According to Philly’s press release, the order does not mandate PLAs on all projects, but it creates a PLA evaluation procedure that opens the door to waste and discrimination during procurement of city construction contracts:

“City departments and agencies will refer projects appropriate for a PLA above five million in estimated construction costs to the Mayor’s Office, which will determine the feasibility of a PLA. The executive order establishes the Advisory Committee for Project Labor Agreements, which will monitor and review all PLAs and will make periodic evaluations of the use of PLAs. The members of the Committee are the Mayor’s Chief of Staff, the City Solicitor, Managing Director, Director of Finance, Deputy Mayor for Transportation and Utilities, and Deputy Mayor for Economic Development.”

The press release claims the executive order will lead to government-mandated PLAs that can prevent strikes, save taxpayer dollars and lead to increased minority and Philadelphia resident participation on construction projects funded by local tax dollars.

A press release (pdf) issued yesterday by ABC Eastern Pennsylvania opposed Mayor Nutter’s pro-PLA executive order. And for good reason. TheTruthAboutPLAs.com readers know how government-mandated PLAs do not prevent strikes, reduce costs, increase competition from qualified bidders or, encourage employment of minorities and women tradespeople. Instead, they serve as a barrier to contracts for minority and disadvantaged businesses, and fail to create meaningful local hiring.

More from ABC Eastern PA’s press release:

ABC objects to the use of government-mandated PLAs on any taxpayer-funded construction project.

”Mayor Nutter’s executive order is discriminatory and costly. Government-mandated PLAs effectively preclude a majority of qualified contractors and their local employees from building construction projects funded by their tax dollars,” said Jeff Zeh, president and CEO of ABC Eastern Pennsylvania. “PLAs are only promoted by construction trade unions and their allies in an effort to end open, fair and competitive bidding, thereby providing unions with a workforce monopoly on construction projects.”

“This is nothing more than play to pay politics at its best in Philadelphia,” said Zeh. “The public should hold the Mayor and new Advisory Committee on PLAs accountable for any PLA mandates as these schemes will undoubtedly restrict competition, increase costs and unfairly cater to narrow special interests.”

Why the Reversal in PLA Policy, Mayor Nutter?
Few media outlets have covered this new executive order or questioned the reasoning behind Mayor Nutter’s sudden reversal of his position on government-mandated PLAs.

Journalists need to ask if this is the best solution for taxpayers, minorities and residents. Is this flip flop the result of Philly trade unions becoming more inclusive and less discriminatory, or is this standard Philly pay-to-play politics now that Mayor Nutter was elected for a second term?

Big Labor Causes Discrimination, Waste and Headaches for Philly
For years, Philadelphia was subjected to a pro-PLA bias on city-funded construction projects, starting with Executive Order No. 5-95, signed by Mayor Ed Rendell (D), who served as Pennsylvania’s governor for two terms and pushed government-mandated PLAs on construction projects built and funded by the commonwealth through the Department of General Services.

Taxpayers are also hurt by Big Labor’s presence in Philly’s residential construction market.  To put the negative impact of Philly’s construction unions on city residents into perspective, a 2010 construction industry report suggested modular homes as a solution to Philadelphia’s urban blight and run down neighborhoods because of Philly’s high construction labor costs.

The report said:

“Philadelphia’s construction costs are the fourth highest of any major city in the nation and 18 percent above the national average for all United States communities. The city’s house values—the price for which homes can be sold —are the third lowest of any major city in the nation and are 40 percent below the national average. As a result, construction costs often exceed the prices of new homes. This makes government subsidy a prerequisite for home building in most Philadelphia neighborhoods to fill the gap between building costs and the sales price of a home. High labor costs, 39 percent above the national average, drive the construction industry’s out-of-scale cost structure. These labor costs make up over half the total cost of an average project in Philadelphia.”

Big Labor’s stranglehold on Philly’s government and construction market also has wasted billions of dollars in the commercial and publicly funded construction markets. Embarrassments like the construction trade unions almost running MTV’s Real World out of town for using nonunion labor to build the cast’s trendy home, and unions forcing the Comcast Tower developers to install a second set of plumbing pipes because of a union dispute over the use of environmentally friendly PVC pipes and flushless urinals because they require less labor to install and less maintenance during the building’s lifespan, are too common. And then there is the infamous Dec. 2007 incident in which an African-American union construction worker from the Operating Engineers Local 542 in Fort Washington, Pa., (which has a storied history of choking diversity since at least 1971) complained that another construction worker from the glaziers’ union brandished a noose while working at the city’s Comcast Center.

