Section 415 of H.R. 2055 ensures fair and open competition on federal construction contracts funded by this legislation. Specifically, it will prevent federal agencies from requiring contractors to sign an anti-competitive and costly project labor agreement (PLA) as a condition of winning federal construction contracts.

On June 1, the White House issued a policy statement that opposed, among other things, Section 415’s restrictions on PLA mandates in H.R. 2055.

In February 2009, President Obama signed Executive Order 13502, which stated that “it is the policy of the federal government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects.” The order encourages federal agencies to mandate PLAs on a case-by-case basis on federal projects exceeding $25 million in total cost.

The Obama executive order and related regulations have exposed agency procurement officials to intense political pressure from special interest groups, the Obama administration, agency political appointees and members of Congress to mandate PLAs and PLA preferences on MilCon and VA projects even when they are not appropriate. (See examples of federal MilCon and VA projects subjected to waste and favoritism here and here).

In response, on May 24 the House Appropriations Committee adopted via voice vote an amendment offered by Rep. Jeff Flake (R-Ariz.) that inserted Section 415 into H.R. 2055.

However, today Rep. Steven LaTourette (R-Ohio) wants to inject waste, favoritism and discrimination into the federal procurement process on projects funded by this bill by offering an amendment to strike Section 415 from H.R. 2055.

Supporters of this amendment believe agencies should be able to mandate federal PLAs and needlessly discriminate against qualified and experienced contractors and employees that are unwilling to sign a collective bargaining agreement with unions (a PLA) as a condition of winning a federal construction contract. A vote for this amendment is a vote for waste and cronyism and is a symptom of special interest favoritism that is eroding the integrity of the federal procurement process.

Last week, a diverse coalition of construction industry associations and employer groups (see below) sent a letter to the House OPPOSING any amendment, such as the LaTourette amendment, that would strike Section 415 from the bill.

PLA mandates and PLA preferences imposed by federal agencies building construction projects funded by H.R. 2055 discourage competition from qualified contractors that want nothing more than to deliver to taxpayers and the government the best possible construction product at the best possible price.

If a federal contractor wants to voluntarily enter into a PLA on a federal construction project funded by H.R. 2055, there is nothing in current law, Section 415 or H.R. 2055 that would prevent them from doing so voluntarily.

Congress must ensure that construction projects funded by H.R. 2055 are cost-effective and administered without favoritism or discrimination.

Section 415 of H.R. 2055 will eliminate inefficiencies in the federal contracting procurement process, increase competition, reduce costs and create construction jobs while protecting the public interest.

TAKE ACTION TODAY
Taxpayers and construction industry stakeholders MUST participate in the legislative process and contact their elected officials TODAY. Tell them to OPPOSE the LaTourette amendment and any amendment that would strike Section 415 from H.R. 2055.

Supporters of fair and open competition can send an email to their member of Congress through this fast and easy Grassroots Action Center or call the U.S. Capitol Switchboard at (202) 224-3121.

This vote will be very close, so every call, email and fax matters.

TheTruthAboutPLAs.com readers may recall that an amendment supported by the merit shop to prohibit costly PLA mandates and preferences on the Homeland Security Appropriations Act for 2012 (H.R. 2017), offered by Rep. Steve Scalise (R-La.), failed June 2 in a 207-213 vote. That amendment would have restrained federal agencies from implementing and enforcing PLA mandates and preferences on projects funded by H.R. 2017.

In February, a similar amendment to the Continuing Resolution (H.R. 1) offered by Rep. Frank Guinta (R-N.H.) failed in a 210-210 tie.

The following representatives will decide the fate of the LaTourette amendment and especially need to hear from you:

The Following Construction Industry and Employer Groups Support Section 415 of H.R. 2055:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Construction Industry Roundtable (CIRT)
Independent Electrical Contractors Association (IEC)
Electronic Security Association (ESA)
Merit Elevator Contractors Association of America (MECAA)
National Association of Minority Contractors (NAMC) – Philadelphia Chapter
National Association of Government Contractors (NAGC)
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
National Ready Mixed Concrete Association (NRMA)
National Stone, Sand & Gravel Association (NSSGA)
NUCA Representing Utility and Excavation Contractors
Small Business and Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners and Executives, USA (WCOE)

Here is Section 415 of H.R. 2055 (page 60 of pdf):

Sec. 415. None of the funds made available by this Act may be used to enforce Executive Order 13502 (41 U.S.C. 251 note), FAR Rule 2009-005, or any agency memorandum, bulletin, or contracting policy that derives its authority from Executive Order 13502 or FAR Rule 2009-005.

Check back for updates here later today.

