The Truth About Project Labor Agreements

Register Exclusive: Many prison project jobs went to non-Iowans
The project was billed as a way to add construction jobs, but just 53% went to Iowa workers, data show.

By William Petroski
[email protected]

When Gov. Chet Culver broke ground on a new $132 million state prison in Fort Madison in April 2010, it was billed as a way to provide 300 to 400 good-paying construction jobs in southeast Iowa.

But as completion nears on the 800-bed Iowa State Penitentiary project, data obtained by The Des Moines Register show that nearly half of those jobs — paid for by Iowa taxpayers — went to workers from Illinois, Missouri and other states.

“I am disappointed, but not surprised. We had warned of that outcome, and unfortunately there were a lot of Iowans who didn’t get to work on that project,” said Scott Norvell, president and chief executive of Master Builders of Iowa, a construction industry group representing 2,000 Iowa businesses.

Norvell argues that if state officials had properly enforced Iowa’s reciprocal preference law, Chicago-based Walsh Construction — the project’s general contractor — would have been required to employ at least 90 percent Iowa workers in its labor force. That’s because Iowa firms hired for Illinois public works projects must hire that same percentage of Illinois workers under certain conditions. He said Iowa legislators have since strengthened the state’s reciprocal preference law to avoid a repeat of such problems.

The Register found that of the 888,691 contractor hours worked on the project, just 476,001 hours — or about 53 percent of the work — was done by Iowa construction workers. The new prison is tentatively set to open in March, and most of the major construction is finished.

Rebecca Bowker, executive officer at the Iowa State Penitentiary, said Iowa union shops sent as many workers as they could to the Fort Madison project, but it was not enough to keep up with demand. “It was my understanding there were other projects competing for the same union workers,” she said in an email.

But Norvell had previously expressed worries that many construction workers would come from outside of Iowa — to the detriment of Iowans searching for well-paid employment.

A project labor agreement approved by the Culver administration for the Fort Madison project called for construction trades workers to be hired through 18 union halls, including 12 in Iowa, five in Illinois and one in Kansas City, Kan. Several union leaders and a union lawyer said at the time the agreement was reached that it’s common for union halls to have cross-state jurisdiction, and they didn’t believe the use of out-of-state hiring halls would reduce the number of Iowans working on the prison project.

The project had been warmly welcomed in southeast Iowa, which was still reeling from the worst recession in decades when construction began three years ago. Even now, Lee County, which includes Fort Madison, has the state’s highest unemployment rate at 7.4 percent.

Master Builders had tried in 2010 to block the state from awarding a $116.9 million state contract for the Fort Madison project to low bidder Walsh Construction, but lost in court and in an administrative appeal. The Weitz Co. of Des Moines had offered a bid of $121.5 million.

Brian McGinty, the project manager for Walsh Construction in Fort Madison, declined to comment on the percentage of Iowa workers on the prison project, referring questions to state officials.

Meanwhile, former Gov. Culver, a Democrat who is now a Des Moines-based consultant, was out of the office Friday and was not available for comment, an aide said.

Walsh Construction also holds a $60 million contract to expand and renovate the Iowa Correctional Institution for Women at Mitchellville. But Caleb Hunter, deputy director of the Iowa Department of Administrative Services, estimated that more than 90 percent of that work is being done by Iowans.

Hunter also said Gov. Terry Branstad signed legislation in 2011 that “greatly enhanced the ability of the state to increase the Iowa workforce and companies involved in state projects.” While this law will not affect every project, it has the potential to increase the number of Iowa companies and Iowa workers employed on state of Iowa projects, he said.

Ryan Drew of Burlington, president of the Southeast Iowa Building and Construction Trades Council, said that in analyzing the workforce on the Fort Madison project, it’s important to recognize the community is on the Iowa-Illinois border. Many Illinois construction trades workers hired for the project reside just across the Mississippi River from Fort Madison and shop at Iowa retailers, so their employment has been positive for Iowa, he said.

Under the project labor agreement, the contractor and subcontractors were allowed to bring in 50 percent of their workforce as “core employees” to the Fort Madison job site, Drew said. That included out-of-state employers who brought in their own workers.

“That is the thing with these big projects. These general contractors that bond and handle $130 million-scope projects deal with contractors all over the United States and pull them in,” Drew said. The project labor agreement was crafted for Iowa — a right-to-work state — to permit contractors to bring in certain core employees who were union or non-union, he added.

State Sen. Tom Courtney, D-Burlington, chairman of an Iowa Senate prison budget subcommittee, said legislators and Iowa businesses are usually cautious about putting too many curbs on out-of-state companies that want to bid on Iowa contracts because they want to keep doors open in other states for Iowa businesses to profit.

“What we need are more jobs in America. Then people can go from state to state” and seek employment, Courtney said.

Additional Facts

PROJECT LABOR PACTS

COORDINATING RELATIONS: The new $132 million Iowa State Penitentiary at Fort Madison has been built using a project labor agreement, which is a pact designed to coordinate labor relations, including wages and benefits, between multiple construction trade unions and contractors on a specific construction site. Supporters say such agreements ensure large projects are completed efficiently and on time. Opponents say the deals discriminate against nonunion contractors and drive up taxpayers’ costs.

CULVER FAVORED: Former Gov. Chet Culver, a Democrat, was an advocate of project labor agreements, signing an executive order in February 2010 requiring all state departments and agencies to consider using project labor agreements on large state construction projects.

BRANSTAD OPPOSED: Gov. Terry Branstad, a Republican, rescinded Culver’s executive order the first day he returned to office in January 2011. Branstad’s order also prohibits project labor agreements to be used for projects involving state funds.