Yesterday, the Free Enterprise Coalition released this press release (see below) about documents recently obtained from the San Diego Unified School District (SDUSD). They prove government-mandated PLAs reduce competition and increase costs. (Note: SDUSD calls these union agreements Project Stabilization Agreements (PSAs) instead of Project Labor Agreements (PLAs). There are a number of alternative names used to describe union agreements that are essentially PLAs, such as Community Workforce Agreements, Site Stabilization Agreements, etc. but they will continue to be referred to as PLAs in this post.)

The press release says union-favoring PLA project bids were 9.7 percent less than the SDUSD’s budget. However, the projects bid without the imposition of the union-only PLA were 31.6 percent below budget…a 21.9 percent difference. If this trend continues, the imposition of the union-favoring PLA could cost taxpayers more than $200 million in unnecessary construction costs on planned projects.

The PLA reduced competition too. For union-only PLA projects, SDUSD was able to interest an average of five responsive general contractor bidders, compared to 10 responsive general contractor bidders on school projects where contractors were not forced to agree to a government-mandated PLA.  General contractors complained projects received only about 50 percent of the subcontractor bids that the non-PLA projects received.

It is no surprise the SDUSD-mandated PLA reduced competition and increased costs.

It will be interesting to see how local Big Labor bosses and school district officials beholden to special interests try to spin these numbers at today’s press conference, where officials were expected to engage in the deceptive manipulation of taxpayers in support of their anti-competitive pro-PLA agenda. (The press conference was planned prior to the public release of these damaging documents. A consultant was expected to present a report in support of the SDUSD PLA policy.)

Opposition to government-mandated PLAs on the $2.1 billion bond measure funding SDUSD projects, Proposition S,  has been covered numerous times here at the TruthAboutPLAs.com. In 2009, the SDUSD sneakily introduced the PLA-mandate policy, which passed May 26 by a 3-2 vote. A number of projects funded by Prop S did not have PLAs mandated on them because of an inter-union dispute. In July 2009, AGC filed a lawsuit against the SDUSD PLA mandate policy. A second lawsuit was filed by the National Right to Work organization in October.  The AGC lawsuit was dismissed in California Superior Court in December 2009. An appeal was rejected in California’s 4th District appeals court in May 2011. The California Supreme Court declined to review the case in September 2011 . In February 2010, bids for the first project subject to the new PSA-mandate policy came in 35 percent more than initial estimates.  In July 2011, SDUSD documents revealed the PSA policy has failed to meet its local hiring goals.

The San Diego region has been a hotbed of government-mandated PLA controversy with Californians taking action in opposition to government-mandated PLAs.

San Diego County voters approved a Fair and Open Competition charter amendment with 76 percent of the vote in November 2010.

In June 2010, 56 percent of voters in the City of Chula Vista approved a Fair and Open Competition ordinance, and 54 percent of voters in the City of Oceanside approved a charter containing a Fair and Open Competition provision.

In response to the passage of similar local fair and open competition measures passed throughout California in 2011, Big Labor pushed the California legislature and Gov. Jerry Brown (D) to pass SB 922, which was signed into law Oct. 2, 2011, under odd circumstances through a gut and amend bill. It is a fine example of how Big Labor’s control of California’s elected officials is harming taxpayers and attacks the will of the people. Learn more here.

We will be following this San Diego story closely. Here is the press release.

Internal Documents Show San Diego Unified School District’s Union-Only Construction Program Costing Taxpayers Millions of Dollars

San Diego, CA – In documents obtained from the San Diego Unified School District’s Facilities Department, the construction industry has found that the District’s union-only Project Stabilization Agreement (PSA) for construction projects financed by the $2.1 Billion Proposition S bond measure has been a dismal failure. The document, prepared at the request of the firm hired by the District to “conduct a study of the impact and effect of the Projects Stabilization Agreement (PSA),” covers the bidding results of all construction projects bid utilizing Proposition S funding since its inception in 2009.

The PSA was negotiated between the San Diego Building and Construction Trades Council and the District in 2009. The first project imposing the terms of the PSA was bid in February 2010. Ten Proposition S projects were bid in 2009 before the PSA was implemented, and six other projects were bid in 2010 and 2011 that were not covered by the terms of the PSA. 17 projects were bid under the terms of the PSA in 2010 and 2011.

