The Truth About Project Labor Agreements

In a head fake in the direction of good government, the Waterbury, CT Board of Education rejected proposals requiring contractors to enter into wasteful and discriminatory project labor agreements (PLAs) with union bosses on 2 of 3 upcoming school construction projects totaling $105 million in taxpayer funds.

Unfortunately, the board did approve a PLA requirement for a $63 million high school project.  This means that over 60 percent of the community’s upcoming school construction projects will go only to contractors willing to play ball with Big Labor.

The sad truth is that Waterbury has a long history of wasteful taxpayer dollars on wasteful PLAs.  This history was noted in the Waterbury Republican American’s (“Waterbury School Board Splits on Project Labor Agreements,” 10/5/10) coverage of the Board of Education’s decision.

Here are the highlights:

After years of insisting school construction projects be restricted to union workers and tradespeople, the Board of Education voted Monday to open two new multimillion projects to bids from all.

The board still agreed to a “project labor agreement” on the most expensive of three future projects — a $63.8 million high school.

As in the past, that vote fell purely along party lines, with six board Democrats supporting a PLA over the objections of two Republicans and two Independent Party members.

Democratic leaders were willing to open two additional projects — a $6.7 million renovation of Wilby High School’s science labs and a new $34.7 million school in Bunker Hill — to bids from unionized and nonunionized companies.

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Several non-union company owners urged open bids as fair, and potentially cost saving. In a few cases, owners with companies in Waterbury said they feel its unfair they can’t bid on city work when they pay city taxes.

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A few Democrats, however, agreed the time had come to open a couple projects to non-union workers. All 10 members of the board opposed a PLA for a project to replace Carrington Elementary School. Only two Democrats — Coleen Flaherty Merritt and Jose Morales — voted for a PLA on the Wilby job.

The Republican American’s (“A Case for Open Bidding,” 10/2/10) editorial board also weighed in on this matter in advance of Monday’s vote.  They site the successful construction of the new Waterbury town hall as local evidence of successful construction without discriminatory, union-only requirements.

Here is an excerpt:

Here they go again. With $105 million to spend on school-construction projects, the Waterbury Board of Education has a choice: open bidding, which allows nonunion contractors to participate; or project-labor agreements, which effectively restrict bidding to unionized firms.

Open bidding enlarges the pool of contractors seeking work, thereby bringing in more expertise and more competitive pricing. Removing the union mandate does not diminish the quality of workmanship because contract language spells out qualifications in detail.

As has been widely reported, the on-time, under-budget City Hall project was non-PLA. In a letter to the editor published Thursday, school board member Ann Sweeney pointed out 17 of the 21 contractors on this project are union; the project manifestly is not in the hands of hacks, crooks and incompetents. And it went so well, city officials were moved to engage in the fiscally dubious practice of adding flourishes, such as engraved bronze elevators doors and a sculpture garden, to an otherwise well-executed project.

Time will tell, but the City Hall renovation is shaping up as the best construction project Waterbury has undertaken in many years. The contractors did no worse than the school district’s PLA contractors in meeting hiring targets for women, minorities and city residents. What message can the school board take from those two facts?

On Monday, the board will decide how it will approach the $105 million in major construction and renovation projects. In the audience will be dozens of union officials and laborers, clamoring for continued exclusion of nonunion contractors. A few of the latter will show up as well, but they’ll be outnumbered.

None of that should matter. Past pleas by forward-thinking, fiscally responsible city officials to use open bidding on one of the three K-8 schools have been ignored, but there’s City Hall, on time, under budget and non-PLA. And there are the union leaders and their members, talking about quality and safety, but guided solely by self-interest, just as the independent contractors are.

But the board’s duty here is quite evident. It should do right by students and taxpayers. And that means disregarding the unionists’ demands and adopting the strategy that worked so well in the City Hall renovation.

The RA’s editorial board is right about the discriminatory impact of PLAs.  These requirements force contractors to unnecessarily recognize unions as the sole representative of their workers, trade in their skilled workers for ones dispatched from Big Labor’s hiring halls and pay into union pension programs instead of (or in addition to) their employees’ retirement plans.  The effect is to make it essentially impossible for nonunion firms to compete.

Additionally, studies have shown the inflationary impact of these Big Labor handouts on school construction in Connecticut.  A 2004 study conducted by the Beacon Hill Institute at Suffolk University found that the use of PLAs on school construction projects in Connecticut increased the cost of the projects by nearly 18 percent. The report concludes that the presence of a PLA increased the projects’ final base construction costs by $30 per square foot relative to non-PLA projects.

While allowing fair and open competition for two of these projects is a positive step, the people of Waterbury deserve better.  The Waterbury City Hall is a shinning example of why PLAs are unnecessary.  We strongly encourage the Board of Education to reconsider its decision to require a PLA on the $63 million high school project.