Today the U.S. House of Representatives Committee on Appropriations passed an important amendment for the Fiscal Year 2012 Military Construction, Veterans Affairs, and Related Appropriations Act that will prohibit federal agencies from mandating anti-competitive and costly project labor agreements (PLAs) and discriminatory PLA preferences on projects funded by the bill.
The amendment, offered by Rep. Jeff Flake (R-Ariz.), ensures fair, open and competitive bidding by all qualified businesses competing for federal construction contracts funded by MilCon Appropriations dollars.
The Flake amendment will eliminate inefficiencies in the federal contracting procurement process, increase competition, reduce costs, and create construction jobs while protecting the public interest.
The Flake Amendment simply prohibits the use of funds in the bill from implementing and enforcing Executive Order 13502 and it’s supporting FAR Council regulations on MilCon projects:
AMENDMENT TO MILITARY CONSTRUCTION APPROPRIATIONS BILL OFFERED BY MR. FLAKE OF ARIZONA
At the end of the bill (before the short title), insert the following new section:
SEC. ll. None of the funds made available by this Act may be used to enforce Executive Order 13502 (41 U.S.C. 251 note), FAR Rule 2009–005, or any agency memorandum, bulletin, or contracting policy that derives its authority from Executive Order 13502 or FAR Rule 2009–005.
The Flake Amendment is supported by the following employer and construction industry groups:
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Construction Industry Round Table (CIRT)
Independent Electrical Contractors (IEC)
Merit Elevator Contractors Association of America (MECAA)
National Association of Minority Contractors (NAMC) Philadelphia Chapter
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce
Women Construction Owners & Executives, USA (WCOE, USA)
The amendment is in direct response to onerous federal regulations implementing a Feb. 2009 executive order issued by President Obama that encourages federal agencies to mandate PLAs on federal construction projects exceeding $25 million in total costs.
President Obama’s pro-PLA Executive Order 13502 has been widely criticized by the contracting community and major media as a scheme to give kickbacks to union political supporters in the form of government construction contracts.
The anti-competitive and costly terms and conditions of government-mandated PLAs typically discourage competition from qualified nonunion contractors and their skilled employees, who compose 86.9 percent of the U.S. construction workforce.
Studies have found that PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects subject to prevailing wage laws.
The Federal Acquisition Regulatory (FAR) Council regulations implementing the Obama executive order and a related memo from the Office of Management and Budget have pushed some federal agencies to interpret the executive order as requiring them to consider the use of PLAs on all projects exceeding $25 million in total costs and give unfair and illegal preferential treatment to contractors submitting a PLA offer (such as the GSA’s controversial PLA preference policy).
The U.S. Army Corps of Engineers have been forced to evaluate PLAs on every project exceeding $25 million in total cost through resource-consuming USACE PLA surveys after the USACE National Contracting Director issued this October 15, 2010 memo, Procurement Instruction Letter (PIL) 2001-01, USACE Policy Relating to the Use of Project Labor Agreemens (PLAs) for Federal Construction Projects.
It has also exposed MilCon agency procurement officials to intense political pressure from special interests, the Obama Administration, agency political appointees and members of Congress to mandate PLAs on MilCon projects even when they are not appropriate, as evidenced by recent PLA controversies on a Veterans Affairs project in Pittsburgh and a USACE project in Camden, NJ.
Compliance with the procurement red tape, legal wrangling and anti-competitive consequences of a PLA mandate result in wasted time, resources, and funds on MilCon construction projects
The Flake amendment simply eliminates favoritism and waste in the federal procurement process created by PLA mandates, yet it permits contractors to voluntarily enter into PLAs on federal construction projects if that is their preference.
In the face of record deficits and rising concerns about corruption in government contracting, states have been advancing similar legislation curtailing discriminatory PLA mandates at the state level.
On April 6, Arizona Gov. Jan Brewer signed S.B. 1403, which prohibits state and local entities from requiring contractors to sign a PLA as a condition of performing taxpayer funded construction (learn more here).
It is clear that U.S. taxpayers are fighting back against costly special interest handouts like PLA mandates through their elected officials.
The House legislation will move to the House floor where PLA proponents will likely attempt to strip the bill of this important language.
Here is a press release from ABC National on today’s legislative development.
ABC APPLAUDS AMENDMENT TO BAN GOVERNMENT-MANDATED PROJECT LABOR AGREEMENTS IN SPENDING BILL
Contact: Gerry Fritz (703) 812-2062, fritz@
For Immediate Release, May 24, 2011
Washington, D.C. – Associated Builders and Contractors (ABC) today issued the following statement after the U.S. House of Representatives Appropriations Committee passed an amendment in the FY2012 Military Construction-Veterans Affairs Appropriations legislation strongly supported by ABC and the merit shop contracting community. The amendment, drafted with help by ABC and offered by Rep. Jeff Flake (R-Ariz.), prohibits federal agencies from mandating anti-competitive and costly project labor agreements (PLAs) and discriminatory PLA preferences on all construction projects funded in the legislation:
“This is a victory for free enterprise, open competition and taxpayers,” said ABC Vice President of Federal Affairs Geoff Burr. “This will result in increased competition, reduced costs and job creation for an industry suffering from an unemployment rate of more than 17 percent.
“Special interest kickbacks like PLAs have no place in construction projects funded with taxpayer dollars. Federal projects should be awarded competitively and without regard to union affiliation,” said Burr.
“With Congress currently considering legislation aimed at slashing out-of-control federal spending, this amendment has never been more timely or crucial,” Burr said. “Representative Flake’s amendment protects taxpayers and ensures fair and open competition on federal military construction contracts.
“We applaud this amendment in the appropriations legislation that would ban PLAs and urge members of Congress to oppose any effort that would strike this language from the bill,” said Burr.
To view this statement on ABC’s website, click here.
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..