This important example of a federal project bid with and without a PLA requirement undermines baseless claims made by PLA advocates and President Obama’s 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 costs to “promote the economy and efficiency in federal procurement.”

Actual results proved the opposite is true: The DOL’s PLA mandate reduced competition, increased costs, harmed local businesses and created needless litigation and delays on this federal project.

Government-mandated PLAs remain anti-competitive schemes to steer federal construction contracts and jobs to well-connected unionized contractors and union members. They harm taxpayers, qualified merit shop contractors, skilled nonunion construction workers and result in less building and hinder the creation of construction jobs as the industry faces a 14.7 percent unemployment rate.

Here is a link to an apple-to-apples comparison of bid results of this federal project bid with and without a PLA.

Below is a press release from ABC National about this imortant win for taxpayers and critical case study on the benefits of fair and open competition free from discriminatory PLA mandates.

News Release

Contact: Gerry Fritz, (703) 812-2062, fritz@abc.org

April 24, 2013

TAXPAYERS SAVE MORE THAN $6 MILLION ON DOL’s NEW HAMPSHIRE JOB CORPS CENTER

ABC Contractor Awarded Contract without Project Labor Agreement Mandate

Washington, D.C. – Associated Builders and Contractors (ABC) today celebrated a victory after the U.S. Department of Labor (DOL) awarded Eckman Construction Company a $31.6 million contract to build a DOL Job Corps Center in Manchester, N.H., after removing a controversial government-mandated project labor agreement (PLA) from the federal project’s solicitation for construction services. Eckman Construction Company, Bedford N.H., submitted a bid that was more than $6 million below the lowest offer when the project was subjected to a PLA.

“The award of this contract to a local contractor demonstrates the benefits of fair and open competition in federal contracting and undermines specious claims made by PLA advocates,” said ABC Director of Labor and Federal Procurement Ben Brubeck. “The apples-to-apples comparison of the Job Corps Center bidding with and without a PLA mandate proves these special interest schemes reduce competition, increase costs and harm local contractors.”

The solicitation for construction services to build the Job Corps Center project was first issued in 2009, but the project was delayed for nearly three years as a result of bid protests filed with the Government Accountability Office (GAO) against repeated efforts by DOL to mandate a PLA.

The first attempted PLA mandate for the project was issued in September 2009 as a result of President Obama’s Executive Order 13502, which encourages federal agencies “to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in federal procurement.”

In response, a federal contractor, with the help of ABC, filed a bid protest with the GAO, prompting the DOL to cancel the Job Corps Center solicitation in November 2009.

“Rather than remove the controversial PLA mandate and proceed with the procurement process using fair and open competition, the DOL waited more than two years to issue a new solicitation, and it still contained a PLA mandate,” said Brubeck. “Public record requests revealed that the DOL spent $428,000 in taxpayer funds to hire a consultant, Hill International, to complete two studies to evaluate the use of PLAs on federal contracts and erroneously justify the DOL’s use of a PLA on the Job Corps Center.”

In March 2012, federal contractors filed another GAO protest against the DOL’s second PLA mandate, again with the assistance of ABC. That summer, the GAO advised the DOL to take corrective action and rebid the project without a PLA. The DOL canceled the solicitation—but after it had already received and publicly unsealed bids that were subject to the PLA mandate.

Finally, in October 2012, the DOL issued a solicitation free from a PLA mandate. Those bids were opened in February. The low bidder, Eckman Construction Company, came in 16 percent less than the low bidder from the first round of bidding subject to a PLA, saving taxpayers $6.2 million. In addition, Eckman is a local firm from New Hampshire, and the first-round low bidder was an out-of-state company.

“When the PLA mandate was removed, the number of qualified contractors bidding on the project increased threefold,” said Brubeck. “Even contractors that submitted proposals during both rounds of bidding lowered their price by an average of 10 percent when bidding on the solicitation without a PLA mandate. Experts familiar with the anti-competitive and costly effect of government-mandated PLAs are not surprised by these results, but taxpayers should be concerned.

“It is time for the Obama administration to stop trying to steer lucrative federal construction contracts to well-connected unionized firms and union members—some of the president’s largest political supporters—through unlawful government-mandated PLAs,” Brubeck 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 PLAs discourage merit shop contractors and subcontractors from competing for federal contracts, thereby increasing costs to taxpayers and discriminating against the 86.8 percent of the construction workforce that does not belong to a labor union. PLAs typically force contractors to hire most or all of their craft employees from union hiring halls; follow inefficient union work rules; hire apprentices exclusively from union apprenticeship programs; and pay into union benefit plans on behalf of employees, even if they have their own qualified benefit programs. PLAs force employees to pay union dues, accept unwanted union representation, and forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefit plans.

View this news release and full bidding results on ABC’s educational blog, TheTruthAboutPLAs.com.

###

Associated Builders and Contractors (ABC) is a national trade association representing 22,000 members from more than 19,000 construction and industry-related firms. Founded on the merit shop philosophy, ABC and its 72 chapters help members win work and deliver that work safely, ethically and profitably for the betterment of the communities in which they work. Visit us at www.abc.org.

Update: Additional Resources

• Link to Oct. 2012 Solicitation and award notice (No PLA mandate – 9 bids opened).
• Link to DOL’s Jan. 2012 Solicitation, Canceled (PLA mandate – 3 bids opened).
• Link to DOL’s Sept. 2009 Solicitation, Canceled (PLA mandate – no bids submitted due to bid protest).
• Here is the Job Corps Center’s proposed PLA and here are the numerous union collective bargaining agreements (CBAs) contractors must agree to for the life of the project concerning issues not specifically addressed by the PLA.
• Affidavit of Prof. David G. Tuerck, PhD., professor and Chairman of Economics and Executive Director of the Beacon Hill Institute at Suffolk University in Boston, before the Government Accountability Offce refuting the need for a PLA mandate and the pro-PLA Hill International report.
• Report by Hill International recommending a PLA mandate on the Manchester, NH, DOL Job Corps Center project (submitted Oct. 28, 2010).
• Evidence documenting cost to taxpayers for Hill International’s pro-PLA mandate report on the Manchester, NH, DOL Job Corps Center ($128,000, solicitation number DOLJ109630678 paid in two installments).
• Evidence documenting cost to taxpayers for Feb. 25, 2011, Hill International report for promoting PLA mandates for all federal agencies  ($300,000, solicitation number DOLF09F422062, subcontracted to Hill International by Interactive Elements).
• Read a sample government-mandated PLA and learn how it harms nonunion contractors and workers here.

The post Taxpayers Win Big Without Federal Project Labor Agreement on New Hampshire Job Corps Center appeared first on The Truth About PLAs.

In February 2000, Wyoming County, W.Va., voters approved a $7 million bond for $5 million worth of construction for Westside High School and $1 million for outdoor athletic fields at both Westside High School and Wycoming County East High School.

On May 8, 2000, the board of education mandated a union-favoring PLA on construction funded by the bond. Many speculated the PLA was mandated via a back room deal in exchange for construction trade unions’ assistance in getting the school bond measure passed by voters.

