Bidding is open only to certified small business contractors willing to agree to the terms and conditions of the DOL’s union-friendly PLA. The DOL issued a sources sought notice Sept. 23, 2011 (DOL111RI20431), to determine if there were enough interested and qualified small business general contractors to designate it a 100 percent small business set-aside.

Controversy concerning the union-favoring PLA mandate will heighten once the project’s solicitation containing the PLA is issued the second week of January.

Update Jan. 30: The DOL solicitation, issued  Jan. 30, 2012, can be read here. Here is the actual PLA and here are the numerous union collective bargaining agreements (CBAs) contractors will have to agree to in addition to the PLA for the life of the project. Bids are due March 21, 2012.

Update Feb. 6: Sen. Kelly Ayotte (R-NH) issued a press release and sent a letter to the White House asking for President Obama to repeal his pro-PLA Executive Order 13502 and remove the DOL’s PLA mandate on this project. The Union Leader has a piece on the controversy here.

Dec. 23, the New Hampshire Union Leader ran a holiday themed op-ed by ABC New Hampshire/Vermont President Mark Holden. It summarizes the long-running controversy surrounding the DOL’s PLA mandate on the Job Corps Center and the absurdity of this gift to Big Labor at the expense of New Hampshire businesses and workers.

Executive Order 13502: Obama's Gift to Big Labor. Image courtesy of The Boston Globe, "Obama kowtows to labor unions," 10/07/09.

By Mark Holden

It may be beginning to look a lot like Christmas, but many New Hampshire construction workers and businesses are expecting a lump of coal in their stockings from the federal government.

In this case, the Grinch is the U.S. Department of Labor (DOL), which is planning to build a $35 million Job Corps Center in Manchester with federal tax dollars.  Unfortunately, the DOL is poised to ensure the project is built by out-of-state union labor and union contractors, despite the fact that more than 91 percent of New Hampshire’s construction workforce chooses not to belong to a construction labor union.

The DOL is mandating a union-favoring project labor agreement (PLA) on the Job Corps Center.  Created by unions as a way to circumvent the free market and regain lost market share, a PLA typically requires contractors to replace most or all of their existing workforce with unfamiliar union labor, follow archaic and inefficient union work rules, and pay into underfunded union pension and benefit plans if they want to win contracts.

New Hampshire’s skilled nonunion workers are forced to accept unwanted union representation and pay union dues, yet they will forfeit benefits paid into union pension and benefit plans during the life of the project unless they join a union and become vested in these plans. 

Such humbuggery has the effect of discouraging competition from New Hampshire’s qualified contractors and their local employees.

Reduced competition coupled with costly union red tape needlessly increases construction costs.  Studies by the Beacon Hill Institute in Boston indicate projects subject to prevailing wage laws built with government mandated PLAs are 12 percent and 18 percent more expensive compared to similar non-PLA projects subject to government-determined wage and benefit rates. The research comes as no surprise to anyone familiar with Boston’s Big Dig boondoggle, which was built with a PLA mandate.

In short, government-mandated PLAs are a gift to Big Labor at the expense of taxpayers and New Hampshire construction businesses and tradespeople.

If this controversy has the disappointing familiarity of a re-gifted fruitcake, it is because the DOL tried to mandate a PLA on the Job Corps Center in 2009.  In the face of such blatant discrimination, a brave contractor, North Branch Construction of Concord, filed a bid protest against the DOL’s anti-competitive PLA. Instead of proceeding with PLA-free construction subject to fair and open competition – which would result in badly needed local job creation – the DOL canceled the project.

Not to be deterred, the DOL retained the services of a consultant, Hill International, to prepare a report justifying and defending a PLA requirement. The report cost taxpayers $130,000. It was the second PLA report Hill International prepared for the DOL. The first report, which trumpeted the alleged benefits of PLAs on federal construction projects, cost taxpayers $300,000. The latest report is so shoddy and full of pro-PLA bias, taxpayers will wish it came with a gift receipt.