The noose incident sparked a demonstration by African-American construction workers in City Center and compelled  the Philadelphia City Council to challenge the unions’ pattern of racism in 2007 and 2008. City Council members were outraged by constituent complaints, high city unemployment, and the lack of diversity in Philadelphia’s construction trade unions. Minorities and local residents have been shut out of the trade unions for decades (remember Nixon’s Philadelphia Plan of 1967) and weren’t hired on recent union-controlled projects funded by the city. Despite the fact that almost 80 percent of Pennsylvania’s private construction workforce does not belong to a union, local nonunion contractors and qualified workers complained they’ve been prevented from working on Philadelphia projects because of the city’s pro-PLA policy and other measures designed to steer contracts to union contractors and union labor who have installed pro-union Democrat allies in all levels of government.  At the time, City Council members and Mayor-elect Nutter called it “economic apartheid” for Philly’s constituents.

In early 2008, Tom Ferrick Jr., the Philadelphia Inquirer’s resident investigative journalist, tirelessly researched and bravely brought these facts to light:

“The building-trades unions – despite nearly three decades of effort to the contrary – remain all-male and overwhelmingly white.

Data I have analyzed recently indicate that only one craft is majority black and Latino: the laborers, who are at the bottom rung of the pay scale…

…Under federal regulations, OHCD must keep information on the home addresses, race and sex of workers who work on any government-subsidized project.

The union projects covered by the OHCD data totaled $514 million and involved 10,748 workers.

The nonunion projects – understandably – added up to much less. They totaled $39 million and involved 992 workers.

But the majority of workers in these nonunion projects were minorities: 72 percent, to be exact. And 71 percent lived in the city. Only 2 percent were women.”

This packet of articles, including Ferrick’s columns, document the Philly PLA controversy and tipping point, when Philadelphia City Council members demanded unions put more local and minority residents to work on the then estimated $700 million Convention Center renovation.

The project’s proposed PLA called for 13 percent of the workers to be minorities. The council wanted it at 50 percent. When the unions refused, the city threatened to open the Philadelphia Convention Center renovation project to competition from nonunion contractors by exempting them from having to agree to the union-only PLA as a condition of winning a contract.  The city demanded that trade unions open up their books and reveal the demographics of their membership. Two unions refused, but those that begrudgingly complied (or else they would lose their beloved PLA – their tool to obtain a labor monopoly on the Convention Center project) revealed results supporting Ferrick’s research: Philadelphia construction trade unions are not diverse and their members are not city residents.

The Philadelphia Daily News ran this article Feb. 5, 2008:

A breakdown of building-trades info that ended standoff

Here’s a breakdown of the 11 building-trades unions that provided membership data to City Council:

* Asbestos Workers: 6 percent minorities and women, 19 percent city residents. Among apprentices, 9 percent minorities and women, 35 percent city residents.
* Bricklayers: 20 percent minorities and women, 26 percent city residents. Among apprentices, 25 percent minorities and women, 59 percent city residents.
* Cement Masons: 27 percent minorities and women, 42 percent city residents. Among apprentices, 45 percent minorities and women, 64 percent city residents.
* Elevator Constructors: 5 percent minorities and women, 9 percent city residents. Apprentice data not provided.
* Ironworkers: 19 percent minorities and women, 32 percent city residents. Among apprentices, 24 percent minorities and women, 47 percent city residents.
* Painters: 7 percent minorities and women, 21 percent city residents. Among apprentices, 8 percent minorities and women, 33 percent city residents.
* Plumbers: 5 percent minorities and women, 29 percent city residents. Apprenticeship data not provided.
* Sheet Metal Workers: 14 percent minorities and women, 30 percent city residents. Among apprentices, 23 percent minorities and women, 56 percent city residents.
* Sprinkler Fitters: 6 percent minorities and women, 23 percent city residents. Among apprentices, 11 percent minorities and women, 40 percent city residents.
* Steamfitters: 4 percent minorities and women, 14 percent city residents. Among apprentices, 9 percent minorities and women, 25 percent city residents.
* Laborers: 91 percent minorities and women, 73 percent city residents.

