OMB Encourages Discriminatory and Costly Union-Only PLAs on Federal Construction Projects

16 July 10, 2009  Federal Construction

The Office of Management and Budget (OMB) July 10 issued a policy memorandum to all federal department and agency heads encouraging the use of discriminatory and costly government mandated project labor agreements (PLAs) on all federal construction projects.

This memorandum comes in advance of the Federal Acquisition Regulation Council’s (FAR) proposed rule on President Obama’s Executive Order 13502, which encourages the use of PLAs on construction projects costing more than $25 million.  The proposed rule is expected to be released July 14.

“The proposed rule itself contains many serious flaws, particularly with regard to the impact statement, the absence of any meaningful criteria for agencies to use in deciding whether to impose PLAs, and the absence of any empirical justification for PLAs on federal projects,” said Geoff Burr, ABC vice president of government affairs.

“What is even more troubling is the OMB memo to all executive and agency department heads encouraging them to consider PLAs before the comment period has expired.  Union-only favoritism on federal construction projects violates longstanding procurement laws and will be challenged.”

ABC strongly opposes union-only PLAs on construction projects. These agreements not only exclude open shop contractors from bidding on projects paid for by their own tax dollars, but also drive up the cost of construction.

To read the OMB policy memorandum, click here.
To read more about Executive Order 13502, click here.
To read the FAR Council proposed rule, click here.
To participate in the regulatory process, click here.

Visit www.TheTruthAboutPLAs.com mid Monday morning for an update and additional analysis and information.

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16 Responses to OMB Encourages Discriminatory and Costly Union-Only PLAs on Federal Construction Projects

TJ August 31, 2009 at 1:58 pm

And I assume this overrides state requirements to the contrary? (Right-to-work, as in VA)

Chrystopher Smith August 31, 2009 at 3:26 pm

At first glance it is hard to walk away from the reality of what this looks like; the blatant redistribution of government resources to support those who support Obama. Also, a direct government “hook up” to offset attrition from states who employ right to work legislation, if employers want fair wages – they no longer have a choice the unions are the only one’s allowed to play. As ghastly as this sounds it is relatively simple to correct, vote the bums out is step one.

Get people in office not beholden to special interests… who are fattening the calf now before 2010 – they smell smoke too, they know what they are doing at the expense of hard working Americans who just want a job.

I pledge to do what I can to put a stop this as a congressional candidate from California’s 39th district.

– Chrystopher Smith [R-CA]

BenBrubeck August 31, 2009 at 9:46 pm

PLAs and a State’s Right to Work status are actually unrelated. Read up here: http://www.thetruthaboutplas.com/2009/07/20/understanding-plas-in-right-to-work-states-2/

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REB September 2, 2009 at 9:28 am

As a former local and state director of planning, in dispensing federal funds for local projects under the federal CDBG program, we invariably had to take the “lowest qualified bidder” in completing local projects using even a portion of federal funds. This fostered competition that favored the use of public dollars more efficiently. Now, with this Exec. Order and OMB policy, a locality has to–at a minimum–review why or why not they decided to use (or not use) PLA’s, particularly for large scale road and building projects. In essence, the taxpayer is “taxed” four times: 1) via income tax supporting the initial federal funds; 2) then increased exponentially as an increase beyond local normal wage–using prevailing wages; 3) loss of local competitive jobs as a result of union-only prevailing wage (a-la Davis Bacon Act), unemployment resulting; 4) payment to union pension without receiving any benefits thereby. From this author’s perspective, the non-union workers often do equal or better work than union workers, serving the local public far better, and stretching & saving limited $$ more into servicing other necessary projects. In essence, we’re asked by law to take the “lowest qualified bidder” yet still have to pay prevailing wage, based on federal wage tables (not local tables). Catch 22…

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