The Truth About Project Labor Agreements

There are new developments in the controversy over Ohio School Facilities Commission (OSFC) Executive Director Richard Murray’s effort to drive lucrative school construction contracts to Big Labor.

As readers of TheTruthAboutPLAs.com are aware, the Ohio Inspector General’s (IG) office released a scathing report on August 5 that brought OSFC E.D. and former Laborers official Richard Murray’s efforts to promote Big Labor’s agenda to light.  The IG’s report outlines Murray’s advocacy for union-only project labor agreements (PLAs) and repeated displays of misfeasance in carrying out his duties.

This investigation and subsequent report was triggered by accusations from several local school officials that Murray not only used his position to pressure school districts into requiring PLAs on school projects, but also allowed union goons to berate local school officials until they agreed to Big Labor’s demands.

More information on the IG’s report and the numerous editorial boards that have called for Murray’s resignation are available in our earlier posts.

Last week, there were two interesting items of note in the Columbus Dispatch.

First, the Dispatch reported that the OSFC approved a policy that expressly prohibits Executive Director Murray’s behavior in support of Big Labor and PLAs in the future.

Here is an excerpt from the Columbus Dispatch’s coverage (“Facilities Panel: Chief Can’t Coerce Schools,” 8/27/10):

The Ohio School Facilities Commission unanimously approved a policy yesterday clarifying that it would be inappropriate for its executive director “to coerce or threaten retribution” to get school districts to use union construction firms.

[snip]

Murray said after the meeting that he didn’t consider the resolution an indictment of how he has run the commission since being picked by Gov. Ted Strickland last fall. Rather, the commission was responding to the inspector general’s recommendation that it take action to ensure neutrality, Murray said.

“That’s nonsense,” said Bryan Williams, a lobbyist with the nonunion Associated Builders and Contractors of Ohio. “Today’s resolution, which was rushed and premature, was absolutely a repudiation of the way Richard Murray has conducted himself on this job.”

[snip]

The inspector general accused Murray of pressuring local school officials to use union construction firms. In one instance, Murray sat silently while a union official with whom he’d arrived at the meeting used profanity and racial slurs to describe the work force that the district was using, according to the report.

Murray’s “reputation has been stained,” said state Sen. Gary Cates, a Republican from West Chester who is a nonvoting member of the commission.

“We have had those conversations with the executive director about how his performance could improve,” said voting member Hugh Quill.

If Executive Director Murray is looking for ways to improve his job performance, we humbly recommend that he start by putting the interests of taxpayers ahead of those of his buddies back at the union hall.

The item of note from last week’s Dispatch came in the form of a letter to the editor from a local resident that is fed up with the kind of political handouts that are plaguing the construction of the Ohio Schools for the Blind and Deaf.  As a direct result of PLA requirements on these projects, bids came in over $11 million (or almost 50 percent) higher than anticipated.

Here is an excerpt from the August 26 letter (“Do the Right Thing for Blind, Deaf Kids,” 8/26/10):

While reading about the Ohio School Facilities Commission, I never cease to be amazed at the politics and mudslinging involved, especially in building the schools for the blind and deaf children (“Blind, deaf schools project to be cut back,” Dispatch article, Aug. 14).

Whatever happened to doing the right thing? Are we too entrenched in Democrats vs. Republicans, unions vs. nonunion contractors and greed vs. a normal profit margin? It’s a sad day when “prime contractors probably withheld their best quotes” and “contractors did not want to tip their hand in this round,” as paraphrased from commission Executive Director Richard Murray.

Well, now the projects are being drastically scaled back while the campuses of both schools lie in ruins. The grounds have been torn up and will remain so while the powers that be take their sides. Do people not have consciences anymore?

There is no shortage of people who should be hanging their heads in shame over this fiasco. Is it still possible for decent people to step up and build school facilities that serve our blind and deaf children from throughout Ohio?

This letter’s sentiment is very important.  The writer simply wants to get the best construction product for the best price.

It is important for the citizens of Ohio to understand that the tactics described in the second paragraph of this letter are a direct result of the PLA requirements that Murray worked to put into place as a condition of winning these projects.

It is nearly impossible for prime contractors to accurately anticipate construction costs in a marketplace where the vast majority of subcontractors are essentially barred from bidding competitively.

Additionally, the number of subcontractors that actually bid on the project may be lower than those that say they would do so when the prime contractor begins to solicit bids as a result of a PLA mandate.  As any freshman economics student call tell you, a decrease in supply leads to an increase in price.  The result is higher construction costs.

All of this could be avoided if OSFC officials had allowed fair and open competition to flurish, instead of allowing Big Labor to browbeat local school officials.

Read our earlier posts for more information on this controversy.