The DOL and the federal government’s discriminatory policy is the product of an executive order signed by President Obama just a few days after moving into the White House in 2009. The measure encourages federal agencies to mandate PLAs on a case-by-case basis on large federal construction projects exceeding $25 million in total cost.

It is no coincidence it steers federal contracts to one of the White House’s and Democrat party’s biggest political patrons: Big Labor.

So while the Grinch has come to town, stealing Christmas hopes and dreams away from The Granite State’s workers and their families, will any of the GOP presidential candidates take a stand against deceptive payback to Big Labor prior to New Hampshire’s Jan. 10 primary?  

All nonunion contractors and their employees want this holiday season is the ability to fairly compete.  Some members of Congress, such as New Hampshire Sen. Ayotte, Rep. Frank Guinta and Rep. Charlie Bass, have stood up for free enterprise and New Hampshire families in support of legislation (S. 119 and H.R. 735) to “preserve open competition and federal government neutrality toward the labor relations of federal government contractors on federal and federally funded construction projects.”

That’s exactly what should happen. The federal government should preserve the right of everyone to fairly compete for jobs, not just a select few.

Congress should pass this legislation or a new president should undo President Obama’s destructive policy catering to well-connected special interests. It’s the only surefire way to keep the federal Grinch at bay.

##

Mark Holden is the president of the New Hampshire/Vermont Chapter of the Associated Builders and Contractors. To learn more about anti-competitive PLAs, visit www.TheTruthAboutPLAs.com.

Well said, Mark.

To date, The Government Neutrality in Contracting Act (H.R. 735/S.119) has 170 cosponsors in the House, nearly 30 cosponsors in the Senate, and broad support from industry groups.

Concerned taxpayers can write Congress here to help keep the federal Grinch at bay this holiday season.

Image Courtesy of the Columbus Dispatch

TheTruthAboutPLAs.com readers may recall previous media coverage of the Job Corps Center project, which most recently includes a New Hampshire Union Leader article (“Jobs Corps Center project going forward,” 8/20/11) and related press release from U.S. Sen. Kelly Ayotte (“Senator Ayotte Expresses Concerns about Labor Requirement for Manchester Job Corps Project,” 8/19/11) in response to the DOL’s August announcement they will proceed with construction and mandate a PLA:

MANCHESTER — A project labor agreement, which delayed construction of New Hampshire’s Job Corps Center for 21 months, will be a project requirement according to the U.S. Department of Labor.

The department announced last week it would move forward with the long-delayed $35 million project off Dunbarton Road. A New Hampshire contractor challenged the requirements two years ago, delaying project construction.

U.S. Sen. Kelly Ayotte said in a press release Friday she is concerned that the PLA favors out-of-state unionized contractors over local firms and could drive up the project’s cost.

“The administration’s plan to keep in place the PLA represents yet another senseless government mandate that could put New Hampshire businesses and workers at a competitive disadvantage. A PLA effectively gives unionized firms an unfair advantage over non-union firms, making it less likely that New Hampshire contractors would be able to bid successfully for the work,” said Ayotte. “This is a New Hampshire project, and local contractors should be able to compete for it on a level playing field.”

Project labor agreements usually require companies working on a construction project to provide health care, retirement benefits and apprenticeship programs. And PLAs usually include work rules, safety provisions, dispute resolution and a no-strike clause.

Contractors balked when the Job Corps agreement called for experience with three or more PLAs. North Branch Construction of Concord filed a protest with the Government Accountability Office and that brought the bidding process to a halt.

Manchester Mayor Ted Gatsas said Friday his concern with the original PLA was the prior PLA experience. That meant no New Hampshire firms could qualify to do the work, because no firm had experience with three PLAs, he said.

“My understanding was that was not going to be in there,” Gatsas said. “It should be New Hampshire people doing this project.”

Gatsas said he has not seen the documentation, but noted “This is a project we need to move forward. It’s 300 construction jobs to the city and 135 permanent jobs.”

In response to a request from Ayotte asking to clarify the PLA issue, the DOL wrote that in keeping with a January 2009 executive order by President Obama, construction projects over $25 million should use PLAs. A PLA is appropriate for the $35 million Job Corps project, the department wrote.

