An Introduction From Government-Mandated Project Labor Agreements: The Public Record of Poor Performance

0 April 7, 2011  Federal Construction, Uncategorized

As part of our ongoing series publishing the truth about government-mandated project labor agreements (PLAs), here is an Introduction to Government-Mandated Project Labor Agreements from Maury Baskin’s Government-Mandated Project Labor Agreements: The Public Record of Poor Performance (2011 Edition).

I. Introduction

Government-mandated project labor agreements (PLAs) are agreements that some public entities require construction contractors and subcontractors to enter into with labor unions as a condition of being allowed to perform work on public construction projects.[1] Government-mandated PLAs should be distinguished from voluntary, private sector PLAs, which are authorized by Sections 8(e) and 8(f) of the National Labor Relations Act solely when entered into by “employers in the construction industry” in an atmosphere free of union or government coercion.[2] The government-mandated PLAs described in this report are “union-only,” meaning they require all contractors and subcontractors on a covered project to sign an agreement with a labor organization, regardless of whether their employees have previously authorized any union to represent them, as a condition of performing work on a public construction project.[3] In this sense, most government-mandated PLAs, and all of the PLAs described in this report, are “union-only.”

Proponents of government-mandated PLAs claim the agreements reduce labor strife and increase efficiency in construction of large projects.[4] Opponents of PLAs assert they discriminate against the majority of the construction industry that is nonunion, reduce the number of potential bidders for the work, increase costs to taxpayers and delay construction—with no improvements in quality, safety or diversity.[5]

The purpose of this report is to fill the gap in public knowledge about the true impact of government-mandated PLAs.  To achieve this goal, the report examines the actual results of government-mandated PLA construction projects across the country. By engaging in this review, it is possible to see whether government-mandated PLAs have achieved the efficiency goals claimed by their supporters, or whether such PLAs have been associated with increased costs, reduced competition, delayed construction timetables, unsafe work practices, problems for minorities and other construction defects. To the maximum extent possible, the report relies on published sources, particularly news media accounts and academic studies that have examined the actual progress of projects built under PLAs.

As shown below, the public record of government-mandated PLA construction reflects a persistent pattern of increased construction costs on public works projects, along with negative impacts on competition for such projects, numerous delays in construction, construction defects, safety problems and diversity issues.  Each of these problems has been confirmed by numerous published reports on specific government-mandated PLAs.

This report is not intended to be a legal treatise; rather, it focuses on the practical outcomes of PLAs. It is nevertheless important to briefly review the legal controversy underlying the debate over government-mandated PLAs, beginning with the 1993 decision of the U.S. Supreme Court in the Boston Harbor case.[6] For the first time, the court held that a government-mandated PLA that was tailored to an individual construction project was not automatically preempted by the National Labor Relations Act (NRLA). The court did not address the legality of multi-project PLAs, however,[7] nor did the Boston Harbor opinion deal at all with the legality of PLAs under state or federal competitive bidding laws or the U.S. Constitution.  During the past two decades, a number of state courts have reviewed challenges to union-only PLAs on government projects, with mixed results.[8]

Three states—Missouri, Montana and Utah—have enacted laws (currently in effect) that prohibit government agencies from imposing union-only PLAs.[9] A fourth state, Idaho, recently passed legislation prohibiting state agencies from imposing government-mandated PLAs, effective July 1, 2011.[10] Several state governors have issued executive orders prohibiting or restricting the use of PLAs on state projects, while other governors have issued orders encouraging the use of PLAs.[11] New Jersey has enacted a law that encourages state government agencies to adopt PLAs on large construction projects. [12] In 2010, a series of ballot initiatives filed by the citizens of several southern California counties resulted in overwhelming votes to prohibit their local governments from imposing PLAs.[13]

In 2001, President Bush issued executive orders prohibiting federal agencies and recipients of federal funds from imposing union-only requirements on federally funded construction projects.[14] The Bush orders remained in effect until 2009, during which time there were no significant labor disputes reported on federal construction that caused delays or cost increases.[15] Nevertheless, on Feb. 6, 2009, President Obama issued Executive Order No. 13502, which revoked the Bush orders and “encouraged” federal executive agencies to “consider, on a project-by-project basis,” whether PLAs should be required on all projects whose costs exceed $25 million.[16] Opponents of the new executive order have successfully challenged its implementation through a series of bid protests filed at the Government Accountability Office (GAO), arguing that PLA mandates unlawfully restrict competition in violation of the federal Competition in Contracting Act (CICA).[17]

Much of the ongoing legal controversy over government-mandated PLAs is focused on whether they advance governmental interests in economy and efficiency, or whether they have precisely the opposite effect of increasing costs, reducing competition and generally harming the interests of taxpayers. Therefore, it is more important than ever to understand the true impact of government-mandated PLAs.

It is not feasible to report on the results of every PLA mandated by a government agency anywhere in the country during the past two decades. However, this report attempts to bring attention to as many government-mandated PLAs as possible whose actual results have been described in published media or academic reports.  Those results frequently contradict PLA proponents’ claims of cost savings, avoidance of delays and/or improved performance under proposed PLAs. Rather, the published reports of PLA poor performance strongly support the assertion that government-mandated PLAs, aside from their questionable legality, are a bad bargain for taxpayers.

This report is organized by PLA performance issue, in the following order:

  • INCREASED COSTS ON PLA PROJECTS
  • REDUCED COMPETITION ON PLA PROJECTS
  • CONSTRUCTION DELAYS ON PLA PROJECTS
  • CONSTRUCTION DEFECTS ON PLA PROJECTS
  • SAFETY PROBLEMS ON PLA PROJECTS
  • PLA PROBLEMS FOR MINORITIES AND WOMEN

Published reports on the government-mandated PLAs within each of these categories are organized chronologically under each issue associated with them, with some allowances for the fact that large projects sometimes generate reports during a period of years. The report concludes with an appendix containing an index of the cited reports on PLAs referenced in the text.

