions are also looking to the executive branch to act on its own, independently of Congress, on other labor issues.” 

Check out more key quotes on this gift to Big Labor after the jump.

Here is more on the final rule from an April 12 statement from House Education and Labor Committe Senior Republican Member Rep. John Kline (R-MN):

“Project Labor Agreements reduce competition, increase costs for taxpayers, and add layers of bureaucracy and red tape to federal construction projects,” said Kline. “Creating a formal federal process for imposing these Depression-era mandates on construction projects may be a win for special interests, but it’s a loss for workers, taxpayers, and small businesses hoping to compete for federal jobs.”

Kline pointed to the U.S. Department of Labor’s decision last year to cancel a Job Corps Center construction project in New Hampshire as evidence of the dangers PLAs pose to federal job creation and project efficiency. The New Hampshire project was canceled after a local contractor raised a legal challenge to the project’s PLA requirement, arguing it was discriminatory and would disqualify most contractors in the state.

PLAs generally require federal contract bids to adhere to union work rules and wage scales and to pay benefits into union pension funds even when non-union workers – who will never benefit from these funds – participate in the project.

“PLAs are an antiquated approach to federal contracting designed to favor large, unionized contractors at the expense of smaller employers,” said Kline. “The likely consequence of this new federal regulation will be higher costs for taxpayers and far less competition among job creators trying to get the American economy back on track.”

Katie Packer of the Workforce Fairness Institute (WFI) describes how this gift to Big Labor will harm small businesses and job creation (“Obama Administration Continues To Reward Big Labor At The Expense Of Small Businesses,” 4/12):

“Today’s news that the administration will once again put Big Labor ahead of small businesses and workers serves as further proof that job creation is not President Obama’s top priority. With record unemployment, forcing businesses both large and small to adhere to costly and non-competitive schemes will only result in lost jobs,” said Katie Packer, executive director of the Workforce Fairness Institute (WFI).

“Ending fair and open bidding for federal contract work will disqualify employers from competing and increase the costs of projects just as our nation’s debt skyrockets. It has become clear that the Obama Administration fails to understand that small business owners, not union bosses, create jobs and they will be the ones who bear the burden of these reckless and short-sighted policies.”

Kent Hoover, Washington Bureau chief for Bizjournals, had this to say about the final rule at Portfolio.com (“New Obama Rule Benefits Unions,” 4/12).

“So PLAs might make sense for large, complicated projects. But $25 million doesn’t go as far as it used to, so lots of run-of-the-mill projects likely will be forced to go with union labor as a result of this new rule.

Other changes favoring unionized companies in federal contracting may be coming down the pike.

Business groups fear the Obama administration will issue a new rule requiring federal contractors to provide a minimum level of wages and benefits to their employees.

The president seems intent on using federal contracting as a tool for promoting economic justice, which in his view means promoting labor unions. Taxpayers, however, are more interested in getting the best value at the best price for whatever the federal government needs. That may not be compatible with slapping a union label on everything the government buys.”

Finally, here is a statement in defense of project labor agreements and President Obama’s Executive Order 13502 from Jared Bernstein, the White House Middle-Class Task Force’s chief economist and economic advisor to Vice-President Joe Biden (“Project Labor Agreements: A Better Deal for Big Labor All,” 4/12). 

We may tear Bernstein’s statement apart in the next couple of days but an email sent to us today by a TruthAboutPLAs.com reader has a go at  it first:

“Shouldn’t Veep Joe Biden’s Middle-Class Task Force be in the business of advancing the interests of ALL of the middle class, not just Obama’s Big Labor political cronies? 

And this Bernstein guy calls himself an economist? On the first day of my Econ 101 class in high school we learned that when you concentrate competition to a few firms (in this case, just 15 percent of the private construction workforce is unionized), you create monopolistic conditions. When there is a lack of competition and/or a monopoly, costs increase. The entire purpose of PLAs is to create a monopoly for Big Labor. 

No wonder why we have 25 percent unemployment in the construction industry and our economy is suffering. This administration’s assault on small business is partially to blame for the current state of our economy.”

As you can see, our readers are passionate about this issue. Speaking of Congress and the White House’s “assault on small businesses,” check out www.HaltTheAssault.com.

After a protest was filed against the PLA with the Government Accountability Office (GAO) by ABC member North Branch Construction of Concord, N.H., with ABC support and representation, the U.S. DOL cancelled its solicitation to construct the project.

Here is more on the hearing from a press release on Rep. Thompson’s website (“U.S. Labor Secretary Dodges Thompson’s Questions on Project Labor Agreements,” 2/3/10).

Thompson described the New Hampshire ordeal in further detail, “Last September, DOL issued a solicitation for construction of a Job Corps Center in New Hampshire that the Department declared was `urgently needed.’ Without explanation, the Department attempted to impose a Project Labor Agreement. After a local small business filed a protest against the PLA, the Department cancelled the solicitation, and has not re-issued it.

Thompson asked Solis, “Why did the Department cancel the entire solicitation of an `urgently needed’ project in the face of the bid protest instead of simply removing the PLA?”

