The Truth About Project Labor Agreements

In an update to our post from earlier today, here is a press release from ABC National on today’s House Oversight and Government Reform (OGR) Committee’s Regulatory Affairs, Stimulus Oversight and Government Spending Subcommittee (chaired by Rep. Jordan of Ohio) hearing called, Regulatory Impediments to Job Creation: The Cost of Doing Business in the Construction Industry.

The hearing focused on the impact of anti-competitive and costly government-mandated project labor agreements (PLAs) on the construction industry as well as some regulatory red tape and other issues regarding OSHA.

ABC TELLS CONGRESS: GOVERNMENT-MANDATED PROJECT LABOR AGREEMENTS VIOLATE FEDERAL LAW

Contact: Gail Raiman, (703) 812-2073
Gerry Fritz, (703) 812-2062
For Immediate Release       March 16, 2011

Washington, D.C. – In testimony delivered today on Capitol Hill, Associated Builders and Contractors’ (ABC) General Counsel Maurice Baskin, a partner with Venable, L.L.P., stated that recent administration efforts to make project labor agreements (PLAs) part of the federal procurement process are “threatening to violate the longstanding Congressional mandate of full and open competition in federal procurement—at taxpayers’ expense.”  Baskin’s remarks were given during a hearing on the impact of the administration’s pro-PLA policy on construction job creation and the efficient use of taxpayer dollars held by the House Committee on Oversight and Government Reform’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending.

“Neither the president nor the Federal Acquisition Regulatory Council has the authority to override the statutory mandate of full and open competition in all federal procurements,” Baskin said.  “No fact-based justification for the change in policy has ever been shown, leading to the widespread belief that the administration’s policy is simply a political payback to organized labor.” According to Baskin, this is the kind of political favoritism that The Competition in Contracting Act was enacted to prevent.

“Since 2009, ABC members have filed a series of bid protests with the Government Accountability Office to stop unjustified PLA mandates from being imposed by federal agencies.  In each case, the federal agency has withdrawn the PLA mandate rather than risk a finding of a procurement law violation.

“The government’s own market research has shown repeatedly that PLAs will not serve the interests of taxpayers, will discourage competitive bidding and will increase costs. Yet, we continue to see PLA requirements popping up on agency procurements around the country,” Baskin said

“Eighty-seven percent of all construction workers currently choose not to belong to a labor union. Rather than promoting full and open competition and maximizing the available labor pool for government construction projects, which is overwhelmingly merit shop, government-mandated PLAs result in the award of federal construction contracts primarily to the much smaller group of unionized contractors and their union employees,” said Baskin.

PLAs are pre-hire contracts that require projects to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; obtain apprentices exclusively from union apprenticeship programs; pay into underfunded and mismanaged union benefit plans; and obey costly, restrictive and inefficient union work rules.

In his testimony, Baskin also urged Congress to support the Government Neutrality in Contracting Act (H.R. 735), which would prohibit the federal government from requiring contractors to execute a PLA as a condition of winning federal or federally funded construction projects.  “This legislation will result in more construction jobs, more infrastructure renewal and a more accountable federal government,” Baskin said.

ABC members John Ennis, Jr., CEO of Ennis Electric Company, Inc., Manassas, Va.; and John F. Biagas, CEO of Bay Electric, Newport News, Va., also testified at the hearing.

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Associated Builders and Contractors (ABC) is a national association with 75 chapters representing more than 23,000 merit shop construction and construction-related firms with nearly two million employees. Visit us at www.thetruthaboutplas.com.

Update:

Here is a youtube video of the first panel of witnesses.

Access the written testimony of each witness by clicking on their name. The time indicates the start of each witnesses testimony on the youtube video.

John Ennis, Jr. (9:30)
CEO, Ennis Electric Company, Inc.

Linda Figg (14:50)
CEO, FIGG Engineering

Dr. Dale Belman (21:10)
Professor, School of Labor and Industrial Relations
Michigan State University

John Biagas (27:50)
CEO, Bay Electric

Maurice Baskin (34:30)
General Counsel, Associated Builders and Contractors Inc.

Chairman Jim Jordan opening statement (:01) witness questions (40:00)

Oversight and Government Reform Committee Chairman Issa (42:35)

Rep. Frank Guinta (R-NH) remarks (43:00) and witness questions (1:01:54)

Rep. Dennis Kucinich (D-OH) opening statment (4:00) questions (45:30)

Vice-Chair Anne Marie Buerkle (R-NY) questions (50:45)

Rep. Jim Cooper (D-TN) questions (56:45)

Rep. Jackie Speier (D-CA) questions (1:08:30)

Rep. Bruce Braley (D-IA) questions (1:12:50)

Oversight and Government Reform Committee Ranking Member Elijah Cummings (D-MD) questions (1:19:50)

Here is a youtube video of the second panel of witnesses.



Daniel Gordon (1:15)
Administrator, Office of Federal Procurement Policy
Executive Office of the President

Robert Peck (7:02)
Commissioner, Public Buildings Service
U.S. General Services Administration

Hon. David Michaels (11:54)
Assistant Secretary for Occupational Health and Safety
U.S. Department of Labor

Notable Moments

Chairman Jim Jordan questions 2nd panel of witnesses (17:00)

Mr. Peck explains GSA’s PLA preference in the best value procurement process (18:50) and (25:00)

Question to Mr. Peck about failed PLA on the 1800 F Street Building (GSA HQ) (22:45)

Mr. Peck says that a PLA has resulted in increased construction costs on some projects where contracts were awarded to contractors submitting a PLA offer (26:10)

Mr. Peck says PLAs have not limited competition on GSA PLA Pilot Program projects (28:17)

Mr. Peck says the vast majority of contractors in the U.S. are not union shops (29:45)

Mr. Peck says GSA has not conducted a study about the effectiveness of PLAs (32:40)

Mr. Peck clarifies that the GSA hired a contractor to conduct a study in 2009 that looked at various construction markets to evaluate the use of government-mandated PLAs. He says that the study was not complete but it questioned the value of a PLA on projects in the Washington, D.C. market. He said he would share the study with the committee (33:30).