About the author:  Maurice Baskin, Esq. is a partner in the Washington, D.C., law office of Venable LLP. He represents construction industry employers in all aspects of labor and employment law representing management. Baskin has frequently litigated, written and spoken on the issue of government-mandated PLAs during the past two decades. The views expressed herein are his own. Nothing in this publication constitutes legal advice or opinion.

NOTE: Tomorrow we will post the report’s chapter about Increased Costs on PLA Projects.

Citations after the jump.


[1]As defined in FAR 52.222-34, a “PLA” is “a collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.”

[2] 29 U.S.C. § 158(e) and (f).

[3] While most PLAs allow nonunion contractors to bid to perform on covered projects, they typically require all successful bidders/offerors to enter into union agreements in order to actually be awarded and perform the work. In other words, contractors (and subcontractors) must become unionized in order to perform work under the PLA.

[4] See, e.g., Section 1 of Executive Order No. 13502, asserting that PLAs may promote the efficient and expeditious completion of large construction projects by “providing structure and stability.”

[5] See public comments filed by Associated Builders and Contractors, Inc. in the notice and comment proceeding on the proposed rule of the Federal Acquisition Regulations (FAR) Council in 2009 implementing President Obama’s Executive Order No. 13502. FAR Case No. 2009-005. Available at www.thetruthaboutplas.com.

[6] Building and Construction Trades Council of the Metropolitan District v. Associated Builders and Contractors of Massachusetts/Rhode Island, Inc. (“Boston Harbor”), 507 U.S. 218 (1993).

[7] See Chamber of Commerce v. Brown, 522 U.S ___ , 128 S. Ct. 2408 (2008) (“In finding that the state agency had acted as a market participant, we stressed [in Boston Harbor] that the challenged action “was specifically tailored to one particular job,” and aimed “to ensure an efficient project that would be completed as quickly and effectively as possible at the lowest cost.”).

[8] Compare Tormee Const., Inc. v. Mercer County, 669 A. 2d 1369 (NJ 1995) (government-mandated union-only PLAs generally not permitted under state competitive bidding law); with New York State Chapter, Inc., Associated General Contractors of America v. New York Thruway Authority, 88 N.Y. 2d 56 (1996) (PLAs permitted only upon proof of cost savings and demonstrable need to meet unusual construction circumstances); and with Associated Builders and Contractors, Inc., Golden Gate Chapter v. San Francisco Airports Commission, 87 Cal. Rptr. 2d 654 (1999) (upholding PLA absent proof of injury to competition in order to “prevent costly delays”); See also ABC of Rhode Island, Inc. v. City of Providence, 108 F. Supp. 2d 73 (D. R.I. 2002) (government’s conditioning of tax incentives on developer’s acceptance of PLA held preempted by NLRA); Callahan & Sons v. City of Malden, Mass., 713 N.E. 2d 955 (1999) (PLAs neither “absolutely prohibited nor absolutely permitted.”).

[9] Missouri RS § 34.209 (2007); Utah Code Ann. § 34-30-14(2) (1995); Mont. Code Anno., § 18-2-425 (1999).

[10] Idaho Becomes 7th State to Ban Government-Mandated PLAs on State and Local Projects, March 4, 2011, available at www.TheTruthAboutPLAs.com (Senate Bill 1006).

[11] Most recently, the governor of Iowa revoked his predecessor’s pro-PLA executive order and substituted a new order prohibiting PLA mandates on any state-funded construction projects. See Iowa EO 69 (Jan. 14, 2011). Other state executive orders relating to PLAs include: Ark. EO 05-09 (2005) (prohibiting PLAs); Minn. EO 05-17 (2005) (same); Nev. EO (2008) (repealing previous order in favor of PLAs); 9 NY CRR § 5.49 (2006) (declaring that “no project labor agreement shall be approved by an agency unless the decision to enter into the project labor agreement has, both as its purpose and likely effect, the advancement of the interests of the state’s competitive bidding statutes.”); Ill. EO 2003-13 (2003) (encouraging PLAs); NJ EO (2002) (same).

[12] NJ Stat. 52:38-1, et seq. (2002).

[13] Proposition A Wins Big, www.KPBS.org (Nov. 3, 2010) (reporting 75 percent of all votes cast in favor of ballot initiative prohibiting government-mandated PLAs in San Diego County; and referencing previous votes prohibiting PLAs in Oceanside and Chula Vista, Calif.).

[14] Executive Order 13202 (Feb. 17, 2001), as amended, Executive Order 13208 (April 6, 2001). President Bush’s executive order was upheld against claims of labor law preemption in Building & Const. Trades Dept., AFL-CIO v. Allbaugh, 295 F. 3d 28 (D.C. Cir. 2002).

[15] See Tuerck, Glassman and Bachman, Project Labor Agreements on Federal Construction Projects: A Costly Solution In Search of A Problem (2009), http://www.beaconhill.org/BHIStudies. From 2001 to 2009, the federal government entered into construction contracts valued in excess of $147 billion. See usaspending.gov.

[16] Executive Order No. 13502 (Feb. 6, 2009).

[17] 41 U.S.C. § 253.  As a result of the bid protests filed with the GAO in 2009 and 2010, numerous federal agencies have been compelled to withdraw solicitations for bids on construction projects that contained PLA mandates. See., e.g., Contractor Protest Causes VA to Delete PLA Mandate from Research Building Bid Notice, 56 Const. Lab. Rep. 1366 (BNA), Jan. 12, 2011.

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