Obama Administration Official Exceeds Authority in Pushing Local Governments to Mandate Project Labor Agreements

0 July 18, 2011  Federal Construction, Transportation & Infrastructure

“I encourage you to read this guidance and to make use of project labor agreements whenever possible.”

Is this an excerpt from a letter written by a top construction union official promoting anti-competitive and costly government-mandated project labor agreements (PLAs)?

Believe it or not, it is the concluding inspirational thought in a “Project Labor Agreement Announcement” emailed on February 18, 2011 to an unknown number of government agencies from Peter Rogoff, a political appointee of the Obama Administration who serves as the head of the Federal Transportation Administration (FTA) (an agency of the U.S. Department of Transportation (DOT)). Rogoff previously served as Democratic Staff Director of the Senate Appropriations Committee’s Transportation Subcommittee.

On July 13, Associated Builders and Contractors of California obtained a copy of this document as part of public records provided by the Sacramento Regional Transit District concerning development of a project labor agreement for the federally-funded $270 million South Sacramento Corridor Phase 2 Light Rail Project. The proposed funding plan for this project anticipates $135 million in federal funding from the Section 5309 Transit Capital Investment Program and $7.1 million from the Federal Highway Administration Flexible Funds for Congestion and Mitigation and Air Quality (CMAQ).

What’s wrong with this “Project Labor Agreement Announcement” from the Obama Administration?

FTA Administrator Rogoff Used His Obama Administration Soap Box to Illegally Promote the Use of PLAs on FTA Assisted Projects and Advance the Union Agenda.

First, Rogoff’s overzealous directive to use project labor agreements “whenever possible” exceeds the direction of President Obama’s pro-project labor agreement Executive Order 13502, which addresses the consideration of project labor agreements on federal projects only. The FAR proposed rule and final rule implementing President Obama’s Executive Order 13502 do not explicitly encourage or direct federal agencies to encourage recipients of federal dollars (i.e., federally assisted projects) to mandate project labor agreements. The rule is clear that on a project-by-project basis, federal agencies such as the Federal Transportation Administration are encouraged to consider requiring the use of project labor agreements in connection with large-scale construction projects procured only by the federal government itself.

In addition, this FTA encouragement for the Sacramento Regional Transit District to “make use of project labor agreements whenever possible” contradicts California state case law that requires a project labor agreement to be adopted only when it “furthers a legitimate governmental interest that is consistent with the competitive bidding law.” Rogoff’s encouragement to a California local government to hold the presumption to mandate “whenever possible” that its contractors sign a project labor agreement ignores the duty of that local government to use discretion with its bid specifications and abide by the state’s competitive bidding law. (Set aside the issue of whether or not a project labor agreement ever truly furthers a legitimate governmental interest that is consistent with California’s competitive bidding law.)

How many state and local government agencies seeking grants from the Federal Transportation Administration received this “Project Labor Agreement Announcement” from Mr. Rogoff and felt “encouraged” to negotiate a project labor agreement? Surely the Sacramento Regional Transit District is not the only victim. We intend to find out who received this announcement, and then we will investigate every one of those targeted state and local agencies and expose any backroom deals to require contractors to sign project labor agreements.

Editor’s Update: The FTA issued this document, FTA Guidance – Project Labor Agreements (issued 6/21/10?), available on this website. The FTA Guidance document makes it clear recipients of FTA funding are not required to mandate or enter into PLAs. It also says recipients of FTA money do not have to seek FTA approval of the PLA, should they choose to mandate a PLA.

In contrast, the U.S. Department of Transportation (DOT) Federal Highway Administration (FHWA) Administrator Victor Mendez issued a May 7, 2010, Interim Guidance on the use of Project Labor Agreements memo (pdf). While it only applies to FHWA projects, the FHWA requires recipients of FHWA assistance to submit the local PLA mandate to FHWA for approval.

It may be confusing to many why two different agencies within the U.S. DOT have different requirements when approving local/state PLAs on federally assisted projects.

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