- Dave Davies

Pitiful.  Plus, the data cannot be independently verified and unions failed to accurately report their exact demographics. For example, nobody knows how many individual black AND local members are in the plumbers union. Two major unions, the IBEW local 98 and the carpenters local union, refused to turn over data. But somehow, it was good enough for the City Council.

Politics Stifled Real Reform
Eventually, the city was pressured by Gov. Ed Rendell to cut a deal. The unions were given their anti-competitive PLA and the city received its unenforceable minority and local hiring ”goals” on the Convention Center. Unions were forced to make their best efforts to hire a Convention Center workforce in which 50 percent of workers were Philadelphia residents, 25 percent were African American, 10 percent Hispanic American, 10 percent women and 5 percent Asian. Of course, the Convention Center  exceeded the $700 million estimated cost by more than $86 million when it was completed in late February 2011.  Union abor costs have been blamed for the Convention Center’s difficulty in attracting customers. It is no surprise that reducing competition and mandating archaic union work rules through a PLA produces results like this. And it is unclear if Philly’s trade unions met the controversial hiring goals.

The deal also led to the creation of a new taskforce to address City Council’s concerns. The Mayor’s Advisory Commission on Construction Industry Diversity (MACCID), packed with union members and Big Labor cronies, was formed and tasked with creating a report that would produce solutions to fix the diversity problem festering within Philadelphia’s construction trade unions.

The MACCID produced this report in March 2009, which glossed over the fact that the power and culture of Big Labor is primarily responsible for preventing minority and local residents from obtaining new construction jobs. It offered few real and effective solutions and did not acknowledge Ferrick’s findings, which documented how the nonunion workforce boasted better diversity and local hire numbers. The report did not offer a cost-effective and viable solution: Philly should open competition from nonunion contractors, creating market pressure on unions to diversify faster and enact real reform.

The report and creation of the MACCID was mainly political window dressing offered to constituents less powerful than Big Labor to create the appearance of government addressing their complaints.

Have Philly Unions Suddenly Diversified?
That brings us to Mayor Nutter’s sudden appetite for government-mandated PLAs.

Have Philly’s trade unions produced measurable improvement in terms of putting minorities and local residents back to work?

Did Philly trade unions meet their hiring goals for the Convention Center?

Have unions really allowed the victims of discrimination to become members, despite record levels of construction industry unemployment, which peaked at 27 percent in Feb. of 2010?

Have the disenfranchised actually been hired by contractors, or are they toiling on union hiring hall out-of-work benches.

If there has been positive results, where is the data?

Why are local nonunion contractors and their skilled employees treated like second-class citizens in Philly?

Why did Mayor Nutter suddenly reverse course? How much money did the building trades contribute to his campaign in the last election cycle?

On Sept. 7, a federal District Court judge in Iowa dismissed a lawsuit filed by the Central Iowa and and Cedar Rapids/Iowa City Building and Construction Trades Divisions of the AFL-CIO.  Their suit claimed that Gov. Terry Branstad’s Executive Order 69, which prohibited PLA mandates on state and state funded construction, was preempted by federal labor law.

While the 1993 Boston Harbor Supreme Court decision may have affirmed that government entities can require PLAs on public construction through their interest as a market participant – not a regulator of labor policy, this decision in Iowa is further evidence that government entities can also decide to prohibit themselves and even their subdivisions from requiring contractors to enter into a PLA as a condition of performing public work.

The key point is that the Iowa order does not prohibit a contractor from voluntarily entering into a PLA (which is authorized by the National Labor Relations Act), it simply ensures that government entities are neutral when it comes to PLA policy.  This gets government out of the business of picking winners and losers via politically motivated crony contracting.  By removing PLA favoritism towards Big Labor, taxpayers can get the best construction at the best price.

Here are the highlights from Gov. Branstad’s press release hailing the decision:

Judge Jarvey found “EO #69 establishes funding conditions that serve the State’s proprietary interest in projects. In prohibiting PLAs, the State of Iowa has made a decision that PLAs detract from a competitive bidding environment and that state funds and state projects will benefit from eliminating coercive union tactics. The State, as the proprietor of its construction projects, can make the decision not to pay union wages or operate under union conditions.”

“Dick Sapp, Frank Harty and Ryan Koopmans of the Nyemaster law firm worked tirelessly to get the case dismissed at the earliest point in time before going to trial, saving the state of Iowa tens of thousands of dollars in litigation costs that the state would have incurred due to the lawsuit brought by the unions,” said Jeff Boeyink, Gov. Branstad’s chief of staff.