Mark Holden, president of the Associated Builders and Contractors of New Hampshire/Vermont said: “It is important for all New Hampshire taxpayers to understand the impact of this decision. Requiring non-union contractors to execute union agreements for the project, agreeing to replace their employees with union workers, pay into union funds and abide by union work rules and conditions creates unknown costs that are impossible to plan and bid for and are conditions that make it non-competitive for non-union contractors.

“To suggest that a non-union contractor’s ability to compete would not be impacted by this PLA is untrue. A PLA requirement will have a chilling impact on competition from non-union contractors and will dramatically inflate the construction cost of this taxpayer funded project. At a time when a challenging economy is dependent on real solutions for job creation and accountability for every taxpayer dollar, this decision is unbelievable.”

Joe Casey, president of the New Hampshire Building and Construction Trades Council, said Ayotte and Holden are making a lot of assumptions about the PLA and what it will require. “It all depends on what the project labor agreement is and I have yet to see one for this project,” Casey said. “This is a debate we should have once the Department of Labor releases the project (documents).”

He noted the DOL hired an independent group, Hill International, to determine if a PLA is feasible for the project, but he had not seen the study. “We should all take a step back and see the actual contents of the project labor agreement,” Casey said. “The provisions could benefit New Hampshire contractors and New Hampshire workers.”

He noted the last major federal construction project in New Hampshire was the Berlin prison and the contractors and almost all of the workers came from out-of-state. That prison has yet to open because the federal government has not released operation money.

“That is the type of thing the project labor agreement addresses,” Casey said. “If federal money is coming to the state of New Hampshire, why shouldn’t it stay in New Hampshire with the New Hampshire workforce. At the end of the day, that is what we are looking for.”

Dick Anagnost, a Manchester developer who is chairman of the Job Corps Task Force, told the New Hampshire Union Leader last week that the project will take about 18 months.

He said the Labor Department should take a month to prepare bid specifications. Another month will be needed to solicit bids, and a final month will be needed to review them.

A Job Corps Center will help train economically disadvantaged youth to enter high-growth industries. New Hampshire is among the last states to have a Job Corps Center. The state began efforts 10 years ago to land a center of its own.

The DOL’s 2009 PLA mandate was the first PLA mandated by a federal agency following President Obama’s Feb. 6, 2009 Executive Order 13502, which encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. The DOL’s 2009 PLA mandate was especially unusual because it was issued prior to the Federal Acquisition Regulatory (FAR) Council final rule (pdf), issued April 13, 2010, and effective May 13, 2010, implementing Executive Order 13502 into federal procurement regulations (learn more here).

Similar attempts by federal agencies to mandate PLAs before and after the effective date of the FAR final rule were foiled by ABC contractor-led bid protests (learn more here).

However, Executive Order 13502 and the related FAR rule remain controversial White House gifts to Big Labor likely to increase federal construction costs, reduce economy and efficiency in federal contracting, reduce competition from quality nonunion contractors and their skilled employees, and deny taxpayers the accountability they deserve from government.

TheTruthAboutPLAs.com will be following the DOL Job Corps Center project closely in the coming weeks.

(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.

Dropping inclusion of union-coddling project labor agreements (PLAs) from bidding requirements for a $50 million Veterans Affairs research office building in Pittsburgh is a step in the right direction — a direction in which all public construction projects must go for taxpayers’ sake.

The VA dropped the requirement — and said it won’t give preference to bids that include PLAs — after North Side contractor Bridges filed an October protest with the Government Accountability Office. Bridges had help from Associated Builders & Contractors, the local trade group that has sued over PLA requirements for Community College of Allegheny County and Penn Hills School District projects.

PLAs should not be part of public construction projects — period. Politicians use PLAs to reward unionized supporters, putting taxpayers on the hook for the higher costs that studies show PLAs impose. Project labor agreements also discriminate against nonunion workers’ — taxpayers who outnumber unionized workers — job opportunities.

The VA decision on the Oakland project must stick, becoming standard procedure for that agency. And the rest of government, at all levels, must follow suit. Taxpayers’ interests must come before those of extorting unions and the politicians who pander to them.

