Update on Lake Champlain Bridge Project Labor Agreement Controversy

1 February 27, 2010  State & Local Construction, Transportation & Infrastructure, Uncategorized

TheTruthAboutPLAs.com covered the controversial proposed project labor agreement (PLA) on the Lake Champlain Bridge project spanning from Crown Point, N.Y. to Chimney Point, N.H. (“A Bridge to Government Waste and Discrimation,” 2/16). Here is an update for readers following this story.

On Feb. 12 the Vermont Senate Transportation Committee held a hearing on the Lake Champlain Bridge PLA where Associated General Contractors of Vermont testified against the PLA and ABC National submitted this statement against the Lake Champlain Bridge project PLA. ABC Empire State also issued this press release.

On Feb. 17, the Vermont House referred a joint resolution opposing the Lake Champlain Bridge PLA, J.R.C. 40, to the committee on General, Housing and Military Affairs.

The New York State Department of Transportation (NYSDOT) is evaluating whether a PLA is appropriate for this $75 million project, of which 10 percent is being funded by the state of New York, 10 percent by the state of Vermont and 80 percent by a grant from the U.S. Department of Transportation’s Federal Highway Administration (FHWA).

New York Executive Order 49 on PLAs
A 1997 New York executive order (E.O. 49), signed by Gov. George Pataki, requires all state agencies to consider a PLA for state-funded projects but they must show a proper “business purpose” and they must follow “the interests of the State’s competitive bidding statutes” established in AGC v. NY State Thruway Authority.

“…agencies should be mindful that, in the past, the courts of the State of New York have struck down any such agreement wherein a contracting entity was unable to show a proper business purpose for entering into such agreement.

No project labor agreement shall be approved by an agency unless the decision to enter into a project labor agreement has, both as its purpose and likely effect, the advancement of the interests of the State’s competitive bidding statutes.”

A consequence of Executive Order No. 49 is that public agencies considering the use of PLAs prior to large public works projects authorize “studies” in order to determine the cost-effectiveness of a PLA. The studies often justify the need for a PLA and have been criticized by the construction community because they tend endorse the use of PLAs without any accurate analysis of costs, labor market forecasts, construction density and other factors that may vary from region to region. The arguments of PLA opponents are rarely acknowledged or addressed in these studies.

Frequently, firms with an existing bias in favor of PLAs, and/or a clientele of construction labor unions, union contractors and union-only construction owners produce these studies – which adds yet another reason to question their objectivity and importance in determining sound public policy (not to mention the added cost to taxpayers of a farcical study with a pre-determined outcome).

Lake Champlain Bridge PLA Feasibility Report
The NYSDOT hired Arace & Company of Warwick, NY to draft a feasibility report on the PLA for the Lake Champlain Bridge project. As you can see from their website, they strongly support PLAs.

A reader recently sent TheTruthAboutPLAs.com a Jan. 27 version of the report (it is unclear if it is a final version and if it has been submitted to the NYSDOT yet) and not surprisingly, it recommends a PLA.  The draft we reviewed contains numerous errors, faulty logic and baseless assumptions that support the author’s assertion that PLAs offer cost savings to taxpayers.

The report was circulated with this “Standard Project Labor Agreement” by the New York Construction Trades Council.  The the sample PLA contains provisions that force union representation on nonunion workers without a secret ballot election, prevent nonunion employers from hiring most of their existing workforce on the PLA project, and mandates that employers contribute benefits to labor and management run union health and pension plans that nonunion employees will never benefit from unless they join a union. All of these provisions discourage competition from merit shop contractors as outlined in more detail at “Project Labor Agreement Basics: What is a PLA?” 4/24/09.

Article 4
SECTION 1
PRE-HIRE RECOGNITION

The Contractors recognize the Unions as the sole and exclusive bargaining representatives of all craft employees who are performing on-site Project Work, with respect to that work.

SECTION 2
UNION REFERRAL

A. The Contractors agree to hire craft employees for Project Work covered by this Agreement through the job referral systems and hiring halls established in the Local Unions’ area collective bargaining agreements (attached as Schedule A to this Agreement). Notwithstanding this, Contractors shall have sole right to determine the competency of all referrals; to determine the number of employees required; and to select employees for layoff (subject to Article 5, Section 3). In the event that a Local Union is unable to fill any request for qualified employees within a 48-hour period after such requisition is made by a Contractor (Saturdays, Sundays and holidays excepted), a Contractor may employ qualified applicants from any other available source. In the event that the Local Union does not have a job referral system, the contractor shall give the Local Union first preference to refer applicants, subject to the other provisions of this Article. The Contractor shall notify the Local Union of craft employees hired for Program Work within its jurisdiction from any source other than referral by the Union.

