Virginia Passes Law Curtailing Government-Mandated Project Labor Agreement Schemes

2 April 24, 2012  State & Local Construction, Transportation & Infrastructure

In a win for taxpayers and Virginia’s merit shop construction industry, on April 9, Gov. Bob McDonnell (R) signed the Fair and Open Competition in Government Contracting Act (HB 33) into law.

H.B. 33 prohibits the Commonwealth of Virginia and recipients of state assistance from mandating project labor agreements (PLAs) and enacting PLA preferences discriminating against bidders unwilling to execute PLAs.

Seven states passed similar legislation in 2011; Virginia is the first state to do so in 2012. A total of 12 states have enacted measures restricting the use of anti-competitive and costly government-mandated PLAs, and additional states may pass similar laws this year.

Virginia Del. Barbara Comstock, who introduced H.B. 33 with chief co-patrons Del. Tim Hugo and Del. David Ramadan, released a statement supporting the measure’s passage:

“H.B. 33 is commonsense legislation that will guarantee competition and a level playing field for all Virginia workers and businesses. This bill protects the 96 percent of Virginia workers who are nonunion. It commits that Virginia workers won’t be robbed of jobs through crony contracting and makes sure that Virginia’s tax dollars are spent wisely and stretched to respond to our transportation and infrastructure needs.”

The issue of government-mandated PLAs and PLA preferences has been hotly debated in Virginia and the greater Washington, D.C., area as a result of the PLA mandate controversy on Phase 2 construction of the Metropolitan Washington Airport Authority’s (MWAA) $2.8 billion Dulles metro rail project known as the Silver Line.

In April 2011, MWAA mandated a PLA on Phase 2 of the project. In the face of months of PLA mandate opposition by Phase 2 funding partners, stakeholders, lawmakers, taxpayers and Virginia’s construction industry, MWAA abandoned the PLA mandate in February. However, MWAA was heavily criticized by stakeholders for substituting the PLA mandate with a preference policy that amounts to a de facto PLA mandate. (Note: Here is a copy of the draft PLA circulated by MWAA board member and Laborers Union Vice President Dennis Martire. Learn more about MWAA and the PLA mandate and preference controversy here).

“Passage of this legislation should send a wakeup call to the Metropolitan Washington Airports Authority Board (MWAA) that they need to work with all of their funding partners who seek a level playing field for all Virginia workers,” said Comstock. “With passage of this legislation, MWAA can no longer stack the deck for union contractors. Instead of pushing union mandates and union preferences, they should do what is best for Virginia and comply with the law and our right-to-work tradition that treats all employees equally.”

Virginia’s Budget Targets MWAA’s PLA Preference Scheme
Last week Virginia passed a budget containing language from Delegate Hugo that prevents Virginia from giving money to projects implementing a PLA preference, such as Phase 2 of the Silver Line.

While the Republican-controlled House passed a budget three times, Senate Democrats delayed passage of the budget for nearly 40 days. They held out for an additional $300 million of funding for Phase 2 of the Silver Line, but the evenly divided Senate approved the budget without additional funding when Sen. Charles J. Colgan (D-Prince William) voted with Senate Republicans.

According to the original Silver Line funding agreement, the project is financed by MWAA (4.1 percent), Fairfax County (16.1 percent), Loudoun County (4.8 percent) and the Commonwealth of Virginia ($275 million total). Toll revenue generated from the MWAA-owned and operated Dulles Toll Road will fund the remainder of Phase 2.

MWAA Can Do the Right Thing
The passage of H.B. 33 and the Virginia budget containing language prohibiting MWAA’s PLA preference schemes will force MWAA to choose between abandoning their discriminatory PLA preference policy benefiting special interests, or forfeiting Virginia’s planned $150 million contribution to Phase 2 costs.

Virginia Secretary of Transportation Sean Connaughton’s letter to Silver Line stakeholders in Northern Virginia establishes a list of conditions MWAA must meet in order to receive Virginia’s pledged $150 million this year and possible future funding from the Commonwealth.

In addition, Loudoun County has until July 1 to decide if they want to fund their share of the Silver Line. Loudoun County Board of Supervisors have repeatedly told MWAA that they must eliminate a PLA preference and mandate if they want Loudoun to fund the project and have raised additional concerns about maintenance costs.

MWAA said the loss of hundreds of millions of dollars of Loudoun and Virginia contributions to Phase 2 would simply be passed on to Dulles Toll Road motorists via increased tolls.  Stakeholders are concerned that raising tolls in excess of the already expensive toll projections needed to finance Phase 2 will decrease traffic and related revenue, which will disrupt already tenuous Silver Line financing models.

Last week, MWAA announced Phase 1 was expected to finish at least $150 million over budget and it has delayed the release of the Phase 2 RFQ until July, when funding commitments are expected from Loudoun County.

U.S. Department of Transportation Secretary Ray LaHood is meeting with stakeholders on Wednesday to get this project back on track.

Phase 1 was built with a PLA voluntarily entered into by the Phase 1 prime contractor, Dulles Transit Partners (DTP).  However, it did not apply to Phase 1 subcontractors. A DTP report revealed that the majority of construction workers employed by DTP on Phase 1 are union members from Maryland dispatched through union hiring halls under the rules of the PLA, despite the fact the project is in Virginia and 97.4 percent of Virginia’s construction workforce does not belong to a union (see coverage in “Maryland workers outnumber Virginians on Dulles Rail project,” 2/17/12).

