The Truth About Project Labor Agreements

Today the merit shop contracting community hit an important legislative milestone in its campaign for fair and open competition in government contracting.

ABC issued a press release today applauding the House Oversight and Government Reform Committee for passing the Government Neutrality in Contracting Act (H.R. 1671), introduced by Rep. Mick Mulvaney (R-S.C.). With nearly 100 cosponsors and backing by a broad coalition of construction and business groups included in this letter of support submitted to committee lawmakers, this good-government proposal would help increase competition and curb waste and favoritism in the procurement of construction contracts.

As described in the press release and in Rep. Mulvaney’s remarks below, H.R. 1671 would prohibit federal agencies and recipients of federal funding from mandating project labor agreements (PLAs) or using PLA preferences during the procurement of federal and federally assisted construction contracts:

Generating support for the Government Neutrality in Contracting Act is part of ABC’s successful campaign to defeat federal PLA mandates and preferences following President Obama’s 2009 pro-PLA Executive Order 13502.

Update 3/23/16: The Congressional Budget Office released its cost estimate on H.R. 1671 on 2/22/16 and the House Oversight and Government Reform Committee issued its Committee Report on H.R. 1671 on 3/23/16. Once the committee filed the report, the bill moved to the union calendar where the bill can be called up for floor consideration at any time but additional cosponsors cannot be added.

ABC News Release
Contact: Jeff Leieritz (202) 905-2104,  [email protected]
For Immediate Release
PERMALINK

ABC Lauds Bill to Increase Competition on Construction Contracts
Government Neutrality in Contracting Act Prohibits Project Labor Agreement Mandates in Federal Procurement

WASHINGTON, D.C., Jan. 12 – Associated Builders and Contractors (ABC) today applauded the House Committee on Oversight and Government Reform’s favorable reporting of the Government Neutrality in Contracting Act (H.R. 1671) out of committee. The bill, introduced by Rep. Mulvaney (R-S.C.), will increase fair and open competition on federal and federally funded construction projects by preventing federal agencies from requiring contractors to sign project labor agreements (PLA) as a condition of winning federal or federally assisted construction contracts.

“Project labor agreement mandates restrict competition from qualified contractors and drive up costs to taxpayers by excluding the 86.1 percent of the U.S. private construction workforce that chooses not to belong to a labor union from working on these projects unless they join a union or pay union dues and fees,” said ABC Director of Labor and Federal Procurement Ben Brubeck. “By removing federal agencies’ ability to require these discriminatory agreements, Rep. Mulvaney’s commonsense legislation will increase competition on taxpayer-funded construction projects and ensure that taxpayers get the best possible construction at the greatest value. Today’s action by the committee follows the momentum built at the state and local level to eliminate these crony contracting schemes.”

ABC sent a letter to members of the committee ahead of today’s markup and has long opposed PLA mandates as discriminatory and anti-competitive backroom deals that increase costs to taxpayers. Studies indicate government-mandated PLAs increase the cost of construction projects in numerous markets between 12 and 18 percent compared to similar non-PLA projects. When mandated by a government agency on a taxpayer-funded project, a PLA typically ensures construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; obtain apprentices through union apprenticeship programs; follow inefficient union work rules; pay into union benefit and multi-employer pension plans; and force workers to pay union dues and/or join a union as a condition of employment.

In 2009, President Obama issued Executive Order 13502, which strongly encourages the use of government-mandated PLAs on federal and federally funded construction projects. In response, 20 states have enacted legislation or executive orders restricting PLA requirements and preferences on state and local projects since 2011.

In 2015 three states took action to guarantee free and open competition on taxpayer-funded construction projects. West Virginia banned PLA mandates in March when Gov. Earl Ray Tomblin became the first Democratic governor to sign a bill prohibiting PLA mandates. Arkansas Gov. Asa Hutchinson signed into law a bipartisan bill prohibiting PLA mandates that passed both the State Senate and House of Representatives in unanimous votes in March. And Nevada Gov. Brian Sandoval signed legislation to make Nevada the 23rd state to restrict PLA mandates on state and state-assisted projects in some capacity in June. However, Maine’s 2011 law sunset in October 2015, dropping the number of states back to 22.

In addition, on March 27, 2015, the U.S. Senate passed Amendment 665, offered by Sen. Flake (R-Ariz.) to the Senate’s budget resolution (S. Con. Res. 11), which expresses the sense of the Senate that construction contracts should be awarded without discrimination based on contractors’ agreements with labor organizations. The House passed the budget conference report, which also included this anti-PLA language, 226-197, on April 30.

Sen. Vitter (R-La.) has introduced companion legislation, S. 71, which has been referred to the Senate Homeland Security and Government Affairs Committee and awaits further action.

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Associated Builders and Contractors (ABC) is a national construction industry trade association representing nearly 21,000 chapter members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically, profitably and for the betterment of the communities in which ABC and its members work. Visit us at abc.org.