We agree.

BNA’s Construction Labor Report also covered this story with notable interviews from VA and GAO officials (“Contractor Protest Causes VA to Delete PLA Mandate from Research Building Bid Notice,” 1/12/11) [Note: Subscription Required]:

The Department of Veterans Affairs has made the use of a project labor agreement optional for all offers to construct a research building in Pittsburgh for the department after it withdrew a PLA mandate from the project’s bid solicitation, a department official told BNA Jan. 10.

 A Veterans Affairs spokesman told BNA that proposals submitted with PLAs on the project to construct the VA Research Office Building in Pittsburgh estimated to cost between $50 million to $100 million, will not be awarded any “additional points or weight” during the bid evaluation process. The spokesman said the decision applies only to this specific project. [snip]

A GAO attorney explains the bid protest and PLA withdrawal:

According to Ralph White, managing general counsel of GAO’s procurement law division, the protest was dismissed Dec. 9, 2010, because the VA decided to delete the PLA mandate from the bidding requirements. The Veterans Affairs chose to amend the bid solicitation after concluding that the protest filed by Bridges Construction might be sustained by the GAO, however GAO did not reach a final decision because the VA “decided to take corrective action,” White told BNA.

To learn more about the bid protest and victory for taxpayers and members of the construction community, please visit here.

ABC WINS ANOTHER CHALLENGE AGAINST GOVERNMENT-MANDATED PROJECT LABOR AGREEMENTS ON FEDERAL CONSTRUCTION PROJECTS

For Immediate Release
January 6, 2011

 Contact: Gail Raiman, (703) 812-2073
Gerry Fritz, (703) 812-2062 

WASHINGTON, D.C. – Associated Builders and Contractors (ABC) today announced another victory in its fight against government-mandated project labor agreements (PLAs) on federal construction projects. As a result of a bid protest filed Oct. 18 with the Government Accountability Office (GAO), a PLA mandate has been removed from the bidding process for the construction of a $50 million U.S. Department of Veterans Affairs’ (VA) Research Office Building in Pittsburgh.

“PLAs are special interest schemes that force all bidders for construction projects to sign a labor agreement with construction unions as a condition of performing work,” said ABC President and CEO Kirk Pickerel. “This is the fourth successful bid protest that ABC has supported on behalf of one of its members against unlawful PLA schemes on federal construction projects. In similar protests filed on projects in New Hampshire, Washington, D.C., and New Jersey, federal agencies have withdrawn the PLA mandates. This case gives us the clearest indication yet that PLAs violate federal competitive bidding laws.”

ABC member company Bridges Construction of Pittsburgh, supported and assisted by ABC, filed a bid protest with the GAO. The protest challenged the VA’s PLA mandate that appeared in a September 10 bid solicitation (pdf) for the Research Office Building. The PLA requirement discriminated against qualified open shop contractors and their employees by imposing union dues requirements and inefficient and costly union work rules as a condition of performing work on the project.

During the course of the GAO protest, the VA revealed that its own PLA impact study found imposing a PLA on the project would increase costs by millions of dollars, would reduce the number of bidders and subcontractors, and would decrease the pool of skilled labor. In spite of this evidence, the VA claimed a PLA was supported by President Obama’s Executive Order 13502, which “encourages” federal agencies to impose PLAs on large construction projects if “consistent with law.”

After reviewing the facts of the case, the GAO strongly indicated it would sustain the protest of ABC’s member contractor under the federal Competition in Contracting Act (CICA), absent corrective action by the VA. In direct response to GAO’s action, on Dec. 21, 2010, the VA announced its withdrawal of the PLA mandate from the Pittsburgh solicitation. On January 5, 2011, the VA confirmed that adoption of a PLA would be completely “optional” for submitting offerors. According to the VA, “No additional points or weight will be assigned to proposals submitted with a PLA.”

“This result confirms ABC’s position that the open competition requirements of the federal CICA law take priority over President Obama’s pro-PLA Executive Order 13502,” said ABC President Pickerel. “The GAO agrees that no PLAs can be imposed on federal contracts in the absence of a compelling showing of need and evidence that PLAs will deliver increased economy and efficiency in federal contracting.”