Update 6/14: The LaTourette amendment was debated by a number of GOP and Democrat members of Congress on the House floor this afternoon.

This evening, the LaTourette Amendment was ADOPTED 204-203.  This is the second time in the 112th Congress an effort to restrict wasteful and disctiminatory government-mandated PLAs failed by just one vote.

Here is the final vote for Roll Call #413.

The following 27 GOP members voted with every Democrat except Dan Boren (D-OK) in support of the LaTourette amendment:

Barton, J. (TX-06)
Biggert (IL-13)
Diaz-Balart (FL-21)
Dold (IL-10)
Emerson, J. (MO-08)
Grimm (NY-13)
Hayworth (NY-19)
Johnson, Timothy (IL-15)
King, P. (NY-03)
Lance (NJ-07)
LaTourette (OH-14)
LoBiondo (NJ-02)
McCotter (MI-11)
McKinley (WV-01)
Murphy, T. (PA-18)
Petri (WI-06)
Reichert (WA-08)
Ros-Lehtinen (FL-18)
Roskam (IL-06)
Runyan (NJ-03)
Schmidt (OH-02)
Schock (IL-18)
Smith, C. (NJ-04)
Turner, M. (OH-03)
Walsh (IL-08)
Whitfield (KY-01)
Young, D. (AK-AL)

Of the 26 House members that did not cast a vote,  the following 10 GOP members did not vote:

Bachmann (MN-06)
Brady, K. (TX-08)
Broun (GA-10)
Huizenga (MI-02)
Johnson, S. (TX-03)
King, S. (IA-05)
Paul, Ron (TX-14)
Rokita (IN-04)
Shimkus (IL-19)
Stivers (OH-15)

The following 15 Democrats did not vote:

Butterfield (NC-01)
Cardoza (CA-18)
Dingell (MI-15)
Engel (NY-17)
Eshoo (CA-14)
Giffords (AZ-08)
Grijalva (AZ-07)
Higgins (NY-27)
Lee (CA-09)
Rush (IL-01)
Slaughter, L. (NY-28)
Speier (CA-12)
Tsongas (MA-05)
Weiner (NY-09)
Wasserman Schultz (FL-20)

Please contact your member of Congress and explain how typical government-mandated PLAs and PLA preferences reduce competition, increase costs and harm qualified businesses and their skilled employees.

More updates to follow.

The VA is requesting feedback for the Palo Alto Health Care System Capital Asset Improvements project in Palo Alto, Calif. and on the Megawatts (MW) Photovoltaic System, VA Southern Nevada Healthcare System Medical Center in Las Vegas, Nev. The USACE is seeking information for several large-scale projects on various military bases in Alaska including Fort Wainwright, Fort Greely, Eielson Air Force Base, and Joint Base Elmendorf Richardson.

All members of Associated Builders and Contractors (ABC) and construction professionals are encouraged to respond to the request for information. Tell the USACE that government-mandated PLAs injure competition, increase costs, and will not advance the economy and efficiency in government contracting.

It is important to express your opposition to government-mandated PLAs today before they are mandated or encouraged on future USACE and/or state and local projects in your community.

Surveys for the VA projects in Palo Alto and Las Vegas should be submitted to Frank Clemons at
Frank Clemons or by fax at 202-565-4595 by March 22. Surveys for the USACE projects in Alaska should be submitted to Kimberly D. Tripp at kimberly.tripp@usace.army.mil or by fax at 907-753-2544 by April 18.

The USACE and other federal agencies have issued PLA surveys as a result of President Obama’s pro-PLA Executive Order 13502 and federal regulations implementing the discriminatory and costly order. The order and regulations encourage federal agencies to mandate anti-competitive and costly PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. The survey results are an important source of information used to determine whether a PLA is appropriate for federal projects.

In the past few months, the USACE has issued multiple surveys requesting information about the potential use of PLAs on construction projects in numerous USACE districts across the country. ABC National and construction stakeholders and contractors responded to these surveys.

Here are ABC National’s responses to the USACE’s recent PLA surveys:

• Letter to USACE, Ft. Worth, TX District concerning Lackland AFB projects (survey) (3/7/11)
• Letter to USACE, New York District on multiple projects at West Point in Orange County, NY (2/18/11)
• Letter to USACE, Ft. Worth, TX District concerning Unaccompanied Enlisted Personnel Housing projects at White Sands Missile Range, NM (2/3/11)
• Letter to USACE, Ft. Worth, TX District concerning Brigade Combat Team Barracks at Fort Jackson, SC (2/3/11)
• Letter to USACE, Ft. Worth, TX  District concerning future projects in USACE Ft. Worth District boundaries (12/14/10)
• Letter to USACE Mobile, AL District concerning Ft. Rucker airport hangar and Mobile, AL projects (11/24/10)
• Letter to USACE Honolulu, HI District concerning four projects (11/23/10)
• Letter to USACE Louisville concerning Danbury, CT project (11/4/10)
• Letter to USACE Louisville concerning Ft. Campbell, KY area projects (11/1/10)
• Letter to USACE Savannah District (10/28/10)

