Gov. Culver Delivers for Big Labor

0 March 17, 2010  State & Local Construction, Uncategorized

In what should be no surprise to anyone, Gov. Chet Culver announced today that the Iowa Department of Administrative Services has been approved to move forward with wasteful and discriminatory project labor agreements (PLAs) on two upcoming projects for the Department of Corrections.

Here is the text of Gov. Culver’s release announcing the PLAs:

Gov. Culver: Welcomes project labor agreements for new construction

3/16/2010

Contact:

Erin Seidler, Governor’s Office

(515) 281.0173

erin.seidler@iowa.gov

Signs letter to use PLAs for two major Dept. of Corrections projects

DES MOINES – Governor Chet Culver today accepted the recommendation by Department of Administrative Services Director Ray Walton to use Project Labor Agreements (PLAs) for construction of two major projects for the Department of Corrections – the new Iowa State Penitentiary in Fort Madison and improvements to the Iowa Correctional Institute for Women in Mitchellville. The Governor signed a letter today to include as a specification in the bid packages for each project the PLA.

The decision follows Governor Culver’s Executive Order 22 that directs state agencies to consider using PLAs for construction projects exceeding $25 million.

“This agreement ensures Iowa workers are paid the wages and receive the benefits they deserve, while keeping these critical projects on time and budget,” said Governor Culver.

While PLAs are common practice by many other states and the federal government, this will mark the first time such a pact has been used for a State of Iowa project. In his recommendation letter to Governor Culver, DAS Director Walton related his extensive research of PLAs, interviews with several trades groups and extensive negotiations with the two trade councils – the Southeast Iowa Building and Construction Trades Council (SEIBCTC) and the Central Iowa Building and Construction Trades Council (CIBCTC) – that will be involved with the two projects.

John Baldwin, Director of the Iowa Department of Corrections, agreed that PLAs are the right fit for these massive projects.

“Prison construction presents unique challenges,” said Director Baldwin. “Hundreds of craftsmen will be on these jobs at the same time and it is imperative to have firm control of the building process. PLAs keep projects on time and on budget.”

In Fort Madison, the project will rebuild a prison originally completed in 1839. The project in Mitchellville, while not as extensive, is critical in that it is the only women-specific facility in the state and must provide for a wider range of offenders.

Work is scheduled to begin in Fort Madison in spring of 2010 with an estimated budget of $130.6 million. The facility in Mitchellville is budgeted at $68 million, with bid letting beginning in August 2010.

As mentioned in the release, the decision to use PLAs on these projects comes as a result of Gov. Culver’s Feb. 3  Executive Order 22, which encourages state agencies to consider PLAs on state construction projects over $25 million.

We knew that the Culver administration was considering PLAs for these projects just days after Executive Order 22 was put to paper.  As early as Feb. 16, less than two weeks after Executive Order 22 was issued, the Des Moines Register reported that PLAs would likely be used on these two prison projects.

Here is an excerpt from the Register’s Feb. 16 coverage of the Department of Correction’s preliminary decision to move forward with PLAs on the two prison projects (Our emphasis added):

“We are just starting to learn about this process,” Baldwin said in an interview. “But we will figure out what it is, get input from both sides, and try to craft a document that is sensitive to everybody.”

Apparently, “learning about this process” to “figure out what this is” didn’t include looking at the history of PLAs in Iowa or on prison projects in other states.

In 2002, the Polk County Board of Supervisors signed a PLA with the Central Iowa Building and Construction Trades Council for the Iowa Event Center project.  This project included a 17,000-seat arena and meeting and exhibit halls.  The Board of Supervisors claimed that the PLA was necessary to “keep the project on time, keep it on budget and complete it in a safe manner.”

A 2006 study by the Public Interest Institute, a nonpartisan, nonprofit research and educational institute in Mt. Pleasant, Iowa, found that the PLA failed on all three counts and created unnecessary burdens for local workers, taxpayers and businesses.

Here is an excerpt from the study:

One might think that completing a project on budget, on time and safely would be the goal for each and every construction project, but apparently the Polk County Board of Supervisors felt these goals could not be accomplished on the Iowa Events Center project without a project labor agreement.  Having been granted the PLA, was the Iowa Events Center completed on budget, on time and safely?  No.  Instead, workers were frozen out of the opportunity to work, businesses were not allowed to compete and the taxpayers were forced to pay even more for the Iowa Events Center construction because of the cost overruns of the project.  The project labor agreement for the Iowa Events Center project was an unnecessary burden on the workers, businesses and taxpayers of Iowa.

The failure of the Iowa Event Center PLA is just one of many examples of PLAs increasing construction costs for taxpayers and limiting opportunities for nonunion workers to compete for projects paid for by their own tax dollars.

It also turns out that the track record for PLAs on prison construction isn’t much better.  Over $800 million worth of prison construction work is currently being held up because Gov. Ed Rendell’s mandate that PLAs be used on these projects led to ridiculously inflated bids and litigation.

We want to take this opportunity to remind the governor that PLAs are nothing more than special interest handouts that deny taxpayers the accountability they deserve on public construction.  We urge the Culver administration to reconsider their decision to mandate wasteful and discriminatory PLAs on these projects.

Visit here for more information on Gov. Culver’s Executive Order 22.

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