“It’s time for the Obama administration to stop steering lucrative federal construction contracts to Big Labor – one of their largest political supporters – through unlawful government-mandated PLAs,” Pickerel said. “The American people deserve the best possible construction project at the best possible price. We can’t afford the increased costs, reduced competition and delays created by these special interest handouts. ABC will continue to fight for fair and open competition, and will challenge federal agencies attempting to impose unjustified PLAs on federal projects.”

Numerous studies show that PLAs discourage open shop contractors and subcontractors from competing for federal contracts, thereby increasing costs to taxpayers and discriminating against the majority of the construction industry workforce; or the 85 percent of the construction workforce that are not members of a labor union.

##

Here are some interesting facts about this case:

TheTruthAboutPLAs.com readers may recall that in 2009, the VA hired a consulting firm to produce a study about the impact of PLAs in specific construction markets where the VA was looking to renovate and build new facilities (“Independent Study Finds PLAs Increase Construction Costs,” 11/2/09). While that study did not address the Pittsburgh market specifically, a similar study (referenced above), was completed in 2010 for the VA on the Pittsburgh market. Like the 2009 study, it found a PLA would increase costs by millions of dollars, reduce the number of bidders and subcontractors, and decrease the pool of skilled available labor.

According to www.unionstats.com, just 20.3 percent of Pennsylvania’s private construction workforce belongs to a construction labor union and just 11.2 percent of ALL private workers (in all industries) in Pittsburgh’s Metropolitan Statistical Area (MSA) belong to a labor union.

The VA failed to produce evidence to suggest that a PLA would create economy and efficiency in federal contracting.  It is no surprise because a PLA is a solution in search of a problem.

If PLA advocates claim that PLAs are needed to prevent labor disputes, the public record from 2001 through early 2009 (when PLAs were prohibited on fedearl and federally assisted construction projects by President Bush’s Executive Order 13202 and 13208) clearly demonstrates that a lack of a PLA did not result in strikes and labor disputes on VA projects, as evidenced by this 2009 Freedom of Information Act request filed by ABC.  Aferall, Big Labor is the cause of labor unrest and worksite friction. Why reward such extortionary tactics with a PLA monopoly?

In addition, comments by PLA proponents claiming that a PLA ensures fair wages and benefits on this project are also bogus. All federal projects, regardless of a PLA, are subject to federal prevailing wage laws set by the Davis-Bacon Act. Davis-Bacon “prevailing wage” rates are typically articifially inflated union wage and benefit rates set by the government that must be paid to all workers, regardless of whether or not there is a PLA or they belong to a union. Wage rates can be found at www.wdol.gov. For example, the rate for an electrician engaged in “Building” construction in Allegheney County is $34.26 in wages plus $17.88  in benefits, for a total compensation package of $52.14 per hour. Assuming full employment through the year, that is a wage and benefit package of $108,451. That is without a PLA, folks.

Again, a PLA is a solution in search of a problem. We think the real problem might be that Big Labor needs a handout from politicians in return for Big Labor’s political investment through campaign contributions and endorsements.

We suspect that officials at the VA were pressured into mandating this PLA by politicians, Big Labor bosses, political appointees and possibly White House staff  interested in paying back Big Labor for their political support.

TheTruthAboutPLAs.com believes that fair and open competition, free from government-mandated PLAs, will help the VA deliver to taxpayers the best possible product at the best possible price.

Update: The Washington Examiner’s Mark Hemingway covered this story today (“White House Loses Battle Over Union Paybacks,” 1/6/10):

Bridges Construction of Pittsburgh recently filed a bid protest with the Government Accountability Office after the federal government tried to impose a Project Labor Agreement (PLA) as part of the federal contract in the construction of a $50 mllion Veterans Affairs building. PLAs are construction contracts negotiated in advance that basically mandate union labor — a study from the Beacon Hill institute found that PLAs make construction projects 12 percent to 18 percent more expensive on average.

