New Study Calls Federal Project Labor Agreements a Costly Solution in Search of a Problem

0 September 24, 2009  Federal Construction

A news release issued yesterday by the Beacon Hill Institute (BHI) promotes a new study that is critical of federal government-mandated Project Labor Agreements (PLAs) and President Obama’s Executive Order 13502.  The study found that PLAs, which are encouraged on federal construction projects costing more than $25 million via President Obama’s Feb. 6 executive order, will “significantly increase construction costs on federal projects while doing nothing to protect the interests of federal taxpayers.”

Here is more from the release:

“The executive order reverses a prohibition on PLAs that was in effect during the Bush Administration.

The purpose of the BHI study, which is entitled Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem (pdf), was to determine whether the reversal of this prohibition is in the interest of federal taxpayers.”

The study calls President Obama’s pro-PLA Executive Order 13502 a “costly solution in search of a problem” and a “costly giveaway to the construction unions with no proven benefit to the taxpayers.”

BHI examined data on federal projects initiated during the Bush Administration – when PLAs were prohibited – to determine, whether, as alleged by PLA proponents and Section 1 of President Obama’s Executive Order 13502, projects absent PLAs are prone to labor disputes that result in delays and cost overruns.  The study found that “the justifications for PLAs provided by Executive Order 13502 are unproven.”

Give it a read. will be discussing the key findings in this study in the next few days.

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