Sacramento Publically-Owned Utility Lets Staff Make Key Contracting Decisions – Including PLA Mandates – with No Board or Ratepayer Scrutiny

September 3, 2010 – 11:46 am

Last night (September 2), the board of directors of the Sacramento Municipal Utility District (SMUD) had an unexpected and unscheduled hour-long inquiry into its contracting practices, including district mandates for contractors to sign project labor agreements (PLAs) with unions in order to work on two specific large projects.  We learned that the elected board of this publicly-owned utility allows staff to make key decisions regarding contracting practices without input or scrutiny from the board or the ratepayers of this district.

First, some brief historical background on PLAs at the Sacramento Municipal Utility District:

In the mid-1990s, prime contractors signed PLAs with unions for three small SMUD power plants (Carson Ice-Gen Plant, Proctor & Gamble Company Generation Plant, and Campbell Soup Cogen).  I’ve heard people cite a variety of reasons why these PLAs were signed, but ABC was not active in fighting these PLAs and has little background documentation.

At its November 21, 2002 meeting, the SMUD board voted 6-1 to require contractors to sign a PLA to build the Cosumnes Power Plant.  Earlier in 2002, California Unions for Reliable Energy (CURE) had become an intervenor in the California Energy Commission permitting process for this power plant.  Some SMUD officials and board members acknowledged at the time that CURE would delay permits to build the power plant unless contractors were forced to sign a union agreement.

The PLA was tainted in February 2005, when SMUD removed the unionized general contractor from the project because of delays, poor workmanship, and a shortage of workers in the pipefitter trade.  Unions had promised in Sections 1.7 and 1.8 of the PLA “to ensure that a sufficient supply of skilled craft workers are available at the Project, that all construction work and related work performed on the Project shall proceed continuously, without interruption, in a safe and efficient manner…and to secure optimum productivity.”  (Empty promises, as usual – obviously the unions had no ability to ensure these conditions.)

SMUD then bid out two large wind projects in the mid-2000s – Solano Wind Phase I and Phase II – under fair and open competition without PLA requirements.  But in 2010, when unions were desperate for work, bid specifications for the Solano Wind Phase III project and the $80-100 million East Campus Operations Center (Corporation Yard) included PLA requirements.

ABC and other supporters of fair and open competition had an opportunity to speak against the PLAs when the SMUD management decided to reject all four bids for the East Campus Operations Center and rebid the job.  At the September 2 board meeting, several association representatives and contractors asked the SMUD board during the general public comment period to eliminate the PLA requirement in bid specifications when the project was rebid.

We challenged the SMUD board to ascertain if PLAs cut competition and increase costs by taking the opportunity to bid the project with a PLA and without a PLA.  (During the same public comment period, three unhappy subcontractors that were part of the winning bid explained to board members how their companies lost time, money, and bidding opportunities as a result of the rejection of all bids.)

Although state law prohibited the board from taking action on an item brought up during public comment, the board asked SMUD staff to elaborate on their decisions to reject all bids and require contractors to use a PLA.  Staff reported that bid protests were becoming routine on public works in Northern California with contractors desperate for work.  All three losing bidders filed bid protests with staff against the winning bidder (Turner Construction), but one bid protest (from McCarthy Construction) contained among its 13 charges one claim that legal counsel had determined was valid and would result in “substantial litigation risk.”

Staff also revealed publicly that the SMUD general manager has full authority to decide when the agency should require its contractors to sign PLAs (a condition I do not believe is allowed by any other California local government).  In other words, the elected SMUD board members do not have to make public votes on PLAs and thus can evade direct accountability to SMUD ratepayers for the financial consequences of PLAs.

What ABC is seeking now is public accountability for the SMUD board members.  Why does the board give staff full authority to negotiate and approve Project Labor Agreements?  How can the board allow staff to reject all bids for an $80 million project without any public discussion or scrutiny of the decision?  Is SMUD being open to its ratepayers about how it conducts business as a publicly-owned utility?

Here is one solution to the problem:

On March 22, 2007, the governor of Missouri signed Senate Bill 339 into law, which states that a state or political subdivision considering a PLA shall publish a document titled “Intent to Enter Into a Union Project Labor Agreement” that establishes a rational basis upon which the state or political subdivision bases its intent to require a union-only project labor agreement for the project.  In addition, the law states that “No fewer than fourteen days but not more than thirty days following publication of the notice of a public hearing, the state or political subdivision shall conduct a public hearing on whether to proceed with its intent to require a union-only project labor agreement.” (See Missouri Revised Statutes: State Purchasing and Printing: Section 34.216.)

The board of the Sacramento Municipal Utility District should adopt this policy, promptly.

By Kevin Dayton | Posted in Uncategorized | Tagged , , , , , , , | Comments (0)

This is a Stick-up!

