Contractor Groups Slam Obama Administration Memo and Proposed Rule Encouraging PLAs on Federal Construction

0 July 12, 2009  Federal Construction, Uncategorized

In a July 13 BNA article covering the Obama administration’s July 10 memo encouraging PLAs on federal construction and proposed rule to implement Executive Order 13502, contractor groups voiced united opposition to the administration’s attempt to exclude 84 percent of the U.S. private construction workforce from competing for federal projects.  Here are the highlights:

From Associated Builders and Contractors:

Geoffrey Burr, vice president for government affairs at the Associated Builders and Contractors, told BNA by e-mail that the proposed rule contained 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 at all on federal projects.” Burr added that most troubling was that the OMB memo encouraged agency department heads to consider requiring PLAs before the comment period expired. “Union-only favoritism on federal construction projects violates longstanding procurement laws and will be challenged,” he said.

Independent Electrical Contractors seem to agree:

Brian Worth, vice president for government and public affairs for the Independent Electrical Contractors, said the proposed rule would increase the costs of federal contracts by narrowing competition if contractors and subcontractors are discouraged from bidding because of PLA terms. “Small businesses and their employees should not be forced to sign a contract with a labor union in order to work on a project that is funded with their own tax dollars. Such a discriminatory policy is without justification and denies job opportunities to the vast majority of our industry,” Worth said by e-mail.

Both the administration and the Congress have consistently advocated for more small business access to federal contracts, Worth said, adding that Executive Order 13502 would deny opportunities to numerous subcontractors who refused to bid on the work that stipulates compliance with a project labor agreement.

What about Associated General Contractors?

The Associated General Contractors “remain opposed to government-mandated labor agreements,” AGC spokesman Brian Turmail told BNA July 10. Government officials are not qualified to dictate work rules for a construction project, he said, nor do they have the expertise or the understanding of the complexities of construction to make such decisions. Turmail said an outright project agreement requirement would exclude any contractor or group of workers who choose not to have the government dictate their work terms from performing federally funded construction.

“With a million construction workers out of work, it is not a good time to put up ‘closed for business’ signs to countless thousands of out of work construction workers,” he said. “So obviously we will be commenting on the proposed [FAR] rulemaking and will continue to lead a group of construction associations in scheduling face-to-face meetings with agency administrators to encourage them to exercise the discretion President Obama provided in his executive order to only consider, but not mandate, government-mandated construction agreements on large projects,” Turmail said

The only group BNA could find to support the administration’s actions was the International Laborers Union.  Shocking. TheTruthAboutPLAs.com will provide an in depth analysis of these developments shortly.

Read the full BNA article after the jump.

 

Mobile-Friendly Display (Disable)Daily Labor Report: All Issues > 2009 > July > 07/13/2009 > News > Construction: OMB Advises Agencies on Implementation Of Project Labor Agreement Executive Order  131 DLR A-16Construction

OMB Advises Agencies on Implementation Of Project Labor Agreement Executive Order

Federal agencies soon may no longer be prohibited from requiring the use of project labor agreements on large construction projects when permitted by law and when the agency determines that it is appropriate to do so, according to an Office of Management and Budget memorandum issued July 10.

OMB Director Peter Orszag advised executive-level departments and federal agency officials that the Federal Acquisition Regulation Council is expected to implement President Obama’s Executive Order 13502 “without delay” to repeal a previous executive order that had prohibited agencies from requiring PLAs. He said the FAR Council would move expeditiously to review and consider public comments on the proposal.

Orszag directed department officials to “take all necessary actions so that, when the FAR Council issues its final rule, your agency will be prepared to promptly implement both the rule and the Order.”

Orszag added that OMB will gather information on how agencies use PLAs and will ask agencies “to submit quarterly (on February 1, May 1, August 1, and November 1) a report identifying all contracts awarded in connection with “large-scale construction projects,” as defined in the order. The reports should include the contract number, dollar value of the total contract award, and the product and service code describing the project.

Several construction contractor associations immediately signaled their displeasure with the administration’s plan, with one association considering a possible legal challenge. The Laborers’ International Union, however, said it was encouraged by the OMB announcement.

