Kerry Lieberman Cap and Tax Bill Contains PLA Language

2 May 12, 2010  Federal Construction, Uncategorized

Senators John Kerry and Joe Lieberman today rolled out the discussion draft of the American Power Act that will likely be the main Senate vehicle for energy and climate change “Cap and Trade” legislation.

The Clean Energy Construction Careers Demonstration Project section of the bill is a sweetheart deal for Big Labor. It contains language encouraging government-mandated project labor agreements (PLAs) on federal and federally-assisted construction projects (Section 4103 (g) on Page 842):

SEC 4103 (g): FACILITATING COMPLIANCE.—The Secretary may require Federal contracting agencies, recipients of Federal assistance, and any other entity established in accordance with this Act to require contractors to enter into an agreement in a manner comparable with the standards set forth in sections 3 and 4 of Executive Order 13502 in order to achieve the purposes of this section, including any requirements established by subsection (c).

While this provision is not a PLA mandate – and it is unclear how many projects would be subject to this provision and this program – this language is nothing more than a scheme  that would funnel lucrative federal construction dollars to unionized contractors.

Unfortunately, the decision to require PLAs appears to be in the hands of the Labor Secretary Hilda Solis and Energy Secretary Steven Chu, who are both on record as strong supporters of anti-competitive and costly PLA schemes.

In addition, this provision expands the possibility of special interest government-mandated PLAs onto federally-assisted projects. 

The April 13, 2010 final rule from the FAR Council implementing President Obama’s pro-PLA Executive Order 13502 does not address federally-assisted projects and only applies to federal construction projects.  In fact, Section 7 of Executive Order 13502 hints that regulations promoting government-mandated PLAs on federally-assisted projects will occur at a later date.  In short, this legislation goes a step further than what is encouraged in Obama’s pro-PLA Executive Order 13502. This means that local projects funded in part or in whole by federal grants, loan guarantees and tax breaks through this program could be forced to require a PLA as a condition of receiving federal assistance.

If a private entity, local or state government is paying for part of the project subject to this provision and subject to government-mandated PLAs, they can expect to pay up to 20 percent more for the cost of construction as a result of PLAs

A federal mandate for PLAs is not good for state and local budgets in the red and it may serve as a barrier to clean energy construction investments in the private sector.

Should government force local and federal taxpayers to build four wind turbines, refineries, and power plants for the cost of five as a favor to Big Labor?  Can government afford to lock out more than 85 percent of the U.S. private construction workforce from employment opportunities to build these projects because they don’t belong to union? 

Wouldn’t it make sense to promote a plan that encourages the entire construction industry (and not just the politically well-connected) to rebuild our energy infrastructure and develop energy solutions to cut our dependence on foreign energy?

5/13 Update: Green For All, a special interest group  founded by ex-White House Green Jobs czar Van Jones – with ties to Big Labor and liberal advocacy groups like The Apollo Alliance and the Center For American Progress – is claiming victory for this PLA language, according to this email sent to supporters:

“We applaud the inclusion of the Green Construction Careers Demonstration Project in the American Power Act, a provision — made possible thanks to our combined advocacy efforts — included in the climate bill (ACES) passed by the House of Representatives almost a year ago.”

Similar language encouraging PLAs was included in Title IV, Subtitle B, Part I, Section 424a (h) of ACES (pg. 1139).

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2 Responses to Kerry Lieberman Cap and Tax Bill Contains PLA Language

D G May 13, 2010 at 10:56 pm

Exactly what is wrong about paying decent wages to people who work hard? Its better than continuing to pay crooks like Massey Energy (killed 29 miners), Halliburton and BP (killed 11 rig workers).

But they are union workers, did they deserve to die?

The bill is getting heavy criticism from extremists on both the left and the right.

It must be just about on target.

BenBrubeck May 14, 2010 at 9:18 am

Of course nobody deserves to die. These were tragic accidents in dangerous occupations. Unfortunately, both union and nonunion employees have perished on PLA jobsites and non-PLA jobsites across the country.

To your point about wages. In the construction industry, federal Davis-Bacon laws ensure that employees who work on projects covered by this Lieberman Kerry legislation (and specifically, the program containging the PLA language) must be paid wages and benefits determined by the federal government. You can look up the wages required on federal projects in your community at These are not $5 an hour jobs. The wages are typically similar to union wages and benefits. Law states that employees must be paid these wages (or higher) regardless of whether a PLA applies to the project. The premise that PLAs guarantee decent wages on federal projects is a bogus argument.

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