In a press release and letter to the White House issued Monday, Sen. Ayotte asked President Obama to repeal his pro-union Executive Order 13502 and remove the anti-competitive and costly union project labor agreement (PLA) mandated by the U.S. Department of Labor (DOL) on a $20 million to $50 million DOL Job Corps Center in Manchester, N.H.

The DOL’s Jan. 30 solicitation (DOL121RB20457) for the Manchester Job Corps Center mandates a union-favoring PLA.

Bidding is only open to certified small business contractors willing to agree to the terms and conditions of the union-friendly PLA drafted and mandated by the DOL.

Qualified federal contractors played no part in creating this government-mandated PLA, which requires contractors to obey numerous union collective bargaining agreements, pay into union pension and benefit plans, follow inefficient union work rules, hire most of their employees through union hiring halls for the life of the project and force unwanted union representation on nonunion employees.The PLA is a direct assault on New Hampshire’s ”Live Free or Die” state motto.

In New Hampshire, 85.5 percent of the construction workforce does not belong to a labor union, according to new government data. The state does not have a history of using government-mandated PLAs and few federal small business contractors are unionized, leading many in the industry to believe out-of-state union contractors and union workers from Boston will steal jobs away from the New Hampshire construction industry, which is already suffering from a grim construction economy.

According to a press release issued by ABC New Hampshire/Vermont President Mark Holden:

The government-mandated PLA has the potential to again delay this project, increase costs, reduce competition from qualified New Hampshire businesses and deny badly needed jobs to skilled New Hampshire construction workers who have freely chosen not to belong to a union.

The Union Leader ran an article about this controversy (“Sen. Ayotte slams bidding for Manchester Job Corps Center,” 2/7/12):

Sen. Kelly Ayotte is calling on the Obama administration to scrap all union-friendly project labor agreements, saying they are the reason the planned Job Corps Center in Manchester has yet to be built.

In a letter to Obama released Monday, Ayotte asked the President to reverse his executive order requiring federal projects over $25 million to consider using project labor agreements, or PLAs. In his State of the Union address, Obama said he wanted to cut government red tape. These agreements would be a good place to start, the Republican senator said.

“Federal government-mandated PLAs needlessly increase construction costs and limit the ability of non-union companies to successfully compete for government construction contracts,” wrote Ayotte. “This Washington mandate also significantly slows down the procurement of construction projects, forcing workers to wait on the sidelines until the PLA winds its way through the federal bureaucracy.”

A Foster’s Daily Democrat editorial also blasts the DOL’s anti-competitive and costly union-friendly PLA mandate on the Job Corps Center (“The union souffle is falling fast,” 2/9/12):

While there is some debate on the actual impact of PLAs on construction costs, PLAs should play no role in a free an open marketplace.

Unions argue that even though union labor — or union labor rates — may increase the cost of constructions projects, their workers bring to the table better skills and quality assurance. These, in the long run, supposedly make the extra costs worthwhile.

If that is true unions should be willing to compete on the merit of their argument. Bidding on such projects as the Job Corps Center should not be delayed by the prerequisite of a PLA. The impact of union labor on a projected should be part of the bid offered by contractors who may of their own free will choose to use union labor — no pre-mandate.

Such dictatorial practices go a long way in alienating the general public. They fuel Right to Work efforts in states such as New Hampshire. And they leave such a sour taste in he mouths of Mr. and Mrs. John Q. Public that union ranks nationally have fallen faster than a souffle after the oven door is slammed shut while baking.

PLA Controversy Delayed Project
TheTruthAboutPLAs.com readers may recall previous media coverage of the Job Corps Center project, which most recently included a Dec. 23  holiday-themed op-ed in the New Hampshire Union Leader  by 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. It was penned in response to the DOL’s Dec. 22, 2011 pre-solicitation indicating the project would be subject to a PLA mandate.

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.

Obama Administration’s First Federal PLA Mandate
The DOL mandated a PLA on this project in 2009. It was the first PLA mandated by a federal agency on a federal construction project 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).

