The Truth About Project Labor Agreements

ABC Virginia Press Release

FOR IMMEDIATE RELEASE
February 16, 2012

Contact: Ben Brubeck, ABC National Director of Labor and Federal Procurement
Contact: Angie Gutenson, ABC-VA VP Communications

Unaccountable Airport Authority Continues Anti-Competitive and Costly Contracting Scheme on Phase 2 Silver Line

Wednesday, the Metropolitan Washington Airports Authority (MWAA) unanimously passed a resolution adopting a new policy favoring contractors who submit proposals promising to use a union-favoring project labor agreement (PLA) to construct Phase 2 of the $2.8 billion Silver Line metro extension project in Northern Virginia.

“MWAA has once again demonstrated they are determined to ensure their cronies benefit from some type of anti-competitive and discriminatory contracting scheme on this multi-billion dollar construction project,” said Patrick Dean, President of the Virginia Chapter of Associated Builders and Contractors (ABC-VA).

MWAA’s new policy favoring those who implement a PLA replaces the controversial April 6, 2011 resolution requiring prime contractors to negotiate and execute a PLA with construction labor unions in order to win Phase 2 construction contracts.

“A PLA typically forces contractors to hire their workforce from union halls in lieu of their existing employees,” said Dean. “PLAs also force contractors to follow inefficient union work rules and pay into union pension plans instead of existing company plans, which results in increased labor costs.”

“It is foolish to think MWAA’s new policy is worth celebrating,” said Dean. “Replacing the outrageous PLA mandate with a new policy just as offensive to taxpayers, the business community and construction industry in Virginia is business as usual for MWAA.”

“Let’s be clear: This is a de facto PLA mandate,” said Dean. “It is a deceptive scheme to alleviate local and state project stakeholders’ opposition to MWAA’s Phase 2 PLA mandate.”

“It was added to the agenda at the last minute without a chance for analysis or public comment and will benefit the special interests represented by MWAA board member Dennis Martire,” said Dean. “Martire is the Vice President for the Laborers’ International Union of North America (LiUNA), a labor union that will receive jobs and direct financial benefits from any type of labor agreement on Phase 2.”

In the next few weeks, MWAA will issue a Request for Qualifications (RFQ) from all contractors interested in competing for contracts to build Phase 2 of the Silver Line. Contractors will submit their qualifications and will be evaluated and assigned scores based on how their response satisfies criteria contained in MWAA’s RFQ.

MWAA’s new policy gives prime contractors who agree to use a PLA on Phase 2 preferential treatment by awarding an additional 10 percent bonus to their evaluation score. The five highest scoring firms will be invited to proceed to the second phase of the procurement process where contractors will eventually submit a price proposal in response to MWAA’s Request for Proposal (RFP), which will likely be issued in May 2012.

“There is little chance a contractor who does not want to build Phase 2 with a PLA can overcome the 10 percent disadvantage,” said Dean. “There is no good reason for MWAA to put their thumb on the scales in favor of union-friendly contractors willing to execute a PLA other than to discourage competition from Virginia’s qualified nonunion contractors and their skilled nonunion employees from the outset. Those nonunion workers make up 95% of Virginia’s construction workforce.”

“It will cost contractors an estimated $5 million to put together a proposal from start to finish,” said Dean. “When placed at such a large competitive disadvantage, why would otherwise qualified firms want to invest money in a fool’s errand?”

“Such blatant favoritism will discourage competition, increase construction costs and result in jobs for out-of-state union members and contractors at the expense of taxpayers, businesses and qualified nonunion construction workers from the Commonwealth,” said Dean.

Virginia, Loudoun County and Fairfax County lawmakers have been critical of MWAA’s Phase 2 PLA mandate.

The Fair and Open Competition in Government Contracting Act, introduced by Virginia Del. Barbara Comstock and Del. Tim Hugo (HB33) and Virginia Sen. Mark Obenshain (SB242), prohibits the Commonwealth from funding state or state-assisted projects subject to government-mandated PLAs.  It prevents recipients of state funding, like MWAA, from mandating PLAs or enacting discriminatory PLA preferences on projects, as a condition of receiving state financing. However, contractors are free to voluntarily enter into PLAs, as protected by federal law. This legislation promoting competition and efficiency in the procurement of public works construction contracts is expected to be signed by Gov. McDonnell in the next few weeks.

“MWAA is anticipating the passage of HB33 and attempting an end-around on the will of Virginians,” said Dean. “This is another example of special interests on the MWAA board trying to have their cake and eat it too.”

“MWAA needs Virginia’s $150 million contribution to Phase 2 of the Silver Line and they want to steer billions of dollars worth of construction contracts to union contractors willing to use PLAs,” said Dean. “Whether it is through a PLA mandate or a PLA preference policy, MWAA seems focused on making sure Big Labor can line their pockets on this project.”

“A PLA will result in more union construction jobs and more campaign contributions from union coffers to politicians appointing MWAA members supporting the union agenda,” said Dean. “It is a cycle of corruption that benefits Big Labor at the expense of taxpayers and the 95% of Virginia’s construction workforce who are not in a union.”

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About ABC — Associated Builders and Contractors is a national association with 74 chapters representing more than 22,000 merit shop construction and construction-related firms with nearly two million employees. Founded in 1972, the ABC Virginia Chapter is the only association in Virginia dedicated to representing the interests of merit shop contractors. ABC VA represents all firms in the commercial construction industry equally. Membership represents the full range of contractors, from small family-owned subcontractors to global general contracting firms, as well as, materials suppliers and industry professionals. The ABC Virginia Chapter has offices in Chantilly, Richmond and Hampton Roads. Learn more about anti-competitive and costly PLAs and the Silver Line Metrorail controversy at www.thetruthaboutplas.com/tag/mwaa/