UPDATE: Big Labor Handout Costs NYS Taxpayers $4.5 Million

0 May 30, 2011  Federal Construction, State & Local Construction, Transportation & Infrastructure

There is a great example of Big Labor handouts at their worst developing in New York State this spring.

Here are the facts from the Empire State Chapter of Associated Builders and Contractors:

“Lancaster Development, Inc., a Schoharie County-based heavy/highway construction firm, and the Empire State Chapter of Associated Builders and Contractors are calling on state leaders to investigate this matter and asking the DOT to fulfill their fiduciary obligation to taxpayers by awarding the contract to the lowest responsible bidder,” said Stephen Lefebvre, president of the Empire State Chapter of Associated Builders and Contractors.

Four weeks after DOT advertised the project for bid in February and only two weeks prior to the March 24 bid opening date, DOT added a requirement that the contractor would be required to sign a mandatory Project Labor Agreement or PLA. The PLA would force the contractor to hire union employees rather than use its own workforce.

“DOT negotiated this agreement in violation of New York State lobbying laws with a registered lobbyist for the Hudson Valley Building Trades claiming that it would save taxpayer money. This argument is clearly untrue given that Lancaster’s bid is over $4.5 million lower than the next lowest bid which was submitted with the PLA,” said Mark Galasso, president of Lancaster Development, Inc. “The reasoning behind DOT’s decision to mandate a PLA is especially dubious considering that merit shop contractors have already saved New York taxpayers nearly $46 million on three projects close to the current project scope – a sum 22 percent less than the next lowest bidders on projects without a PLA.”

Galasso further explained that New York State Procurement lobbying law prohibits inappropriate communication between a State agency and an “offerer” during a procurement’s “restricted period” which is from the date of bid advertisement until the time of contract award and prohibits any communication between a State agency and a registered lobbyist. Galasso noted that by negotiating a PLA during this time period, the state Department of Transpiration has violated the law.

The state is continuing to advance the procurement process forward, despite the fact that Lancaster Development’s bid would save taxpayer nearly $5 million on a single construction project.

The NYS DOT has delivered the procurement contracts to the New York State Comptroller’s office for their certification.  Lancaster Development has filed a bid protest.  In the protest, Lancaster Development demands that the Comptroller’s office stand up for taxpayers and restart the bidding process to ensure that taxpayers get the best construction at the best price.

This is a Big Labor handout at its worst.  In this instance, taxpayers are stuck with a nearly $5 million premium for this project and a contractor and their employees don’t get the opportunity to compete for a project funded by their own tax dollars.

UPDATE (May 31):

In an letter dated May 23 and released last Friday, the New York Office of the State Comptroller has responded to the bid protest submitted by Lancaster Development by returning the contract to the state Department of Transportation as “non-approved.”

This is a good development for the taxpayers of New York.  Here at TheTruthAboutPLAs.com, we hope that the NYS Department of Transportation uses this as an opportunity to re-bid this project without requiring the winning bidder to agree to a wasteful and discriminatory PLA.  This would save taxpayers millions and level the playing field for the vast majority of New York’s construction workforce that chooses not to join a labor organization.

Here are some helpful links for more information on this story:

News Coverage

Press Republican: Opinion Page (5/06/11)

Radio Interview: LDI President Mark Galasso on “Live from the state Capitol with Fred Dicker” [mp3] (5/05/11)

Daily Gazette Media Coverage (4/24/11)

Times Union Media Coverage (4/19/11)

Capital Tonight (4/19/11)

Bizjournals.com Media Coverage (4/19/11)

Bizjournals.com (late) media coverage (4/19/11)

Capital Region YNN Media Coverage (4/19/11)

NYtorch.com Media Coverage (4/19/11)

Other Supporting Materials:

Letter from Congressman Hanna to NY Governor Cuomo (4/25/11)

ABC Empire State Chapter Press Release (4/19/2011)

Lancaster Development Executive Summary (4/7/2011)

Letter to Inspector General (4/4/2011)

ABC Protest Letter (3/18/2011)

This post was written by and tagged Tags:, , , , , ,

Leave a Reply

Your email address will not be published.