After months of opposition by contractors and taxpayers against the discriminatory PLA mandate, the county opened bids subject to a PLA mandate Dec. 12, 2000.

As expected, officials experienced weak competition and bids exceeded the project’s budget by roughly $1.5 million.

On Dec. 18, 2000, officials reconvened and voted to rebid the project without a PLA.

When PLA-free bids were opened, the results were not surprising. (See primary documents here).

Without a PLA mandate, the number of bids increased by 67 percent (15 bidders without a PLA vs. nine bidders with a PLA) and costs decreased by 11 percent ($12.889 million with a PLA vs. $11.482 million without a PLA).

It should be noted this project was covered by state prevailing wage laws so wage and benefit rates were the same with or without the PLA mandate and school construction plans were identical. The only difference was the PLA mandate.

Research Supports Anecdotal Evidence

Four subsequent studies researching the effect of PLA mandates on a large sample of public schools subject to state prevailing wage laws in California, New York, Connecticut and Massachusetts found results similar to this West Virginia anecdote: PLA mandates typically increased costs between 12 percent and 18 percent compared to similar non-PLA projects.

Likewise, research conducted by the New Jersey Department of Labor and Workforce Development found PLA mandates on New Jersey schools increased construction costs by an average of 30 percent and PLA projects took an average of 100 weeks to complete, in contrast to 78 weeks for non-PLA projects (learn more here).

Back to the Future: School Projects Bid With and Without PLA Mandates Prove PLAs Reduce Competition and Increase Costs

TheTruthAboutPLAs.com has collected more than a dozen other examples of federal, state, and local projects that were bid with and without PLAs. In every instance, either fewer bids were submitted under the PLA mandate than were submitted without it or the costs to the public entity went up—or both.

Here are recent notable examples involving school construction:

Connecticut

This spring, Middletown, Conn., may rebid the Maloney High School project after bids subjected to a PLA mandate busted budgets by 13 percent and reduced competition from qualified local firms and their skilled employees. Two school projects in Middletown, the Snow Elementary school in 1996 and the Middletown High School in 2005, benefited from increased competition and reduced costs once the projects were rebid without PLA mandates.

Kentucky

In Kentucky, the Carter County Board of Education rescinded a controversial PLA mandate on the Tygart Creek Elementary School after the school district failed for the second time to receive construction bids within the $12 million scope of the project. Bids opened in October 2010 exceeded estimates by about $1.1 million. When first advertised in late 2009, the project’s low bids were more than $2 million above budget. In addition, the PLA mandate was subject to a legal challenge.

In the face of the PLA-related lawsuit, increased costs and reduced competition resulting from the PLA mandate, the PLA was removed in time for the third and final round of bidding. PLA-free bidding resulted in an $11.6 million contract awarded within the project’s $12 million budget, for a net cost savings of $1.5 million.

Ohio

In 2010, the Ohio School Facilities Commission was forced to rebid a planned PLA project to replace the state’s schools for the deaf and blind after only two firms bid on the general trades contract work, with the lowest bid exceeding the estimated cost by 44 percent. After removing the PLA, 12 firms bid for the general trades work, with a low bid 20 percent under the commission’s estimate.

Massachussetts

In 2006 the City of Fall River, Mass., adopted a PLA on multile school construction projects.  As a result, fewer than half of the contractors who were prequalified by the city for the job ended up submitting bids. After bids for the projects came in millions of dollars over budget, Fall River mayor Edward Lambert was forced to abandon the PLA mandate and rebid the project without a PLA. Now that the project was truly open to competition from qualifed union and nonunion firms, the number of bids nearly doubled and the prices plummetted.  Fall River Councilor Joseph Camera wrote:

“With the first rebid, 64 bids came in, compared to 21 when the PLA was used.  Furthermore, the costs were cut by 17 percent, and every trade had multiple bidders, even electrical.”

Fall River taxpayers saved $8.5 million from a combination of lower bids and the need to borrow less money. A December 2006 report by the Beacon Hill Institute at Suffolk University, “Project Labor Agreements and Financing Public School Construction in Massachusetts,” reviews this real-world case study supporting BHI’s previous research on the effect of PLAs on school construction costs. This packet of articles provides additional information.

California

The Oakland Unified School District put out a call for bids on the Burkhalter Elementary School in 2002 and received a low bid of $1.8 million (out of seven bidders) for the construction work. Prior to contract award, however, the school district entered into a PLA for all of its school projects, resulting in rebidding the work with a PLA mandate. During the second round of bidding a week later, only three companies bid on the PLA project. The low bid exceeded $2.2 million, more than $437,000 (24 percent) higher than the original non-PLA bid of $1.8 million. In addition, the winning firm increased their bid by $167,000 from their first bid. (Learn more here).

In addition, there are similar examples of school projects bid with and without PLAs in the 90s from Massachusetts, Missouri and Ohio.

Finally, a total of 14 non-school projects bid with and without PLAs have experienced similarly reduced competition and increased costs.

When considering whether to mandate PLAs on taxpayer-funded projects, it is wise for lawmakers go back in time to consider evidence to predict the future.

Update 4/24/13: Here is an apples-to-apples comparison of a federal construction project, the U.S. Department of Labor’s Manchester, New Hampshire, Job Corps Center, bid with and without a PLA. Bid results prove PLA mandates reduce competition and increase costs.

The post Great Scott: Projects Bid With and Without PLA Mandates Show PLAs Increase Costs and Reduce Competition appeared first on The Truth About PLAs.

Despite the warnings, testy public hearings, and Connecticut’s state and federal pro-PLA lawmakers interrupting proceedings with election season pandering to Big Labor, a May 2012 vote cast by Meriden Mayor Michael Rohde broke a rare 6-6 city council deadlock and approved a resolution to mandate a PLA on both school renovation contracts.

Bid Results Proved Pro-PLA Claims Untrue

PLA proponents claimed a PLA would not increase costs or reduce competition.

They also said it would solve the “problem” of out-of-state contractors and workers stealing jobs from local residents by ensuring 30 percent of construction jobs would be performed by local residents dispatched to the jobsite via union hiring halls, as required by the PLA.

Of course, these were deceptive pro-PLA talking points designed to hoodwink taxpayers and lawmakers into accepting anti-competitive and costly public policy that only serves special interests.

Under the guise of a PLA mandate, lawmakers are free to steer taxpayer-funded construction contracts to well-connected unionized contractors with little competition and create jobs exclusively for union members, despite the fact that almost eight out of 10 members of Connecticut’s construction workforce do not belong to a union. In return, lawmakers typically receive support from construction unions to help maintain or advance their political ambitions.

This month, Meriden City Council’s PLA chickens came home to roost, and they laid a big stinky egg on Meriden taxpayers.

The Record-Journal, which should be commended for diligent reporting in 2012 and 2013 on this issue, reported Maloney High School renovation project bids are at least 13 percent higher than the project’s estimated $75 million construction and abatement budget.

The bid results, documented in this spreadsheet, indicate bids were $9.7 million (13 percent) higher than budgeted estimates and contracts received sparse competition from primarily out-of-area union contractors. The PLA mandate ensured qualified and local merit shop contractors, who successfully built other Meriden projects, did not submit bids because they could not compete on a level playing field with unionized contractors favored by the PLA.

