PLA Mandate Legislation Introduced in Baltimore City Council

0 February 25, 2020  State & Local Construction

As reported last month in the Baltimore Sun (“Baltimore Council bill would require union agreements before contractors win major city projects,” 1/27/20), a bill introduced in the Baltimore City Council by Councilmember Shannon Sneed and Council President Brandon Scott would make sweeping changes to the City of Baltimore’s procurement laws. The proposed ordinance, File 20-0488, would impose government-mandated project labor agreements on any construction contract valued at $25 million or more. The same mandate would also apply on any long-term capital improvement plan that involves construction projects at multiple locations if the total value of the project is valued at more than $15 million.

Councilmember Sneed and President Scott are both candidates in the 2020 Baltimore mayoral election.  Scott was endorsed by the Laborers Union International of North America in his mayoral candidacy Jan. 6, 2020, just weeks before co-introducing the bill with Councilmember Sneed.

If passed, this anti-competitive measure would end open, fair and competitive bidding on public works projects in the City of Baltimore and drive up the cost of construction. In fact, newly released data shows that PLAs can inflate the cost of construction by up to 20 percent, according to a study from the Beacon Hill Institute that examined the cost of school construction in Connecticut, which means hundreds of millions of dollars in projects annually would be subject to unnecessary cost increases if the City Council adopts this policy.

ABC Baltimore and the Maryland Minority Contractors Association (MMCA) are leading efforts opposing the bill. In their partnership, ABC Baltimore and the MMCA produced this video of member contractors discussing the negative impacts of the bill, including shutting out 90% of the city’s workforce.

This is not the first instance where the Baltimore City Council has debated a PLA mandate on publicly financed construction projects in the city. In 2010, the Council proposed a similar ordinance that would have required PLAs on projects valued at $5 million or more. That legislation never made it into law after widespread pushback, including opposition from the Baltimore City Solicitor and minority contractors that spoke out against the discriminatory nature of PLA mandates.

If passed and signed, the proposed law would go into effect 30 days after enactment.

When mandated by governments, PLAs discourage nonunion contractors and subcontractors—which employ 94% of Maryland’s construction workforce—from competing for contracts to build projects funded by taxpayer dollars.

Government-mandated PLAs force contractors to follow union work rules and hire most or all workers on a jobsite from specified union hiring halls and union apprenticeship programs instead of journeyman and apprentices already employed by their company. That limits the pool of bidders, since nonunion contractors and even some union contractors don’t want to abandon their existing employees, workforce development programs and quality-control practices—key components of a safe and productive workplace—for strangers from union halls governed by unfamiliar rules.

Government-mandated PLAs also cause nonunion workers (and some union workers) to lose an estimated 20% in wages and benefits unless they join a specific union, pay membership dues and meet the union benefits plan’s vesting requirements. It’s a form of wage theft that will harm working families employed in Baltimore’s construction industry, as well as Baltimore taxpayers.

Union advocates argue government-mandated PLAs are needed to prevent strikes and jobsite disruptions on a construction projects. However, arguments that government-mandated PLAs—which essentially grant unionized contractors and unionized labor a monopoly on public works projects—are needed to prevent strikes caused by unions is tantamount to extortion. In addition, strikes in this market are extremely rare. According to a list of construction industry work stoppages recorded by the Federal Mediation and Conciliation Service, there have been two strikes in Baltimore and only five construction industry work stoppages in Maryland since 1984. The threat of strikes caused by construction unions, who represent less than 1 out of 10 employees in Maryland’s construction industry, is not a legitimate rationale to mandate PLAs, eliminate competition and increase costs.

UPDATE: The Baltimore Sun published a March 5 op-ed by ABC Baltimore President Mike Henderson, “Proposed labor agreement requirement would hurt contractors doing business in Baltimore,” highlighting how this measure will choke off workforce development and career pipelines catering to city residents:

“This legislation is doubly disappointing because we are already working to improve job prospects in construction for city residents. Our organization has made a multi-million-dollar commitment to consolidate all of our training and administrative operations and move into Baltimore from Baltimore County to create the Construction Education Academy of Greater Baltimore (our grand opening will be later this spring).

We already train more than 2,500 construction professionals a year in everything from carpentry and electrical apprenticeship to safety and project management. We are betting that by having our own place, we can double those numbers and begin to make a real dent in the area’s shortages of skilled workers.

And we’re not exactly neophytes to the Baltimore; through Project JumpStart we’ve been training city residents in underserved communities for the past 14 years and have seen literally hundreds of our graduates go on to apprenticeship school and become licensed journeypersons. Many have moved up the ranks to superintendent and beyond.

This legislation threatens that entire enterprise.

By leaving the county for the city, we weren’t looking for a pat on the back, but we certainly didn’t expect a punch to the gut. We believe in Baltimore, its future and its people and can only hope that when the final votes are tallied, the same can be said for the City Council and all its members.”

The Baltimore Sun’s March 9 article, “Minority contractors protest Baltimore City Council bill that would require union agreements for major contracts,” tells more about the controversy behind this legislation, which is expected to receive a hearing in the Labor Committee on March 19. Stay tuned for more updates.

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