Mr. Sapp and Mr. Koopmans are also lead counsel on the case brought by AFSCME and Democratic leadership challenging the governor’s line item veto authority.

Illinois lawmakers went after people’s pocketbooks directly in early 2011, enacting one of the most massive tax increases in state history. Democratic leaders claimed that this tax increase was necessary to address the state’s budget deficit, which was somewhere in the neighborhood of $11 – 15 billion, or approximately a third of the total state budget.

Now, to add insult to injury, the General Assembly has decided to pass legislation to codify a Blago/Quinn political handout to Big Labor that will end up costing taxpayers more for public construction projects.

State legislators sent H.B. 2987, The Project Labor Agreements Act, to Gov. Pat Quinn (D) on June 23 and he signed it into law on July 27. This bill enacts the language of Quinn E.O. 3 of 2010 and former disgraced Gov. Rod Blagojevich’s E.O. 13 of 2003 into statute. These orders, and the newly enacted H.B. 2987, encourage state agencies to require wasteful and discriminatory project labor agreements (PLAs) on taxpayer-funded construction.

Here at TheTruthAboutPLAs.com, we have a couple quick thoughts on this sad, but remarkably unsurprising, legislative enactment.

This is the type of law that helps produce an $11-15 billion structural deficit. It appears as though the attitude of most Illinois lawmakers is that paying 12-18 percent more for construction services is fine because they can just raise taxes. This doesn’t exactly sound like a recipe for sound fiscal policy.

On another note, what is it with Chicago politicians and giving handouts to construction unions?  Whether it is President Obama’s Executive Order 13502, the Quinn/Blago executive orders, this newly enacted Project Labor Agreements Act or the way union bosses leveraged their relationships with Chicago pols to pressure Wal-Mart into agreeing to a 19-county PLA, Chicagoland politicians just love the construction unions.  It is just too bad that this love comes at the expense of taxpayers’ wallets and the vast majority of the construction workforce that chooses not to join a union.

Finally, the impact of the Project Labor Agreements Act is particularly sad.  Prior to the 2010 election, Gov. Quinn issued his executive order encouraging state agencies to require PLAs on public construction projects.  In other words, the policy adopted through the passing of legislation was already in place as a result of the executive order.  The most practical impact of passing this bill is that it will now require an act by the General Assembly, not just an executive order, to reverse this policy in the future.

The enactment of the Project Labor Agreements Act is a setback for the people of Illinois.  It is a sign that despite a massive budget deficit and weak economy, it is business as usual in Springfield and Chicago.

In an opinion editorial published in The Wall Street Journal (“Towards a 21st Century Regulatory,” 1/18/11), President Obama wrote:

“Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business – burdens that have stifled innovation and have had a chilling effect on growth and jobs.”

Section 6 of the executive order calls for federal agencies to conduct a welcome “Retrospective Analyses of Existing Rules.”

TheTruthAboutPLAs.com suggests that the administration review and roll back a regulatory scheme designed to steer lucrative federal construction contracts to unionized contractors and create jobs primarily for union labor.  It’s a huge payback to the White House and Congressional Democrats’ biggest political supporters: Big Labor. These special interest deals needlessly inflate construction costs, leading to fewer roads, bridges, schools and sewers for taxpayers, as well as fewer construction jobs in an industry facing 20.7 percent unemployment. 

The schemes are called government-mandated project labor agreements (PLAs) and the Obama administration is encouraging federal agencies to use them on a case-by-case basis when agencies build federal construction projects costing more than $25 million.

On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule (pdf), effective May 13, implementing President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 into federal procurement regulations.

While it is true that the PLA final rule does not mandate PLAs on all federal construction projects — and it offers agencies some flexibility when deciding whether to mandate a PLA on a specific large-scale construction project — the decision to agree to a PLA should be left up to individual contractors and not forced onto qualified contractors by government agencies as a condition of winning a federal construction contract. 

PLAs discourage competition from qualified nonunion contractors that employ 85.5 percent of the construction workforce – those who have decided not to join a union. PLAs also force contractors to sign a union agreement that saddles nonunion contractors with archaic and inefficient union work rules and forces them to hire most or all of their labor from union hiring halls. Studies have found that the red tape associated with PLAs increases the cost of PLA construction projects by as much as 18 percent compared to similar non-PLA projects. 