Solis answered that in many instances PLAs have actually helped to reduce costs and that it is appropriate that the Department look for ways to keep costs down. She did not answer the question about New Hampshire.

Committee Chairman Rep. George Miller (D-CA) asked that Solis answer Thompson’s question in writing at a later date. TheTruthAboutPLAs.com will be sure to cover Solis’ response. You can view the entire exchange at the 85 minute mark at the hearing’s archived webcast.

To date, the DOL has not taken any additional steps to construct this project, demonstrating that special interest politics trump sound public policy and badly-needed job creation. The DOL opted to cancel the project instead of proceeding without a PLA which will not create jobs for New Hampshire residents and will not help the 24.7 percent unemployment rate in the U.S. construction industry.

Rep. Thompson summarizes the situation best.

“This is not an ‘us vs. them’ scenario, this is about American jobs. Contract decisions for the federal government should not be based on politics,” said Thompson. “True competition will provide the lowest cost, union or not. In this economic crisis, we need to maximize the job creation in this country. And while I commend the Secretary for acknowledging the need to mitigate costs, the Secretary of Labor should be making sure jobs are maximized, rather than catering to unions.”

It is concerning that Solis couldn’t answer Thompson’s question and demonstrated a limited understanding of government-mandated PLAs when she stated that PLAs reduce construction costs. In reality, anti-competitive PLAs increase costs, funnel contracts to special interests and deny taxpayers the accountability they deserve from government. Solis’s position on PLAs is alarming, especially since Section 7 of President Obama’s Executive Order 13502 directs Solis to determine the expansion of the federal government’s PLA policy [Emphasis added]:

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

States and local communities should take interest in the expansion of Executive Order 13502 via Section 7. Accepting federal assistance for construction projects with attached PLA strings that favor Big Labor could bust strained budgets. Will states and local communities swallow the 18 percent PLA premium? Can they afford to build four schools, hospitals, bridges and courthouses for the price of five?

A PLA mandate on federally-assisted projects will also cost jobs. The impact of higher labor costs on finite budgets translates into fewer construction projects. Less building means less jobs which will harm local, state and federal revenue streams.

TheTruthAboutPLAs.com urges Secretary Solis and elected officials in favor of government-mandated PLAs to reconsider their support of these costly, corrupt and anti-competitive special interest agreements.

Worth’s testimony focused on Executive Order 13502 and federal and state government-mandated union-only project labor agreements (PLAs). Worth described how his 400 employees are excluded from PLA construction projects, even though they are qualified and their own tax dollars are being used to fund the projects.

PLAs drive up the cost of construction by reducing competition and effectively excluding merit shop contractors from working on state and federal projects paid for by their own tax dollars.

Construction projects subject to PLAs stifle competition and take away opportunity from nonunion employees unless they agree to the PLA. While nonunion contractors are permitted to bid on PLA projects, the reality is the contracts subject to PLAs end up being awarded almost exclusively to unionized contractors.

Currently, only 15.6 percent of America’s private construction workforce belongs to a union. This means PLAs discriminate against more than 8 out of 10 construction workers, including all of my employees.

In an industry facing an unemployment rate of more than 20 percent, we cannot afford to give some workers jobs simply because they carry a union card while forcing merit shop employees to be without work.

TheTruthAboutPLAs.com covered the forum, entitled “A Culture of Favoritism: The Obama Administration’s Labor Agenda” with a post yesterday.

Here is ABC’s press release on the event.

If you are curious about other types of gifts Big Labor has received from the Obama Administration, a post by Rick Manning on BigGovernment.com documents some key special interest handouts in the Obama agenda(“Transforming the U.S. Department of Labor to the Department of Organized Labor,” 1/20).

No accountability. Workers forced to pay for union benefits that they might not have asked for.  Restricts competition. Special interest handout. This sounds a lot like the Employee Free Choice Act – and it’s not even a law yet. Looks like EFCA may have more than one (equally) evil twin.

TheTruthAboutPLAs.com agrees and reminds voters and elected officials that there is a legislative solution to EFCA’s evil twin.  The Government Neutrality in Contracting Act (S. 90/H.R. 983), introduced Jan. 6 by Sen. David Vitter (R-La.) and Feb. 11 by Rep. John Sullivan (R-Okla.) protects federal and federally-funded construction contracts from government-mandated PLAs and will allow all qualified contractors to have a fair and open chance at competing to rebuild America’s infrastructure.

Here are some facts about the Government Neutrality in Contracting Act:

• Codifies language from President Bush’s Executive Order 13202 into law.
• Prohibits federal agencies engaged in federal and federally-assisted construction contracting from requiring any contractor or subcontractor to sign a union agreement as a condition of performing government work.
• Applies to contracts awarded by federal agencies and construction managers acting on behalf of government agencies.
• Applies to local or state projects receiving federal financial assistance.
• Contractors are permitted to voluntarily enter into PLAs.

Express your opposition to President Obama’s Executive Order 13502, which encourages the use of PLAs on federal construction projects over $25 million, by supporting this the Government Neutrality in Contracting Act.

Help preserve full and open competition on federal and federally-funded construction contracts and call or write your elected officials today.