More Required Reading: April 14 Media on Obama’s Project Labor Agreement Final Rule

2 April 14, 2010  Federal Construction, Uncategorized

The public continues to cover the Obama administration’s controversial final rule encouraging federal agencies to require project labor agreements (PLAs) on federal construction projects costing more than $25 million. It’s a sop to Big Labor that is sure to increase construction costs, cut competition and inject some Chicago-style cronyism into the federal construction procurement process.

A Washington Examiner anti-PLA editorial reveals the implications of costly PLAs on taxpayers and exposes the symbiotic relationship at the root of government-mandated PLAs between Big Labor and their political benefactors (“Another Obama Favor for Unions,” 4/14):

By eliminating the vast majority of potential bidders on federal construction projects, Obama guarantees two things. First, the projects will cost taxpayers more because union labor is always more expensive. And with mandated PLAs, the cost premium for union contractors will be even greater because fewer bidders always means less competition and higher prices. Second, by guaranteeing unions a bigger stream of federal contracts, Obama is making sure that Big Labor, already among the Democrats’ biggest sources of campaign cash, will have even more money to hand out for the 2010 and 2012 elections. You scratch our back with taxpayers dollars gleaned through PLA-based federal construction jobs, and we’ll scratch your back with campaign contributions. That’s the way it works in Obama’s business-as-usual Washington. It’s also known in some quarters as “the Chicago Way.”

Matthew Moon over at the Republican National Committee’s blog explains the implications of government-mandated PLAs on federal construction contracts and mocks a flimsy thesis that PLAs are “a better deal for all” by a Chief Economic Advisor to Vice President Biden  (“Obama’s “Hurt-The-Middle-Class” Task Force,” 4/14):

The truth is PLAs are nothing but another layer of bureaucracy that steers government contracts toward unions at the expense of the middle class.

In addition to blackballing the large majority of construction workers who do not belong to unions, the added costs that the regulation would impose will effectively price small and minority-owned businesses out of competition on federal construction projects. We fail to see how rigging federal contracts to deliver millions to union campaign donors helps the middle class, but then again, we know this President never misses a chance to bow to his union paymasters.

The blog published an AM post about the pro-PLA final rule with this headline:  

Union Bosses’ Bailout Continues: Obama To Issue New Rules That Would Give Union Bosses Unfair Advantage When Competing For Millions Of Dollars In Federal Contracts

The research under the headline is worth a read as it demonstrates how PLAs are a cozy addition to the recent and numerous Big Labor boss bailouts.

Other notable links:

To be fair, Goolsbee wasn’t prepared to speak about the PLA issue, but then again, the misguided promotion of PLAs by Jared Bernstein, Chief Economist and Economic Policy Adviser to Vice President Joseph Biden and Executive Director of the Middle Class Working Families Task Force, demonstrates that it is difficult to spindoctor PLAs as a benefit to the public rather than a special interest handout to Big Labor (“Project Labor Agreements: A Better Deal for Big Labor All,” 4/12).

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BenBrubeck April 16, 2010 at 8:51 am

Here is an interesting LTE from a Washington Examiner reader on the Examiner editorial:

PLAs are not required under executive order Re: “Another Obama favor for unions,” editorial, April 14 Your editorial’s question: “So why has President Obama signed Executive Order 13502 directing federal agencies taking bids for government construction projects to accept only those from contractors who agree in advance to a project labor agreement that requires a union work force?” is interesting, but it misstates what Obama did.

Executive order 13502 — which was issued on Feb. 6, 2009, more than one year ago — allows federal agencies to require PLAs on a project-to-project basis if certain conditions are met, but does not “require an executive agency to use a project labor agreement on any construction project.” Nor do new federal regulations issued on April 13, 2010, require PLAs. They only implement the executive order’s authorization to use them, and go no further.

Whether PLAs should be required by federal agencies is certainly a matter that is subject to debate and worthy of attention. But the Examiner should correctly state the facts.
– Michael L. Roy agrees with this analysis. At the same time, federal agencies will be under tremendous pressure to use PLAs from special interests and politicians engaged in crony contracting.

In fact, here is what the White House’s Jared Bernstein said about how the administration is going to advance PLAs:

“Many agency contracting offices have little knowledge of or experience with PLAs. To boost implementation of the President’s Executive Order, the Middle Class Task Force convened an Inter-agency PLA Working Group to provide technical assistance to agencies on PLAs.

The working group currently includes the Department of Energy, the Department of Labor, the Department of Commerce, the Department of Justice, the Department of Housing and Urban Development, the Department of Agriculture, the Department of Transportation, the Department of the Interior, the Tennessee Valley Authority, the National Aeronautics and Space Administration, the General Services Administration, the Department of Defense and the Office of Management and Budget. The Department of Labor is also funding a survey of key participants in the contracting process to help us better understand how best to use PLAs in the future.

The Middle Class Task Force Working Group on PLAs will continue to compile resources and provide assistance to Agencies as they work to implement EO 13502, helping to coordinate large projects while generating efficiency gains for businesses, the government and taxpayers.”

When is the last time you said “No” to your boss?

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