They Built Executive Order 13502 On False Premises

0 February 13, 2010  Federal Construction, Uncategorized

CNSnews published a story yesterday providing some insight into President Obama’s pro-project labor agreement (PLA) Executive Order 13502 from Brett McMahon, vice-president of ABC member Miller&Long Concrete Construction (“Construction Industry Opposes Obama Pro-Union Order,” 2/12/10).  

It’s a little misleading to say the entire construction industry opposes the order. Certainly union contractors and 14.5 percent of the U.S. private construction workforce that belong to a union and stand to benefit from discriminatory and costly PLAs support this order. But astute taxpayers and the remaining 85 percent of the construction workforce that does not belong to a union are right to challenge this special interest policy, as PLAs needlessly increase costs and essentially prohibit quality nonunion contractors and their skilled employees from badly needed jobs (there is 24.7 percent unemployment in the construction industry as of Jan. 2010) and hinder them from delivering the best possible product at the best possible price to the public.   

What’s notable about this article – besides the fact that it provides an accurate update on Executive Order 13502 – is that McMahon highlights the problems with false premises that are the foundation of Executive Order 13502.

McMahon said the premise of the executive order is false.

“They say contractors don’t have their own workforces and just hire by the job,” McMahon said. “That’s not true. Most contractors, particularly those working on projects that are $25 million, overwhelmingly currently employ their own workers.”

A PLA might put a construction firm in the position of having workers that are not part of its own workforce on a job to be eligible for a federal contract. With half of the cost of a project coming from labor, it is best for a firm to be familiar with its workers, McMahon said.

“As a businessman, it’s one thing to have the numbers on the page,” he said. “What you really need to know is how productive everybody is. You can’t get a brand new team and expect to win the playoff game.”

Even if the contractor brings some of his own people onto a job, they would still be part of the required collective bargaining agreement. agrees and it is clear that the architects of the executive order have limited understanding of the inner workings of  the construction industry.  If they did, they wouldn’t have built this order on a foundation of false premises.

And these false premises are going to end up costing taxpayers additional money with no added return in project quality. Gus Perea, president of ABC member Adams-Bickel Construction in Collegeville, Pa. says PLAs will drive up the cost of construction projects and make projects less efficient.  Perea discusses how PLAs and Executive Order 13502 are simply payback to Big Labor.

“We’ve been seeing the paying back of a long standing debt from Congress and now the executive branch,” Perea told “It’s got to be payback. What else can it be? The government should encourage competitive bidding and pricing.”

…When Obama signed the order last year, Teamsters President Jimmy Hoffa praised the step, saying, “This is yet another reason for working families to be grateful that we have a champion in the White House.”

M. Kirk Pickerel, president and CEO of the Associated Builders and Contractors, criticized the order last year, saying, “Union-only PLAs drive up costs for American taxpayers while unfairly discriminating against 84 percent of U.S. construction workers who choose not to join a labor union. All taxpayers should have the opportunity to compete fairly on any project funded by the federal government.”

Further, “construction contracts subject to union-only PLAs are designed to be awarded exclusively to unionized contractors and their all-union workforces,” said Pickerel. “Absent the economic benefits of competitive bidding, union-only PLAs are known to increase construction costs between 10 percent and 20 percent and discriminate against minorities, women and qualified construction workers who have traditionally been excluded from union membership.”

The media is starting to catch on that Executive Order 13502 benefits nobody but Big Labor. Will the mounting public pressure force the White House to re-examine this bad public policy?

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