One of the documents, “Proposition S Construction Contracts Bidding Review,” shows that on average the District is paying a 21.9% premium for projects bid under the union-only terms of the PSA. This 21.9% premium amounts to approximately $16 million in additional construction costs that the District has incurred in the two years in which they have imposed the union-only condition on the projects. The document shows that while PSA project bids were 9.7% under the District’s budget, the projects bid without the imposition of the union-only PSA were 31.6% under budget…a 21.9% difference. If this trend continues, the imposition of the union-only PSA could cost taxpayers over $200 million in unnecessary construction costs.

Jim Ryan, Executive Vice President of the Associated General Contractors of America, San Diego Chapter, Inc., stated that “the reason for the 21.9% premium is obvious. On the union-only Prop S PSA projects, the District has only been able to interest an average of 5 responsive general contractor bidders, compared to 10 responsive general contractor bidders on Proposition S projects in which the PSA was not a condition of the contract. General contractors also tell us that the union-only PSA projects receive only about 50% of the subcontractor bids that the non PSA projects receive. When there are more bidders, the District receives better construction bids. It’s that simple.”

Scott Crosby, CEO of the Associated Builders and Contractors, San Diego Chapter, noted that “the District has also spent several hundred thousand dollars to administer the PSA. This includes additional staff to administer the numerous grievances and jurisdictional disputes on the union-only PSA projects, pay consultants to conduct seminars to explain the complex provision of the PSA to the industry, and market the bid opportunities to contractors in areas throughout the Southwest. These expenses were incurred because the local contractors have shown little interest in bidding the union-only PSA projects.”

Eric Christen, Executive Director of the Coalition for Fair Employment in Construction, expressed hope in the unlikely chance that the school board may use this as an opportunity to rid themselves of the PSA. “We now have two years worth of data in which every metric the district set forth has failed to be met. This disastrous study now gives the school board one more opportunity to put the interest of students and taxpayers ahead of Big Labor special interests who fund their campaigns.”

Another failure of the union-only PSA relates to local workers. The Building Trades promised that 70% of the craft workers would be residents of the San Diego Unified School District. As of December 1, 2011, only 40% of the craft workers working on the projects reside in the District.

The District will hold a “closed to the public” news conference Friday, December 9 to detail the results of a study by Rea & Parker Research, which was commissioned by the District’s Board of Trustees at the cost of $71,825.

The news conference will be held at Hoover High School’s Woodshop Building, which was the first Proposition S project bid under the union-only terms of the PSA. The project had to be bid twice. Only five bidders bid the first time, and the low bidder from Stanton, California was 35% over the District’s budget. All bids were rejected, and the District rebid the same project. This time there were only four bidders, and the low bid was about 26% over budget. A comparable project was bid about the same time by another school district that does not impose a union-only PSA on its projects. 17 bids were received, and the low bid was about 25% under budget.

Source Documents: Proposition S Construction Contracts Bidding Review & Project Specific Budget/Estimates/Bids

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CONTACT: Brad Barnum
858-731-8158

More information on Proposition A is available in our earlier posts.

Also, check out ABC San Diego Chapter President Scott Crosby on Fox News’ Neil Cavuto’s show.

The Howard Jarvis Taxpayers Association endorsed Proposition A yesterday (September 7).  They Howard Jarvis Taxpayers Association joins the San Diego County Taxpayers Association (see their comprehensive analysis here), the Oceanside Taxpayers Association, the La Mesa Taxpayers Association, the Chula Vista Taxpayers Association, and the San Diego Tax Fighters in support of Proposition A.

Visit the Yes on Proposition A web site at www.fairandopencompetition.com.

The Proposition A Facebook page is here: Yes on A: The Fair and Open Competition Initiative for San Diego County | Facebook

A video in support of Proposition A is here: YouTube – Fair and Open Competition – Yes on A

It’s great radio and they really do an outstanding job of touching on why PLAs are a bad deal for San Diego.

Catch the entire interview here.

Here are the highlights (Links added):

Unemployment stands at 12.4 percent. The state is facing un-ending multi-billion dollar deficits. The city of Vallejo has declared bankruptcy and other cities and counties are considering following suit. But that hasn’t stopped Big Labor lobbyists from pushing costly, job-killing special interest Project Labor Agreements (PLAs) that will cost hard-working taxpayers hundreds of millions of dollars. The problem for San Diego is that local union bosses are trying to make an art of it.

