The release also outlines some of the other local school districts that have used PLAs and experienced the predictable cost overruns.  Let that be a lesson to the members of the McKeesport committee should a proposed PLA requirement ever come to a vote.

The release is below (Our emphasis added):

News Release

FOR IMMEDIATE RELEASE

Potential PLA Would Cost McKeesport Taxpayers More

McKeesport, Pa – Members of Associated Builders and Contractors (ABC) of Western Pennsylvania met Wednesday, May 26 with the McKeesport Area School District Building and Grounds Committee, which is currently on a “fact-finding” mission concerning union-only Project Labor Agreement (PLA) and the district’s upcoming $62 million consolidation construction project.

A union-only PLA would prohibit merit shop firms from bidding on the project due to provisions designed to favor union contractors and workers, such as forcing non-union companies to hire from the union halls, and compelling non-union workers to contribute to union pension funds, which are grossly underfunded. Eighty-five percent of the construction workforce is non-union, and a union-only PLA would exclude all but 15% of construction workers.

“It was so important for ABC to get its message not just to the school board members, but to the general public, as well,” said ABC of Western PA Chairman Robert A. Glancy, president of R.A. Glancy & Sons. “Studies prove PLAs cost taxpayers more money because there are fewer contractors bidding the project, resulting in less competition. Less competition equals higher costs.”

ABC member Richard Bosco, Ryco, Inc., participates in the school district’s School-to-Work program, through which he hires two graduates each year and pays for their four-year apprenticeship program. Bosco stated that, if the district attaches a union-only PLA, their own graduates would be ineligible to work on the project.

Other local school districts have experienced consequences for attaching PLAs to their construction projects. Shaler Area School District’s PLA on its $30 million high school renovation project resulted in only two bids from general contractors. The district would have saved a minimum of $1.5 million if there had been no PLA, allowing open shop contractors to bid on the project. A late completion caused the district to delay the start of classes for the high school twice.

Baldwin-Whitehall School District instituted a PLA on its 2005 high school renovation. Limiting the competition to union contractors caused a 1.5 tax millage increase in both 2006 and 2007, resulting in a $4.75 million cost increase.

Local school boards that did not attach PLAs to their construction projects saved their districts millions. In 2006, Quaker Valley School District saved its taxpayers $1.4 million by awarding its Osborne Elementary School Renovation and Addition project to a merit shop contractor. Pine Richland School District awarded its 2007 New Upper Elementary School project to a merit shop contractor at $18.9 million. The closest union bidder was $21.3 million; $2.4 million more.

“Open shop contractors are just as qualified and safe, if not more so, than union contractors. Merit shop contractors complete their projects at consistently lower costs, all while paying prevailing rate,” said Glancy. “It would be a shame to preclude these local contractors and their workers from even bidding on this project.”

# # #

As predicted, the PLA has already failed to deliver on Big Labor’s promises:

WINNING BID IS FROM LOS ANGELES COMPANY AND 35% OVER BUDGET!

Big Labor Promises of “On Budget” and of “Local Jobs” Ring Hollow as Bid is Awarded on First Prop. S Project with PLA
       
San Diego – The bid results are now in and they are devastating for Big Labor special interests and their SDUSD Board Member allies Richard Barerra, Shelia Jackson, and John Lee Evans. 

Yesterday at 2pm the bid results were opened for SDUSD’s Hoover High School New Woodshop Building. This is the first Proposition S project bid with a Project Labor Agreement (PLA) covering it. CFEC and others have warned for more than a year the results of a PLA would be disastrous in a city where 90% of the construction workforce is union-free but the three union controlled school board members would have none of it and shoved a PLA through with little study and no understanding of what it would mean to taxpayer dollars.  Now we know.

Total Bidders:

In this economy similar size projects, $2.8 million, have at least 15 bidders on them. For instance, the Auto Tech Careers Center Project at Miramar College for the San Diego Community College District had 17 bidders on it less than one month ago.  But San Diego Unified’s Hoover High School New Workshop Building had only FIVE BIDDERS!

Cost:

In this economy it is unheard of to see a job not come in UNDER budget.  That same project, the Auto Tech Careers Center for San Diego Community College District which was estimated at $2.8 million came in at $2,195,000. SDUSD’s Hoover High School New Workshop Building’s estimate was $2.5-$3.5 million; however, the low bid was $4 million. THAT IS 35% OVER THE ESTIMATE! This is exactly what we warned the district the cost increases would be.

Local Work:

Perhaps worst of all for PLA proponents was the complete and total undermining of their chief claim for why a PLA was so needed: “Local Jobs”.  The winning bidder for this job is USS Cal Builders, a Los Angeles based firm! 

“This is a complete and total repudiation of these three board members and their special interest allies in Big Labor” said CFEC’s Eric Christen. “In these tough times where taxpayers are demanding the best product at the best price SDUSD has instead given special interests a monopoly agreement that will result in children and taxpayers getting three schools built when they could have had four.  These three board members at their next board meeting need to take care of two orders of business before they do anything else: First they need to repeal the PLA and then they need to resign.”