September 2, 2010 – 4:33 pm

There is an interesting story on Fox & Hounds Daily (California politics and business blog) about big Labor and their allies push for costly project labor agreements (PLAs) even on privately funded projects built to benefit society – like museums.

Here are the highlights with our emphasis added (L.A. to Eli Broad: ‘Stick ‘em Up’, 9/2/10):

It’s sickening to see the way Eli Broad is being mugged by Los Angeles.

Here’s a statesman who’s trying to make a gift to the city, and one that’s exceedingly generous. So you’d think the so-called leaders of Los Angeles County and the city would have the decency to say thank you.

Instead, they’re leveling the blued-steel barrel of government power at him and saying, “Stick ‘em up.”

Broad is being forced to march through L.A.’s band of brigands, paying a little extra here, a few million more there, and it’s stomach-churning to watch.

Broad’s gift, of course, is a downtown L.A. museum – that he would pay $100 million to build – that would display terrific art, which he would supply. And he’ll even endow it with $200 million to pay for its future operations. Got that? Broad’s gift would be akin to creating a city or county museum – an outstanding one – except he’s paying for all of it; taxpayers are getting a gift.

Well, Los Angeles County Supervisor Michael Antonovich didn’t see that. He saw a chance for a shakedown. There’s no reason for local governments to give Broad a $1-a-year lease for the land that Broad wants to build on, he said, asking, Why should we do a favor for some rich guy?

Well, here’s why: Broad wasn’t asking for a favor. He was requesting the same kind of consideration that cultural institutions from sea to shining sea have always received because cities and counties benefit tremendously from such museums. A dollar-a-year deal was given to the Norton Simon Museum in Pasadena and the Museum of Contemporary Art on Grand Avenue downtown (which is across the street from Broad’s proposed museum).

[snip]

But the holdup of Broad didn’t end there. The cutpurses down at the Community Redevelopment Agency told Broad he needs a big garage for his museum. Actually, the museum only needs 100 or so parking spaces, and it could lease those from nearby buildings, so, no, it doesn’t need a big garage at all. The CRA said Broad didn’t hear correctly. He needs a big garage.

So, without complaining, Broad agreed to loan the CRA $15 million to help pay for a 300-space garage under the museum. And Broad’s museum will lease parking spaces from the CRA. Money that the CRA can use to help repay the loan. Neat, huh?

But the CRA wasn’t done with Broad. At a recent meeting, the CRA required the museum be built under a Project Labor Agreement, which means it must be constructed with union labor.

Now, Broad would have done that anyway, but it provided Madeline Janis, who chaired the meeting for the CRA, a chance to let her union buddies take the stage and testify how they’d support the museum – so long as there was a PLA. (Does anyone else see an itty-bitty conflict in allowing Janis, who founded and oversees a union labor organization, to chair meetings in which the CRA becomes an unalloyed union-boosting agency?)

As they say, no good deed goes unpunished.

Visit our earlier posts for more information on the effort to ensure that public construction contracts are awarded based on open competition and value for taxpayers, and not special interest handouts to Big Labor.

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , | Comments (0)

Pittsburgh Area School District Approves Wasteful and Discriminatory PLA Requirement

September 1, 2010 – 4:24 pm

The Pittsburgh-area Penn Hills School Board this week approved a policy requiring contractors to sign a wasteful and discriminatory project labor agreement (PLA) as a condition of working on $150 million worth of upcoming school construction.

Here is an excerpt from Associated Builders and Contractors Western Pennsylvania Chapter’s August 31 press release:

PENN HILLS PLAYS FAVORITES AT THE EXPENSE OF STUDENTS

Pittsburgh, PA – At a special meeting last night, the Penn Hills School Board members voted 8-1 in favor of placing a project labor agreement (PLA) on their upcoming $130 million construction project, which goes to bid in a few weeks. The only member to vote against using a PLA and protecting taxpayer money and student education was Margie Krogh. The Board voted without having the final version of the agreement present, neglecting any source of fact-finding. This follows Chief Executive Dan Onorato’s statement earlier in the month that it was “probably wrong” to place PLAs on school projects.

Associated Builders and Contractors (ABC) of Western Pennsylvania expressed their grave concern over the Board’s decision to place a PLA on this project, and also for abandoning the information process. “This is what we’re fighting for – ensuring everyone is included in the process, which means minority and woman-owned small businesses,” said Eileen Watt, President of ABC. “Penn Hills has made it clear they want to push special interests behind closed doors, and this could result in a potential lawsuit if not rectified,” continued Watt. ABC confirmed they did not know about a PLA being discussed within Penn Hills School District.