Project Labor Agreements are special interest kickback schemes that end open, fair and competitive bidding on public work projects. PLAs deny nearly 85 percent of California’s construction workforce the ability to do public work projects, reducing competition and significantly driving up costs to taxpayers. With government budgets stretched to the breaking point and essential services being cut, it is critical that taxpayers get the best quality work at the best price. Always. PLAs put special interests ahead of the public interest by restricting the bidding process to ONLY contractors backed by big labor unions — denying others the opportunity to do a better job at a better price.

This is an outrage — especially in San Diego where unemployment in the construction industry stands at an astounding 25 percent. Big Labor is pushing for special interest PLAs on San Diego’s new City Hall, downtown library, Convention Center expansion, new Charger stadium, and the latest Chula Vista bay-front project. San Diego has already paid the price of costly PLAs.

Last year, Gaylord Entertainment withdrew its plan to build a $1 billion resort and convention center in Chula Vista after being blackmailed by Big Labor. The owner was told to agree to a PLA or face the threat of costly lawsuits. Gaylord spent three years and millions of dollars trying to bring 2,000 construction jobs and millions in annual revenue to the region (couldn’t we use those about now?) but finally threw up its hands and moved the project to Mesa, Ariz.

Unfortunately, PLAs raise ethical concerns. After getting $400,000 in union political contributions, three San Diego School Board members voted to impose a PLA on SDUSD’s $2.1 billion Proposition S construction bond. Rather than spending money for better schools, more classrooms and more educational opportunities for our children, three of the board members — Shelia Jackson, Richard Barerra and John Lee Evans — voted to spend more money on higher construction costs.

Just last week the extent of the damage became evident. The first project to go out to bid with a PLA had 66 percent less bids than another San Diego School Distict project without a PLA kickback scheme attached to it. Worse yet, the bid was 35 percent over budget. To add insult to injury, the job was awarded to a bidder from Los Angeles. So much for the “local hire” propaganda pushed by PLA proponents.

Taxpayers demand and deserve the best quality work at the best price. Denying the vast majority of San Diego firms the opportunity to even bid on projects makes no sense. Only fair and open competition can ensure taxpayers get the best bang for their buck.

Fortunately, taxpayers in San Diego have the opportunity to end the special interest kickback schemes. In 2010 there are no fewer than four entities in San Diego County who will be voting to ban PLAs and codify into law support for open competition.

The cities of Chula Vista and Oceanside will have measures on the June ballot. We are also currently working with the San Diego County Board of Supervisors to do the same thing. And in the city of San Diego, California’s second largest city, we are currently collecting signatures that would amend the city charter to protect taxpayers from these costly backroom deals. We need to collect 100,000 valid signatures by the end of April to have this placed on the November ballot. You can help to accomplish this by going to reformsandiego.com.

Help us protect taxpayers by putting the public interest ahead of the big labor special interests that have harmed working men and women, taxpayers, children, and the business climate for too long.

This Op-Ed comes on the heels of a San Diego County Board of Supervisors’ vote to prohibit PLAs on county projects.

There is no question that after years of politicians giving handouts in the form of PLAs to their Big Labor cronies at the taxpayers’ expense, Californians are fighting back against corruption and special interests.

If you support open competition and accountability on taxpayer funded projects, please visit reformsandiego.com.

San Diegans for Fair and Open City Contracting is the group collecting the 100,000 signatures necessary to put fair and open competition on the ballot for the city of San Diego.  They are currently in the middle of an effort to raise $48,000 in 48 hours to support their efforts.  This is a golden opportunity to end these sweetheart deals in the city of San Diego once and for all.

Please visit www.reformsandiego.com to contribute to the “48K in 48 Hours” effort.

And be sure to tell them that TheTruthAboutPLAs.com sent you!

This is a problem for unions, who become irate and frustrated when the public learns about proposals to impose project labor agreements (PLAs) on taxpayer-funded construction.

Sunshine is a powerful disinfectant against the plague of PLAs.

Union officials are especially aghast at the proliferation of ballot initiatives in California as part of the ongoing 20 in 2010 campaign in California to ban PLAs this year at twenty local governments. Ballot initiatives subvert the typical union strategy of winning monopolies on public works construction by first supporting the election campaigns of candidates in places where few people normally pay attention to civic affairs.