For contractors, taxpayers and construction professionals unfamiliar with the problems with federal PLAs and regulations implementing President Obama’s pro-PLA Executive Order 13502, please review the letters sent by ABC National to the USACE, which may be helpful information for contractors to review before responding to the USACE PLA surveys.

Responding with accurate and timely information is critical and effective. The USACE recently removed government-mandated PLAs from the Army Reserve Center in Los Alamitos, Calif. and the Patrick Air Force Base in Brevard County, Fla. after a strong grassroots response and survey participation from the contracting community. The USACE removed a PLA mandate on the Armed Forces Reserve Center in Camden, N.J. following a legal challenge and robust grassroots response from the construction stakeholders.

Thanks for taking the time to respond to these surveys. Your responses will help maintain an open and competitive environment that will allow all qualified contractors to fairly compete for contracts to build the best possible construction projects at the best possible price.

Additional helpful links:

• PLA Final Rule Takes Effect Today: Let the Waste, Cronyism and Discrimination Begin (provides a helpful overview about the current state of federal PLAs and the Obama order.)
• Project Labor Agreement Basics: What is a PLA?
• Get the Truth About PLAs
• ABC National’s Main Comments to the FAR Council’s Proposed Rule
• ABC Member Survey/Comment Supplement to Main Comments
• ABC National Comments Specifically Addressing the Regulatory Flexibility Act

All ABC members and construction professionals are encouraged to respond to the request for information. Tell the USACE and the VA that government-mandated PLAs injure competition, increase costs, and will not advance the economy and efficiency in government contracting.   

It is important to express your opposition to government-mandated PLAs today before they are mandated or encouraged on future USACE, VA and/or state and local projects in your community.

All surveys regarding the USACE Lackland Air Force Base in San Antonio must be submitted to Alisa Marshall by close of business Monday, March 7, 2011. Surveys regarding the parking structure in San Juan should be submitted to Diane Campbell by March 30, 2011.

The USACE and other federal agencies have issued PLA surveys as a result of President Obama’s pro-PLA Executive Order 13502 and federal regulations implementing the discriminatory and costly order. The order and regulations encourage federal agencies to mandate anti-competitive and costly PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total cost. The survey results are an important source of information used to determine whether a PLA is appropriate for federal projects.  

In the past few months, the USACE has issued multiple surveys requesting information about the potential use of PLAs on construction projects in numerous USACE districts across the country.  ABC National and construction stakeholders and contractors responded to these surveys.

Here are ABC National’s responses to the USACE’s recent PLA surveys:

• Letter to USACE, New York District on multiple projects at West Point in Orange County, NY (2/18/11).
• Letter to USACE, Ft. Worth, TX District concerning Unaccompanied Enlisted Personnel Housing projects at White Sands Missile Range, NM (2/3/11).
• Letter to USACE, Ft. Worth, TX District concerning Brigade Combat Team Barracks at Fort Jackson, SC  (2/3/11).
• Letter to USACE, Ft. Worth, TX  District concerning future projects in USACE Ft. Worth District boundaries (12/14/10)
• Letter to USACE Mobile, AL District concerning Ft. Rucker airport hangar and Mobile, AL projects (11/24/10)
• Letter to USACE Honolulu, HI District concerning four projects (11/23/10)
• Letter to USACE Louisville concerning Danbury, CT project (11/4/10)
• Letter to USACE Louisville concerning Ft. Campbell, KY area projects (11/1/10)
• Letter to USACE Savannah District (10/28/10)

For contractors, taxpayers and construction professionals unfamiliar with the problems with federal PLAs and regulations implementing President Obama’s pro-PLA Executive Order 13502, please review the letters sent by ABC National to the USACE, which may be helpful information for contractors to review before responding to the USACE PLA surveys.

Responding with accurate and timely information is critical and effective. The USACE recently removed government-mandated PLAs from the Army Reserve Center in Los Alamitos, Calif. and the Patrick Air Force Base in Brevard County, Fla. after a strong grassroots response and survey participation from the contracting community. The USACE removed a PLA mandate on the Armed Forces Reserve Center in Camden, N.J. following a legal challenge and robust grassroots response from the construction stakeholders. Similarly, earlier this year the VA recently removed a PLA from the bidding process for the construction of a $50 million VA Research Office Building in Pittsburgh after a legal chalenge and a robust grassroots response from construction stakeholders.

