Yesterday we raised concerns about dual bidding experiments utilized by the U.S. General Services Administration (GSA) that will determine whether or not PLAs are appropriate on a pilot program of ten federal construction projects. Today the Washington Times wrote about one of the GSA pilot projects in Washington, D.C. – the Lafayette Building on 811 Vermont Avenue – that has drawn criticism from local contractors and employees opposed to PLAs (“Obama Union Push Stymies Contractors,” 12/27).
President Obama’s plan to force contractors to hire union workers for large government construction projects is proving easier said than done, confusing and costlier than expected.
It’s been more than a decade since a federal project required bids that include union representation of workers, known as a “project labor agreement” or PLA, and a $100 million project to modernize the 12-story Lafayette Building that houses federal agencies is highlighting the kinks that need to be worked out.
The General Services Administration (GSA), for example, first called for PLAs to win bids to rehabilitate the Washington office complex, but earlier this month backtracked, saying the solicitation was in error and it would instead ask contractors to submit two bids, one with a PLA and one without – a highly unusual and costly requirement.
“It’s crazy to try to do that. … It is just pure confusion on their part,” said Brett McMahon, vice president of business development for Miller & Long Co. Inc., the country’s largest concrete subcontractor and the largest employer of construction workers in the Mid-Atlantic region.
He estimated that a general contractor would spend more than $100,000 putting together a single bid for a job of that size and submitting dual bids would increase the cost by about $75,000.
GSA officials said the dual bids were part of its effort to comply with Mr. Obama’s order to use PLAs and a way for the agency to gauge the cost of using PLAs. The Lafayette Building modernization is one of 10 pilot projects with solicitations for bids under way that require the dual pricing, officials said.
“As part of our ongoing outreach, GSA has received feedback from bidders that this process has not caused a significant increase in workload or cost in preparing a proposal,” the GSA said in a written statement issued in response to questions by The Washington Times.
Depending on the results of the unusual multiple bid process, the Lafayette Building project may be one of the first government-mandated PLAs on a federal construction project.
Earlier this year, the Department of Labor required a PLA on bids for a $35 million contract to build a 160,000-square-foot Job Corps Center in Manchester, N.H. The department last month canceled the bidding process, citing a “need to evaluate the issues” surrounding PLAs.
New Hampshire contractors had formally challenged the union mandate as an unfair restriction on competition. Just 8.7 percent of construction workers are unionized in New Hampshire.
About 14 percent of construction workers in the Washington area are union members.
Nationwide, about 16 percent of construction workers were union members or covered by union contracts in 2008, despite union workers generally receiving higher pay and better benefits than their nonunion counterparts, according to the Bureau of Labor Statistics.
An executive order by Mr. Obama in the first weeks of his presidency would make PLAs the norm for all federal contracts on large-scale construction jobs. The order is under review and a final rule is expected soon.
The order replaced one by the Bush administration that discouraged the use of such agreements.
Despite the setback for PLAs, Mr. Obama’s policies have largely succeeded in tipping the advantage to the labor movement.
TheTruthAboutPLAs.com will be monitoring the Lafayette project and the other pilot projects selected on the GSA’s Procurement Instructional Bulletin (PIB) 09-02 that will likely give Big Labor a big advantage when competing for federal construction contracts.
The other projects listed in the GSA’s PIB 09-02 are:
- 1800 F Street (GSA HQ) – Approx. award amount of $159.29 million
- Lafayette Building on 811 Vermont, Ave, NW – approx. award amount of $106.27 million
- DHS Headquarters Campus at the former St. Elizabeth’s Hospital facility – contract approx. award amount of $93.45 million
UPDATE: On 2/4, the GSA cancelled the Lafayette Building solicitation. Contractors submitted a bid protest with the Government Accountability Office (GAO) against the GSA’s dual bidding/PLA requirement. Similar to the outcome of the bid protest issued against the U.S. Department of Labor Job Corps Center in Manchaester, N.H., the GSA opted to cancel the solicitation instead of move forward without a PLA.
However, according to the GSA solicitation cancellation notice, “GSA expects to re-issue the Lafayette Building Modernization solicitation in the near future.”
UPDATE 3/25/10: The GSA issued a new solicitation March 24, 2010 that permits contractors to submit bids with a PLA, without a PLA, or both:
“Offerors will be invited to submit a proposal subject to PLA requirements (a PLA offer), a proposal not subject to PLA requirements, or both. If a PLA proposal is accepted by GSA, the awardee shall be required to execute a Project labor Agreement (PLA) with one or more appropriate labor organizations for the term of the resulting contract.”
However, in their technical evaluation section of offerors (Section M), the GSA is giving a 10 percent preference for contractors who submit a PLA bid. The same PLA preference is being used for the 1800 F Street building and multiple contracts on the St. Elizabeth’s Campus Department of Homeland Security project in Washington, D.C.
There is no fact-based justification for this PLA preference and it will likely steer contracts to contractors submitting PLA offers and ensure that only union workers will be employed on these projects. We will be monitoring these projects closely.
UPDATE 12/22/10: On Sept. 14, the GSA awarded a $52.3 million ARRA-funded contract to renovate the Lafayette Building at 811 Vermont Ave NW (which houses, among other entities, the U.S. Department of Veterans Affairs) to a contractor offering a non-PLA bid with the best overall experience at the best price.
But then something shocking happened. Politics trumped responsible governing. On the very same day, the GSA ordered the contractor to make it a union-favoring PLA project. The tab for this change to a special interest handout, in a city where union labor makes up a minority of the industry at just 12 percent, was a cool $3.3 million.
Learn more about the Lafayette project here.
The waste of taxpayer dollars on the Lafayette building PLA and GSA’s new policy of favoritism towards Big Labor by favoring contractors who “voluntarily” submit PLA offers has drawn sharp criticism newspaper editorials, columnists, Congress and political pundits.