Done Deal: Unions Will Control Construction on California High-Speed Rail with Project Labor Agreements

1 December 16, 2012  Federal Construction, State & Local Construction, Transportation & Infrastructure

An article in the December 7, 2012 Fresno Bee newspaper (Needy’ Workers Will Get Jobs on High-Speed Railreports that all five design-build consortiums that are pre-qualified to bid on contracts for the first segment of California’s High-Speed Rail have signed a Project Labor Agreements (PLA) with construction trade unions:

Five teams of contractors have been invited to bid on the first major contract for a stretch of the rail route between Madera and Fresno. How the new policy will translate into the contract has yet to be determined, said Jeffrey Morales, the authority’s CEO. Potentially complicating the issue is that each of the five would-be prime contracting teams has already signed project labor agreements with labor unions. Morales said the existence of project labor agreements between the contractors and labor unions is independent of any action the agency takes.

The latest scheme of the 
California High Speed Rail Authority to encourage Project Labor Agreements (PLAs) as part of design-build proposals is a “Community Benefits Policy for Construction,” approved at a December 6, 2012 meeting while the outgoing and incoming heads of the State Building and Construction Trades Council of California sat in the audience. This policy compels the design-build consortiums to show a plan to hire various categories of disadvantaged workers for construction work. Obviously these consortiums will cite their PLAs as a tool to implement this policy. The Fresno Bee reported on how Merit Shop representatives exposed the plot:

Organizations representing nonunion contractors worry that the policy ultimately will become a requirement for prime contractors to sign project labor agreements with unions, limiting jobs only to union workers.

We believe this project needs to be awarded under fair and open competition,” Nicole Goehring of the Associated Builders [and Contractors] of California told the authority’s board before the vote.
 
Eric Christen of Grass Valley, executive director of the Coalition for Fair Employment in Construction, said he believes the policy is “just a euphemism for a project labor agreement, just a different name.”
A union monopoly on construction of this project is not a surprise for readers of www.TheTruthaboutPLAs.com. A January 12, 2011 article on this web site (California’s Top Construction Union Officials Love the State’s $100 Billion High-Speed Rail Project) predicted accurately that unions would get a PLA by pressuring design-build contractors behind the scenes to sign it. When the head of the State Building and Construction Trades Council of California served as an appointed member of the High-Speed Rail Authority and provided vocal support for the project despite growing public criticism, it was obvious that design-build entities would be inclined to make deals with construction unions in order to be well-positioned to win contracts awarded by the High-Speed Rail Authority under somewhat subjective “best value” criteria.
It’s unlikely that the public will have difficulty obtaining these Project Labor Agreements because they are negotiated directly between the design-build consortiums and the unions, without the High-Speed Rail Authority as a signatory party. This is a clever way to prevent potential critics from knowing the terms and conditions of these union agreements, even as the unions brag about them.

American taxpayers will be contributing to this project, as the U.S Department of Transportation’s Federal Railroad Administration has authorized $3.3 billion in federal funding for the first segment of the project. The total cost of the rail line is now estimated at $68 billion, although previous estimates were as high as $117 billion. 
Congressman Kevin McCarthy (R-Bakersfield) has been leading the charge in the U.S. House of Representatives to terminate federal funding for this project, which he describes as a boondoggle of ever-changing cost and ridership estimates that will end up requiring perpetual taxpayer funding. Obviously there are some powerful special interests aligned with “progressive” true believers of high-speed rail seeking that perpetual taxpayer funding.
 
Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

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One Response to Done Deal: Unions Will Control Construction on California High-Speed Rail with Project Labor Agreements

Dayton Public Policy Institute, a project of Labor Issues Solutions, LLC » Fresno Bee Reporter Finds Out that All Five Prequalified Prime Contractors for First Segment of California High-Speed Rail Signed Project Labor Agreements with Unions December 19, 2012 at 11:38 pm

[…] UPDATE: My article about contractors signing a Project Labor Agreement with unions for the first segment of the California High-Speed was posted on the web site http://www.theTruthaboutPLAs.com on December 16, 2012: see Done Deal: Unions Will Control Construction on California High-Speed Rail with Project Labor Agreeme…. […]

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