Thanks for taking the time to respond to these surveys. Your responses will help maintain an open and competitive environment that will allow all qualified contractors to fairly compete for contracts to build the best possible construction projects at the best possible price.

Additional helpful links:

• PLA Final Rule Takes Effect Today: Let the Waste, Cronyism and Discrimination Begin(provides a helpful overview about the current state of federal PLAs and the Obama order.)
• Project Labor Agreement Basics: What is a PLA?
• Get the Truth About PLAs
• ABC National’s Main Comments to the FAR Council’s Proposed Rule
• ABC Member Survey/Comment Supplement to Main Comments
• ABC National Comments Specifically Addressing the Regulatory Flexibility Act

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

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

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

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

We agree.

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

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

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

A GAO attorney explains the bid protest and PLA withdrawal:

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

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

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

For Immediate Release
January 6, 2011

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

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

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

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

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

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

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

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

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

##

Here are some interesting facts about this case:

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

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

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

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

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

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

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

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

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

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

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

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

[snip].

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

[snip]

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

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

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

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

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

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

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

We agree.

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

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

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

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

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

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

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

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

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

TheTruthAboutPLAs.com’s own Ben Brubeck penned the following column (“Millions of taxpayer dollars wasted on stimulus for Big Labor“), published by The Daily Caller on December 9:

Millions of taxpayer dollars wasted on stimulus for Big Labor

6:31 PM 12/09/2010

Congratulations, Mr. and Mrs. Taxpayer, you just gave Big Labor a $3.3 million tip. Not for exceptional service, mind you. Just for wearing the union label.

As part of the flood of taxpayer cash approved by the American Recovery and Reinvestment Act (ARRA) of 2009, the federal government has about $140 billion worth of federal and federally assisted construction projects to fund and oversee. Most of us would expect that such projects would be awarded to qualified bidders based on whichever contractor submits a bid delivering to taxpayers the best work at the best price.

But that has not been the case under the Obama administration.

After receiving major political dollars and support from Big Labor, President Obama signed Executive Order 13502 just 16 days after taking office. The order repealed a prior executive order in effect since 2001 that kept the government accountable by prohibiting government-mandated project labor agreements (PLAs) on at least $147.1 billion worth of federal construction projects. It had also ensured fair and open competition on hundreds of billions of dollars of important federally assisted schools, jails, bridges, roads and sewers in communities across the United States.

Now, taxpayers are stuck with an executive order that encourages federal agencies, whenever possible, to require a union-favoring PLA on projects exceeding $25 million in total cost.

Think of a government-mandated PLA as a stimulus package for Big Labor at the expense of taxpayers and the construction industry’s non-union workforce. PLA schemes discourage competition from qualified non-union contractors and ensure that most or all the workforce building the federal project will be union members hired through union hiring halls. Such favoritism steers lucrative federal contracts to unionized contractors and is especially appalling since just 14.5 percent of the U.S. private construction workforce belongs to a labor union.

Unfortunately, this favoritism is going to hit taxpayers in the wallet, as evidenced by the results of a PLA forced on a U.S. General Services Administration (GSA) project in the District of Columbia. On Sept. 14, the GSA awarded a $52.3 million ARRA-funded contract to renovate the Lafayette Building at 811 Vermont Ave NW (which houses, among other entities, the U.S. Department of Veterans Affairs) to a contractor offering a non-PLA bid with the best overall experience at the best price.

But then something shocking happened. Politics trumped responsible governing. On the very same day, the GSA ordered the contractor to make it a union-favoring PLA project. The tab for this change to a special interest handout, in a city where union labor makes up a minority of the industry at just 12 percent, was a cool $3.3 million.

That’s taxpayer money being taken from the U.S. Treasury to benefit Big Labor, one of President Obama’s biggest political supporters. While this rigged public bidding system funneled an additional $3.3 million of taxpayer funds to reward special interests — only a drop in the bucket when you consider all federal construction spending — imagine the skyrocketing costs if more federal agencies are nudged by the White House into using costly federal PLAs. Numerous studies have found that government-mandated PLAs can typically increase construction costs up to 18 percent. Can America really afford four schools, jails and hospitals for the price of five?

The Lafayette Building PLA upcharge is a clear example of government waste and crony contracting and taxpayers should be wary of similar PLA schemes in their communities. Contractors have already identified costly and anti-competitive PLA preferences in GSA solicitations for large federal buildings in Hampton, Va. and in Miramar, Fla. In the last year, PLA mandates on federal projects in New Hampshire, New Jersey, Pennsylvania and Washington, D.C. were defeated by legal challenges from members of the federal contracting community concerned about guaranteeing quality and results for hard-working taxpayers.