B. A Contractor may request by name, and the Local will honor, referral of persons who have applied to the Local for Project Work and who meet the following qualifications:

(1) possess any license required by New York State law for the Project Work to be performed;
(2) have worked a total of at least 1000 hours in the construction field for the Contractor during the prior 3 years; and
(3) were on the Contractor’s active payroll for at least 60 out of the 180 calendar days prior to the contract award.

C. No more than twelve per centum (12%) of the employees covered by this Agreement, per Contractor by craft, shall be hired through the provisions of this paragraph B. Under this provision, name referrals begin with the eighth employee needed and continue on that same basis.

Learn how the following pension provision in typical PLAs harms nonunion employees and employers here and here

Article 11
SECTION 2
EMPLOYEE BENEFITS

A. The Contractors agree to pay promptly contributions on behalf of all employees covered by this Agreement to those established jointly trusteed employee benefit funds designated in Schedule A (in the appropriate Schedule A amounts).

B. The Contractor agrees to be bound by the written terms of the legally established jointly trusteed Trust Agreements specifying the detailed basis on which payments are to be paid into, and benefits paid out of, such Trust Funds with regard to Project Work done under this Agreement for those employees to whom this Agreement requires such benefit payments.

If the NYSDOT evaluates the feasibility report and finds it sufficient to justify a PLA and comply with existing state law, the NYSDOT will have Big Labor draft a similar PLA for this project, approve the PLA and then present the study and the draft PLA to the FHWA to make sure the PLA complies with federal competitive bidding laws and other federal strings attached to the FHWA’s federal assistance.

But the report and PLA will meet fierce opposition and perhaps a legal challenge according to some of the recent media coverage listed below and in a recent article in The Post-Star (Glens Falls, NY) (“Lawsuit Could Delay Bridge Construction,” 2/19).

General Contractors President AJ Castelbuono said the goal is to prevent a PLA from being mandatory on the $75 million job.

“If this is such a great document and if a union contractor wants to sign it then great, but if a non-union contractor thinks he doesn’t need it that’s great, too. Why impose it on everybody?” he said.

Although Castelbuono said the people in and around Crown Point are in a dire need of a fix for their transportation woes, he said he can’t let the project move forward if a PLA is going to be used.

“A lot of the bridge builders in the community and surrounding communities happen to be non-union, open shop. This effectively means they really can’t bid the job without changing their labor policies and without giving up their crews. After all that’s how contractors bid work, based on their historical productivity of their crews,” he said.

…Castelbuono wouldn’t release his source, but said he received a copy of the study and said it recommends a PLA for the bridge project.

“I literally personally negotiate the labor agreements that cover that bridge and the consultant never talked to me about the agreement or the cost of the agreements. He’s only spoken to organized labor. The study is skewed and vacillated from fantasy to fabrication,” he said.

In a Feb. 12 letter to FHWA Administrator Victor Mendez, Associated General Contractors Chief Executive Officer Stephen Sandherr asked FHWA “to deny New York’s request to mandate a project labor agreement” on the Lake Champlain Bridge project.

ABC, AGC, and their respective chapters in NY and VT, concerned taxpayers, construction employees and other groups will continue to oppose a special interest government-mandated PLA and promote free and open competition on the Lake Champlain Bridge project. We want this project built immediately by local employees and qualified companies that can build the best possible quality project at the best possible price.

Additional coverage:
ABC Empire State’s press release opposing the Lake Champlain Bridge PLA
The Times of Ti (Contractors oppose possible union deal on bridge,” 2/23).
WNZB.com (“Senators, Organizations Spar over Bridge Project Labor Agreement,” 2/22).
North County Gazette (“Myths Dispelled About PLAs & Champlain Bridge,” 2/20).
The Press Republican (“New Champlain Bridge Could See Lawsuit,” 2/16).
Albany Times Union (“Threatened lawsuit could delay Champlain Bridge rebuild,” 2/15).
Albany Times Union (“Blowup over a blowup,” 12/28/09).

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One Response to Update on Lake Champlain Bridge Project Labor Agreement Controversy

Scott February 28, 2010 at 11:13 am

Good work Ben and ABC NY and VT. Keep pounding the trust and benefits drum. The media in CA was shocked that nonunion companies would be forced to make double payments into their own benefit plans and the union plans, which ends up hurting nonunion employees. Especially since the union multi-employer pension plans are going broke. Also if there is a local taxpayer group or association get them invoved immediately.

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