The Truth About Project Labor Agreements

Today a diverse coalition of construction industry associations and employer groups sent letters to the U.S. House of Representatives and U.S. Senate in opposition to government-mandated project labor agreements (PLAs) and anti-competitive PLA preferences used by federal agencies as a result of President Obama’s pro-PLA Executive Order 13502 and related regulations.

The coalition is prepared to fight for fair and open competition in federal contracting during the 1st Session of the 113th Congress

The letters ask lawmakers to cosponsor the Government Neutrality in Contracting Act (H.R. 436/S. 109), introduced by Rep. Andy Harris (R-Md.) and Sen. David Vitter (R. La.) in the 113th Congress:

“The Government Neutrality in Contracting Act will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of federally funded contracts throughout the construction industry, which suffers from a 14.7 percent unemployment rate.”

The letters clarify the Government Neutrality in Contracting Act would only restrict PLA preferences and PLAs mandated by federal agencies:

“The Government Neutrality in Contracting Act seeks to counteract potential special interest favoritism by prohibiting federal agencies and recipients of federal assistance from mandating PLAs and implementing PLA preferences. However, it also would allow federal agencies to award contracts to businesses that voluntarily enter into PLAs, which is permitted by the National Labor Relations Act.

H.R. 436/S. 109 will curb waste and favoritism in the procurement of construction projects and ensure taxpayer dollars are spent responsibly by letting the market determine if a PLA is appropriate. We ask that you take a stand against discrimination and special interest carve-outs in government contracting by cosponsoring H.R. 436/S. 109.”

A similar coalition supported identical legislation and other legislative efforts to ensure “fair and open competition on federal and federally assisted construction contracts” in the 112th Congress.

The following construction industry and employer groups support government neutrality in federal contracting and oppose government-mandated PLAs and discriminatory PLA preferences:

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Electronic Security Association (ESA)
Independent Electrical Contractors (IEC)
National Association of Home Builders (NAHB)
National Association of Minority Contractors (NAMC) – Philadelphia Chapter
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
National Ready Mixed Concrete Association (NRMCA)
National Utility Contractors Association (NUCA)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce

Resources:

Coalition letter to Senate in support of S. 109 (4/16/13).
H.R. 436 Dear Colleage letter from Rep. Andy Harris to full House (3/20/13).
ABC Issue Brief on Government-Mandated PLAs (113th Congress).

Here is the House coalition letter in its entirety:

The diverse group of undersigned construction and business associations writes in strong support of Rep. Andy Harris’s (R-Md.) Government Neutrality in Contracting Act (H.R. 436) ensuring fair and open competition on federal and federally assisted construction contracts.

H.R. 436 would prevent federal agencies and recipients of federal assistance from requiring contractors to sign an anti-competitive and costly project labor agreement (PLA) as a condition of winning a federal or federally assisted construction contract. It also would eliminate discriminatory PLA preference policies that discourage competition and result in needless waste and favoritism in the procurement of taxpayer-funded construction projects.

A PLA is a collective bargaining agreement unique to the construction industry that typically requires companies to agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; follow union work rules; and pay into union benefit and multi-employer pension plans that nonunion employees will be unlikely to access—forcing employers to pay “double benefits” into existing plans and union plans and placing firms opposed to these costly provisions at a significant competitive disadvantage. In addition, PLAs typically force construction workers to pay union dues or join a union if they want to receive union benefits and work on a PLA project.

When mandated by government agencies, PLAs can interfere with existing union collective bargaining agreements and unfairly discourage competition from nonunion contractors and their employees, who comprise 87 percent of the U.S. private construction workforce.

President Obama’s Feb. 6, 2009, Executive Order 13502 encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost on a case-by-case basis “in order to promote the economy and efficiency in federal procurement.”

However, studies of construction projects subject to prevailing wage laws found PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects. Recent government-mandated PLAs on federal projects have resulted in litigation, reduced competition, increased costs and needless delays.

In addition, the executive order and related FAR regulations have exposed agency procurement officials to intense political pressure from special interest groups and politicians to mandate PLAs on federal projects even when they are not appropriate.

The Government Neutrality in Contracting Act seeks to counteract potential special interest favoritism by prohibiting federal agencies and recipients of federal assistance from mandating PLAs and implementing PLA preferences.  However, it also would allow federal agencies to award contracts to businesses that voluntarily enter into PLAs, which is permitted by the National Labor Relations Act.

H.R. 436 will curb waste and favoritism in the procurement of construction projects and ensure taxpayer dollars are spent responsibly by letting the market determine if a PLA is appropriate. We ask that you take a stand against discrimination and special interest carve-outs in government contracting by cosponsoring H.R. 436.

The Government Neutrality in Contracting Act will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of federally funded contracts throughout the construction industry, which suffers from a 14.7 percent unemployment rate.

Sincerely,

American Council of Engineering Companies (ACEC)
Associated Builders and Contractors (ABC)
Associated General Contractors (AGC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Electronic Security Association (ESA)
Independent Electrical Contractors (IEC)
National Association of Home Builders (NAHB)
National Association of Minority Contractors (NAMC) – Philadelphia Chapter
National Association of Women in Construction (NAWIC)
National Black Chamber of Commerce (NBCC)
National Federation of Independent Business (NFIB)
National Ready Mixed Concrete Association (NRMCA)
National Utility Contractors Association (NUCA)
Small Business & Entrepreneurship Council (SBEC)
U.S. Chamber of Commerce