U.S. Department of Labor Job Corps Center Opening Demonstrates Value Of Open Competition

0 October 26, 2015  Federal Construction, Open Competition Works

Last week, the U.S. Department of Labor (DOL) held a ribbon-cutting ceremony for the opening of its $32 million Job Corps Center in Manchester, N.H. The on-time and on-budget delivery of the federal project is a reminder of the benefits of fair and open competition, free from anti-competitive and costly union-favoring project labor agreement (PLA) mandates.

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TheTruthAboutPLAs.com readers may recall the Job Corps Center was embroiled in a controversy over the DOL’s PLA requirement, which pitted pro-PLA lobbyists and union bosses versus New Hampshire taxpayers, lawmakers and members of the merit shop contracting community opposed to the PLA scheme.

In 2013, two New Hampshire newspapers ran pieces critical of New Hampshire Building and Construction Trades Council President Pat Casey’s misguided attacks against Sen. Kelly Ayotte (R) and the merit shop contracting community for their justified opposition to the DOL’s PLA mandate.

An editorial in The Foster’s Daily Democrat blasted Casey’s attacks and op-ed (“Sen Ayotte is proven correct,” 9/1/13):

We don’t challenge Casey’s right to object to losing union jobs because Ayotte helped convince President Obama to lift the PLA requirement. He has every right to argue his union members can do a better job….[snip]

Where Casey goes astray, however, is to depend on federal laws rather than making his case in an open and competitive marketplace.

But Casey knows his case is weak; the public has lost faith in unions as has the once rank-in-file. In the 1950s union membership accounted for more than 30 percent of the workforce. Today that number nudges just past 11 percent in 2012.

Casey also misleads when he writes: “She (Ayotte) falsely claimed these (PLA) protections would favor out-of-state contractors and make it harder for New Hampshire workers to compete for jobs.”

In fact that is what happened. Before lifting the PLA, Sen. Ayotte was told late last year, “that only three companies bid on the work, all from out of state.”  As it turns out — without the PLA — Eckman Construction Company, a Bedford firm, has been awarded the contract.

That means Ayotte was correct: lifting the PLA did benefit New Hampshire workers.

An opinion piece published in The Concord Monitor by ABC NH/VT President Mark Holden sets the record straight on Casey’s misleading campaign and explains why PLA-free competition is constructive (“My Turn: Union’s criticism misses mark on Job Corps project,” 8/31/13):

Re “Hypocrisy from Ayotte on Jobs Center” (Monitor Forum, Aug. 28):

It’s puzzling why New Hampshire Building and Construction Trades Council President Joe Casey is attacking Sen. Kelly Ayotte and New Hampshire’s merit shop contracting community for fighting for a fair shot to compete to win federal contracts to build the U.S Department of Labor’s new $31.6 million New Hampshire Job Corps Center in Manchester.

By opposing the union-favoring, project-labor agreement mandated by the labor department, we increased competition from local contractors, created jobs for New Hampshire construction tradespeople, saved taxpayers millions of dollars and fought special interest favoritism that is plaguing federal contracting.

If anyone should be criticized for delays related to the Job Corps Center, it’s organized labor and its cronies in government for requiring a project-labor agreement in the first place.

According to Federal Election Committee data, the 17 largest national construction trade unions donated nearly $65 million to federal candidates during the 2011-12 election cycle, earning the distinction as the No. 1 overall hard PAC dollar donor to the Democratic Party. It was a thank-you note to President Obama, who after 16 days in office, signed a Feb. 6, 2009, executive order encouraging federal agencies to mandate project-labor agreements on federal construction projects exceeding $25 million.

A project-labor agreement typically requires contractors to hire union labor, follow inefficient union work rules and pay into union benefits plans even if firms have existing benefits plans. Additionally, nonunion tradespeople are forced to pay union dues, and they forfeit benefits earned during the life of the project unless they join a union and become vested in union benefit programs.

It’s no surprise such red tape and worker exploitation discourages competition from qualified merit shop firms and tradespeople in New Hampshire, where just 10.7 percent of the construction workforce belongs to a union.

In short, a government-mandated project-labor agreement is a scheme concocted by politicians and Big Labor to steer government contracts to select unionized builders and create jobs exclusively for union members at the expense of everyone else – which is exactly why federal contractors, with help from my organization, filed a bid protest with the Government Accountability Office against the labor department’s anti-competitive requirement.

In the face of a certain loss before the GAO, the labor department cancelled the solicitation in 2009. Rather than create jobs immediately and break ground without a project-labor agreement, the department waited more than two years to reissue the project’s solicitation – again with a project-labor agreement –while sinking $428,000 into taxpayer-funded studies justifying the use of such an agreement on the Job Corps Center and other federal projects.

Again, we challenged the project-labor agreement in 2012 and prevailed.

A comparison of contractor bids submitted to the labor department with and without a project-labor agreement requirement proves this was a fight worth having.

The number of bidders on the project increased from three to nine when the project-labor agreement requirement was removed. The average bid dropped from $39 million with a project-labor agreement to $35 million without a project-labor agreement. The contract was awarded to a New Hampshire firm that bid $31.635 million without a project-labor agreement, saving taxpayers nearly $6.237 million (16.5 percent) compared with the lowest project-labor agreement bid from a Florida firm.

These facts are an embarrassment to project-labor agreement proponents, which is why Casey has to rely on falsehoods and politically motivated attacks.

In contrast to Casey’s rhetoric, all the project’s tradespeople must be paid an hourly wage and benefit rate exceeding a Department of Labor-determined rate typically consistent with above-market local union rates. Local contractors and union and nonunion tradespeople will build the Job Corps Center with a commitment to quality and safety in accordance with federal rules and regulations.

It is time to put this controversy behind us and let the new Job Corps Center serve as a reminder that PLA-free competition is the best way to serve all taxpayers instead of only well-connected special interests.

Sen. Ayotte deserves praise, not criticism, for advocating for fair and open competition in federal contracting.

(Mark Holden is president of Associated Builders and Contractors, New Hampshire/Vermont.)

ICYMI, here are the bid results referenced in the op-ed, which provides actual data of a federal project bid with and without a PLA mandate, demonstrating the common-sense benefits of free and open competition.

Sen. Ayotte and stakeholders who fought for open competition deserve credit for opposing the PLA scheme instead of turning a blind eye to corruption. In the end, this effort saved taxpayers millions of dollars and resulted in New Hampshire construction workers and companies building a project in their own community.

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