The Truth About Project Labor Agreements

On Sunday, The Pittsburgh Post-Gazette published a strong #NoPLAs letter to the editor by ABC Western Pennsylvania President Pete Gum in response to a pro-project labor agreement (PLA) op-ed submitted by Dennis Martire, vice president and Mid-Atlantic regional manager of the Laborers’ International Union of North America (LiUNA):

Government-mandated project labor agreements are anti-competitive and costly
October 11, 2015

In his op-ed promoting the use of project labor agreements, Laborers International Union Vice President Dennis Martire chastises Associated Builders and Contractors for championing legislation restricting the use of anti-competitive and costly government-mandated PLAs on taxpayer-funded construction projects in 23 states and dozens of localities across the country (“Here’s How to Fill Those Construction Jobs,” Oct. 4).

We appreciate the recognition of ABC’s key role in defending fair and open competition in public contracting. Helping public construction owners deliver the best possible construction project at the best possible price to taxpayers is something to celebrate, not be ashamed of.

Research and studies have found PLA mandates increase costs by 12 to 18 percent compared with similar non-PLA projects, which should come as no surprise to anyone familiar with terms in PLAs that stifle competition from local and qualified merit shop contractors and needlessly steer contracts to firms using unionized labor.

Strangely, Mr. Martire claims a PLA is the only way to meet a skilled workforce shortage in the construction industry. But the truth is using a PLA to discriminate against the 80.8 percent of Pennsylvania’s construction workforce who choose not to belong to a union can only make a labor shortage worse.

Unfortunately, instead of competing fairly on a level playing field, union bosses like Mr. Martire must rely on misinformation and political connections to lobby governments to mandate PLAs on projects to regain lost market share. Taxpayers, construction firms and the construction workforce of Pittsburgh and the commonwealth would benefit from ABC-supported public policy encouraging more competition and less cronyism.

R. PETE GUM
President
ABC of Western PA
Hampton

This letter to the editor, submitted to the Pittsburgh Post-Gazette, also takes issue with Martire’s op-ed:

Government-mandated PLAs Will Contribute to Construction Worker Shortage, Not Solve it

Contrary to Laborers Union Vice President Dennis Martire’s tired claims (“Here’s how to fill those construction jobs,” 10/4/15), union-favoring government-mandated project labor agreements (PLAs) will contribute to a construction labor shortage because they discourage competition from qualified merit shop contractors and their skilled local employees.

Government-mandated PLAs typically force contractors to hire most or all of their craft employees from union hiring halls instead of their existing employees; follow inefficient union work rules; hire apprentices exclusively from union apprenticeship programs; and pay into union benefit plans on behalf of employees, even if they have their own qualified benefits programs. PLAs also force merit shop employees to pay union dues and forfeit benefits earned during the life of a project unless they join a union and become vested in union benefit plans.

Union bosses like Martire are upset that Associated Builders and Contractors (ABC) exposes back-room deals between union lobbyists and union-friendly public officials who steer contracts to union contractors via government-mandated PLAs.

For example, when Martire was a board member of the Metropolitan Washington Airport Authority (MWAA), which is constructing the Silver Line rail project in Virginia referenced in his op-ed,  ABC exposed his attempt to mandate a PLA on phase 2 of the project that would have unethically pushed multibillion dollar contracts to builders signatory to the very labor union he represents.

This conflict of interest and other violations of public trust forced Martire off the MWAA board and is one of the key reasons why Virginia became one of 23 states to pass a pro-competition and pro-taxpayer measure restricting government-mandated PLAs.

Ben Brubeck, ABC Director of Labor and Federal Procurement

TheTruthAboutPLAs.com readers may remember Martire for his exploits pushing a PLA mandate (foiled) and then a PLA preference (foiled again!) on an estimated $2.8 billion construction package to build Phase 2 of the $5.8 billion Silver Line metro rail project in Northern Virginia before he was ousted from the Metropolitan Washington Airport Authority (MWAA) board of directors.

It is worth noting Martire’s op-ed bends the truth with respect to the use of PLAs on both phases of the Silver Line project, which is odd considering he served on the MWAA committee responsible for overseeing Phase 1 construction and procuring contracts to build Phase 2 of the Silver Line. Martire claims this:

The stories of how PLAs reward workers and help contractors can be found every day in Pittsburgh and elsewhere. The first phase of the metro Silver Line extension linking Washington, D.C., to Dulles airport was completed with a PLA. There were no serious injuries and the project was finished on budget and on time. After a political squabble, the second phase is underway without a PLA and is delayed and severely over budget.

Contrary to Martire’s claim, Phase 1 of the Silver Line project was not subject to a government-mandated PLA. It was subject to a voluntary PLA adopted by Dulles Transit Partners (DTP) (see point 8 under Subcontracting), the joint venture that constructed Phase 1 of the Silver Line, which ensured union labor was used for work self-performed by DTP. The voluntary Phase 1 PLA did not apply to subcontractors and MWAA could not identify any subcontractors that voluntarily signed the PLA. Note: DTP was the name of the joint venture between Bechtel Infrastructure Inc. and Washington Group International (now URS) that served as the Phase 1 prime contractor.

Phase 1 of the Silver Line certainly did not finish on time or on budget. With a project of this size and complexity, it is difficult to blame the PLA for the project’s delays and cost overruns (even if it had been mandated). It is even more difficult, if not impossible, to attribute any of the project’s success to the voluntary PLA, because it’s limited scope did not impact many of the Phase 1 construction workers. In short, conclusions about the pros and cons of a government-mandated PLA cannot be made based on the results of Phase 1.

It has been well-documented that Phase 2 bids benefitted from robust competition free from PLA mandates. The $1.178 billion design/build Package A contract was awarded May 14, 2013, to Capital Rail Constructors, a joint venture consisting of Clark Construction Group and Kiewit Infrastructure South Co., at a price $222 million to $422 million less than expected.

“We are very encouraged by the price submitted by Capital Rail Constructors and the potential savings it includes,” said Pat Nowakowski, executive director of the Dulles Corridor Metrorail Project. “This has been a very successful competitive procurement process. The winning proposal is well below our original estimates of $1.4 billion to $1.6 billion for this portion of the project, which hopefully will allow us to pass on additional savings to users of the Dulles Toll Road.”

Just think how much Phase 2 would have cost taxpayers with a shady PLA mandate or preference, if not for stakeholders smoking out the backroom corruption?

Martire’s claims about Phase 2 suffering from delays and overruns due to a lack of a PLA also don’t pass the sniff test. The Washington Post reported the prime contractor voluntarily negotiated a PLA with unions for work self-performed by the prime contractor and did not require subcontractors to execute the PLA.

Simply put, the Silver Line facts undermine Martire’s pro-PLA arguments. Martire has no credibility.

LiUNA union leader Dennis Martire’s pro-Project Labor Agreement arguments have no credibility.