The Truth About Project Labor Agreements

The Pittsburgh Tribune-Review ran an excellent Q & A interview with Ken Holmes, President of ABC member company North Branch Construction of Concord, New Hampshire (“Sidelined by Unions’ Payback,” 10/31).  

Holmes filed a bid protest with the Government Accountability Office about the discriminatory and costly government-mandated project labor agreement (PLA) on the new U.S. Department of Labor Job Corps Center in Manchester, New Hampshire.  It is the first government-mandated PLA issued on a federal construction project since President Obama signed Executive Order 13502.

KH on the impact of a PLA on his local New Hampshire workforce:

•Q: How did your employees feel about being shut out of a project in the middle of their own state? You had looked at the project as a way to get some of your guys back to work, right?

•A: That’s correct. We’ve actually had in the last year at least a couple of layoffs. … And to answer your question, our employees are, of course, annoyed, particularly when it’s their dollars that are paying for this project and it essentially shuts us out of the game. And this is the type of project that would be right up our alley, so this was a project that we clearly had expressed interest in and wanted to bid and wanted to put our own people to work on. And we’re not being allowed to. From our perspective it’s arbitrary and … incredibly discriminatory. We just don’t understand it at all.

KH on why government-mandated PLAs are special interest “paybacks” to Big Labor:

•Q: President Bush had barred agencies from using PLAs and then Obama quickly repealed that executive order. Some folks see that as political payback. Do you agree?

•A: That’s certainly my opinion. … President Obama issued the executive order encouraging agencies to consider using PLAs, but they haven’t even put the guidelines or rules in place as to when it’s appropriate to consider — or even under what circumstances. Now, from my perspective, I can’t see that there would ever be an advantage to a PLA. We’ve been building for literally decades — my company has been in business in New Hampshire for 51 years — and there’s never been a need to have a PLA. Our projects get built, they are on time or ahead of schedule, they are on budget. We don’t have work force issues here in New Hampshire, so I don’t understand it. But be that as it may, what’s particularly perplexing is the public comment period hadn’t even ended on how President Obama’s executive order would be implemented and they came out with this project making it a mandatory PLA. … The only explanation that comes to my mind is that it’s political payback

KH on Big Labor’s bogus claim that a PLA guarantees high wages and benefits for all workers:

•Q: Doesn’t the Davis-Bacon Act mandate prevailing wages for federal projects?

•A: It does. … So when somebody has said, “Well, wouldn’t a worker for the union get paid more than one of your workers on this project?” the answer is no. The actual worker’s take-home would be the same or quite possibly even higher for my workers because union workers have to pay so much money in for union dues and so forth, which our workers don’t pay. Our workers get it in terms of actual gross pay. They actually get a paycheck that equates to the Davis-Bacon wages.

KH on why PLAs waste taxpayer dollars and why everyone should oppose government-mandated PLAs:

•Q: A Beacon Hill Institute study concluded that had PLAs been in place in 2008, the cost of federal construction projects exceeding $25 million would have increased by as much as $2.6 billion. In this economy a lot of projects might not get built, right?

•A: It’s been suggested that if you only have $100 million and the PLA is going to cost, say it’s 15 percent or 18 percent more, instead of building five $20 million projects you are going to end up building four $25 million projects. So I have heard a suggestion that that means for the same amount of dollars you are going to build less schools or less job corps centers or less courthouses or what have you. It certainly seems like a rip-off of the American taxpayer to me.

Let’s recap. This PLA is a rip-off of the American taxpayer, will shut out qualified local workers that are unemployed, is not responsible for high wages and benefits, and a special interest payback.  And President Obama wants more PLAs on federal construction projects?  Let’s hope a ruling from the GAO will put an end to this bad public policy.