These results come as no surprise to those familiar with a September 2004 study conducted by the Beacon Hill Institute at Suffolk University in Boston. It found the use of PLAs on school construction projects in Connecticut increased the cost of the projects by almost 18 percent. The report concludes that the presence of a PLA increased projects’ final base construction costs by $30 per square foot relative to non-PLA projects.

PLA proponents’ claims of out-of-area contractors and workers stealing construction jobs from locals on PLA-free projects proved to be meritless, too. A subsequent investigation into local hire on Meriden construction projects revealed 47 percent of the workforce building another, albeit smaller, PLA-free Meriden school project were local, exceeding the 30 percent local hire goal set in the Maloney High School PLA.

If these results don’t blow a hole in stale arguments used by PLA mandate advocates, what will?

When will taxpayers hold elected officials accountable for these anti-competitive and wasteful special interest schemes?

Why should children suffer from shoddier schools resulting from lawmakers’ attempts to stay within budget by trimming construction plans to offset increased costs from the PLA?

Meriden City Council Democrat and architect Steve Iovanna said it best on Twitter following his vote against the PLA, “Anti-PLA does not equal anti-union. It equals PRO-competition!”

When will other lawmakers follow Iovanna’s lead and put taxpayers and families ahead of party politics?

Solutions

Meriden City lawmakers can correct this debacle and rebid the Maloney High School without a PLA and ditch the PLA on the upcoming $111.8 million Platt High School project. Meriden will receive more competition and it will save money. If lawmakers act quickly, they can stay on schedule, too.

There is local precedent for rebidding problematic PLA projects, according to the Record-Journal (“Meriden seeks ways to cut Maloney project cost,” 3/30/13):

Middletown is no stranger to project delays and cost overruns. The newly constructed Middletown High School went out to bid in the mid-2000s under a PLA. The bids came in close to $17 million over budget and the construction manager was eventually fired, amid scandal.

A new committee was formed for the construction of the school and Gilbane was hired. The project was put back out to bid without a PLA and came in several million dollars under budget, according to the committee’s former chairman, W. Lee Osborne, an architect by profession.

“It’s almost always going to cost more,” Osborne said about using a PLA. “That doesn’t mean that you should always not do a PLA. You should look at the composition of the community and if the community is largely union based, then maybe you should acknowledge that and consider a PLA.”

Similarly, in 1996, Middletown experienced increased competition and saved taxpayers $1.31 million when it rebid the Wilbur Snow Elementary School renovations without a PLA after the first round of PLA bidding experienced insufficient competition and busted budgets (learn more here).

Lawmakers should let fair and open competition provide Meriden taxpayers with the best possible product at the best possible price.

Record-Journal columnist Eric Cotton’s latest piece puts this debacle into perspective, (“Forget the Taxpayers,” 3/27/13):

The staff at Meriden City Hall said last week they were still trying to figure out exactly why bids for the Maloney High School renovation project came in about $10 million higher than expected.

But I suspect they already have a pretty good idea. And it’s really not their fault.

City Manager Lawrence Kendzior and Purchasing Officer Wilma Petro strongly advised city councilors last spring not to sign a collective bargaining agreement giving trade unions the ability to refer workers and negotiate terms and conditions for the Platt and Maloney high school projects. They said a project labor agreement or PLA, as it’s known, would likely make for a less competitive bid process and drive up costs because non-union companies would be discouraged from bidding. You’d be narrowing the field down to unionized contractors, which only represent about 20 percent of the industry, at a time when most construction companies – union and non-union alike – are still hungry for work.

Unfortunately, six city councilors and the mayor chose to ignore that advice.

So now, a year later, we find that the first two rounds of bidding for Maloney weren’t very competitive, with union shops submitting bids much higher than estimates. Only two companies bid on painting, for example. Drywall also attracted just two bids, as did glass and glazing. No single item attracted more than five bids. The low bid for masonry came in at $11.2 million – almost double what the construction manager expected.

Estimates are rarely so far off.

But it shouldn’t come as any surprise. On the night of the City Council vote, Kendzior warned councilors in no uncertain terms what support for a PLA would mean.

“The data shows school construction projects done with a PLA have a higher cost,” he said. “From a staff position,” he said, doing the project without a PLA “is the most effective and least likely to be legally challenged. We can set hiring goals within the bid packages and shape them so smaller companies in Meriden are able to compete.”

There was simply no need for a PLA from the perspective of the city’s professional staff. But councilors like Democratic Majority Leader Brian P. Daniels, the biggest proponent of the PLA, and Mayor Michael S. Rohde, who broke the 6-6 tie in favor of the agreement, seemed to place the trade unions’ interests above the interests of the average Meriden taxpayer.

Daniels went so far as to criticize fellow Democrat Steve Iovanna’s decision to oppose the PLA.

“If you go back and look at the statements by Councilor Iovanna on the floor, there’s not one legitimate concern that showed he should have voted against it,” Daniels said at the time.

But Iovanna, an architect with Meriden-based BL companies, has said that in his experience PLAs drive up costs. Democrat Matt Dominello, longtime chairman of the School Building Committee, agreed with Iovanna and took issue with Daniels’ statement that councilors had a responsibility to side with party principles when a vote gets close. Dominello said other concerns, such as the effect on taxpayers, can outweigh party allegiance.

“Just because you’re in politics for the party doesn’t mean you have to vote that way all the time,” Dominello said at the time.

“What kind of system is that? That’s saying forget the people, forget the taxpayer.”

As you can see from the Maloney bids, that’s exactly what some Meriden politicians did.

Reach Eric Cotton at ecotton@record-journal.com or (203) 317-2344. Follow him on Twitter @ecotton3

Amen. TheTruthAboutPLAs.com will be following this story closely, but in the interim, you can help.

Take Action

Ask the Meriden City Council to ditch the PLA on the Platt High School and rebid the Maloney High School renovation without a discriminatory and costly PLA mandate.

Urge the following lawmakers to change their position to No PLA:

• Mayor Rohde
• Councilor Battista
• Councilor Daniels
• Councilor Thorpe
• Councilor Tomassetti

Encourage new city council members Castro and Graham to oppose PLA mandates and be sure to thank members Iovanna, Dominello, Brunet, Scarpati, Williams and Shamock for voting with taxpayers and Meriden families ahead of special interests.

Get informed, learn more:

• 2012 articles of interest
• 2013 articles of interest

The post Told You So: Project Labor Agreement on Connecticut High School Increased Costs and Reduced Competition appeared first on The Truth About PLAs.

Proponents of anti-competitive and costly PLAs claim these schemes deliver economy and efficiency in federal contracting. However, the negotiation and execution of the 1800 F Street PLA became so problematic, the GSA allowed the contractor to ditch the PLA and proceed with construction without a PLA.

GSA Rendering of Phase 1 Modernization of GSA Headquarters at 1800 F Street

GSA Issues a Discriminatory De Facto PLA Mandate
In April 2010, the GSA issued a solicitation to potential bidders utilizing a two-step selection process. In Step 1, the GSA issued a Request for Qualifications (RFQ) that the GSA used to narrow the list of qualified bidders to invite to respond to its Request for Proposal (RFP). Step 2 participants received the project plans and contract specifications and were invited to respond to the RFP and submit a firm-fixed price.