Merit Shop Applauds H.B. 33
ABC Virginia applauded the passage of H.B. 33, which it strongly supports:

 “This legislation will enhance competition, protect and expand opportunities for qualified Virginia employers and their skilled workers, and help ensure Virginia obtains the best product and service at the best price.”

Earlier this year, urged taxpayers to contact their legislators and encourage them to support H.B. 33 and Sen. Mark Obenshain’s companion legislation in the Virginia Senate, S.B. 242 (pdf). Kudos to everyone who contacted their elected officials and participated in this legislative process. applauds the passage of H.B. 33 and a Virginia budget ensuring fair and open competition on all taxpayer-funded construction projects. We thank Virginia Delegates Comstock, Hugo, Ramadan, Sen. Obenshain, the McDonnell administration and all of the local and state stakeholder groups for their leadership on this important issue.

It is time for MWAA to eliminate the PLA mandate and preference schemes and ensure fair and open competition for Phase 2 construction contracts. Doing so will ensure critical funding from Phase 2 stakeholders, create jobs for Virginia’s construction industry and the community served by the Silver Line, and help deliver to taxpayers the best possible project at the best possible price.

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2 Responses to Virginia Passes Law Curtailing Government-Mandated Project Labor Agreement Schemes

Dayton Public Policy Institute » San Diego Seeks the Economic Freedom Found in Other States April 25, 2012 at 11:06 am

[…] 9, Virginia became the latest of more than a dozen states to enact policies to prohibit those states from entering into […]

Bablu November 9, 2015 at 5:39 pm

I don’t consider the Dulles Greenway to be a sucsecs, because it took so much borrowed money and so much finance cost to pay for it, that its tolls are just plain ridiculous. We can build intelligently, or our whole economy can fund banks. I vote for intelligent construction.There are companies that have left a trail of multiple bankrupt toll roads behind them. Try a web search on bankrupt toll roads and see what comes up. Bankrupt toll roads in Texas, Australia, California and South Carolina come to mind. Excessive prices, excessive tolls, and bogus usership projections will do that. Oh, and see if you can find the way overpriced road work in Romania. (Romania got smart and pushed back. We haven’t.) You know, if I had a track record like that, I’d have serious trouble finding work. Not these guys, though.The construction of beltways, interstate highways and other corridors is a visionary thing. I don’t recommend overbuilding it with borrowed money and doing it with at double prices like this rail mess, though. Establish the right of way, and build for forseeable needs,and then expand it as needed. Otherwise, the money all goes to the banks, and to friends of certain crooked agencies.Hey if money just fell out of the sky, we could drop everything, and build all future road and rail ad building needs for everything that will ever need to be built from now until the sun burns out in a few billion years, right now. But it turns out that money actually doesn’t fall out of the sky. The more we borrow, the longer we will need to pay it back, and the more we will pay in finance costs. If we get so far ahead of ourselves that we borrow a hundred quintillion dollars and start building Deep Space Nine next year, we are likely to lose any credit rating that our wiser elders might have earned, and then we’ll go broke in very short order.OK, that’s a bit beyond the things you are mentioning. But what I’m saying is that we can’t just borrow wildly as though there are no local, state or national debts to consider, and pre-build willy-nilly because we think we have a good idea.OK, somebody thinks they have a plan for Smart Growth. Let’s- see if we actually agree that it’s a good idea,- figure what actually makes sense,- reserve the rights of way for it,- proceed intelligently to build what we need, and not get so deep in debt that we choke on the payments and finance costs, and- enjoy the results of it.In my opinion, we are being led around by the noses by people who hope to pocket serious money from our foolish decisions, while Public Relations types are trumpeting Big Lies from every media source. We are clearly not wise like our parents generation and we are directing ourselves to disaster. We need to realize that crazed overbuilding is just going to lead us to another spending bubble and if we learned anything from the tech bubble and the real estate bubble, we should know that’s not where we want to go.Where would I want to send sent BRT? I’m wondering why the rail line goes where it goes. Why Rt 606, why Ashburn? I guess because Tysons is there, and the toll roads are there. So maybe further on down the Dulles Greenway, but I think people want transit to Leesburg, and it’s in another direction And I thought Purcelville, because it’s in that general direction, and it’s big enough that I have heard of it.What’s wrong with responding to the communities that exist now, and serving them with transit? Are taxpayers just pawns for the self-appointed planners? Whose country is this, anyway?Leesburg, I think. Purcelville, probably. Something out in the stix? I’m not going to build palaces in the stix for kings yet to be born, but we can talk about possible industrial and residential development. Let’s plan logical transit routes, AND DO IT RIGHT THIS TIME. Not an arm twisting political circus this time. Decide (not by the usual agenda-driven meetings, but by real thinking), figure how to establish rights of way, reserve the rights of way with BUS ROUTES, see if it seems to be working, and adjust based on what actually happens, before locking in rail.No premature rail. No wild spending and borrowing. Think Pay-As-You-Go, not another 16 Trillion of debt. I will not stand for more of the nonsense I saw at the Fairfax and Loudoun BOS meetings about approving the rail project. Oh gee, we have NO idea where the money will come from, gee the problem is that we need a source of funding, gee we’re looking at ways to lower the tolls, oh gee what a surprise, we have to TAX you NOT THAT!!!

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