“Project Labor Agreements have a proven track record of success,” Laborers President Terence O’Sullivan told BNA by e-mail July 10.

“PLAs help build America by ensuring that projects are completed on time and under budget,” O’Sullivan said. “They turn jobs into careers with good pay, benefits and skills training that open doors to new opportunities for workers and contractors alike.”

FAR to Propose Revocation of Executive Order 13502

The General Services Administration, Department of Defense, and National Aeronautics and Space Administration are expected to publish in the July 14 Federal Register a proposed rule that would amend the FAR. The proposal would encourage federal departments and agencies to consider requiring the use of project agreements for federal construction projects that total more than $25 million.

Interested parties would have 30 days from the publication date to offer comment. Officials are specifically requesting comments relating to when during the contract solicitation process the PLA requirement should occur.

Comments also are being solicited regarding which factors should be considered in determining when a project labor agreement would be in the best interest of the government.

The proposed rule is expected to implement Obama administration Executive Order 13502 by proposing to amend the FAR to:
• provide a new FAR Subpart 22.5, “Use of Project Labor Agreements for Federal Construction Projects”; • add a new provision under FAR Section 52.222, for “Notice of Requirement for Project Labor Agreement, to be included in solicitations where the agency has exercised its discretion to require a project labor agreement as prescribed at FAR 22.505(a)”; and • add a new clause under FAR Section 52.222, for “Project Labor Agreement, to be included in contracts in accordance with FAR 22.505(b).

GSA, DOD, and NASA also are expected to publish in the July 14 Federal Register a final rule that would revoke Bush administration Executive Order 13202 upon publication.

The Obama administration’s Executive Order 13502 revoked Bush administration executive orders 13202 and 13208 and was similar to memorandum language relating to PLAs that former President Bill Clinton sent to the heads of executive departments and agencies in June 1997.

The Bush order prohibited making project labor agreements a bid specification on federal construction contracts.

AGC Opposes Mandate
The Associated General Contractors “remain opposed to government-mandated labor agreements,” AGC spokesman Brian Turmail told BNA July 10. Government officials are not qualified to dictate work rules for a construction project, he said, nor do they have the expertise or the understanding of the complexities of construction to make such decisions.

Turmail said an outright project agreement requirement would exclude any contractor or group of workers who choose not to have the government dictate their work terms from performing federally funded construction.

“With a million construction workers out of work, it is not a good time to put up ‘closed for business’ signs to countless thousands of out of work construction workers,” he said.

“So obviously we will be commenting on the proposed [FAR] rulemaking and will continue to lead a group of construction associations in scheduling face-to-face meetings with agency administrators to encourage them to exercise the discretion President Obama provided in his executive order to only consider, but not mandate, government-mandated construction agreements on large projects,” Turmail said.

ABC Signals Legal Challenge
Geoffrey Burr, vice president for government affairs at the Associated Builders and Contractors, told BNA by e-mail that the proposed rule contained 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 at all on federal projects.”

Burr added that most troubling was that the OMB memo encouraged agency department heads to consider requiring PLAs before the comment period expired.
“Union-only favoritism on federal construction projects violates longstanding procurement laws and will be challenged,” he said.

IEC Sees Higher Costs
Brian Worth, vice president for government and public affairs for the Independent Electrical Contractors, said the proposed rule would increase the costs of federal contracts by narrowing competition if contractors and subcontractors are discouraged from bidding because of PLA terms.

“Small businesses and their employees should not be forced to sign a contract with a labor union in order to work on a project that is funded with their own tax dollars. Such a discriminatory policy is without justification and denies job opportunities to the vast majority of our industry,” Worth said by e-mail.

Both the administration and the Congress have consistently advocated for more small business access to federal contracts, Worth said, adding that Executive Order 13502 would deny opportunities to numerous subcontractors who refused to bid on the work that stipulates compliance with a project labor agreement.

Worth pointed out that 84 percent of the construction workforce chooses not to be represented by a labor union.

By Sheila R. Cherry

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