Officials reviewing existing regulations may claim the FAR Council’s PLA final rule is flexible – and therefore should not be repealed – but the reality is that the White House, agency political appointees, certain members of Congress and Big Labor bosses frequently pressure federal bureaucrats in charge of construction procurement in the hopes of forcing them into mandating a PLA.

This pressure removes discretion and replaces it with the fear of retribution.

The FAR Council should repeal the PLA Executive Order 13502 for two key reasons if Obama is serious about:

“…looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for—and reduce—the burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.”

First, PLAs have a disproportionately negative impact on small businesses. A 2009 report from the U.S. Small Business Administration (SBA) found that the construction industry has one of the highest concentrations of small business participation (more than 86 percent). Because few small businesses are unionized, they are discouraged from participating as a subcontractor on large federal construction projects subject to a PLA. How will these businesses grow if they can’t compete on a level playing field with larger unionized contractors and are forced into the false choice between agreeing to a PLA or opting not to compete for federal construction subcontracts?

Second, the federal regulatory system spends a tremendous amount of time and money encouraging participation from small businesses, disadvantaged businesses, and minority and women owned businesses through agency programs and small disadvantaged business participation mandates in federal procurement regulations. The use of PLAs may impede the ability of potential offerors and subcontractors to meet federal small, minority and disadvantaged business utilization goals and mandates.  As is often the case in the complex web of regulatory red tape, the PLA regulation has unintended consequences and actually counteracts existing regulations and federal resources devoted to addressing the growth of disadvantaged businesses.

The fact that PLAs harm small businesses and weaken the contracting community’s ability to meet federal small and disadvantaged business utilization laws and regulations is one of many reasons why the Small Business & Entrepreneurship Council and the following groups are opposed to government-mandated PLAs: Associated General Contractors, Construction Industry Round Table, Independent Electrical Contractors, National Association of Government Contractors, National Association of Minority Contractors – Philadelphia Chapter, National Association of Women in Construction, National Black Chamber of Commerce, National Federation of Independent Business, National Ready-Mixed Concrete Association, National Utility Contractors Association, U.S. Chamber of Commerce and Women Construction Owners and Executives, USA.

Congress even held a hearing on Aug. 6, 1998, “The Administration’s Policy of Discrimination: Project Labor Agreement’s Negative Impact on Women and Minority Owned Small Businesses” about this very issue when President Clinton promoted PLAs on federal construction contracts as another payback to his political base.

The construction community shouldn’t count on the Obama administration repealing PLA regulations. The WSJ editorial board is skeptical of Obama’s sudden concern with regulations, considering the fact that his administration has watched and directed unprecedented and costly regulatory growth (“Obama’s Rules Revelation,” 1/19/11).

An Op-Ed in The Washington Examiner (“Obama’s Executive Order Rules Out Real Regulatory Reform, 1/18/11) also expresses skepticism about the ability of the Obama administration to cut regulatory red tape. It provides examples of how regulation impacts the ability and cost of businesses hiring people, such as:

“OSHA overreach, the Davis-Bacon Act, new requirements that will have Americans chopping down entire forests to print 1099 tax forms, EPA regulation of carbon dioxide, and FCC regulation of the Internet.” 

ABC sent a letter to Rep. Darrell Issa (R-Calif.) explaining the serious and negative impact of regulations on the construction industry. The PLA regulations is at the top of this list.

If President Obama won’t repeal federal PLA regulations, Congress has the opportunity to protect all taxpayers and businesses while creating ideal conditions for economic growth and job creation.

When Democrats took over Iowa’s state government in 2006, Big Labor was ready to change Iowa’s labor landscape. The state’s long held status as a Right to Work state was in serious jeopardy.

Right to Work laws ensure that workers aren’t forced to pay union dues as a condition of their employment. Repealing Iowa’s Right to Work law would dramatically alter the state’s employment environment and would be a coup for Big Labor.

Despite sizable majorities in both chamber of Iowa’s legislature, Big Labor’s allies have been unable to affect this drastic – and unpopular – change. Although Right to Work repeal legislation has been considered every year since 2006, it still has yet to be enacted.

The most recent attempt to do so is currently being considered by the Iowa House Labor Committee, but is unlikely to become law.