Last month, I wrote about how the Obama White House signed an executive effectively imposing on all big Federal construction projects as way to pay back unions for their political support. After my column ran, a number of Republican Congressmen wrote a letter to the White House questioning the White House’s PLA policy.

According to today’s press release from Associated Builders and Contractors, Associated Builders and Contractors and Bridges Construction successfully thwarted the PLA on the VA building in Pittsburgh:

[snip].

During the course of the GAO protest, the VA revealed that its own PLA impact study found imposing a PLA on the project would increase costs by millions of dollars, would reduce the number of bidders and subcontractors, and would decrease the pool of skilled labor. In spite of this evidence, the VA claimed a PLA was supported by President Obama’s Executive Order 13502, which “encourages” federal agencies to impose PLAs on large construction projects if “consistent with law.”

[snip]

Emphasis mine. The government’s own study found the PLA was a waste of tax dollars, and yet they still tried to impose one anyway. Remember unions are Democrats biggest campaign donor. PLAs are not about efficient use of your hard earned tax dollars — they’re political payback.

Hemingway hit the nail on the head. Government-mandated PLAs are all about payback.

Update 1/12/11: An editorial in The Pittsburgh Tribune-Review praised the removal of government-mandated project labor agreement (PLA) on the construction of a $50 million U.S. Department of Veterans Affairs’ (VA) Research Office Building in Pittsburgh and heavily criticized politicians and special interests participating in these anti-competitive and costly schemes (“The VA & PLAs: A welcome reversal,” 1/13/11):

Dropping inclusion of union-coddling project labor agreements (PLAs) from bidding requirements for a $50 million Veterans Affairs research office building in Pittsburgh is a step in the right direction — a direction in which all public construction projects must go for taxpayers’ sake.

The VA dropped the requirement — and said it won’t give preference to bids that include PLAs — after North Side contractor Bridges filed an October protest with the Government Accountability Office. Bridges had help from Associated Builders & Contractors, the local trade group that has sued over PLA requirements for Community College of Allegheny County and Penn Hills School District projects.

PLAs should not be part of public construction projects — period. Politicians use PLAs to reward unionized supporters, putting taxpayers on the hook for the higher costs that studies show PLAs impose. Project labor agreements also discriminate against nonunion workers’ — taxpayers who outnumber unionized workers — job opportunities.

The VA decision on the Oakland project must stick, becoming standard procedure for that agency. And the rest of government, at all levels, must follow suit. Taxpayers’ interests must come before those of extorting unions and the politicians who pander to them.

We agree.

BNA’s Construction Labor Report also covered this story with notable interviews from VA and GAO officials (“Contractor Protest Causes VA to Delete PLA Mandate from Research Building Bid Notice,” 1/12/11) [Note: Subscription Required]:

The Department of Veterans Affairs has made the use of a project labor agreement optional for all offers to construct a research building in Pittsburgh for the department after it withdrew a PLA mandate from the project’s bid solicitation, a department official told BNA Jan. 10.

 A Veterans Affairs spokesman told BNA that proposals submitted with PLAs on the project to construct the VA Research Office Building in Pittsburgh estimated to cost between $50 million to $100 million, will not be awarded any “additional points or weight” during the bid evaluation process. The spokesman said the decision applies only to this specific project. [snip]

A GAO attorney explains the bid protest and PLA withdrawal, indicating that the GAO would have ruled against the VA’s PLA mandate:

According to Ralph White, managing general counsel of GAO’s procurement law division, the protest was dismissed Dec. 9, 2010, because the VA decided to delete the PLA mandate from the bidding requirements. The Veterans Affairs chose to amend the bid solicitation after concluding that the protest filed by Bridges Construction might be sustained by the GAO, however GAO did not reach a final decision because the VA “decided to take corrective action,” White told BNA.

To learn more about the bid protest and victory for taxpayers and members of the construction community, please visit here.

