Gov. Patrick Pushes PLA on Whittier Memorial Bridge as Big Dig Costs Balloon to $24.3 Billion

0 July 16, 2012  State & Local Construction, Transportation & Infrastructure

Insanity is often described as doing the same thing over and over again and expecting different results.  Mass. Gov. Deval Patrick (D) should revisit his position on a costly and unfortunate policy favoring construction trade unions or expect more waste, discrimination and insanity in the Bay State.

Last week, the ballooning costs of the Big Dig grabbed headlines while Gov. Patrick was criticized for restricting competition for construction contracts to build the $285 million Whittier Memorial Bridge across the Merrimack River to firms willing to sign a union-only government-mandated project labor agreement (PLA) (Boston Globe, “Union-only labor for bridge project irks firms,” 7/13/12).

An editorial in today’s Boston Herald criticised the latest Big Labor favor by Gov. Patrick (“Gov’s union giveaway,” 07/16/12):

Project labor agreements steer public construction work to union shops in exchange for what their supporters call labor “harmony,” or an agreement not to strike.

But strikes by non-union workers on public projects are a total myth. “Harmony” just means that union workers won’t cart their inflatable rats to the job site and disrupt work being conducted by non-union workers, usually at a lower cost to the taxpayers.

Studies indicate that PLAs limit competition for public work, therefore driving up both bidding and construction costs on projects that are financed by the taxpayers. With the commonwealth leveraged to the teeth to pay for upkeep and repairs of its crumbling infrastructure you would think this administration would want to stretch every last dollar as far as it can. You would be wrong.

In March 2012, the Globe editorial page attacked Gov. Patrick for mandating a PLA on the $260 million Longfellow Bridge project while the benefits of fair and open competition were evident on the PLA-free Route 9 Burns Bridge project, in which a merit shop company won the contract after bidding $30 million less than the $118 million MassDOT expected.

In 2010, and editorial boards across Massachusetts blasted Gov. Patrick for endorsing a new PLA mandated by the UMass’s Building Authority board of directors on future university construction projects, arguing the governor forgot the lessons of the Big Dig, the most infamous PLA project of all time (Gloucester Times, Editorial: Construction plans show state learned little from Big Dig,” 6/22).

Last week, state lawmakers learned Big Dig costs have mushroomed to more than $24.3 billion, harming the state’s ability to fund other critical transportation projects and create additional construction jobs (Yahoo Finance, “Big Dig costs pegged at $24.3B, lawmakers told,” 7/10/12).

Gov. Patrick’s recent PLA push makes little fiscal sense for Massachusetts taxpayers and stinks of election year political favoritism toward Big Labor – especially considering the Big Dig’s well-documented record of missed deadlines, cost-overruns, construction defects (including a motorist fatality due to a collapsed tunnel ceiling panel), and reports of union workers visiting methadone clinicssleeping and drinking heavily on the job.

The Big Dig, a PLA project, is affectionately known by locals as The Big Swig due to frequent drinking on jobsites by unionized construction workers.

Funded by federal and Massachusetts taxpayers, the Big Dig is the most expensive and infamous government-mandated PLA job of all time.

For readers not familiar with the Big Dig, its Wikipedia page says it all:

The Big Dig was the most expensive highway project in the U.S.[2]. Although the project was estimated in 1985 at $2.8 billion (in 1982 dollars, US$6.0 billion adjusted for inflation as of 2006[update]),[3] over $14.6 billion ($8.08 billion in 1982 dollars)[3] had been spent in federal and state tax dollars as of 2006[update].[4]

A July 17, 2008 article in The Boston Globe stated, “In all, the project will cost an additional $7 billion in interest, bringing the total to a staggering $22 billion, according to a Globe review of hundreds of pages of state documents. It will not be paid off until 2038.”[5] At the beginning of the project, Congressman Barney Frank joked, “Wouldn’t it be cheaper to raise the city than depress the artery?”[6] The project has incurred criminal arrests,[7][8] escalating costs, death, leaks, and charges of poor execution and use of substandard materials.

Of course the PLA isn’t responsible for all of the Big Dig snafus, but it certainly didn’t prevent these mistakes either.  Because PLAs are marketed to lawmakers and project owners as a tool to prevent these types of incidents, it’s critical that lawmakers do their homework and fairly evaluate whether PLAs actually live up to proponents’ promises of delivering a quality, on-time and on-budget project.

It’s clear Gov. Patrick hasn’t done his homework on PLA projects like the Big Dig, and apparently neither have other public officials who allow this blatant favoritism.

The evidence against PLAs hasn’t stopped Bay State lawmakers like Gov. Patrick from mandating Big Labor-favoring PLAs on public works projects in exchange for construction union campaign cash and votes.

These officials should expect taxpayers, contractors and ABC chapters to hold them accountable for these special interest deals.

For example, in a 2005 effort to educate local and state lawmakers pushing PLAs on Massachusetts schools, the ABC Massachusetts chapter erected this billboard along the Southeast Expressway in Dorchester for drivers exiting the Big Dig’s I-93 tunnel.

The billboard’s connection between Massachusetts school PLAs and the Big Dig PLA received considerable media attention.  As a result of the bad publicity, public officials were reluctant to mandate PLAs on schools.

Additionally, in 2006 the City of Fall River, Mass., bid the Kuss school construction  project under a PLA. After attracting few bidders — with those providing bids coming in well above the projected budget — the city canceled the PLA and reopened the bidding process. Reports stated Fall River saved $5.8 million on total construction bids by removing the PLA and bidding the project using free and open competition.

It was a real-world experiment measuring the cost of PLAs, – right in the backyard of the Big Dig, – and its results clearly demonstrate PLAs cut competition and increase costs.

A December 2006 report by the Beacon Hill Institute (BHI) at Suffolk University, “Project Labor Agreements and Financing Public School Construction in Massachusetts,” reviews this case study, which supports BHI’s previous research on the effect of PLAs on Massachusetts school construction costs.

BHI’s peer-reviewed academic paper published in Bentley’s business school journal,  “Do Project Labor Agreements Raise Construction Costs?”  found “PLAs raise the cost of school building by between $12 and $20 per square foot, or by between 9% and 15% of total costs.”

When Gov. Patrick and other Massachusetts lawmakers talk about the benefits of government-mandated PLAs, ask them what happened with the PLA on the Big Dig. Or the PLA experiment in Fall River. Or BHI research that found PLA school projects are more expensive than non-PLA schools.

If lawmakers give you the wrong answer, they haven’t learned their lesson from the Big Dig and need to hit the books.  If you don’t give them the truth, they will continue pushing the same failed special interest policy and expect different results.  And that is the definition of insanity.

Required Reading on the Big Dig

The Boston Herald: Dozing on the Dig: Idle hands raise ire
Channel 7 News WHDH: Hank Investigates: The Big Swig (pdf)
The Boston Globe: Fore! Score a Bogey for the Big Dig (pdf)
City Journal: Lessons of Boston’s Big Dig
Boston Magazine
: Confessions of a Big Dig worker
Wall Street Journal
opinion piece by Stephen Moore: You Can’t Big Dig Yourself Out of a Hole (pdf)
Washington Post: Minding the Cost of Boston’s Bid Dig

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