Pursuant to a new controversial pilot program promoting the use of PLAs outlined in the GSA Public Buildings Service’s Aug. 11, 2009, Procurement Instructional Bulletin (PIB) 09-02, contractors invited to participate in Step 2 of the 1800 F Street project bidding were allowed to submit a proposal with or without a PLA (or submit two proposals: one with a PLA and without a PLA).

However, the winning bidder was selected using a best value process evaluating firms based on a mix of price and non-price factors. The best value process, outlined in Section V.A. Evaluation of Offers of Section C201 of the RFP (see page 23), included a anti-competitive and discriminatory provision giving firms submitting a proposal containing a promise to utilize a PLA 100 points, or 10 percent, out of the 1,000 total possible points the GSA used to evaluate non-price factors.

While Step 2 firms were not technically forced to use a PLA, the GSA’s new policy discriminated against contractors unwilling to enter into a PLA and put them at a significant competitive disadvantage. This 10 percent “bonus” to PLA contractors is a de facto PLA mandate because it would be virtually impossible for contractors that do not want to build the project with a PLA to have a non-price score competitive with firms willing to use a PLA. There is no rationale justifying the preferential treatment towards PLA offers other than special interest favoritism.

In short, the 10 percent bonus is the GSA’s way of rigging the competitive bidding process to produce a result that would guarantee the contractor building 1800 F Street does so with a PLA that would funnel jobs to well-connected union-friendly contractors and ensure job creation for unionized workers, despite the fact that fewer than one out of 10 construction workers in the District of Columbia and surrounding states belong to a union.

1800 F Street Contract Awarded to PLA Offeror
On Sept. 16, 2010, the GSA awarded contract GS-11P-10-MKC-0025 to a Whiting-Turner Walsh Joint Venture (JV) for $124,349,000 funded by the American Recovery and Reinvestment Act (ARRA) of 2009, commonly known as the stimulus act.

As expected, the JV submitted a PLA offer. A non-PLA offer would have been a waste of time because of the GSA’s rigged bidding process, so there is no direct comparison of the JV’s winning PLA bid versus its non-PLA bid.

Section C101 of the RFP (see Section III.A.16 Project Labor Agreement on page 20), explains the minimum mandatory terms of a PLA acceptable to the GSA and requires the winning contractor to “bargain in good faith with all Labor Organizations having jurisdiction over work included in the Contract and to enter into a PLA that will govern the performance of all construction work by the Contractor and its subcontractors under this Contract.” It also requires the executed PLA to be furnished to the contracting officer within 45 days following award (Oct. 31, 2010).

However, FOIA documents demonstrate this project suffered increased costs and was delayed by at least 107 days due to the prime contractor’s inability to successfully execute a PLA with labor organizations.

PLA Negotiation Caused Delays
The GSA issued Whiting-Turner Walsh JV a Limited Notice to Proceed Nov. 1 because it had not submitted an executed PLA by the Oct. 31 deadline. 

The JV was granted a 10-day extension to submit a final PLA by Nov. 10.

Correspondence on Nov. 30 from the GSA indicated the JV must continue PLA negotiations with “all Labor Organizations having jurisdiction over work” despite the fact the JV could only successfully execute a PLA with the carpenters union and were unable to execute a PLA with other unions represented by the DC Building Construction Trades Council (here is the executed Carpenters PLA).

On Feb. 10, 2011 (107 Days after Nov. 1), the GSA communicated to the JV would receive a Full Notice to Proceed and must issue a refund to the GSA for costs associated with the PLA in its bid because the JV could not execute a PLA with all labor organizations:

 “…[the]GSA would be issuing a modification to your contract that would not only remove the PLA requirement but also establish a credit value for the removal of that requirement. Therefore, given that your initial bid proposal did not include Non-PLA pricing, I request that you provide Non-PLA pricing to the attached list of items that were awarded on 16 September 2010 under your PLA cost proposed.”

The delays associated with the PLA conflict directly with June 3, 2011, testimony given by GSA Deputy Administrator Susan Brita before the House Oversight and Government Reform Committee’s Technology, Information Policy, Intergovernmental Relations and Procurement Reform Subcommittee. At 40:50 of this hearing video, Brita claims the PLA only delayed the 1800 F Street project by 45 days. The truth is the PLA delayed the project by 107 days.

Click here to view the video on YouTube.

PLA Increased Costs
It is unclear how much the de facto PLA mandate increased costs for the GSA and taxpayers, but the bottom line is it did increase costs.

A July 25, 2011, contract modification document puts the amount the JV credited to the GSA due to the PLA at $1,631,600.

However, this amount appears to factor in other non-PLA-related costs at issue between the JV and the GSA. In addition, the figure does not account for the amount of time lost and expense incurred by the JV negotiating a PLA with various labor groups prior to the GSA issuing a Full Notice to Proceed 107 days after the JV could have proceeded with construction had there not been a PLA requirement.

Finally, the figure fails to address the additional cost savings the GSA could have experienced had the RFP been bid without a discriminatory de facto PLA mandate policy.

Studies indicate PLA mandates on projects subject to prevailing wage laws like the 1800 F Street project increase costs between 12 percent and 18 percent.  In fact, a Jan. 27, 2010, consultant’s report funded by the GSA recommended against a PLA on the 1800 F Street project, expressing concerns it would raise costs by 4.9 percent (see page 93 of the PDF):

“Based on the Rider Levett Bucknall analysis contained within this report and given the current poor economic climate in the US – for a well compiled PLA on 1800 F St, Washington DC, the GSA may be disadvantaged by a PLA and that a PLA is likely to not “advance the federal Government’s interest in achieving economy and efficiency in federal procurement…”

The only entity that knows the cost of the PLA is the Whiting Turner Walsh JV and perhaps the GSA. The GSA’s Office of Inspector General should investigate the waste, fraud and abuse associated with the PLA and the GSA’s discriminatory pro-PLA policy.

However, an investigation wouldn’t reveal the true amount of money wasted because it would fail to account for the cost-saving benefits of free and open competition without a PLA mandate or preference.

In short, the excessive delays and the act of the GSA requesting the JV to refund money associated with increased costs related to the PLA undermines the key claim in President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 that a PLA increases economy and efficiency in federal contracting. A PLA is supposed to establish jobsite harmony and rules all unions and contractors must obey, yet the PLA proved to be more of a problem than a helpful tool. Phase 1 of the 1800 F Street building ended up being constructed without a PLA without any strikes, delays or any other problems.

GSA Continues Costly Policy of PLA Favoritism
As a fitting coda to this story, the GSA announced it has halted plans to construct Phase 2 of the 1800 F Street modernization due to a lack of funding.

The increased costs and delays associated with the 1800 F Street project PLA, in addition to $3.3 million worth of increased costs associated with a de facto PLA mandate on another GSA building in Washington, D.C, – the Lafayette Building – have not dampened the GSA’s enthusiasm for PLA preferences and PLA mandates.