Last summer, the project and PLA controversy received attention from the New Hampshire Union Leader (“Jobs Corps Center project going forward,” 8/20/11) and a related press release from Sen. 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 despite previous controversy.

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 the government.

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

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.

The solicitation contained a crony contracting scheme called a project labor agreement (PLA) that would funnel construction contracts to unionized contractors. It was the first time a federal agency attempted a government-mandated PLA on a federal construction project since President Obama issued the controversial Executive Order 13502 Feb. 6, 2009.

However, after ABC member North Branch Construction of Concord, N.H., with ABC support and representation, filed a protest against the illegal, costly and anti-competitive PLA with the Government Accountability Office (GAO), the U.S. DOL cancelled its solicitation to construct the project.

Rather than build the project without the unethical and illegal PLA, the DOL decided to sit on the project and deny local residents services offered by the Job Corps Center and badly needed construction jobs.

Yesterday the stalled project made headlines as it was raised as n issue in the New Hampshire gubernatorial race (“Stephen hits Lynch on stalled Job Corps Center, 6/24″):

Republican gubernatorial candidate John Stephen blasted Gov. John Lynch for failing to move the project forward. The U.S. Department of Labor had halted the bid process in November when a local contractor complained about labor requirements.

“I find it unconscionable that nothing has been done in eight months to move this project forward when we need jobs,” said Stephen at a press conference in the Legislative Office Building yesterday. “Being silent on the issue is not leadership.”

Lynch’s press secretary Colin Manning said Lynch, an early supporter of the project, has been in contact with the Department of Labor since the bidding was halted. He said the governor was told recently that the bidding process would be restarted in 30 to 60 days.

“The governor is very supportive of that center, and is working to get people back to work in this state,” Manning said.

[snip]

Yesterday, Stephen declined to say if he supports or opposes the PLA, but said all sides should sit down and work out their differences so workers could have badly needed jobs. With 50,000 people out of work in the state, the priority must be jobs, he said.

“Gov. Lynch has said he wants to do all he can to create jobs, but for the past eight months, he has been silent on a contract that could be putting hundreds of people to work today,” Stephen said.

Here is more from the Stephen campaign. Nothing from the Lynch campaign.

Either candidate would serve New Hampshire residents appropriately by urging the DOL to deliver the best possible product at the best possible price free from corrupt and costly PLA mandates.

Let’s hope common sense prevails over politics and special interests and the DOL builds the project using fair and open competition without a PLA.

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.”

Blunting Big Labor

Monday, November 16, 2009

Kudos to Ken Holmes for stopping in its tracks taxpayer-funded political payback to organized labor.

Mr. Holmes is president of nonunion North Branch Construction in New Hampshire, where the U.S. Department of Labor required contractors hoping to build a $35 million Job Corps Center to use project labor agreements (PLAs).

Correctly seeing PLAs’ mandate of employment on union terms as a violation of federal law and procurement rules, North Branch filed a protest with the Government Accountability Office.

Labor responded by canceling bidding but said the project will go forward. It left unclear whether bidders again will face the PLA requirement.

Because PLAs hike project costs by as much as 20 percent, according to the Beacon Hill Institute, they’re obviously bad for taxpayers. Equally obvious is that this initial Obama administration attempt to reverse Bush-era policy by requiring PLAs aimed to reward politically supportive unions with public dollars.

PLAs also destroy free trade and fair competition. So let the North Branch complaint mark not just a temporary halt but the end of federal PLA requirements.

That would be a fitting testament to the courage displayed by Mr. Holmes and his company in opposing White House political bribery.

This editorial is referencing the U.S. Department of Labor’s (DOL) decision to cancel its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement.

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.

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

A Labor Department spokesman didn’t return our calls or an e-mail for comment. We called Ken Holmes, the contractor who filed the protest against the rule, and he said that Labor Department either had to cancel their bidding or respond to this complaint this week. Although Holmes technically won, he says he isn’t celebrating yet. He said that the administration is currently drafting an official policy on union-only (PLA) contracts, and that it may simply be waiting until that is in place to restart union-only bidding

“It’s a victory in that they canceled this bid, but we’ll feel a lot better when they open the contract to all bidders,” he said.