Once it became clear that repeal of Iowa’s Right to Work status was out of reach, Big Labor turned its attention to another item on their to do list: enacting a state prevailing wage requirement. Although prevailing wage requirements are a lower profile issue, they still negatively affect taxpayers by significantly increasing construction costs.

This also turned into a Herculean task, as Iowa lawmakers learned about the expensive impact prevailing wage requirements have on public construction. Studies of the federal Davis-Bacon (prevailing wage) requirement show that it can increase construction costs by almost 40 percent in some cases and numerous studies found similar results at the state level as well.

Again, despite Democrat majorities in the General Assembly, Big Labor’s priority still languished. Sensible lawmakers just couldn’t bring themselves to change how Iowa does business just to benefit one special interest group.

At this point, Big Labor is angry. They spent big money to get Democrats elected in 2006 and got very little perceived benefit in return. This is where Governor Culver comes in. He is down big in the polls with Election Day less than 10 months away. It’s likely that the governor and his political advisors felt they needed to find a way to satisfy Big Labor in order to get their money and support in 2010.

At the same time, the governor didn’t want average Iowans to believe he was doing union bosses a favor in exchange for political support.

Tough problem indeed.

Apparently, the answer was to slap Big Labor with one hand, but give them a high five with the other.

On February 3, this is exactly what Governor Culver did. He walked into the Iowa Building and Construction Trade annual conference, told attendees and the media that he did not support Labor’s number one priority – Right to Work repeal – but then issued an executive order encouraging state agencies to consider project labor agreements (PLAs) on state funded construction.

Talk about trying to thread the proverbial needle!

And then story gets better.

Less then one week after Governor Culver issued this order, state officials announced they would execute PLAs on nearly $200 million worth of planned prison construction.

Are Iowa taxpayers to believe that in the five days after Executive Order 22 was issued, the Iowa Department of Corrections carefully considered all the facts and decided to go with PLAs?

Maybe an excerpt from the Des Moines Register’s coverage of the Department of Correction’s decision to mandate PLAs on the two prison projects can shed some light on this question (Our emphasis added).

“We are just starting to learn about this process,” Baldwin said in an interview. “But we will figure out what it is, get input from both sides, and try to craft a document that is sensitive to everybody.”

It doesn’t sound like the folks at the Department of Corrections even know what a PLA is. And why would they? They didn’t require PLAs other recent projects.  Here is another excerpt from the Register’s coverage:

Iowa Corrections Director John Baldwin said Tuesday his department didn’t use such agreements when three new state prisons were built in the 1990s in Clarinda, Newton and Fort Dodge. But an executive order signed by Gov. Chet Culver last week requires state officials to consider using project labor agreements on all large-scale state government construction projects.

It doesn’t look like they spent much time considering the impact of PLAs either or their sad, well documented history in Iowa.

In 2002, the Polk County Board of Supervisors signed a PLA with the Central Iowa Building and Construction Trades Council for the Iowa Event Center project. This project included a 17,000-seat arena and meeting and exhibit halls. The Board of Supervisors claimed that the PLA was necessary to “keep the project on time, keep it on budget and complete it in a safe manner.”

A 2006 study by the Public Interest Institute, a nonpartisan, nonprofit research and educational institute in Mt. Pleasant, Iowa, found that the PLA failed on all three counts and created unnecessary burdens for local workers, taxpayers and businesses.

Here is an excerpt from the study:

One might think that completing a project on budget, on time and safely would be the goal for each and every construction project, but apparently the Polk County Board of Supervisors felt these goals could not be accomplished on the Iowa Events Center project without a project labor agreement. Having been granted the PLA, was the Iowa Events Center completed on budget, on time and safely? No. Instead, workers were frozen out of the opportunity to work, businesses were not allowed to compete and the taxpayers were forced to pay even more for the Iowa Events Center construction because of the cost overruns of the project. The project labor agreement for the Iowa Events Center project was an unnecessary burden on the workers, businesses and taxpayers of Iowa.

With all this evidence to consider, why would the Iowa Department of Corrections publicly announce that they plan to require contractors on these projects to sign PLAs so quickly?

Here at TheTruthAboutPLAs.com, this smells like political payback to us.  It is clear that the department has not carefully considered the impact of PLAs.  Additionally, it doesn’t appear as though PLAs were even on the department’s radar before Governor Culver stepped in for the union bosses he is trying to court.