While procuring this project, the GSA revised its pro-PLA policy April 30, 2010, and Sept. 24, 2010, to clarify some sticking points in its PLA pilot program, including forcing contractors to sign PLAs with all labor organizations (and not just one labor organization, as was a problem with the 1800 F Street project).

In addition, despite negative media attention, a congressional hearing and inquiry from House GOP members, the GSA has expanded its policy of PLA favoritism to all GSA projects exceeding $25 million. However, the impact of this change has been limited because the GSA’s budget for new construction has been slashed dramatically during the past few years due to fiscal concerns, a glut of federal properties and the scandal that rocked the agency in April 2012.

It’s time for the GSA to shelve its anti-competitive and costly pro-PLA policy once and for all, and restore economy and efficiency in federal contracting.

The post Delays and Increased Costs: The Truth about the Failed PLA on the GSA’s Headquarters at 1800 F Street appeared first on The Truth About PLAs.

Dissent in the labor movement is a thorn in the side of PLA advocates attempting to gain public support by painting the PLA debate as a union vs. nonunion dispute. The truth is that government-mandated PLAs are bad public policy from a variety of practical, technical, economic and philosophical perspectives unrelated to whether a firm is affiliated with labor unions.

A reader sent us this September 2008 column by Mark Breslin, CEO of the Engineering and Utility Contractors Association (EUCA). It provides some outstanding examples of why and how PLA mandates harm EUCA’s union-signatory contractors (and by extension their unionized employees).

EUCA has since changed its name to United Contractors and Breslin also serves as a motivational speaker and leadership guru for the construction industry and works with union members and leadership closely. Check out Breslin’s website here. He has some great information about leadership and productivity that the entire construction industry should take to heart.

For your reading pleasure, here is Breslin’s column:

Union Project Labor Agreements: A Good Concept Even Union Contractors Oppose

By Mark Breslin, CEO, The Engineering and Utility Contractors Association (EUCA)
Union Construction Magazine, Sept. 2008

As the CEO of an association that represents exclusively union construction firms, one would think that I would automatically and heartily endorse broad-based use of Project Labor Agreements for the benefit of contractors, unions and end-users. In this regard, you would be seriously in error.

Despite some years of our support for PLAs, our contractors and association no longer see value in them for contractors, unions, or owners.

PLAs have become a vehicle for circumventing union contractors, undermining labor agreements, and “subsidizing” some non-performing local unions and their weak leadership. We can no longer find union contractors willing to support PLAs in our marketplace.

The Broken Promise

From a conceptual standpoint, PLAs as industry-shaping policies have a compelling positive operational and economic rationale. They are presented as engines of opportunity and project stability. The breakdown occurs when the concept moves to policy and into implementation. In this regard, systematic failures have become a fertile breeding ground for disputes, conflict, and contractor liability.

Relevance, Responsiveness and Responsibility

Heretofore, industry construction craft practices have been a function of the contractual scope of Union Master Agreements. A hundred years of Construction Master Agreements between unions and employer associations is how labor and management have found their middle ground.

With the PLAs of today, this is often abandoned because the union no longer has to negotiate with the employer: they can go to a third party who will then dictate terms of scope, coverage, and employment. These are most often negotiated directly between local Building Trades organizations and the owner.

As a result, contractors are now required to become signatory to agreements they did not negotiate.

Union Master Agreements are the level playing field. They are known territory that governs bidding labor costs and assessing contractor risk. They are templates for assembly of a workforce and a production objective.

Most union contractors are not signed to many unions. That is a normal part of the industry. Factors that impact this have always been contractor utilization and preference, decisions based on the craft’s ability to perform, their progressive (or lack of) cooperative nature, and their ongoing relevance to the market and industry.

Though some might point to cost as another driving factor, in my opinion there are crafts that could price themselves at minimum wage and never be utilized due to their real or perceived inability to meet market or contractor needs. Now PLAs require contractors to sign with nearly every union regardless of need, operational history or efficiency.

As the PLAs proliferate, owners and unions rarely take into account the contractor’s concerns. These contractors are completely and deliberately omitted from what has become a “deal-cutting” process that often expands coverage beyond existing collective bargaining agreements, obscures or prevents local practices from being used, includes new classifications, and otherwise shows no regard or respect for the union employer.

Bottom line: what they cannot get at the bargaining table with their “employer partners” they can sell to an unknowing, apathetic or under-pressure public/private owner.

Impact on the Union Contractor

Contractors, due to the obligations of many PLAs, are finding that with the multiplicity of bargaining obligations required they cannot utilize their existing workforces; cannot follow decades-long practices; cannot determine what craft rates to use or not to use for labor costs; and cannot perform to the time, cost and production schedules that they have built their businesses upon.

Beyond this, a significant negative impact is being experienced by union contractors due to the proliferation of PLAs and a total lack of responsiveness and responsibility on the part of the unions promoting them. For many it is just a free handout that turns the contractor upside down. Here are some of the specific impacts:

• Many of our members are being forced to use unions that they have no relationship with and no need of utilizing.

• Contractors do not know how to bid projects “apples to apples” from a labor cost standpoint, and so are at undue risk.

• Jurisdictional disputes are much higher in number and nature on PLAs, and contractors are the only ones operationally impacted.

• Local practices are often ignored at the expense of the contractor’s efficiency and long-standing history.

• Contractors are being forced to expand coverages and classifications that are not in their existing agreements.

• Contractors report that costs associated with bidding PLA projects often result in an increase in price to the owner of 10-20%.

Subsidizing the Non-Performing

For unions that are progressive, cooperative and responsible, PLAs have little impact. On the other hand, for unions that have been unresponsive to the market, contractors and competition, PLAs have become a welfare program.

PLAs are life support for some unions that have been unable, unwilling or incapable of meeting the market’s needs for years. As such, this owner-mandated contractual vehicle requires little effort and no downside, and suddenly jurisdictional disputes between crafts increase exponentially. The contractor, of course, is stuck in the middle, between the owner’s vague idea on the content of the PLA or the consequences, and the union’s struggle s to expand or retain jurisdiction.

A PLA does not require a poorly run or led union to be more efficient, effective, responsive or professional. It only slices up the pie into smaller pieces and then jams them down the throat of the contractor, like it or not.

The Union Contractor Viewpoint

For something that was supposed to look pretty good to existing union contractors, we have heard nothing but complaints about complications, conflict and cost escalations for our contractor members. We cannot find union contractors willing to support PLAs in our marketplace any longer. This should be taken very seriously. Most have found themselves in the middle of conflicts between crafts, or been forced to use workers from unions with which they did not have relationships. This leads to higher risk, lost production, and a souring of the union-employer relationship.

Solutions: Integrity or Elimination

There must be structural reform of PLAs. Here are the key recommendations that must be enacted:

PLAs cannot contain any variations from the Master Construction Agreements. Anything more or less is a total breach of bargaining integrity. Behind the scenes deal-cutting is unacceptable and lacks transparency and integrity.