UPDATE: The VA hired the same consulting firm to update their PLA study from September 2010. The new study, dated May 17, 2011, again recommended against a government-mandated PLA on the Pittsburgh project:

For a Pittsburgh, Pennsylvania project at the present time, we see a potential cost risk premium of 3% to 5% if a PLA is mandated. For a $40 mil. project, this would equate to $1.2 to $2.0 mil.

We see that a mandated PLA will reduce sub-contractors and lower the labor pool to the detriment of the project, and potentially add cost; therefore we believe that a PLA would likely not “advance the federal Government’s interest in achieving economy and efficiency in federal procurement.”

This is yet another blow to the Obama administration’s effort to implement Executive Order 13502, which encourages the use of PLAs on federal construction costing more than $25 million.

In this most recent victory for taxpayers, ABC was successful in having a mandatory PLA removed from the bidding process for the construction of an Armed Forces Reserve center in Camden, N. J.

Here is ABC’s August 25 press release:

ABC Wins Challenge Against Mandatory Project Labor Agreement on Federal Construction Project in New Jersey

WASHINGTON, D.C. – Associated Builders and Contractors (ABC) today announced it was successful in having a mandatory project labor agreement removed from the bidding process for the construction of an Armed Forces Reserve center in Camden, N. J.

In response to a bid protest filed with the Government Accountability Office by ABC member Wu & Associates, Inc. of Cherry Hill, N. J., with ABC support and representation, the U.S. Army Corps of Engineers eliminated a solicitation requirement that would have limited the pool of qualified bidders to contractors willing to sign onto a federal construction project covered by a controversial government-mandated project labor agreement.

“Our company and other quality New Jersey businesses deserve a fair opportunity to provide the public with the best construction product at the best price,” said Wu and Associates President Kirby Wu, AIA. “The wasteful and discriminatory project labor agreement would have cut competition from qualified merit shop contractors and their skilled employees. The U.S. Army Corps of Engineers’ decision is a real win for all taxpayers, as well as for the people of New Jersey.”

“We hope that other federal agencies will heed this example and recognize that discriminatory project labor agreements only result in increased costs, delayed construction and harm to taxpayers,” said ABC President and CEO Kirk Pickerel. “ABC will continue to fight any attempt to impose project labor agreements on federal construction projects in violation of competitive bidding laws.”

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

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Associated Builders and Contractors (ABC) is a national association with 77 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. Visit us at www.abc.org.

On Feb. 6, 2009, President Obama signed Executive Order 13502, which repealed a 2001-2008 prohibition on federal PLAs. The Obama order also encourages federal agencies to require PLAs on federal construction projects whose total costs exceed $25 million. This April, the Federal Acquisition Regulatory (FAR) Council issued a controversial final rule, effective May 13, that implements Executive Order 13502 into federal regulations.

Newspaper editorial boards across the country and the construction community widely viewed the pro-PLA Executive Order 13502 as payback to the construction industry’s Big Labor bosses for their past and continued political support of President Obama and congressional Democrats, as PLAs steer lucrative federal construction contracts to unionized contractors and their union employees.

Big Labor bosses deduct union dues from rank-and-file union members to fund PAC contributions and soft money donations to political campaigns of candidates who support PLAs and other pro-Big Labor policies.

This cycle of corruption costs taxpayers dearly, as studies demonstrate PLAs increase the cost of construction between 12 percent and 18 percent while delivering no additional benefits to construction owners or taxpayers.

The PLA racket also stifles job creation for nonunion contractors and their employees. This is particularly offensive because 85 percent of the U.S. construction workforce does not belong to a union and the industry is suffering from 17 percent unemployment as of July 2010.

ABC and TheTruthAboutPLAs.com have led the fight against similar crony contracting mandates by federal agencies (See U.S. DOL Job Corps Center in Manchester, N.H., the U.S. General Services Administration’s (GSA) Lafayette Building in Washington, D.C. and the U.S. Army Corp of Engineers technical applications center at Patrick Air Force Base in Brevard County, FL).

This is a huge win for taxpayers and the 85 percent of the private construction workforce that chooses not to join a labor union.  Here at TheTruthAboutPLAs.com, we thank the U.S. Army Corp of Engineers for doing the right thing and removing this PLA from the bidding process.