This is quid pro quo politics at its worst and a prime example of PLAs as payback to Big Labor at the taxpayers’ expense.

As we stated in an earlier post, this is an unfortunate development for the people of Iowa.  Although Gov. Culver claims that this order “fights for working families,” it really means wasted tax dollars and stinks of election year politics.

Iowans have some experience with wasteful and discriminatory PLAs.  In 2002, the Polk County Board of Supervisors signed a PLA with the Central Iowa Building and Construction Trades Council for the Iowa Event Center project.  This project included a 17,000-seat arena and meeting and exhibit halls.  The Board of Supervisors claimed that the PLA was necessary to “keep the project on time, keep it on budget and complete it in a safe manner.”

A 2006 study by the Public Interest Institute, a nonpartisan, nonprofit research and educational institute in Mt. Pleasant, Iowa, found that the PLA failed on all three counts and created unnecessary burdens for local workers, taxpayers and businesses.

Here is an excerpt from the study:

One might think that completing a project on budget, on time and safely would be the goal for each and every construction project, but apparently the Polk County Board of Supervisors felt these goals could not be accomplished on the Iowa Events Center project without a project labor agreement.  Having been granted the PLA, was the Iowa Events Center completed on budget, on time and safely?  No.  Instead, workers were frozen out of the opportunity to work, businesses were not allowed to compete and the taxpayers were forced to pay even more for the Iowa Events Center construction because of the cost overruns of the project.  The project labor agreement for the Iowa Events Center project was an unnecessary burden on the workers, businesses and taxpayers of Iowa.

The failure of the Iowa Event Center PLA is just one of many examples of PLAs increasing construction costs for taxpayers and limiting opportunities for nonunion workers to compete for projects paid for by their own tax dollars.

So what prompted Gov. Culver to issue this order?  Here at TheTruthAboutPLAs.com, we have a guess.

Gov. Culver is facing long odds for re-election this fall against former Gov. Terry Branstad (R).  Recent polling shows Culver trailing Branstad by double digits and although it is still early, this is a troubling sign for an incumbent governor.

This is where Big Labor comes in.  Since Democrats took control of state government in 2006, Big Labor’s priorities have come to the forefront.  In 2007, union bosses and their allies in the General Assembly tried and failed to repeal the state’s Right to Work law.  After seeing the Right to Work repeal effort fail, Big Labor attempted to enact a state prevailing wage requirement in both 2008 and 2009.  Sensible lawmakers from both parties saw that prevailing wage requirements can significantly increase state construction costs and these measures were defeated as well.

Recognizing that Iowans aren’t too keen on changing their state’s Right to Work status, Gov. Culver marched into today’s Building Trade’s convention and told them he would not try to repeal the Right to Work law this year.  But it appears as though the governor thinks that he needs Big Labor’s support to win in November and gave them a parting gift on his way out – an executive order encouraging state agencies to execute wasteful and discriminatory PLAs.

Perhaps Gov. Culver hoped that his Right to Work announcement would overshadow his gift to the construction unions both in the media and in the minds of taxpayers.  He was wrong.  Reactions to this special interest handout have been swift and strong.

Former Gov. Branstad issued an immediate response on his 2010 campaign website.  Here is an excerpt:

This executive order will drive up costs. It will cost YOU, the taxpayer, even more than you are already paying.

What Governor Culver isn’t counting on is the people of Iowa to rise up and say, “Stop forcing costly, job-killing actions!” Whether it’s legislative liberals who push the repeal of right-to-work, prevailing wage, choice of doctor – all VITAL to the Big Labor agenda – to this governor kowtowing to them through election year conversions, we must stand up to him.

Not only that…he’s buttering them up at their own convention!

The Iowa Chapter of Associated Builders and Contractors issued the following news release:

The Iowa Chapter of Associated Builders and Contractors Denounces Executive Order 22 as Wasteful

Des Moines, IA – The Iowa Chapter of Associated Builders and Contractors (ABC) today denounced Executive Order 22 issued by Gov. Chet Culver, which encourages the use of project labor agreements (PLAs) on large-scale construction projects.

“Construction contracts subject to government-mandated PLAs are designed to be awarded exclusively to unionized contractors and their all-union workforces,” said Mike McCoy, ABC of Iowa Chairman.  “PLAs drive up construction costs by as much as 18 percent and discriminate against 8 out of 10 Iowa construction workers who have chosen not to join a construction labor union.”

