Washington Times Publishes TheTruthAboutPLAs Op-Ed Celebrating Kentucky’s Fair and Open Competition Law

0 April 1, 2019  Featured, State & Local Construction

The Washington Times published this op-ed by TheTruthAboutPLAs.com touting the benefits of fair and open competition following the passage of a Kentucky law (HB 135) restricting controversial government-mandated project labor agreements on state and local public works construction projects (“Let’s welcome all Americans to rebuild America’s infrastructure,” 4/1/19):

On March 21, Gov. Matt Bevin, R-Ky., signed HB 135, the aptly named Fair and Open Competition Act, making Kentucky the 25th state to invite all of its construction industry to compete for taxpayer-funded contracts to build state and local public works projects like schools, roads and bridges.

It’s a win-win for taxpayers and the construction industry. The Fair and Open Competition Act helps taxpayers get the best possible construction projects at the best possible price by increasing competition. It will create jobs for local construction workers and qualified small businesses seeking to rebuild their communities.

As Congress and the Trump administration hash out a plan to rebuild America’s crumbling infrastructure and address our country’s estimated $2 trillion, 10-year infrastructure funding gap, it would benefit taxpayers and the economy if President Trump enacted a similar policy fostering the robust competition and fiscal responsibility Americans deserve from the federal government’s investment in infrastructure.

Unfortunately, many lawmakers in blue states and cities prefer to subject federally funded public works projects to anti-competitive, costly and controversial project labor agreement requirements.

When mandated by a government entity, PLAs typically force builders, whether union or not, to follow inefficient union work rules and hire most or all workers on a jobsite from union hiring halls and apprenticeships. That effectively limits the pool of bidders, since nonunion contractors don’t want to abandon their quality control practices and existing journeymen and apprentices — a key competitive advantage and ingredient for a safe and productive workplace — for strangers from union halls governed by unfamiliar rules.

The negative impact of government-mandated PLAs on nonunion construction workers, who compose 87.2 percent of the U.S. private construction workforce, is especially severe. They lose the wages and benefits contributed to union plans during the life of a typical PLA project unless they join a union and/or pay union fees and meet plan vesting requirements.

The stated intent of many lawmakers promoting government-mandated PLAs is purely political — to create jobs for union labor and steer contracts to unionized contractors supporting their campaigns. But the effect is to drive up costs.

A May 2017 study by the Beacon Hill Institute in Massachusetts found that PLAs raised the base construction cost of Ohio schools by 13 percent—$23 per square foot in 2016 prices—relative to non-PLA projects. Studies on the effect of PLA mandates on CaliforniaNew JerseyNew York, Connecticut, and Massachusetts school construction all reached similar conclusions — PLAs increase the cost of construction between 12 and 18 percent.

Take a specific example — a federal Job Corps center in Manchester, New Hampshire. The Obama administration’s Department of Labor sought bids to build the center in 2009. While the project originally had a PLA requirement, a merit-shop contractor filed a successful bid protest against it. When the PLA mandate was removed, three times as many bids came in, at prices 16 percent lower. That saved taxpayers $6 million.

Proponents of PLAs claim they prevent cost overruns and delays by discouraging strikes. As Trump knows from experience, however, the mere presence of a PLA won’t prevent union members from going on strike. In 2006, three unions building the Trump hotel in downtown Chicago walked off the job, despite a no-strike clause in the project’s PLA.

In 2001, former President George W. Bush signed executive orders that barred government-mandated PLAs on federal and federally assisted projects, which former President Barack Obama reversed in 2009. Obama’s executive order encourages PLA mandates on federal projects over $25 million and allows state and local government recipients of federal funds to require them.

Surprisingly, the federal government has rarely mandated PLAs on large-scale projects — presumably because of their exclusionary and costly effect. Thanks in large part due to successful legal challenges and advocacy efforts by the construction industry led by Associated Builders and Contractors, from fiscal year 2009 to 2018, just $1.25 billion out of nearly $83 billion worth of large-scale construction projects were subject to PLAs and none have occurred under the Trump administration.

However, union-friendly blue cities and state governments in California, Connecticut, Hawaii, Illinois, New Jersey, New York, and Washington have policies encouraging PLAs on local and state projects often financed with federal investments, further wasting valuable federal tax dollars for infrastructure.

It should come as little surprise that PLAs have been mandated on budget-busting federally assisted boondoggles like Honolulu’s Rail Projectthe California High Speed Rail to nowhere and Seattle’s Highway 99 tunnel, which suffered from delayssafety issues, cost overruns, strikesdiversity concerns, and worse, despite the alleged promises of a PLA.

It is unclear just how many similar federally assisted projects are subjected to government-mandated PLAs, but a snapshot of data collected by just one federal agency, the Federal Highway Administration, shows PLAs were mandated by blue states and localities on more than 400 contracts valued at $10.2 billion since May 2010. Although this is a limited snapshot of data, can America continue to afford such waste, given our infrastructure needs?

America deserves efficient infrastructure investment free from special-interest handouts. By following the lead of 25 states and enacting a common-sense policy restricting government-mandated PLAs on federal and federally assisted projects, Trump can begin rebuilding America’s infrastructure with the help of all Americans and qualified businesses at a price that’s right for the taxpayer.

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