It is time for Congress, led by new leaders elected on the promise to restore fiscal responsibility in Washington, to hold the White House and federal agencies accountable and end wasteful and corrupt special interest PLA handouts in federal contracting.

Ben Brubeck is the director of labor and federal procurement for Associated Builders and Contractors (ABC). Learn more about government-mandated PLAs at www.TheTruthAboutPLAs.com.

Taxpayers are still waiting for Big Labor to at least say ‘You’re welcome.’

What is a Government-Mandated PLA?
Anti-competitive government-mandated PLAs are special interest schemes that force contractors to promise that most or all of their workforce building a PLA project must be hired through a union hiring hall or be card-carrying (and unfamiliar) union members. In some PLAs, merit shop contractors are permitted to use a limited number of existing nonunion employees, but they are forced to join a union and/or pay union dues and fees in order to work on a project funded by their tax dollars. It is a raw deal for an industry workforce already facing 18.8 percent unemployment according to November Bureau of Labor Statistics numbers.

In addition, PLAs saddle contractors with archaic and inefficient union work rules that drive up construction costs.

Finally, PLAs typically force merit employers to pay employee benefits into union-managed funds, but employees do not see the benefits of the employer contributions unless they join a union and become vested in these plans.

An October 2009 report by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements,” found that nonunion employees of merit contractors forced to work under government-mandated PLAs suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.

Merit contractors that offer their own benefits, including health and pension plans, often continue to contribute to both existing programs and union programs under a PLA.

The McGowan report found that nonunion contractors are forced to pay in excess of 25 percent in benefits costs above and beyond existing prevailing wage laws as a result of this “double payment” attached to PLAs. These requiements make it impossible for nonunion contractors to compete and results in increased construction costs. It is also unfair to employees who have earned this money for a secure retirement.

PLAs Increase Costs and Reduce Competition
The costly and discriminatory terms and provisions in typical PLAs discourage competition from non-union contractors and increase the cost of construction. Numerous studies have found that government-mandated PLAs typically increase the cost of construction between 12 percent and 18 percent.

In the case of the Lafayette Building, the $3.3 million change order is the added cost the contractor charged the federal government for agreeing to the provisions in a PLA. (Remember that the general contractor for this project was awarded the contract for $52.3 million without a PLA). The added $3.3 million isn’t the result of increased material costs, revised blueprints or a more aggressive completion deadline. The contract was awarded to the same company with the same proposal, and the only variable is the PLA. There is no denying the PLA is the culprit of the increased costs on the Lafayette Building.

PLAs Are Political Payoffs to Big Labor Bosses
The Lafayette Building PLA is a clear example of government waste and crony contracting. In return for political dollars and support from Big Labor that helped get President Obama elected to the White House, President Obama signed Executive Order 13502, just 16 days after he took office. The order repealed a prior executive order in effect since 2001 that prohibited government-mandated PLAs and ensured fair and open competition on federal and federally-assisted construction projects.

The Obama order also encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost. The White House rabidly promotes the use of PLAs through Vice President Joe Biden’s Middle Class Task Force in consort with political appointees posted in federal agencies and members of Congress beholden to union special interests. More government-mandated PLAs mean more money flowing back into Big Labor’s coffers. This money later supports pro-PLA politicians  through campaign donations “voluntarily” deducted from the paychecks of rank and file union members by Big Labor bosses.

Government-mandated PLAs feed the endless cycle of corruption in the federal government (here is an obvious example) and in local and state governments across the country (for starters, evidence here, here and here).

The administration justifies the use of PLAs because they allegedly produce “economy and efficiency” in government contracting. The problem is that there is no credible evidence to support this claim. PLAs are an earmark for Big Labor bosses masked as a solution to a problem that doesn’t exist in federal contracting.

TheTruthAboutPLAs.com readers know that the Federal Acquisition Regulatory (FAR) Council’s regulations implementing this gift to Big Labor went live May 13, 2010, but this didn’t stop the GSA from prematurely trying to mandate a PLA on the Lafayette project about a year ago. However, on Feb. 4, 2010, the GSA canceled the Lafayette Building solicitation in response to a bid protest contractors submitted with the Government Accountability Office (GAO) against the GSA’s PLA requirement.