“In the face of sagging poll numbers, Governor Culver issued an order that is nothing more than a political handout to Big Labor at the expense of taxpayers,” McCoy continued.  “There is no question that PLAs increase construction costs.  Studies conducted on a project here in Iowa found PLAs to be an unnecessary burden on local workers and taxpayers.  The only reason for Governor Culver to issue this order is to satisfy Big Labor after Democrats failed to repeal Iowa’s Right to Work law in 2007 and enact burdensome construction wage requirements in 2008 and 2009.”

A PLA is a contract that requires a construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; pay union wages and benefits; and obey the union’s restrictive work rules, job classifications and arbitration procedures.

PLAs have been hotly contested because they discriminate against nonunion workers.  President Obama signed controversial Executive Order 13502 to encourage PLAs for use on federal construction projects over $25 million.  The order is under government review and is expected to be implemented.

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ABC of Iowa is a statewide association representing approximately 550 merit shop construction and construction related firms. For more information visit www.abciowa.org

It is unfortunate that Gov. Culver decided to make his campaign for re-election a priority over good stewardship of the taxpayers’ money.  TheTruthAboutPLAs.com will do a complete roundup of news and blog coverage of this executive order and a breakdown of the order itself tomorrow.  Stay tuned.

The article tempers Big Labor’s praise for President Obama’s pro-labor policies with their muted disappointment because the Orwellian named Employee Free Choice Act (EFCA), commonly known as Card Check legislation, has stalled in the Senate and the Obama administration is allegedly lukewarm in spending political capital to push EFCA through the Senate.

Invariably, union activists tick off the positive things that Obama has done, including signing the Lilly Ledbetter Fair Pay Restoration Act, which gives workers more time to file wage-discrimination suits; issuing three executive orders that boost organizing opportunities for federal employees; using more pro-union rhetoric than any other president has in decades; winning enactment of massive economic stimulus legislation to boost employment; and promising still more government spending on transportation and green jobs.

The author fails to mention President Obama’s gift to organized labor (and blow to the merit shop construction community) in Executive Order 13502.

Executive Order 13502, signed Feb. 6, 2009, encourages federal agencies to require PLAs on federal and federally funded construction projects in excess of $25 million. 

President Obama signing one of three pro-union Executive Orders January 30, 2009, one week before Executive Order 13502 was signed.

The Obama order also repealed President Bush’s Executive Orders 13202 and 13208 which prohibited federal agencies and recipients of federal financial assistance from mandating wasteful and discriminatory union-only PLAs on construction projects.

 Between 2001 and 2007, at least $123.1 billion worth of federal construction projects was bid without discriminatory and wasteful union-only PLAs thanks to the Bush executive order.  The actual value of construction projects protected by Executive Order 13202 is exponentially larger, as the above figure does not include 2008 federal construction put in place spending or state and local construction spending from 2001-2008 that received federal funding or assistance but was protected from government mandated PLAs by the order.

ABC strongly opposes government mandated union-only PLAs and released this Feb. 6 press release denouncing Executive Order 13502.

“Today’s decision to repeal Executive Order 13202 opens the door to waste and discrimination in federal and federally funded construction contracts,” said ABC President and CEO Kirk Pickerel. “This action removes the safeguards that prohibited discrimination based upon union affiliation in the awarding of federal contracts.

“Construction contracts subject to union-only PLAs are designed to be awarded exclusively to unionized contractors and their all-union workforces,” said Pickerel.

“Absent the economic benefits of competitive bidding, union-only PLAs are known to increase construction costs between 10 percent and 20 percent and discriminate against minorities, women and qualified construction workers who have traditionally been excluded from union membership.

“Union-only PLAs drive up costs for American taxpayers while unfairly discriminating against 84.4 percent of U.S. construction workers who choose not to join a labor union,” added Pickerel. “All taxpayers should have the opportunity to compete fairly on any project funded by the federal government.”

ABC will be monitoring this issue closely as the Obama order requires the FAR Council to issue implementing regulations within 120 days (June 6), and the Director of Office of Management and Budget is expected to provide the President, within 180 days of the date of the Order (Aug. 5), “with recommendations about whether broader use of labor agreements will promote economical, efficient, and timely completion of such projects.”

Be sure to look for more updates on TheTruthABoutPLAs.com about Executive Order 13502 as we get close to the June 6 and Aug. 5 deadlines.

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