Holmes says his company protested the union-only rule because the policy “takes taxpayer money and earmarks it to a special interest group… to me, this seems like political payback.”

To me too. It costs taxpayers about 18 percent more when only unions are allowed to bid on federal contracts. One reason union construction costs more is the wasteful, motivation-killing union work rules.

In Buffalo, New York, private contractors point to rules that require crane operators to be accompanied by a “crane oiler” – even though that job is obsolete.

A couple years ago in Philadelphia, Comcast wanted to build the tallest “green” building in the US. That meant installing water-efficient pipes . But Philly Magazine reports:

“Not so fast, the city’s plumbers union said. Less water means fewer pipes. Fewer pipes mean less work. And so the union blocked the job, threatening the completion of the building, and in turn delaying all the business that would happen inside it… the city twaddled in the face of a clear decision: “We’re still looking into this,” the top building code official told the Inquirer at the time. “I want to make sure they’re safe.”

Thankfully, the unions ended up losing that fight.

These types of union inefficiencies experienced above (and by Mr. Stossel in the studios – see his full post) are pushed onto nonunion contractors and their employees when government mandates a PLA. Whether or not a nonunion contractor is able to win work on a PLA project, wasteful union work rules prevent taxpayers from getting the BEST possible product at the BEST possible price. Add that to reduced competition from quality nonunion contractors driven away by PLAs during the procurement process and it is no wonder why PLA projects cost so much more money than non-PLA projects.

It is a shame that political cronies have successfully lobbied the government to force inefficiencies down the throats of businesses that the free market has already addressed and corrected.

John Stossel knows that the public needs a break from PLAs.

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued Feb. 6, 2009. 

An Associated Press (AP) story appeared in The New York Times, Boston Globe, WBZ38-TV (DE), The News Journal (DE), CBS 4 Denver, Yahoo! News, Seattle Post-Intelligencer, The Miami Herald, The Sacramento Bee, ABC News and other media outlets (“US Labor Dept Reviews NH Job Corps Building Terms, 11/12).

The piece mentions a statement by Republican Senator Judd Gregg, a vocal critic of the discriminatory and costly PLA on this project:

…Thursday, Republican Sen. Judd Gregg, who had lobbied for the Job Corps center, called the Labor Department’s recent decision ”just another unnecessary bureaucratic delay to the progress of this critically important project.”

”This setback clearly illustrates that the administration’s decision to discriminate against successful, independent construction firms because Granite State employees choose to work in a union-free environment simply does not hold water in New Hampshire,” he said.

In September, Gregg had urged the department to reconsider its decision, saying that only 8.7 percent of the construction workers in New Hampshire were unionized…

Additional coverage from the Concord Monitor, Job Corps Site Sits in Silence (11/12), explains why this project is so important to qualified New Hampshire contractors who oppose the discriminatory and costly PLA:

Kenneth Holmes, president of North Branch Construction, which filed the protest that lead to the bid delay, said he hoped his firm could qualify for the project. He said that he had laid off about 18 workers in the past couple of years because of the economy but that a big project such as the Job Corps center might require him to call some of them back.

“I’ve got 40 workers, and I’d like to put them to work,” Holmes said.

Additional coverage, besides the stories linked here and here, include:

• (BNA) Construction Labor Report: Labor Department Cancels Bid Solicitation Under Challenge in New Hampshire for PLA,” 11/12 (password required)
• The Nashua Telegraph: Labor Dept Examining Requirement for NH Jobs Corps, 11/12
• OpenMarket.org: Obama Administration Hits Brakes on Project Labor Agreement, 11/12

Let’s hope that the increased media attention will shed some light on Executive Order 13502 and PLAs, which are special interest giveaways to Big Labor and have no place in fair and effective public policy.

Mr. Stossel may shed more light on the recent controversy surrounding the U.S. Department of Labor’s (DOL) decision to cancel its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement (PLA). 

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued Feb. 6, 2009.