Local practices must be respected in jurisdictional dispute resolution. With the breakdown of the AFL-CIO Building Trades agreements, solid alternatives must be agreed to between the crafts. The answer needs to be based on local practices and local arbitration. Local union leaders need to find methods of bridging their gaps, not dumping it into some administrative black hole. No longer can contractors and unions refer to ancient documents, decades-old decisions, and irrelevantly distant geographic practices to govern local work.

PLAs do not need to be “one size fits all” with every craft signatory. Perhaps not everyone needs to be included in every PLA. If the work does not warrant it (heavy civil vs. building vs. residential) due to nature or scope, it should be streamlined to meet the needs of the project, the contractor, and the owner.

Contractors and their associations need to be asked to the table. The arrogant position that the contractor has no stake or voice is idiotic. One hundred percent of the economic risk of every project bid under a PLA is on the contractor, and he or she has a right to protect the interests of their business and the bargaining environment that ensures a level playing field.

In absence of the protections above, union contractors and their associations should oppose PLAs that impact their markets, bargaining agreements, and companies. Owners need to take heed of possible additional costs and complications they would otherwise not experience with PLAs as they are generally drafted today.

- Mark Breslin, CEO, The Engineering and Utility Contractors Association (EUCA), September 2008.

The post Why Unionized Contractors Are Opposed To Government-Mandated Project Labor Agreements appeared first on The Truth About PLAs.

The PLA removal was a victory for free enterprise and the Granite State’s taxpayers and contracting community.

When mandated by government entities, PLAs unfairly steer taxpayer-funded construction contracts to unionized contractors and their unionized employees at the expense of taxpayers, qualified contractors and skilled nonunion tradespeople.

Local, state and federal lawmakers are persuaded by Big Labor lobbyists to require contractors to agree to use a PLA as a condition of being awarded a taxpayer-funded construction project. Studies have found such special interest favoritism kills construction job creation, reduces competition, and increases costs between 12 percent and 18 percent, on average, compared to similar non-PLA projects.

In New Hampshire, 85.6 percent of the construction workforce does not belong to a union. The Job Corps Center was the first federal project subject to a government-mandated PLA following President Obama’s Feb. 6, 2009, Executive Order 13502, which encourages federal agencies like the DOL to mandate PLAs on a case-by-case basis for federal construction projects exceeding $25 million in total cost.

President Obama’s union-favoring executive order was widely criticized as a handout to his biggest political supporters, Big Labor, and another example of the administration interfering in the free market and engaging in crony contracting.

The PLA mandate resulted in considerable delays and prevented the creation of badly needed new jobs for the construction industry, which suffered from an industry-wide unemployment rate of 27.2 percent in February 2010 – the highest level recorded since the federal government began making the data available in 1976.

PLA Mandate Delayed Project

In September 2009, the DOL mandated a PLA on this project before the FAR Council had even issued a final rule implementing regulations into federal procurement code permitting federal agencies to mandate a PLA. In the face of a bid protest filed at the Government Accountability Office (GAO) by a New Hampshire contractor opposed to the PLA mandate, the DOL canceled the Job Corps Center solicitation in November 2009.

Rather than remove the controversial PLA mandate and proceed with the procurement process, the DOL waited more than two years to issue a new solicitation for the Job Corps Center in December 2011.

The solicitation still contained a PLA mandate, and public record requests uncovered the DOL spent almost $430,000 paying for Hill International to evaluate the use of PLAs in federal contracting and justify the DOL’s use of a PLA on the project.

Once again, federal contractors, with the assistance of ABC National, filed a protest at the GAO against the DOL’s PLA; in June 2012, the DOL once again canceled the solicitation in the face of a bid protest.

The DOL’s recent PLA-free pre-solicitation is a win against special interest favoritism in federal contracting.

New Hampshire Lawmakers Fought for Granite State Economy 

New Hampshire lawmakers supporting fair and open competition like Rep. Frank Guinta, Rep. Charlie Bass and Sen. Kelly Ayotte should be commended for their vigilance against crony contracting and efforts to expose waste and protect taxpayers in New Hampshire and across the country.

All have cosponsored legislation called the Government Neutrality in Contracting Act (H.R. 735/S.119) prohibiting government-mandated PLAs on federal and federally assisted construction projects.

Reps. Guinta and Bass also voted in support of amendments limiting PLA mandates on various federal construction projects funded via appropriations and authorizing legislation (Roll Call No.’s 302, 267, 413, 396, and 26). (There has not been a vote on this legislation in the Democrat-controlled Senate.)

More lawmakers in Washington must be willing to stand up and fight for construction jobs and advocate for fair and open competition in federal contracting so taxpayers receive the best construction project at the best price.

The post Victory: Manchester’s U.S. DOL Job Corps Center To Proceed Free From Project Labor Agreement Scheme appeared first on The Truth About PLAs.

Although it lacks any compelling reasons for doing so, the Patrick administration is continuing to impose project labor agreements on some major state projects. Those agreements restrict work to contractors who agree to use union labor and abide by union work rules, effectively excluding the state’s nonunion firms and nonunion workers, and raising costs at a time when the state’s transportation coffers are already running dry. [snip]

Now, several studies have indicated that these agreements push the price of construction projects up significantly. When the Beacon Hill Institute, Suffolk University’s market-oriented think tank, looked at school-construction projects in Massachusetts, Connecticut, and New York, it found that PLAs had added at least 12 percent to construction costs. Other studies have suggested that limiting bidders boosts prices even more. Unions dispute such conclusions, but the usual effect of restricting competition is to increase prices. The net result is that, because of the labor agreements, the state will end up spending tens of millions of dollars that could otherwise have been directed toward other road projects or toward long overdue transit repairs.

On the Whittier Bridge project, as with the Longfellow project, the administration’s rationale has been thin and unpersuasive. An internal analysis cited the “size and complexity” of the project, the risk of labor unrest, and importance of keeping to a schedule. But state Transportation Secretary Richard A. Davey conceded to the Globe that nonunion contractors and workers were capable of doing the work. Nor could he cite any instances of labor problems delaying highway projects. Anyway, if union workers had created havoc on a project awarded to a nonunion firm, why reward such activity by granting union firms exclusive rights to future work?

The editorial continues by identifying the real reason behind these Big Labor favors and explaining the unfortunate results on the Commonwealth’s taxpayers and construction industry when these special interest schemes are mandated by politicians:

The most plausible interpretation, however, is that Patrick is simply rewarding unions for past political support — and for the help Democrats want in this election year. But political considerations aren’t legitimate grounds for even an occasional PLA. And the longer-term political consequences are unpredictable: If the administration continues to foster the impression of profligacy, it could undermine the crucial effort to secure more highway and transit funding.

The state will end up spending tens of millions of dollars that could otherwise have been directed toward other road projects.

If project labor agreements are unfair to taxpayers, they are also unfair to the thousands of nonunion construction workers in the Commonwealth. Those workers and the firms that employ them aren’t asking that construction jobs be designated specifically for nonunion firms. Rather, they are simply seeking to compete on a level playing field for state work.