The General Services Administration admitted it made a mistake when it placed a non-competitive, cost-raising, union-pleasing Project Labor Agreement (PLA) on a federal construction project in Washington before the Federal Acquisition Regulation (FAR) Council issued its final ruling on President Obama’s executive order, which encourages the use of PLAs on all federal construction projects worth more than $25 million.

The $100 million Lafayette Building Modernization project is currently the only active federal government-mandated PLA.
Here’s a link to the project (See Section H, 12.02 and Section 16 page 24 on Section H for the PLA language).

After jumping the gun, GSA is now requiring contractors to submit two proposals – one subject to a PLA requirement and one that is not.  The Associated Builders and Contractors criticized this highly unusual two-bid process, saying it puts even more obstacles before the 86 percent of local D.C. contractors, many minority owned, who are non-unionized.

UPDATE: On 2/4, the GSA cancelled this solicitation. Qualified local contractors submitted a bid protest with the Government Accountability Office (GAO) against the GSA’s dual bidding/PLA requirement. Similar to the outcome of the bid protest issued against the U.S. Department of Labor Job Corps Center in Manchester, N.H., the GSA opted to cancel the solicitation instead of move forward without a PLA.

However, according to the GSA solicitation cancellation notice, “GSA expects to re-issue the Lafayette Building Modernization solicitation in the near future.”

Below is a news release from ABC National.

New Release

ABC Defeats Unlawful and Discriminatory New Hampshire Construction Contract

 Move Comes in Response to ABC Member Protest

Washington, D.C. – Associated Builders and Contractors (ABC) today announced that the U.S. Department of Labor (DOL) has cancelled its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement (PLA). The cancellation came in response to a protest filed with the Government Accountability Office (GAO) by ABC member North Branch Construction of Concord, N.H., with ABC support and representation. North Branch Construction challenged the PLA as unlawful and discriminatory.

“This is a real win for the principle of fair and open competition in government procurement,” said North Branch Construction attorney Maurice Baskin of Venable LLP, ABC’s General Counsel. “It is no coincidence that the Department of Labor cancelled its unlawful PLA mandate the day before the agency was required to file a response to our bid protest. We demonstrated that there was no justification for imposing a PLA on this project and that the PLA mandate violated the Competition in Contracting Act and other longstanding federal procurement requirements.”

“There is no justification for playing favorites in the government procurement process,” said ABC President and CEO Kirk Pickerel. “We hope that other federal agencies will heed this example and recognize that PLAs only result in delayed construction and harm to taxpayers. ABC will continue to protest any attempt to impose PLAs on federal construction projects in violation of competitive bidding laws.”

“The Department of Labor can still move this project forward by abandoning this illegal PLA,” said Ken Holmes, president of North Branch Construction. “Our company and other New Hampshire businesses deserve a fair opportunity to provide the public with the best construction product at the best price and we hope the Labor Department will build this project without a PLA in early 2010.”

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

The bid protest challenged the legality of the federal government’s recent shift in federal procurement policy concerning the use of discriminatory and costly PLAs. On Feb. 6, President Obama signed Executive Order 13502, which repealed a 2001-2008 prohibition on federal PLAs and encourages agencies to require PLAs on federal construction projects whose total costs exceed $25 million. The Federal Acquisition Regulatory (FAR) Council is in the process of reviewing public comments on its controversial July 14 proposed rule that would implement Executive Order 13502 into federal procurement code. ABC filed detailed comments challenging the implementation of Executive Order 13502.

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since Executive Order 13502 was issued.

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Media Inquiries: Gail Raiman, (703) 812-2073 or Gerry Fritz, (703) 812-2062

TheTruthAboutPLAs.com on this development: Rather than build this project without a discriminatory and costly (and probably illegal) PLA – and generate the related economic benefits this project would create for New Hampshire taxpayers - the DOL has inexplicably cancelled this project. 

This unfortunate decision also stopped the bid protest pending before the Government Accountability Office (GAO) that would have addressed the legality of federal government-mandated PLAs and Executive Order 13502.

Justice delayed, is justice denied.