“We have to trust school districts to use due diligence before signing agreements,” said Bob Glancy, Chairman of ABC and President of R.A. Glancy & Sons. “It’s unfortunate that Penn Hills is not serving their students and taxpaying citizens as positively as other districts, for example, McKeesport,” continued Glancy. Glancy is referring to a decision in July where the McKeesport Area School District rejected a PLA, 7-2, saving the taxpayers money and offering many opportunities to their diverse group of students, many of whom enter the construction industry and participate in ABC’s school-to-work program.

Here at TheTruthAboutPLAs.com, we are starting to sound like a broken record.  At a time where local officials are struggling with declining revenue and historic budget deficits, now is the worst possible time to waste taxpayer dollars on special interest handouts – like PLAs.

One other important point is that the press release above and accounts from the meeting indicate that Penn Hill School Board members didn’t get an opportunity to review the actual PLA their policy requires contractors to sign before working on the $150 million worth of projects.  In other words, the school board approved a requirement that contractors must sign a legally binding contract with Big Labor, but didn’t specify its terms.

This essentially gives Big Labor free reign to stack the PLA with any terms they want.  The contractors – both union and nonunion – have no recourse because the school board has required them to sign a PLA as a condition of working on the project.  If they aren’t willing to acquiesce to Big Labor’s demands, then union bosses refuse to sign the PLA and the contractors involved can’t work.  Situations like this are the primary reason many union contractors oppose PLAs.

Public construction projects should be about giving taxpayers the highest quality products at the best price.  Always.  PLA requirements make this objective nearly impossible to achieve.  Numerous studies show that PLAs increase construction costs by as much as 18 percent and discriminate against the 85 percent of the construction workforce that chooses not to join a labor union.

If you live in the Penn Hill School District, contact your school board members and tell them NO to wasteful and discriminatory PLAs.

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , , , | Comments (0)

Ohio School Facilities Commission Controversy – Latest Developments

August 30, 2010 – 5:25 pm

There are new developments in the controversy over Ohio School Facilities Commission (OSFC) Executive Director Richard Murray’s effort to drive lucrative school construction contracts to Big Labor.

As readers of TheTruthAboutPLAs.com are aware, the Ohio Inspector General’s (IG) office released a scathing report on August 5 that brought OSFC E.D. and former Laborers official Richard Murray’s efforts to promote Big Labor’s agenda to light.  The IG’s report outlines Murray’s advocacy for union-only project labor agreements (PLAs) and repeated displays of misfeasance in carrying out his duties.

This investigation and subsequent report was triggered by accusations from several local school officials that Murray not only used his position to pressure school districts into requiring PLAs on school projects, but also allowed union goons to berate local school officials until they agreed to Big Labor’s demands.

More information on the IG’s report and the numerous editorial boards that have called for Murray’s resignation are available in our earlier posts.

Last week, there were two interesting items of note in the Columbus Dispatch.

First, the Dispatch reported that the OSFC approved a policy that expressly prohibits Executive Director Murray’s behavior in support of Big Labor and PLAs in the future.

Here is an excerpt from the Columbus Dispatch’s coverage (“Facilities Panel: Chief Can’t Coerce Schools,” 8/27/10):

The Ohio School Facilities Commission unanimously approved a policy yesterday clarifying that it would be inappropriate for its executive director “to coerce or threaten retribution” to get school districts to use union construction firms.

[snip]

Murray said after the meeting that he didn’t consider the resolution an indictment of how he has run the commission since being picked by Gov. Ted Strickland last fall. Rather, the commission was responding to the inspector general’s recommendation that it take action to ensure neutrality, Murray said.

“That’s nonsense,” said Bryan Williams, a lobbyist with the nonunion Associated Builders and Contractors of Ohio. “Today’s resolution, which was rushed and premature, was absolutely a repudiation of the way Richard Murray has conducted himself on this job.”

[snip]

The inspector general accused Murray of pressuring local school officials to use union construction firms. In one instance, Murray sat silently while a union official with whom he’d arrived at the meeting used profanity and racial slurs to describe the work force that the district was using, according to the report.

Murray’s “reputation has been stained,” said state Sen. Gary Cates, a Republican from West Chester who is a nonvoting member of the commission.

“We have had those conversations with the executive director about how his performance could improve,” said voting member Hugh Quill.

If Executive Director Murray is looking for ways to improve his job performance, we humbly recommend that he start by putting the interests of taxpayers ahead of those of his buddies back at the union hall.

The item of note from last week’s Dispatch came in the form of a letter to the editor from a local resident that is fed up with the kind of political handouts that are plaguing the construction of the Ohio Schools for the Blind and Deaf.  As a direct result of PLA requirements on these projects, bids came in over $11 million (or almost 50 percent) higher than anticipated.

Here is an excerpt from the August 26 letter (“Do the Right Thing for Blind, Deaf Kids,” 8/26/10):

While reading about the Ohio School Facilities Commission, I never cease to be amazed at the politics and mudslinging involved, especially in building the schools for the blind and deaf children (“Blind, deaf schools project to be cut back,” Dispatch article, Aug. 14).