The GSA issued a new solicitation March 24, 2010 that removed the PLA mandate and permitted contractors to “voluntarily” submit bids with a PLA, without a PLA, or both:

“Offerors will be invited to submit a proposal subject to PLA requirements (a PLA offer), a proposal not subject to PLA requirements, or both. If a PLA proposal is accepted by GSA, the awardee shall be required to execute a Project labor Agreement (PLA) with one or more appropriate labor organizations for the term of the resulting contract.”

However, in the new technical evaluation section of contractors submitting a bid (Section M), the GSA awarded a 10 percent preference to contractors that voluntarily submitted a bid subject to a PLA. In some procurement scenarios and competitive construction markets, this needless bonus for bids subject to PLAs will result in a de facto PLA mandate.

GSA’s New Procurement Policy Gives Illegal Preference to PLA Proposals
This same frivolous PLA preference used on the Lafayette project is being used on all GSA projects exceeding $25 million, according to this April 30, 2010 GSA Public Buildings Service Procurement Instructional Bulletin 10-04.

The GSA’s White House-driven PLA preference is a clear violation of the Competition in Contracting Act (CICA) — a federal statute requiring open competition on federal contracts — and will be subject to a legal challenge.

The GSA has applied their unwarranted PLA preference on a number of contracts in the District of Columbia, despite evidence indicating that PLAs make little sense in the local construction market. The policy has resulted in the award of about $237.38 million worth of GSA contracts (1800 F Street,the Lafayette Building, and the Adaptive Reuse contract for the DHS HQ at St. Elizabeth’s Hospital) to contractors that submitted a “voluntary” PLA bid versus an estimated $82 million worth of contracts awarded to contractors who submitted non-PLA bids (Security Perimeter, Demolition, and Phase I Tunnel contract for DHS HQ at St. Elizabeth’s Hospital). That’s quite a stimulus for Big Labor.

Congresswoman Eleanor Holmes Norton (D-DC) praised the GSA’s District of Columbia PLAs in an October 7 press release riddled with factual errors. Norton, who is no stranger to pay to play politics as evidenced by this shocking audio recording, claims these PLAs will ensure employment of D.C. residents and help produce a quality project. Of course, Norton’s endorsement of PLAs is motivated by politics and support and campaign cash from Big Labor rather than facts and sound public policy: About 12 percent of D.C.’s construction workforce belongs to a labor union and a review of PLAs in the District demonstrates a record of poor performance. Is this really a win for the District’s nonunion workforce and taxpayers footing the bill for added PLA costs? Norton’s PLA promotion drew sharp criticism from the National Black Chamber of Commerce President Harry Alford:

The Congressional Black Caucus continues this selling out of Black workers.  Just this month Congresswoman Eleanor Holmes Norton (D – DC) put out a press release praising the Project Labor Agreement for the new headquarters of Homeland Security (a boondoggle).  A Project Labor Agreement means union only labor on the project or union only rules for anyone there.  That locks out 98% of the Black workforce and she is shouting for joy about this.  The very next day the Washington Post reported that Black unemployment in DC was actually increasing.  This can certainly be credited with the betrayal of elected officials like Congresswoman Norton.  They get it but just don’t care about those defenseless underrepresented citizens in their district that do not get a decent chance to make a living.  Clearly, Congresswoman Norton works for the enemy.  She is too intelligent to be ignorant.  She knows the deal (blocking Black employment) and plays along with it as their constituents can’t organize worthy opponents to defeat her and the others at the next election.  We are still waiting on the change.

Solutions to End PLA Crony Contracting?
The answer to the PLA problem is primarily a political solution.

However, stakeholders can support the cost of educational campaigns and legal efforts led by ABC and TheTruthAboutPLAs.com to limit PLAs on a case-by-case basis as well as lawsuits against the GSA’s PLA preference and PLA mandates by other federal agencies. These cases may present an opportunity to challenge President Obama’s illegal and discriminatory Executive Order 13502.

Citizens can also write or call their elected officials and encourage them to support the Government Neutrality in Contracting Act (S. 90/H.R. 983) now or when it is reintroduced in the 112th Congress. This legislation will prohibit PLAs on federal and federally-assisted construction projects, and ensure fairness and accountability on important public works projects.

Learn more about the debacle surrounding the Lafayatte Federal Building’s renovation in our earlier posts.

Also, visit our earlier posts to learn more about President Obama’s attempt to drive public construction to Big Labor at the expense of American taxpayers.

As regular readers remember, the U.S. General Services Administration (GSA) paid a federal contractor at least $3.3 million as part of a change order adding a wasteful and discriminatory project labor agreement (PLA) to a $52.3 million renovation funded by the 2009 Stimulus bill. This was according to a column by Mark Hemingway in The Washington Examiner (“Mark Hemingway: Mandatory PLAs put tax dollars into union coffers,” Dec. 5).

