Despite a major legal defeat earlier this year, the New York State Department of Transportation (NYS DOT) is continuing their effort to impose a wasteful and discriminatory project labor agreement (PLA) mandate on a highway reconstruction and bridge replacement project near Exit 122 on Route 17 in Orange County, NY.
In March 2012, an Albany, NY court found that NYS DOT’s clumsy attempt to require a PLA this project violated the state’s competitive bidding laws. You can read more about this issue in our earlier posts here.
Nevertheless, NYS DOT is re-bidding the project with a PLA requirement attached. While there are indications that the department may have followed the state’s complicated legal requirements for mandating a PLA a little more closely this time, taxpayers still know that the PLA mandate will increase construction costs by millions.
Stephen Lefebvre, president of the Empire State Chapter of Associated Builders and Contractors (ABC) lays out the issue in an op-ed published by the Albany Times-Union last week.
Here are the highlights, our emphasis added:
In 2011, DOT awarded a $70 million, heavy highway construction project in Orange County to the second-lowest bidder. The low bidder, by $4.5 million, was Lancaster Development of Schoharie County. DOT denied Lancaster the work because it refused to participate in a mandatory Project Labor Agreement that was imposed on the contract.
Lancaster challenged the bid award in state Supreme Court and won. Supreme Court Justice Joseph Teresi in a stinging rebuke to the DOT declared the contract void and found the bid process to have been hopelessly compromised by actions of the state.
Astonishingly, the DOT is again insisting that it will rebid the project with a PLA. This is bad news for taxpayers and the concept of competitive bidding.
In making this decision, the DOT is not being honest with taxpayers and is instead attempting to legally rig this highway contract so that only union workers are employed on the project. DOT Commissioner Joan McDonald has even gone so far as to issue a finding justifying the PLA, which relies upon inaccurate, incomplete and misleading information obtained from a consultant study.
The study — which was released by DOT only after legal proceedings were commenced by Lancaster to obtain it — contends that a PLA using union labor would complete the project for approximately $70.6 million. Yet, the study ignores the fact that Lancaster’s 2011 bid for this identical project was $67.8 million.
The DOT also accepted the study’s assertion that 85 percent of the highway construction workforce in Orange County belong to unions. This estimate is wildly inflated and relies on unsupported assertions by the Laborers Union, hardly an unbiased source for this information.
The DOT contends that similar projects in the region have mostly been performed by union firms. This, too, is factually wrong. Since 2005, more than 70 percent of winning bids on major DOT projects in Orange County were submitted by open-shop firms like Lancaster.
Lancaster is one of the best heavy highway firms in the state, employing hundreds of local workers and doing multiple projects in our region, including the large Exit 6 Northway project in 2011. It has completed projects on-time and on-budget.
Trade unions are pushing for a PLA for the sole reason that it keeps firms like Lancaster from bidding. Prevailing wages are always paid on public work, but union work rules often make union firms more costly than nonunion competitors. If an open-shop firm like Lancaster were to agree to a PLA, it would mean it could not use most of its own workers and must instead only hire from the union hall. To say, as some PLA supporters do, that open shop firms can bid on such projects is only true in a technical sense. By what logic would a firm bid on a contract and then be precluded from using its own workers?
Obviously, this PLA mandate is a bad deal for taxpayers. By bidding the project without the PLA requirement, Lancaster gave us an apples-to-apples cost comparison for this project. We know the PLA requirement will cost taxpayers an additional $4.5 million.
This comparison would always be available for taxpayers if the New York Legislature would enact the Public Savings Construction Act (A. 7855/S. 4121), which requires public entities that want to mandate PLA requirements as a condition of performing work to also allow bidders to submit bids without PLAs, and requires the public entity to accept the lower of the two.
Additionally, we strongly encourage the NYS DOT to re-think this wasteful and discriminatory mandate. This project should be about creating jobs, not giving a taxpayer-funded handout to construction union bosses.