Univ. of Iowa Board of Regents Approve Crony Contracts for Coralville Clinic

3 June 23, 2010  School Construction, State & Local Construction, Uncategorized

Iowa Governor Chet Culver’s effort to encourage public bodies to require wasteful and discriminatory project labor agreements (PLAs) is paying dividends for his Big Labor allies. The Iowa University Board of Regents voted 5-4, along party lines, in favor of requiring a PLA on the construction of the $73 million outpatient clinic for the University of Iowa Hospitals and Clinics in Coralville, IA.

This vote comes just months after Gov. Culver issued Executive Order 22, which encourages state agencies to consider requiring PLAs on projects costing over $25 million.

The adoption of this PLA requirement made some headlines in the Iowa media. Here is an excerpt from the Iowa City Press-Citizen’s coverage of the vote (“Contractors Group Blasts Regents,” 6/15/10):

The Iowa chapter of Associated Builders and Contractors is calling on regents to reject a so-called “project labor agreement” for building the $73 million University of Iowa Hospitals and Clinics project in Coralville. The agreement, in which UI would negotiate a deal with one or more unions before the bidding of the project and the hiring of labor, is expected to be presented to the regents for approval in August.

“This is blatant discrimination and the (Gov. Chet) Culver cronies on the Board of Regents took this partisan action under direct pressure from Gov. Culver …,” chapter president Greg Spenner said in a statement. “Iowans deserve leaders who do not make decisions simply meant to reward political donors. In this case, ‘Big Labor’ is the winner, at the expense of the majority of Iowa workers.”

Spenner said the agreements are designed so projects are awarded only to union contractors and discriminate against non-union contractors, who will not be able to bid on the project.

UI officials and Regent President David Miles declined comment.


Regents voted 5-4 along party lines during a board meeting June 9 for UI to negotiate a project labor agreement for the Coralville project. The agreement will define the terms and conditions of employment and takes precedence over all preexisting collective bargaining agreements.

Miles, who supported the agreement, cited a spectrum of support and opposition for the practice as well as Culver’s executive order, and said regents should pursue it as a trial that would not necessarily set a precedent for future projects.

No other regents spoke in support of the agreement, but three commented in opposing.

“I think anything we do that would diminish the number of bidders that would be available for the project would not be in our best interest and would not be in our charge,” Regent President Pro Tem Jack Evans said at the meeting.

Regent Craig Lang said he thought the agreement would drive up project costs and drive away good contractors. Regent Bob Downer said the current method has a strong track record.

It also turns out that state leaders may have played a part in securing this project for Big Labor.  As reported by the Cedar Rapids Gazette (“Regents got Email on Project Labor Agreements,” 6/22/10), regents received messages from Gov. Culver’s staff and at least one member of the General Assembly urging them to adopt these special interest handouts on the clinic’s construction.  Here is an excerpt from the Gazette’s reporting (Our emphasis added):

The nine regents received an e-mail from Sen. Bob Dvorsky, D-Coralville, two days before the June 9 meeting where the board voted on using a project labor agreement for a planned $73 million UI Hospitals outpatient clinic in Coralville. In his e-mail, Dvorsky asked the board to require project labor agreements for all construction projects totaling more than $25 million. They are collective bargaining agreements, negotiated between a project’s owner and local unions, that define the terms and conditions of employment. Gov. Chet Culver issued an executive order directing state agencies to consider such agreements for large projects.

Dvorsky this week said it’s not unusual to lobby members of state boards and commissions, including the regents, regarding certain topics. In this case, he wanted to make sure the regents considered project labor agreements because he thinks they help guarantee timely completion, fair wages and safety.

“I just thought it was prudent for them to look at it,” he said. “They get lobbied all the time for various issues.”

After Dvorsky’s June 7 e-mail to board members, Regent Michael Gartner of Des Moines forwarded the message to Miles and wrote “This is an example of the political peril in this issue.” Miles, as board president, also received an email in April from James Larew, general counsel for Gov. Culver, asking to communicate with Miles about how the project labor agreement concept will be advanced within the regent bidding process.

It’s unusual for the board to have a 5-4 vote, and Miles said he can’t recall a previous vote split down party lines. And while that may raise the concern of some people regarding this vote, Miles said within the board, members maintain respect for each other’s opinions and trust each other.

As we have noted before, PLAs have a public record of poor performance in Iowa. 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.

Also, Big Labor’s recent push for PLAs on university construction is nothing new.  As major construction purchasers with ties to their state elected leadership, public universities are a ripe target for Big Labor to push these special interest rip offs.  As recently as this week, we have seen PLA issues escalate at universities in Nebraska and Massachusetts.

We strongly encourage taxpayers supporting public universities and students paying tuition to hold academic institution leadership accountable for the way that their school purchases construction.  The fact is that construction is a major expense for these institutions and it is no wonder that tuition keeps increasing when schools are buying four buildings for the price of five.

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3 Responses to Univ. of Iowa Board of Regents Approve Crony Contracts for Coralville Clinic

Virginia VeDepo July 22, 2010 at 11:51 am

Wow! Talk about a job-killer for Iowa! We have a huge problem already with out-of-state contractors coming to Iowa to do jobs. While the ripple affect for the most part goes unnoticed in the public sector, it is huge. Small businesses are going under, and our stat government does nothing. How soon can we get rid of this government?

George Maynard September 29, 2010 at 11:19 am

Yes, Virgina, we do have a problem with out of state contractors coming to Iowa to do jobs, laws to the contrary would be restraint of trade, but a PLA is the ONLY protection available that ensures that Iowa WORKERS will be employed on the projects

BenBrubeck September 30, 2010 at 11:43 am


There are a number of cases and legal opinions that demonstrate the local hire goals set through PLAs and through union hiring halls are also illegal and a restraint of trade. The bottom line is that a PLA offers limited protection to ensure that local workers will be employed on projects.

This news report demonstrates that a PLA on an Iowa project will be dispatching workers through a union hiring hall located in Illinois: http://www.desmoinesregister.com/article/20100922/NEWS10/9220361/-1/BUSINESS04/Labor-accord-for-prison-calls-for-use-of-Illinois-hiring-halls

Typical union hiring hall rules dictate that the person who has been out of work the longest (the person at the top of the hiring list) is the first off the bench. That means it could be an Illinois resident in this instance. Explain to me how a PLA address this issue?

Under a PLA, when there aren’t enough union Iowa workers to perform a project, union members from other states have preference over nonunion Iowa workers. How is that fair? Why is that permitted under a PLA? Shouldn’t all Iowa residents have a fair shot at working on a project funded by their tax dollars?

Why not come out and say that the real reason you like a PLA is because it favors union members, whether they are from Iowa or from other states, and a PLA puts nonunion Iowa construction professionals and their families at a significant disadvantage? That is exactly what a PLA does. Please show me evidence that is not the case.

The two posts below provide evidence how PLAs cannot guarantee local hire:



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