Here are the highlights from Jacobson’s post:

It’s pretty clear the administration owes union bosses big, and the payoffs may take many forms. There was the failed attempt to push card check by legislation and now through the National Labor Relations Board. In the meantime, though, the administration is shelling out on smaller projects — such as today’s news of a $3.3 million gift to Big Labor to make a DC construction project union-only.

The story is a bit tough to follow because of federal contracting rules (click here for more details from The Truth About PLAs), but one thing is clear: taxpayers were forced to pay an extra $3.3 million after a project was already awarded just so it would carry a “project labor agreement.” That means no additional services, no higher quality, just the “value” of using union-only labor.

It also means we are paying for nothing at a time when both our long-term and immediate fiscal outlooks are in full crisis mode. The final kicker: the PLA in question made it more difficult to improve a building that houses the Department of Veterans Affairs.

And people wonder how the federal debt became such a problem…

This story was also covered on several outlets by Warner Todd Huston (“Another Big Labor Union Payoff: Obama Adds $3.3 Million to Construction Project,” 12/9/10), here are his thoughts:

The government is over spent. This single fact is beyond dispute. Even Democrats say so. We have but to recall that Democrat after Democrat attempted to run for office this last election by claiming fealty to small government, cost cutting, and lower spending. So with all this small government/low spending fever sweeping the political classes, what does Barack Obama do? He forces policies on federal building projects that inflates costs by the millions. And why would he do this? As a payoff to unions that gave him millions in campaign contributions, of course.

The latest bloated price tag for a federal project is that of the Lafayette Federal Building in Washington D.C., a project that has seen costs rise at least $3.3 million thanks to Obama’s payoffs to unions. That’s right in a day when we are drowning in government overspending, Obama is making sure costs rise, not insuring that they fall.

Barack Obama’s political tin ear is nowhere better revealed than in his constant payoffs to Big Labor. One of Obama’s very first actions, for instance, was to write an Executive Order that forced all government building projects to follow union marching orders in pay scale, work rules, and pension payouts by imposing Project Labor Agreements (PLAs) on all of them.

<snip>

Imagine being a non-union construction worker and being told that you are going to be forced to pay union dues even when you are not a member of the union. Imagine realizing as a worker that your hard earned wages are going to go to pay pensions for union members when you, yourself will never benefit from the very pensions you helped fund. Further imagine that the company you work for is going to take a cut in the profits it will make because of these same rules. Then you realize that your taxes are paying unions while you suffer as the costs for the projects you are working on are wildly inflated because of these PLA rules. And finally you come face-to-face with the singular fact that as a non-union worker, you are in the majority of all workers because union workers are less than 14 percent of your industry.

This is an example of the tyranny of the minority if there ever was one. As the Washington Examiner’s Mark Hemingway reports, only 14 percent of the construction labor force is forcing 86 percent to follow the rules of the minority. As in most of Obama’s policies, his PLA order helps out but a tiny minority and a minority that gave him millions in campaign donations to boot.

Learn more about this project and how taxpayers got a bad deal on our earlier post.

This editorial is one for the ages. Let’s hope federal agencies and their procurement officials put politics aside and acknowledge that PLAs are a “rotten deal for taxpayers” when deciding whether a PLA is appropriate for federal construction projects.

There’s almost a direct correlation these days between the Obama Administration’s complaints about “special interests” and its own fealty to such interests. Consider its latest decree that federal contractors must be union shops.

The federal rule, which went live yesterday, implements an executive order President Obama signed within weeks of taking office. It encourages federal agencies to require “project labor agreements” for all construction projects larger than $25 million. This means that only contractors that agree to union representation are eligible for work financed by the U.S. taxpayer.

Only 15% of the nation’s construction workers are unionized, so from now on the other 85% will have to forgo federal work for having exercised their right to not join a union. This is a raw display of political favoritism, and at the expense of an industry experiencing 27% unemployment. “This is nothing but a sop to the White House’s big donors,” says Brett McMahon, vice president at Miller & Long Concrete Construction, a nonunion contractor. “We’ve seen this so many times now, and how many times does it have the union label? Every time.”

It’s also a rotten deal for taxpayers. White House economist Jared Bernstein blogged that these agreements “significantly enhance the economy and efficiency of Federal Construction projects.” In fact, the carve-outs put an end to open, competitive federal bidding, which means higher project costs. They also mean taxpayers must finance the benefits and work rules of union members.

Mr. Bernstein could check all this with the Department of Veterans Affairs, which last year commissioned an independent study showing the Obama project labor agreements would likely raise the VA’s construction costs for hospitals by as much as 9% in three of five markets—Denver, New Orleans and Orlando. In two others, New York and San Francisco, the study predicted a mixture of small cost increases and small cost savings.

