Keystone Research Center Studies Promoting Pennsylvania Project Labor Agreements Can’t Be Trusted

1 February 23, 2014  Featured, School Construction, State & Local Construction

Proponents of discriminatory and costly government-mandated project labor agreements (PLAs) have concocted some wild schemes to help misguided and corrupt lawmakers steer taxpayer-funded contracts to their union workers and unionized contractor political supporters with little competition and public scrutiny, but this latest caper from Bristol Township, Pa., is remarkable and deserves to be exposed.

Scam-1

In August 2013, when Bristol Township lawmakers agreed to hire the Keystone Research Center (KRC) to conduct a PLA feasibility study for upcoming school construction, the merit shop contracting community knew taxpayers were about to be on the business end of a costly campaign of deception and cronyism.

Here are details on the KRC contract from the Bucks County Courier Times (“Bristol Twp school district ponders project labor agreement,” 8/20/13):

Bristol Township School District will pay $18,000 for the Keystone Research Center to look at whether the district should establish a project labor agreement for the proposed $152 million new schools and renovations project.

An agreement between the district and Keystone Research Center was approved by Bristol Township’s school board in a 7-0 vote Monday night by board members Angela Nober, Stacy Gerlach, Katherine Bachman, Frederick Black, Earl Bruck, Patricia Koszarek and Constance Moore. Board members James Baker Jr. and Helen Cini were absent from the meeting.

Solicitor David Truelove said the purpose of the month-long study is to determine if a project labor agreement is appropriate moving forward. Even if Keystone Research Center comes back with a report that recommends a project labor agreement, the school board could still reject the idea.

Hiring a consultant to evaluate a complicated and controversial public policy decision that could potentially increase costs and harm the local construction community is usually a reasonable course of action except it’s clear the KRC is a mouthpiece for Big Labor’s interests and has a well-documented track record of promoting PLAs.

KRC’s website says it is “a leading source of independent analysis of Pennsylvania’s economy and public policy,” but that simply isn’t true.

KRC has a reputation for churning out “research” on a variety of progressive topics embraced by the stakeholders that fund the center.

At least seven of KRC’s 22 board members are union officials and KRC self-reported that at least 9 percent of its funding came from unions in 2009-2010. KRC also reported it received 52 percent of its funding from unspecified foundations, which likely are heavily funded by construction unions and other sources affiliated with Big Labor.

In 2009, TheTruthAboutPLAs.com reported KRC received more than $350,000 from organized labor between 2005 and 2008, according to U.S. Department of Labor LM-2 reports by labor unions. Since then, from FY2009 and FY2013, KRC received more than $557,000 from labor unions (pdf).

In 2009, KRC produced a one-sided study used by the Rendell Administration to push PLA favoritism on $800 million worth of jail facility construction projects procured by the Pennsylvania’s Department of General Services (DGS). It was a classic case of the fox guarding the hen house instead of an objective and independent analysis. Concerns about KRC’s pro-PLA research were well-founded, as evidenced by the fact the PLA contributed to delays, litigation, reduced competition and increased costs on some of the DGS projects.

In fact, KRC is about as reliable as corporate PLA pimps like Hill International, which profit from recommending PLA mandates on taxpayer-funded projects via biased and inaccurate reports that have been debunked.

It Ain't Easy for Corporate PLA Pimps Like Hill International

It Ain’t Easy for Corporate PLA Pimps Like Hill International

When KRC’s September 2013 report, by Stephen Herzenberg and Mark Price, was released to the public, few were surprised by its emphatically pro-PLA stance.

In fact, barely a sentence is devoted to the legitimate claims of PLA opponents. The report failed to mention the problems with PLAs on the recent DGS jail projects or other examples of PLAs failing to deliver on their promises in the region and across the country.  It didn’t even address why some unions and unionized contractors oppose PLA mandates.

Biased research like this, similar to pro-PLA work by Hill International and labor sympathizers in academia (Kotler, Phillips and Belman) and other pro-PLA sources referenced in the KRC report, have been addressed here (see pages 53-62 of Dr. Davide Tuerck’s Cato Journal article in response to Kotler), here (Tuerck in response to Phillips), here and here (NUSIPR in response to Belman and Le’s critique of a California school PLA study),  and here (see pages 24-27 of this 2009 Beacon Hill International (BHI) study in response to Kotler, Philips and Belman).