San Diego taxpayers supported the $2.1 billion Proposition S school construction bond in November of 2008.  At their first school board meeting in January of 2009, three board members heavily supported by unions  (Jackson, Barerra, and Evans) had as their first order of business, a PLA for all Prop S work.  The PLA mandates that all workers have to pay union dues and into union benefit programs and it excludes non-union apprentices.  CFEC has also learned it is costing the district more than $600,000 per year just to administer.  The public outcry over this monopoly giveaway to Big Labor special interests was unanimous with the Associated Builders and Contractors, the Associated General Contractors, Western Electrical Contractors Association, the San Diego County Taxpayers Association, the Black Chamber of Commerce, the National Association of Minority Contractors, and countless other community groups opposing such discrimination and waste.  Two board members, Katherine Nakamura and John DeBeck also agreed it was unnecessary  Their prescient predictions were ignored.

Now, if only someone had told the SDUSD this would happen.  Oh wait, they did. 

This is just one more example of local officials putting their political friends’ interests ahead of the people they represent.

Additional TheTruthAboutPLAs.com coverage of this debacle is available here.

The latest PLA-related story titled, “An Ailing Process,” comes courtesy of the January 24 Indianapolis Star.

Here are the highlights:

At the heart of the issue is the decades-old use of project labor agreements that require contractors on most major projects to negotiate with union officials, recognize union benefits and generally abide by collective-bargaining agreements.

Gaylor has been opposing PLAs for years as president of Associated Builders and Contractors, an Indiana trade group representing nonunion firms.

He is raising his voice a little louder this year as officials prepare to award contracts for the $754 million Wishard Memorial Hospital complex in Indianapolis under such an agreement.
Gaylor and other nonunion contractors argue that the agreements limit competition and drive up construction costs.

As evidence, Gaylor points to the fact that earlier this month only five contractors bid for the contract on the $30 million parking garage planned for Wishard.

For Gaylor, the fact that only a handful of contractors bid during a recession that is starving the construction industry for work shows a bid process gone awry.

“By limiting competition, you don’t get the competitive bids,” Gaylor contends.

Ten or 12 bidders could drive down the price, Gaylor argues, but the bid process thwarts competition and, he claims, costs taxpayers millions of dollars on expensive projects.

The story goes on to mention that some “experts” say that no data exists to support J.R. Gaylor’s contention that PLAs increase construction costs.

Really?

If someone asked for data to prove the inflationary impact of PLAs, I would first direct them to a June 2009 study conducted by consulting firm Rider Levett Bucknall for the U.S. Department of Veterans Affairs (VA) Office of Construction and Facilities Management found that PLAs would likely increase construction costs by as much as 9 percent in construction markets in which the VA is planning to build hospitals.

Additionally, the Beacon Hill Institute at Suffolk University researched the impact of PLAs on school construction in Massachusetts, Connecticut and New York from 2003-2006 and found that PLAs increased construction costs by as much as 18 percent.  In Connecticut, this costs taxpayers an extra $30 per square foot in final construction expenses.  In other words, PLAs on school construction in Connecticut costs taxpayers an extra textbook worth of waste for every square foot of construction.

There are numerous other studies that show the inflationary impact of PLAs available at www.abc.org/plastudies.

Don’t believe the numbers?  Here is some anecdotal data.

Indianapolis has some recent history with PLAs.  Construction of Lucas Oil Stadium, home of the Super Bowl-bound Indianapolis Colts, blew out its budget by over $75 million and the Indianapolis Public Library construction project exceeded its budget by $50 million.  The library project was also plagued by problems and took two extra years to build.

The data is out there.  PLAs are nothing more than special interest handouts that deny taxpayers they results they deserve.  Hoosiers deserve better than construction defects and cost overruns.

In the meantime, we hope Marion County Health and Hospital Corporation – owners of the Wishard hospital – seriously reconsider becoming associated with the next PLA failure in Indiana.

Mr. Fleishman on PLAs (emphasis added):

They’re nothing more than special interest giveaways to unions and provide no benefit to taxpayers. I can’t imagine any Republican that would support these agreements. Construction contracts of any kind should be awarded to the best bidder, regardless of if they’re union or non-union.

My friends on the left love to claim that these union giveaways guarantee quality and accountability on taxpayer financed projects. However, the Associated Builders and Contractors, California Cooperation Committee (ABC-CCC) and their Taxpayer Accountability Project have blown a hole in that argument. The City of Milpitas enacted a PLA for the construction of a $39 million library project. City officials boasted that this project, because of the PLA, was a resounding success. The problem for City officials stems from the fact that they never anticipated that any organization would actually audit the project to ensure state labor laws were followed.

Mr. Fleishman makes a crucial connection about PLAs in light of the findings of the Milpitas Library report (emphasis added):

… So to summarize, the PLA on the City of Milpitas Library project did not prevent labor compliance violations or ensure accountability by contractors.