The study reported “strong evidence to suggest that the result of a PLA [project labor agreement] that dictates work rules, double benefits, team structure and activities on non-union type contractors will be that production costs will increase—given these union-related requirements.” It also rebutted a favorite liberal argument that such agreements lead to less labor strife, noting that there are “many examples for projects where there have been strikes but also no strikes—unrelated to whether or not a PLA is in place.”

The Veterans study mirrors academic work showing that project labor agreements raise the costs of construction by 10% to 20%. The Beacon Hill Institute at Boston’s Suffolk University in 2006 investigated the costs of building 126 Boston-area schools. It found project labor agreements raised winning bids for school construction projects by 12% and actual construction costs by 14%.

Boston’s Big Dig, Seattle’s Safeco field, Los Angeles’s Eastside Reservoir project, the San Francisco airport, Detroit’s Comerica Park—all were built under PLAs marked by embarrassing cost overruns. We’d list more, but newsprint is expensive.

The White House went out of its way to note that the Supreme Court has upheld such agreements in the past, suggesting it has a guilty conscience. In fact, the High Court has never ruled on the legality of these agreements under federal competitive bidding laws. Industry groups are now threatening legal action to defend the rights of workers who will be denied employment for the crime of not sporting Obama-Biden bumper stickers. It’s a fight worth having.

Links to the Veterans Affairs and the Beacon Hill Institute studies on PLAs can be found at www.abc.org/plastudies.

Many of the examples cited in the WSJ editorial are also referenced in ABC General Counsel Maury Baskin’s 2005 report, Union-Only Project Labor Agreements: The Public Record of Poor Performance.

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

Here are the highlights:

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

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

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

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

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

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

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

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

Really?

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

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

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

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

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

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

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

The study found that PLAs would likely increase construction costs by as much as 9 percent on three of the five construction markets (Denver, New Orleans and Orlando) in which the VA is planning to build hospitals.

For the other two markets, San Francisco and New York City, the study predicted mixed results ranging from small project cost increases to small cost savings.

In San Francisco:

“…a PLA would be relatively cost neutral ranging from -1.5% to +1.5% in a poor economy.  In a stable economy we see that the effect of a PLA in San Francisco would have  a construction cost increase range from 0% to 3%.” 

In New York City:

“….a PLA could be used to negotiate construction cost savings of approximately 2% to 5% in a poor economy.  In a stable economy we see that the effect of a PLA in New York would be relatively cost neutral ranging form -1.5 to +1.5%.”

The study belies  Big Labor’s bogus claims that PLAs offer considerable cost savings to project owners.  At best, these special interest agreements offer a small amount of cost savings only in unique areas where union market share is strong (such as NYC) and “a PLA can offer concessions to normal union work rates and rules” that would otherwise be prevalent on a construction project absent a PLA.

The study’s conclusion highlights a main reason why nonunion contractors oppose government-mandated PLAs. PLAs shackle nonunion contractors with expensive and wasteful inefficiencies that are unique to a union contractors’ business model. These discriminatory and costly agreements prevent nonunion contractors from offering the best bid at the best price.  The report finds that PLAs increase production costs of nonunion contractors:

 ”Whether or not a project has a PLA should not affect productivity or schedule in terms of the rate of production per day – as a project will be manned accordingly by subcontractors to meet schedule.  However, there is strong evidence to suggest that the result of a PLA that dictates work rules, double benefits, team structure and activities on non-union type contractors will be that production costs will increase – given these union related requirements.”

What about Big Labor’s selling point that PLAs are necessary to avoid strikes?

“Strikes have become a rare event in U.S. construction and given the main original and advocated benefit of a PLA was to prevent strikes in isolated, non-union areas, the PLA adds very little value to the no-strike arguments as both PLA and non-PLA advocates cite many examples for projects where there have been strikes but also no strikes — unrelated to whether or not a PLA is in place.”

And finally, what about all of the other “kitchen sink” arguments PLA proponents push as compelling reasons to sign a PLA?

“Targeting safety, employment of minority and women owned businesses, meeting prevailing Davis-Bacon rates, ensuring 100% worker eligibility status for project workers and focusing on preventing strikes, can all be contract clauses and procurement approaches without a PLA.”

For a thorough and fair examination of the impact of government-mandated PLAs on federal construction projects, be sure to read “Project Labor Agreements – Impact Study for the Department of Veterans Affairs.”

Given the findings of this independent study, why is President Barack Obama encouraging government agencies to require the use of PLAs on federal construction projects exceeding $25 million via Executive Order 13502?