This frustration was evident on February 23, when the San Diego County Board of Supervisors voted 5-0 to ban PLAs in county-funded projects. One proposal from a county supervisor at this meeting was to allow voters to make the decision to ban PLAs through a ballot initiative. The San Diego Union-Tribune February 23 reported the union response:

Evan McLaughlin of the San Diego-Imperial Counties Labor Council said the debate was too complicated for voters.

“Voters don’t know anything about these issues,” he told the board. “You are the policymakers.”

Here is a test for you to try: next time you’re with a group of people who do not follow politics closely, fairly and honestly describe PLAs and the arguments for and against them. The typical response will be this: “I think unions are needed to protect workers, but this PLA thing that they’re doing is wrong.” Then they’ll say this: “Who’s voting for these PLAs? I guess all they care about is the unions instead of the people paying taxes. I want to vote them out of office.”

Union arrogance aside, the media has done an outstanding job of covering this win for taxpayers.

The local ABC affiliate did an outstanding story and shows that they really understand the issue.  Video of their story is available here.

In addition to the San Diego Union-Tribune story linked above (and here), the San Diego Daily Transcript also covered the victory.

This is a huge win for the people of San Diego County.  Kudos to the San Diego County Board of Supervisors!

We noted yesterday that this vote was covered in the North County Times (”County Moves to Restrict Union Labor Requirement“, Feb 9), the San Diego County News (”Ensuring Fair and Open Competition For County Contracts“‏, Feb 9) and SignonSanDiego.com (”County Considering Ban on Labor Deals, Public Works Projects Would not Require Hiring Through Union Halls“, Feb 9).

The vote was also covered by KUSI San Diego.  The KUSI video is available through their website.  This video is worth watching.  It is clear that the reporters from KUSI understand the issue and the impact of PLAs on their community.

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.

Project labor agreements (PLAs) came to the forefront in San Diego in the wake of the San Diego Unified School District’s decision to require PLAs on all projects funded by Proposition S, a $2.1 billion bond approved by voters in November 2008.

Here is an excerpt from the San Diego News Network’s coverage of Monday’s press conference:

“This measure imposes clear rules for open and fair contracting within city government,” DeMaio said at a news conference outside City Hall, flanked by about two dozen non-union trade workers.

It would also ban project labor agreements on developments being undertaken by the city, according to DeMaio.

A project labor agreement mandates that government contracts for public construction projects go only to union contractors. There isn’t currently a project labor agreement before the city, but San Diego is exploring several large projects, including a downtown stadium for the Chargers, a new central library, redeveloping City Hall and expanding the Convention Center.

“We need to ensure that if these taxpayer-funded projects do proceed, that all San Diegans are allowed to apply for the jobs that they would create,” DeMaio said.

The event’s speakers included members from Associated Builders and Contractors of San Diego, Associated General Contractors of San Diego, the National Association of Minority Contractors and local apprentices.  The apprentices at the event are trained professionals that could be prohibited from working on projects funded by their own tax dollars by government-mandated PLAs.

Video of the event is available on YouTube and pictures are also available.

This event was covered by a number of local news outlets, including:

Here is an excerpt from the National Right to Work Legal Defense Foundation press release:

The discrimination against nonunion construction workers is facilitated by a so-called “Project Labor Agreement” (PLA) – essentially a collective bargaining agreement signed by contractors as a condition of performing work on a government-funded construction project. Arguing that the PLA between the school district and various unions (including the Southwest Regional Council of Carpenters and San Diego Building & Construction Trades Council, AFL-CIO) illegally discriminates against construction workers who exercise their right to refrain from union membership, Foundation attorneys are defending the interests of the vast majority of construction employees in California who have opted against unionization.

Last November, San Diego voters approved a $2.1 billion school bond, called Proposition S. California law requires that all qualified contractors’ employees complete state-mandated “apprenticeship” programs, but it is illegal under federal law to discriminate against workers or businesses on account of union association. The discriminatory PLA, however, requires workers to go through union-run apprenticeship programs (disqualifying high quality training programs run by employers and other groups), and the subcontracting clause further attempts to coerce even more workers into union ranks.

This is the second legal challenge filed against the SDUSD since adopting the project stabilization agreement requirement in May.

Read the San Diego Source’s October 13 article titled, “Another Discrimination Claim Against School Bond Measure,” or the National Right to Work Legal Defense Foundation’s October 7 press release for more information.