Mr. Stossel has reported on other instances of misguided government interference in the construction industry that, like PLAs, ultimately harm taxpayers and free enterprise (“The Fallacy of the Prevailing Wage,” 08/10/05).

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. 

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

When the New Hampshire project was announced, critics warned that the union rules would drive up costs, delay the project and force most of the workers to pay union dues and pension contributions for which they likely will never receive benefits.

Just 8.7 percent of construction workers are unionized in New Hampshire.

Nationwide, about 16 percent of construction trades workers were union members or covered by union contracts in 2008, despite union workers generally receiving higher pay and better benefits than their nonunion counterparts, according to the Bureau of Labor Statistics.

An executive order by Mr. Obama in the first weeks of his presidency would make PLAs the norm for all federal contracts on large-scale construction jobs. The order is under review and a final rule is not expected for months, but the Labor Department went ahead and imposed a PLA on the New Hampshire job.

The order replaced one by the Bush administration that discouraged the use of such agreements.

Despite the setback for PLAs, Mr. Obama’s policies have largely succeeded in tipping the advantage to the labor movement.

He signed three other pro-union executive orders, including one requiring contractors on large federal projects to post signs informing workers of the right to join a union. The president also has appointed a succession of union loyalists to top spots in the Labor Department and on the National Labor Relations Board, which administers federal law governing the relations between unions and employers.

The Union News blog also covered this story and provided an explanation of the political motivation behind government-mandated PLAs (Obama Knocked Off Stride: Mystery Shrouds Obama Job Corps Center Union Payoff, 11/11):

‘Project Labor Agreements’ are an extortion scheme for union-backed politicians. Here’s how it works. Tax-funded construction projects are mandated to use union-only contractors. The contractors kick-back to the unions, with the cash finding its way back to their handmaiden politicians who write the PLA requirements. The result: non-union labor is excluded and the public is forced to pay a higher cost that includes the ugly forced-tribute payments to politicians.

This is a fairly accurate assessment of how PLAs make their way onto public projects, except that these discriminatory and costly agreements often permit nonunion contractors to bid on projects. But only if contractors agree to recognize unions as the representatives of their employees on that job without a vote by employees; 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 terms and conditions drafted by Big Labor and their hand-picked politicians are so burdensome that nonunion contractors frequently can’t and won’t bid on PLA projects. 

Politicians rarely admit to the quid pro quo nature of PLAs and are quick to cite weak arguments in support of PLAs that are easily refuted. Typical PLA advocates cite arguments that these back room deals prevent strikes, ensure a trained workforce, benefit local communities, guarantee the delivery of on-time and on-budget project, and do not limit competition or give a union-signatory contractor an unfair advantage over a nonunion contractor.

However, the chilling impact of PLAs on competition from nonunion contractors is acknowledged and celebrated by Big Labor, which is why Big Labor’s political clout pushes PLAs  through changes to public policy that advance special interests at the expense of taxpayers and open competition. In order to compete in a competitive market, Big Labor needs the government to change the rules to stifle efficient competitors.

For example, Building and Construction Trades Council of New York President Edward Malloy (“PLAs are Essential to Growth Opportunities for Union Sector,” Subcontracting News, March 2008) wrote the following about the importance of PLAs in New York City:

“To create growth opportunities in the union sector, PLAs are the most valuable tool we have…

…These PLAs, which typically involve modest adjustments on isues other than wages and supplements, can reap huge rewards for the union sector of the industry by assuring that all work from start to finish — including tenant build-outs — will be done union.

We must address our shrinking share of the residential market, particularly in the affordable and low-rise segments, but quite frankly, in the market rate and high-rise segments as well…

In the affordable and low-rise segments, however, we must acknowledge that there are very few projects where union labor, contractors and subcontractors are competitive.  We can, and therefore must, adopt a more aggressive package of wages and supplements to address this sector of work…”

It is well-documented that the impact of government-mandated PLAs on competition is real and taxpayers are shouldering this burden. Government-mandated PLAs remain a form of government corruption and are bad public policy.