(Note: A strong critique of shoddy pro-PLA research by groups like KRC is Dr. Tuerck’s response to a biased Hill International report recommending a PLA on a U.S. DOL Job Corps Center in Manchester, N.H. Litigation forced the PLA’s removal, resulting in more competition and considerable savings, and a real-world anecdote supporting BHI’s conclusions.)

When the Bristol Township School Board recently used the KRC study to justify the union-favoring requirement in this solicitation to construct two new elementary schools, which forces contractors to sign this PLA and hire construction workers from union halls for the life of the projects instead of their existing employees, everyone knew the fix was in.

ABC Eastern Pennsylvania President Mary Tebeau’s letter to the Bucks County Courier Times sums up the controversy (“Unnecessary Cost to Taxpayers,” 2/14/14):

Dear Editor:

It is with great dismay that the Bristol Township School Board voted to require a discriminatory union-only Project Labor Agreement (PLA) on the upcoming school construction projects. This requirement demands that all construction workers on these projects must be signatory to the respective trade union.

According to the latest U.S. Dept. of Labor statistics, 76 percent of construction workers in Pa. choose to not be signatory to a construction union.

With the employers of more than three-quarters of local construction workers unable to bid on the project, the remaining minority of unionized firms will most certainly raise prices knowing that the competition is limited. Studies completed regarding projects with and without a PLA have shown a 20-30 percent savings in construction dollars. For this construction project, this could equate to millions of dollars in savings.

As if that isn’t enough of a taxpayer waste of dollars, last year the board spent $18,000 on a “study” conducted by the Keystone Research Group, an organization funded by and led by labor unions. Essentially, a union organization was paid utilizing taxpayer dollars to create study whose end result is that the upcoming construction projects should be built with union-only labor. Surprise!

In addition, when Gov. Corbett assumed office he promised that under his watch, state funds would not be used for any public construction project that forced a restrictive union-only PLA. The Bristol Township School Board applied for Pennsylvania Plancon funding several years ago and still believes they will receive this to pay for a portion of the upcoming construction, however this could be a valuable chunk of public assistance refused due to the discriminatory agreement Bristol has put in place.

I urge the school board to rescind this agreement immediately and save yourselves the wasted taxpayer dollars it will cost to implement this discriminatory agreement.

This is the truth about PLAs in Bristol Township:

DC School PLA Chalkboard

The KRC report’s premise that there is no evidence to support claims that PLAs limit the pool of bidders, discriminate against qualified nonunion construction workers and contractors, and/or drive up actual construction costs simply ignores the facts and questions the validity of other conclusions drawn in the biased paper.

An overwhelming body of evidence suggests PLAs have the practical effect, if not the stated purpose, of eliminating competition from merit shop contractors and their employees—qualified and skilled craft professionals—who compose almost 76 percent of the commonwealth’s private construction workforce.  Research has found less competition and archaic and inefficient union rules increase the cost of construction projects subject to PLAs between 12 percent and 18 percent, on average. The public and the construction community know that free and open competition, without discriminatory and costly PLAs, is the best and most rational way to ensure quality construction at the best possible price.

It is a shame that PLA proponents have to rely on dishonest academic papers, pro-PLA laws passed by political cronies and sometimes violent union threats to private construction owners to regain lost market share.

KRC’s research can’t be trusted, nor can the politicians who rely on its product to justify waste, discrimination and cronyism.

Further Reading on KRC and PLAs on Pennsylvania jails:

Fox in the Hen House, 5/19/09

Big Labor’s Propaganda Machine to Decide Fate of Project Labor Agreements on PA Jail Construction, 6/2/09

PA Senator Fights Rockview Prison PLA, 6/24/09

PA Government Cronyism Continues with Rockview Jail PLA, 7/9/09

Do PLAs Reward Special Interests?, 3/9/10

Rendell Administration Love Affair With Big Labor Stalls Prison Construction Projects and Slows Job Growth for Pennsylvanians, 3/17/10

Op-Ed: State’s Union-Friendly Deals Unfair, Too Costly, 6/22/10

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One Response to Keystone Research Center Studies Promoting Pennsylvania Project Labor Agreements Can’t Be Trusted

Someone in Pennsylvania needs to research February 23, 2014 at 11:44 pm

This group is reeling in about $1 million per year in contracts from someone. In 2012 it subcontracted for $181,000 to something called World-Class Industrial Network, LLC (WIN) in Pittsburgh. That is associated with something called Labor-Management Clearinghouse. Lots of union money is sloshing around the bathtub.

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