What an editorial. It exposes numerous facts about government-mandated PLAs worth listing again:

PLA mandates increase costs. Check.
PLAs result in fewer construction projects and construction jobs. Check.
Merit shop contractors and tradespeople are capable of building large-scale projects. Check.
PLAs offer little value against strikes because strikes are rare. Check.
PLAs are extortionary and monopolistic market protectionism schemes. Check.
PLAs are politically motivated special interest handouts to Big Labor. Check.
PLAs are not in the best interests of Commonwealth taxpayers. Check.
PLAs discriminate against Commonwealth merit shop firms and employees. Check.
PLAs are unfair and inject special interest favoritism into competition for taxpayer-funded jobs. Check.

Kudos to the The Boston Globe editorial board for telling the Truth About Project Labor Agreements.

Further reading:

Read the Beacon Hill Institute studies referenced in the editorial here.
Read previous Boston Globe editorials and coverage on PLA mandates here.

The post Boston Globe Editorial Blasts Government-Mandated Project Labor Agreements and Patrick Administration appeared first on The Truth About PLAs.

In short, Hill International is a corporate PLA pimp. Read on to learn why this isn’t hyperbole.

It Ain’t Easy for Corporate PLA Pimps Like Hill International

Many local, state and federal entities in charge of taxpayer-funded construction contracts are required by law or directed by wayward lawmakers to hire consultants to help them determine if a PLA mandate is appropriate for construction projects.

Hill International, headquartered in Marlton, N.J., is a publicly traded construction management and consulting firm. A division within Hill International called the Project Management Group generates profit by providing reports to government clients whose goal is to obtain justification for a proposed government-mandated PLA.

The reports almost always justify an anti-competitive and costly government-mandated PLA on a project by using false logic to calculate alleged cost savings resulting from concessions made by construction trade unions to inefficient terms in normal collective bargaining agreements (learn more here).  The reports rarely present the legitimate concerns of the merit shop contracting community about the impact of PLAs on their business and workforce, nor do the reports truthfully evaluate the cost of a PLA project when compared to a project bid with open competition—appealing to the employers of 86 percent of the U.S. construction workforce (those who choose not to join a union).

Firms like Hill International sell their services to taxpayers as an objective consultant for confusing and often controversial PLA mandates. Yet, Hill’s own website makes it clear that it approaches the task of evaluating a PLA with a distinct bias in favor of PLAs:

“Hill helps both public and private organizations who have large, complex construction projects save time and money through a type of collective bargaining agreement called a Project Labor Agreement (PLA). PLAs create efficiencies through standardization of project participant contracts. They help avoid conflict issues between contractors who are working a large project and help protect against strike conditions. Hill will work with all parties on the project, including owners, contractors and unions to unify their contractual relationship. The end result is a tremendous savings in both time and money through standardization efficiency.”

You Get What You Pay For

PLA proponents know that spending taxpayer dollars on a Hill International report will guarantee a government-mandated PLA on a taxpayer-funded project.

For example, Gerald Murphy, former vice president and chief operating officer of the New Jersey Schools Development Authority, made clear Hill’s pro-PLA bias in testimony before the New Jersey Office of Inspector General about his experience with Hill when he was Philadelphia’s deputy mayor for labor:

“We used Hill International for a project labor study over there that Mayor Rendell at the time had an Executive Order that he utilized and [sic] project labor agreements. So to do project labor agreements you usually need some authority to come – you know, a company that comes in that specializes in them that basically can set up the justification for it. So we used Hill.”

- New Jersey Office of Inspector General report, starting on page 11, available here.

Unfortunately, Hill International and similar consultants recommend PLAs not because they are in the public interest, but because they can make a buck off producing these studies and drafting and defending PLA mandates as a high-priced consultant.

For example, on Sept. 30, 2009, the U.S. Department of Labor (DOL) awarded Hill International and Interactive Elements a $300,000 contract to produce a report touting the benefits of government-mandated PLAs on federal construction projects as a result of President Obama’s Feb. 6, 2009, Executive Order 13502 and related FAR Regulations encouraging federal agencies to mandate PLAs on a case-by-case basis for federal construction projects exceeding $25 million in total costs.

The DOL again hired Hill International to produce an Oct. 28, 2010, report justifying a PLA mandate on a DOL Job Corps Center in Manchester, N.H., that cost taxpayers $128,000.  The  report says the firm was retained by the DOL “as an expert witness in anticipation of litigation and to evaluate the viability,” of the PLA, and “to provide assistance to the DOL in defense of its position in the event of litigation…based upon its extensive experience in all aspects of the PLA process in over 40 projects.”

The DOL was forced to drop its PLA mandate after merit shop contractors filed a bid protest with the Government Accountability Office (GAO) against the anti-competitive and illegal scheme. The DOL relied on Hill International’s study justifying the PLA, but was dismayed when GAO officials found flaws in Hill International’s research and recommendations for a PLA, and notified the DOL the PLA mandate would violate federal law if not removed from the solicitation.

Hill International Also Produces Expensive Pro-PLA Reports for State and Local Governments

Hill International doesn’t just make money by producing pro-PLA studies for the federal government; it makes money recommending and managing PLAs with state and local governments, too.

For example, in 2010 a joint venture between Hill International and LiRo won a $15 million contract to provide services and produce a report for the New York City School Construction Authority (NYCSCA) justifying a PLA mandate on billions of dollars worth of city construction projects. The PLA mandate was subject to a recent unsuccessful legal challenge by union contractors and associations because some union tradespeople and contractors were locked out from participating on school projects subjected to the PLA mandate because they were not part of the PLA drafted by Hill International, the NYSCA and favored construction trade unions controlling the labor supply to these projects. Hill International also produced a pro-PLA report for the NYSCA for an unknown sum in 2005.

In 2007, The Daily Freeman reported that Hill International’s relationship with Ulster County, N.Y., was scrutinized by a special investigating committee after it received $1.64 million in taxpayer money for services like a pro-PLA study, “administering a PLA,” and “compiling a jail project study that consisted of copies of job logs…” for the Ulster County Law Enforcement Center (“Jail probe committee scrutinizes consultant,” 8/29/07)

Hill International also produced costly pro-PLA reports for notable projects like the Tappan Zee Bridge in New York (1996); Washington National’s Stadium in Washington, D.C., (2006); and Pittsburgh’s Baldwin High School (2005), Bristol Borough School District (2007) and Scranton School District (2008), all in Pennsylvania.

Where Is the Incentive to Provide Objective Analysis?

If Hill International were to recommend against a PLA mandate, other governments would be unlikely to hire the firm to produce a report justifying a PLA mandate. In essence, the gravy train would run dry. In addition, Hill International could not make additional money drafting a PLA and serving as an expert witness in legal proceedings. And if Hill were to oppose a PLA, it could damage lucrative construction management relationships with pro-union governments and unionized contractors.

So there is no incentive to tell the truth about government-mandated PLAs.

Hill International and other corporations and consultants engaged in pimping PLAs to governments at the expense of taxpayers and free enterprise need to be exposed and held accountable.

