ABC Continues Successful Fight Against Government-Mandated Project Labor Agreements
In 2009, President Obama signed Executive Order 13502, which encourages federal agencies to mandate project labor agreements (PLAs) on large-scale federal construction projects exceeding $25 million in total cost on a case-by-case basis. Many merit shop advocates of fair and open competition predicted it would lead to billions of dollars’ worth of federal construction contracts being awarded to unionized contractors and their all-union workforces—without true competition from qualified merit shop contractors.
Industry experts feared the executive order would result in taxpayers needlessly paying nearly 20 percent more per federal contract procured with a PLA requirement. Faced with finite building budgets, it would generate less building and create fewer jobs for the experienced men and women employed by merit shop contractors who deliver projects safely, on time and on budget every day to the federal government.
Stakeholders turned to Associated Builders and Contractors (ABC) to defend fair and open competition in federal contracting. ABC and the merit shop contracting community mobilized an aggressive campaign of effective public relations, political, legal and legislative strategies to restrict the devastating impact of anti-competitive and costly government-mandated PLAs on federal, state and local public works projects.
The campaign continues to produce impressive results. Efforts helped prevent PLA mandates and preferences on nearly 99 percent of federal contracts exceeding $25 million from FY2009-FY2014, freeing up almost $55 billion worth of work from PLA requirements so all qualified firms can fairly compete to win these contracts.
From FY2009-FY2014, ABC member prime contractors won 56.45 percent of large-scale federal contracts subject to President Obama’s pro-PLA Executive Order 13502. That’s 569 contracts valued at a total of $35.885 billion won by ABC members. This data does not include work awarded and performed by subcontractors.
Legal tactics proved effective at stopping federal PLA mandates. Federal contractors, with the support of ABC, filed five Government Accountability Office (GAO) bid protests against PLAs mandated by four different federal agencies on large-scale federal construction projects. In each instance, federal agencies abandoned the PLA requirements after GAO officials suggested they violate federal contracting laws in specific circumstances.
The latest legal victory against a PLA mandate on a U.S. Department of Labor (DOL) Job Corps Center in Manchester, N.H., was the DOL’s second failed attempt to require a PLA on the project. It was also the first apples-to-apples comparison of a federal project bid with and without a PLA requirement. Advocates of fair and open competition were not surprised when the PLA-free project experienced three times as many bidders and bid prices that were 16 percent lower than when the project was bid with a PLA mandate, saving taxpayers more than $6.2 million.
Helping merit shop contractors respond to more than 250 surveys issued by federal agencies to determine if a PLA is appropriate for a federal project has been another effective strategy in the fight against PLAs. A robust response from the merit shop contracting community resulted in no PLA requirements on any surveyed projects.
More importantly, ABC’s campaign prevented the expansion of Executive Order 13502 onto federal projects costing less than $25 million, as well as thwarted an additional push for costly PLA mandates on private, state and local projects receiving federal assistance.
Since President Obama issued Executive Order 13502, 20 states have responded to the threat of discriminatory PLA mandates and preferences by adopting legislation or executive orders banning government-mandated PLAs on state, local and publicly funded projects, bringing the total number of states to enact such measures to 23.
To date, Nevada, West Virginia and Arkansas enacted laws in 2015 prohibiting state government entities from requiring contractors to sign a PLA or other agreements with labor unions as a condition of performing work on public construction projects. A total of 23 states have enacted laws and executive prohibiting government-mandated PLAs and 20 states have taken action since President Obama issues EO 13502.
Dozens of communities across the country also have enacted similar rules for public works contracting.
These efforts ensure a level playing field, increase competition, reduce costs and eliminate cronyism in public works contracting at the local and state level.
However, some states controlled by union-friendly Democrats have enacted legislation or executive orders pushing the use of PLAs on state and state-assisted projects. In addition, federal agencies have encouraged state and local governments to require PLAs on billions of dollars worth of state and local projects receiving federal money and other forms of federal assistance.
While our campaign is making remarkable progress, lawmakers requiring and encouraging the use of PLA mandates cost taxpayers a fortune and harm qualified merit shop contractors and their skilled trades employees.
Continuing the Fight
Faced with the last 18 months of President Obama’s discriminatory pro-PLA policies, ABC will continue to make defending fair and open competition in public contracting a top priority. In the 114th Congress, ABC is promoting the Government Neutrality in Contracting Act (H.R. 1671/S. 71) and similar language in appropriations bills with a diverse coalition of organizations, which would restore a level playing field in federal contracting by preventing entities procuring federal and federally assisted projects from requiring PLAs as a condition of winning a taxpayer-funded contract.
ABC will continue to complement effective legislative, legal and regulatory strategies with a communications and grassroots campaign to educate federal agency procurement officials, lawmakers, industry stakeholders, the media and taxpayers about the harmful effects of special interest PLA schemes.
The merit shop contracting community can overcome these discriminatory PLA schemes as long as industry leaders remain diligent and continue to educate lawmakers and stakeholders about this campaign until a political or legislative solution is achievable.
5 Responses to ABC Continues Successful Fight Against Government-Mandated Project Labor Agreements
Here in California, we are getting demolished. Help.
1. provide uniform wages, benefits, overtime pay, hours, working conditions, and work rules for work on major construction projects;
2. provide contractors with a reliable and uninterrupted supply of qualified workers at predictable costs;
3. ensure that a project will be completed on time and on budget due to the supply of qualified labor and relative ease of project management;
4. ensure no labor strife by prohibiting strikes and lockouts and including binding procedures to resolve labor disputes;
5. make large projects easier to manage by placing unions under one contract, the PLA, rather than dealing with several unions that may have different wage and benefit structures;
6. may include provisions to recruit and train workers by requiring contactors to participate in recruitment, apprenticeship, and training programs for women, minorities, veterans, and other under-represented groups (this is a common CWA provision);
7. reduces misclassification of workers and the related underpayment of payroll taxes, workers compensation, and other requirements;
8. may mean a larger percentage of construction wages stay in state; and
9. may improve worker safety by requiring contractors and workers to comply with project safety rules.
PLA proponents note that the positive impact of creating career paths for women, minorities, veterans, and other under-represented populations (a common CWA component) may not be easily measured in the short term. But they say that developing qualified workers in the construction trades, and including people who historically were underrepresented in the trades, has a positive long-term economic benefit for the individuals who receive the jobs and for the construction industry as a whole.
The article states PLA free projects experienced 16 percent lower bid prices, you did not state that the project construction managerial company had profits yielding an additional 16 percent, so, contractors and workers get beat down as usual, how about telling the complete truth!!!!!
In the New Hampshire DOL Job Corps Center example used in this post to illustrate the costs of bids with a PLA and without a PLA, the winning contractor bid price when the solicitation was included without a PLA mandate was 16 percent less than what the government was going to pay during an earlier round of bidding when the PLA was required. These are actual bid numbers and have nothing to do with profit. I am afraid your argument doesn’t make sense on many levels.
I take issue with many aspects of your pro-PLA talking points, but appreciate the comment. Many of the alleged benefits of a PLA can be achieved without a PLA and without typical PLA provisions that discriminate against 86 percent of the U.S. construction workforce and drive up construction costs so taxpayers are getting four schools, bridges and hospitals for the price of five. Typical PLA provisions harming merit shop contractors and hard hats can be found here: http://thetruthaboutplas.com/get-the-truth/