It’s the PLA, Stupid!

0 August 28, 2009  State & Local Construction, Uncategorized

Penn State’s student run newspaper, The Daily Collegian,  reports that the Pennsylvania Department of General Services (DGS) has started the rebidding process for the $200 million State Correctional Institution (SCI) at Benner Township in Centre County, PA after costs from the initial round of bidding came in too high (“Prison construction bidding to resume,” 8/26).

Despite predictions by politicians (specifically PA Senator Jake Corman), taxpayers and the local construction community that PLAs would increase the cost of construction and discriminate against more than eight out of 10 Pennsylvania construction workers (construction workers who do not belong to a labor union), the DGS initially required a PLA on this project. Now the DGS is rebidding SCI Benner Township without a PLA, yet local politicians are still not convinced a PLA is responsible for the unacceptably high costs. 

According to the article, Jon Eich (D), chairman of the Centre County Board of Commissioners, was surprised that bids were substantially higher than the allocated budget and isn’t sure a PLA is to blame.

“It’s not clear to me as to why the bids came in higher than expected,” he said. “It might be when the bids went out, typically there are good times to issue bids so that a contractor can put it into their regular work schedule. It might have been a very tight time frame to get the work done.”

Eich said other factors that may have driven the prices higher could have been the significant amount of skilled labor required and the design of the facility.

A project labor agreement was originally attached to the plan. Eich said the project labor agreement insures once the prison project starts, it will not be interrupted by work stoppages or labor disputes.

“Some people feel that’s the reason the prices came in higher,” Eich said. “I don’t think that is consistently what happens. That was some of the concern and when they re-bid, they’re going to adjust the terms somewhat.”

A bastardization of President Clinton’s 1992 political catch phrase is appropriate for this situation: “It’s the PLA, stupid!”

Politicians indebted to the political power of special interests such as Big Labor will not criticize PLAs. Or they just don’t get it. They have been misled into thinking that a PLA won’t cut competition and increase costs. PLA proponents argue that PLA projects are not closed to only union contractors and anyone can bid on these jobs. Therefore, a PLA does not impact competition and does not discriminate against non-union contractors and their workers.

While it is technically true that bidding is open to every contractor (regardless of labor affiliation), the fact remains that PLAs have a chilling impact on competition from non-union contractors. PLAs impose restrictive and inefficient union work rules and force contractors to contribute to union pension plans from which their employees will never benefit from unless they join a union.  Contractors have to factor double benefit costs into their bids to maintain existing benefits for their workforce.  All of these factors increase construction costs.

Maybe confused politicians need to read a PLA to understand how and why a PLA discourages non-union contractors and their skilled workforce from bidding on a PLA project. dissected a sample PLA in a previous post (“Project Labor Agreement Basics: What is a PLA?” 4/24/09). We encourage curious minds to read that post and then apply those lessons to the SCI Benner Township PLA.

We’ve even gone through the trouble of highlighting the provisions offensive to non-signatory contractors and workers:

Paragraph 2.2: All subcontractors are bound to this PLA, yet they have no place at the table when negotiating these agreements.

Paragraph 3.1: “[Contractors] recognize the Trades Council and the Unions as sole and exclusvie barganing representatives of such employees within their respective jurisdictions working on the Project under the Agreement.”

PLAs take away workers’ rights.  Workers normally are permitted to choose union representation through a card check process or a federally supervised private ballot election.  With a PLA, unions are recognized as the exclusive bargaining representatives of non-union employees. The decision to elect union representation is made by the employer – when agreeing to participate in a PLA project – rather than the employees.

Paragraph 3.3:  “Other than the Project manager, Project superintendent and Project foreman, the remaining workforce shall be referred to the DBC in accordance with the job referral systems provided in the Collective Bargaining Agreements of the Unions…” 

PLAs require merit shop companies to obtain their workers from union hiring halls.  This means a merit shop company has to exclude their hard working employees from specific jobsites and exclusively use unfamiliar union workers.

Paragraph 3.6: Non-union workers have to pay “financial core” dues to the union in order to work on a PLA job. That’s right, they have to pay the union to work.

Paragraph 3.8 and 3.9: PLAs discriminate against local workers. In the event that a local union does not have enough members to fulfill the manpower requirements of the job, union workers from other local unions have preference over non-union local workers.

Paragraph 9.1(A): Contractors must pay contributions to the union-established employee benefit funds in the amounts designated in the appropriate craft/Local Union Collective Bargaining Agreement.  Workers will never receive these benefits unless they join a union and/or become vested. Thus, companies have to pay benefits twice: once to the union and once to the existing company plan to make sure their employees have benefits. There is no language that permits contractors to contribute to existing benefit plans instead of union plans.

These provisions are enough to discourage merit shop contractors from bidding on the SCI Benner Township project. If politicians still refuse to believe that a PLA is responsible for increased construction costs, perhaps they will see the light once the second round of bidding sans PLA produces more bidders and an on-budget project.

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