This is yet another reason why I’m so proud of the Orange County Board of Supervisors who last year voted to ban PLAs. That was the right decision, because there’s absolutely no benefit in a PLA that cannot be derived through a simple contract. The only difference is that unions are forced to compete on a level playing field with other businesses. Perhaps they can’t compete on quality and cost, and that is why they take the fight to a political forum where campaign cash and electoral intimidation are the tools of the trade.

The FlashReport commends ABC-CCC for conducting labor compliance audits that debunk the union rhetoric. Let’s hope that the folks in Long Beach, who are considering a PLA for the remodeling of the airport terminal, as well as any local elected official that spends taxpayer money on public works projects are paying attention to these developments.

Here is the ABC-CCC Release.

Nevertheless, the Taxpayers Accountability Project of Associated Builders and Contractors, California Cooperation Committee (ABC-CCC) found at least 56 violations of state labor law – including underpayment of workers, failure to follow journeyman to apprentice ratios and improper use of apprentices – on Milpitas’ $39 million City Library project.

ABC-CCC was able to uncover these violations despite the fact that this project was covered by a PLA.  City officials called this project a, “Model of success” in an October 2008 letter to the Santa Clara & San Benito Building and Construction Trade Council.

Here is an excerpt from James Spencer’s article in PublicCEO.com on the release of ABC-CCC’s audit in September 2009:

Milpitas Public Works Director Greg Armendariz wrote in a letter to the Building & Construction Trades Council that the project “was a model of success” and the Project Labor Agreement would help the construction industry work through this downturn in the economy.

Project Labor Agreements require that “union-only” contractors can bid or perform public works projects barring merit shop contractors – despite qualifications – from the opportunity to submit a project bid. The stated goal of the agreement is to ensure worker protections and project quality, as required by the Milpitas City Council.

However, the audit reveals that the 56 violations were the result of a lack of oversight of apprentice workers, which jeopardizes job quality and puts employees at risk.

The audit’s findings have been reported to the Department of Industrial Relations for review and action. ABC‐CCC investigated the 56 violations and filed formal complaints on Sept. 14 with the California Labor Commissioner’s office.

ABC‐CCC is performing audits of public works projects statewide as part of The Taxpayer Accountability Project and releasing findings to ensure that public funds are efficiently and effectively managed.

Well, ABC-CCC sent their findings to California’s Department of Industrial Relations (DIR) and it turns out ABC-CCC was right to be concerned.  DIR has notified eight of the contractors that worked on the Milpitas City Library project that they violated state labor laws.

Here’s an excerpt from ABC-CCC’s January 8 press release (our emphasis added):

Responding to the findings of a labor compliance audit conducted by the Taxpayer Accountability Project of Associated Builders and Contractors, California Cooperation Committee (ABC-CCC), the California Department of Industrial Relations has officially notified eight contractors that they violated state labor laws during construction of the $39 million Milpitas City Library Project. See the letters issued by the state at this link: Milpitas Library Labor Violations.

“Staff for the City of Milpitas reacted angrily and defensively when the Taxpayer Accountability Project submitted its findings to the Labor Commissioner in September,” Kevin D. Korenthal, executive director of Associated Builders and Contractors, California Cooperation Committee said. “The results of the independent audit were validated by the State and we are pleased that action has been taken to protect the public trust and ensure accountability by contractors on public works projects.”

Confirmed violations by contractors on the Milpitas Library Project include lack of proper ratios of journeymen to apprentices and improper use of apprentices. These infractions are significant as they could have contributed to project quality and worker safety issues. Furthermore, many contractors working on the project failed to provide records as required by law until after the audit and subsequent state inquiry.

Contractors confirmed in violation include five based in the South Bay, two others based in the Bay Area, and one based in the state of New York: Milpitas Library Labor Violations.

“Additionally, based upon the findings of ABC-CCC’s independent audit, we have reason to believe that our conclusions only scratched the surface of how labor laws were violated on this project,” Korenthal added. “Clearly, City of Milpitas officials neglected to scrutinize the project following the City Council’s vote to give construction unions a monopoly by virtue of a Project Labor Agreement.”

Additionally, James Spencer at publicCEO.com picked up the story about DIR acting on ABC-CCC’s audit and notifying the eight contractors that labor law violations occurred on the Milpitas library.  Here is an interesting excerpt from this January 11 story:

After the story ran [the September 2009 story mentioned earlier in this post] , I received an irate e-mail from a very high-level public official in Milpitas, who was upset about our article and said that PublicCEO’s information was not accurate.

The official asked, “Do you realize we had a Project Labor Agreement?” and said that Milpitas believed no violations existed on the project. I immediately followed up with this official in regards to the e-mail, but never heard back.

Here at TheTruthAboutPLAs.com, we’d like to take this opportunity to respond to this unnamed Milpitas official.

Yes, we realize there was a PLA on this project and we strongly encourage you to think about the potential quality and worker safety issues that could result from restricting the ability of 80 percent of California’s construction workforce from competition for a project.

We will continue to report on PLAs that don’t live up to Big Labor’s promises on this blog.