Here is some further reading on Hill International’s flawed methodology and monetary motivation behind its pro-PLA reports:

• Affidavit of Prof. David G. Tuerck, PhD, professor and chairman of economics and executive director of the Beacon Hill Institute at Suffolk University in Boston, before the Government Accountability Office refuting the need for a PLA mandate and the pro-PLA Hill International report. Tuerck debunks Hill International’s methodology starting on page 5, section 9.
• Report by Hill International recommending a PLA mandate on the Manchester, N.H., DOL Job Corps Center project (submitted Oct. 28, 2010).
• Evidence documenting cost to taxpayers for Hill International’s pro-PLA mandate report on the Manchester, N.H., DOL Job Corps Center ($128,000, solicitation number DOLJ109630678 paid in two installments).
• Evidence documenting cost to taxpayers for Feb. 25, 2011, Hill International report promoting PLA mandates for all federal agencies ($300,000, solicitation number DOLF09F422062, subcontracted to Hill International by Interactive Elements).
• Blog post about a compelling article by Tuerck critical of government-PLAs,”Why Project Labor Agreements Are Not in the Public Interest,” from the Cato Journal (Volume 30 Number 1, Winter 2010, “Are Unions Good for America?”).

The post Who Is Hill International and Why Does It Promote Government-Mandated PLAs? appeared first on The Truth About PLAs.

Although Michigan adopted a similar bill in 2011, a federal district court judge invalidated it in February 2011, claiming the law was an attempt to regulate labor policy as opposed to determining how the state procures construction services.

The new law removes all ambiguity and makes it abundantly clear that the intent is to ensure economy and efficiency in public construction. It does not infringe on the rights of contractors to use PLAs; it simply ensures contractors – not government bureaucrats or elected officials beholden to Big Labor – decide whether a PLA is appropriate. The law takes government out of the business of picking winners and losers.

This law is particularly important, as a number of public entities in this state have required the use of PLAs as a condition of performing public work in the past.

In a state where many communities are still struggling to break free from the negative impacts of onerous public sector union contracts negotiated by union bosses and the politicians they support, the legislature’s commitment to cost-effective and quality construction without union favoritism is a great example that the state’s political subdivisions should follow.

Here is the press release from ABC of Michigan:

ABC applauds signing of bill ending construction industry discrimination and providing fiscal accountability in Michigan

Lansing, MI—Today Governor Rick Snyder signed into law Public Act 238 again making government mandated project labor agreements (PLAs) that discriminate on the basis of labor affiliation illegal in Michigan.

“Today is an important day for all Michigan workers and taxpayers,” said Chris Fisher, president of ABC of Michigan. “This law means that all businesses and all workers—union and nonunion alike—have a level playing field to compete for and build publically-funded construction projects and ensures that nobody is denied a fair shot at succeeding in Michigan.”

New changes to the Michigan Fair and Open Competition Act specify that contractors may enter into a PLA only if doing so is voluntary and not mandated. On taxpayer-funded construction projects, a mandate that requires or prohibits contractors to sign a union-favoring PLA or other agreement as a condition of performing work is illegal. In addition, any term discriminating on the basis of labor affiliation is illegal. The law requires the neutral, economical, nondiscriminatory and efficient procurement of construction services by the state.

“This major reform protects citizens with transparency in governmental contracting and defends taxpayers against costly special interest handouts that eliminate competition when public money is at stake,” Fisher explained. “As of today Michigan is again a national leader joining with more than a dozen other states that are promoting construction industry competitiveness, growth and opportunity.”

In early 2012, a Federal District Court judge made a controversial decision to suspend the Michigan Fair and Open Competition Act. Public Act 238 creates new protections that are not affected by the court’s previous ruling.

“We commend Governor Snyder, bill sponsor Senator John Moolenaar, and the legislature for standing up for Michigan citizens and for their staunch support of fiscal accountability and equal opportunity,” said Fisher.

###

ABC of Michigan, a statewide trade association representing the commercial and industrial construction industry, is dedicated to quality, open competition, equal opportunity and accountability in publicly and privately funded construction projects.

Michigan is the 14th state to ban government-mandated PLAs on taxpayer-funded projects within the state. Here at TheTruthAboutPLAs.com, we bet there are more to come.

The post Michigan Again Bans PLA Mandates on Taxpayer-Funded Construction appeared first on The Truth About PLAs.

Bids have been submitted for a fire station construction project in Brandywine, Md., that was estimated to cost $2.9 million. The lowest bid is approximately $4.2 million – a 41 percent increase over the estimated cost of the project! (See the bid results here.)

County officials have not awarded the project under the PLA requirement yet, and we urge them to rebid the project without this wasteful and discriminatory mandate.

The significant cost increase is no surprise. The history of PLA mandate failures in the Mid-Atlantic region is extensive. In Washington, D.C., adjacent to Prince George’s County, several large and high-profile projects were built with PLAs mandates, including the Washington Nationals baseball stadium and the D.C. Convention Center. Both projects experienced major problems, including significant cost increases.

A comprehensive list of PLA failures in Washington, D.C., is available on TheTruthAboutPLAs.com here.

The last high-profile PLA project in Prince George’s County was a disaster as well. The $2.4 billion Woodrow Wilson Bridge was a federally assisted project that included renovating the bridge spanning the Potomac River between Maryland and Virginia and updating four major bridge-related interchanges. The bridge superstructure contract temporarily was subjected to a union-favoring PLA requirement by former Maryland Gov. Parris Glendening (D). Originally estimated to cost $450 million to $500 million, the bridge’s superstructure contract received just one bid in December 2001 at a price of $860 million – a 78 percent cost overrun and $370 million more than engineering estimates.

The PLA was subjected to a legal challenge and related controversy involving the White House and elected officials in Maryland and Virginia. Eventually, the Wilson Bridge superstructure contract was rebid without the government-mandated PLA into three smaller bid packages. In October 2002, multiple bids were received for each of the smaller contracts from union and nonunion firms, and the winning bids came in significantly below the engineering estimates. While the bridge project was delayed more than a year for re-bidding, it eventually was completed on time and below the original budget.

Learn more about the Wilson Bridge here.

These examples should serve as case studies for Maryland’s leaders on the impact of Big Labor’s handouts. Nevertheless, Gov. Martin O’Malley’s administration is pursuing a federal GSA-style PLA preference policy for the construction of a juvenile detention facility in Cheltenham, Md.

Similar to the discriminatory PLA preference policy adopted by the GSA and the PLA preference the Metro Washington Airports Authority (MWAA) attempted to institute on Phase 2 of the Silver Line metro project, giving bidders willing to agree to a PLA an unfair advantage on the Cheltenham project would severely limit the ability of merit shop contractors to compete effectively for this project. It would make it nearly impossible for the vast majority of Maryland’s construction workforce that chooses not to join a labor organization to compete for a project funded by their own tax dollars.

The astronomically high bids for the Brandywine fire station project should be a warning to elected leaders: PLA mandates do not make sense for Maryland. Taxpayers deserve the best construction at the best price – and political-motivated considerations should not be a factor. Maryland leaders should follow Anne Arundel County’s lead and say no to PLA mandates.

In addition to concerns about increased costs, the National Black Chamber of Commerce has raised concerns that Prince George’s County’s pro-PLA policy could harm minority and disadvantaged businesses and workers in the community.

We will continue to follow the situation in Maryland closely.

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