Whatever happened to doing the right thing? Are we too entrenched in Democrats vs. Republicans, unions vs. nonunion contractors and greed vs. a normal profit margin? It’s a sad day when “prime contractors probably withheld their best quotes” and “contractors did not want to tip their hand in this round,” as paraphrased from commission Executive Director Richard Murray.

Well, now the projects are being drastically scaled back while the campuses of both schools lie in ruins. The grounds have been torn up and will remain so while the powers that be take their sides. Do people not have consciences anymore?

There is no shortage of people who should be hanging their heads in shame over this fiasco. Is it still possible for decent people to step up and build school facilities that serve our blind and deaf children from throughout Ohio?

This letter’s sentiment is very important.  The writer simply wants to get the best construction product for the best price.

It is important for the citizens of Ohio to understand that the tactics described in the second paragraph of this letter are a direct result of the PLA requirements that Murray worked to put into place as a condition of winning these projects.

It is nearly impossible for prime contractors to accurately anticipate construction costs in a marketplace where the vast majority of subcontractors are essentially barred from bidding competitively.

Additionally, the number of subcontractors that actually bid on the project may be lower than those that say they would do so when the prime contractor begins to solicit bids as a result of a PLA mandate.  As any freshman economics student call tell you, a decrease in supply leads to an increase in price.  The result is higher construction costs.

All of this could be avoided if OSFC officials had allowed fair and open competition to flurish, instead of allowing Big Labor to browbeat local school officials.

Read our earlier posts for more information on this controversy.

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , , , , | Comments (0)

Op-Ed: Labor Agreements Raise Construction Costs

August 28, 2010 – 7:17 pm

In a guest op-ed published by the Rochester Democrat and Chronicle (“Labor Agreements Raise Construction Costs,” 8/28/10), Marci Miller of the Empire State Chapter of Associated Builders and Contractors has some thoughts on the impact of wasteful and discriminatory project labor agreements (PLAs) on local construction projects.

Here are the highlights:

Despite some claims to the contrary, these requirements are nothing more than handouts to one politically-connected special interest group — Big Labor. PLAs and the unnecessarily burdensome apprenticeship requirements are designed to ensure that only union labor has the opportunity to work on construction projects.

When public officials place these requirements on projects, they essentially preclude the 75 percent of local construction workers that choose not to join a labor organization from competing for projects funded by their own tax dollars.

Unfortunately, for local taxpayers, the discrimination inherent in these types of agreements is not the end of the story. Numerous third-party studies show that PLAs have a record of increasing construction costs by approximately 18 percent when required on public construction projects.

A 2006 study conducted by the Beacon Hill Institute at Suffolk University found that PLAs add an estimated $27 per square foot to the bid cost of construction (in 2004 prices), representing an almost 20 percent increase in costs over the average non-PLA project.

At a time when local families, and also state and local government, are grappling with significant budget deficits and crippling unemployment, now is the worst possible time to reward special interest groups at the expense of hardworking taxpayers.

By opening the door to all contractors, they can help keep the competition up and the project costs down by insisting that every worthy company has a fair shot.

We agree.

By the way, the Beacon Hill Institute study referenced in the article is available here.  Of the 117 schools examined by the researchers, 19 municipalities entered into PLAs for school projects. The researchers took into account differences in both the type of schools (elementary, junior and high schools) and the size (controlling for square footage). The majority of school districts that chose not to enter into such agreements saved between $2.7 million for a 100,000-square-foot building and $8.1 million for a 300,000-square-foot structure.

With local budgets stretched to their limits nationwide, now is the worst possible time for local officials to waste taxpayer dollars on Big Labor handouts.  We urge Rochester officials to say no to PLAs.

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , , , , | Comments (0)

ABC Wins Challenge Against Mandatory Federal PLA in New Jersey

August 26, 2010 – 8:54 am

Associated Builders and Contractors (ABC) and its members have stopped another government-mandated project labor agreement (PLA) on a proposed federal construction project.  This is yet another blow to the Obama administration’s effort to implement Executive Order 13502, which encourages the use of PLAs on federal construction costing more than $25 million.

In this most recent victory for taxpayers, ABC was successful in having a mandatory PLA removed from the bidding process for the construction of an Armed Forces Reserve center in Camden, N. J.

Here is ABC’s August 25 press release:

ABC Wins Challenge Against Mandatory Project Labor Agreement on Federal Construction Project in New Jersey

WASHINGTON, D.C. – Associated Builders and Contractors (ABC) today announced it was successful in having a mandatory project labor agreement removed from the bidding process for the construction of an Armed Forces Reserve center in Camden, N. J.

In response to a bid protest filed with the Government Accountability Office by ABC member Wu & Associates, Inc. of Cherry Hill, N. J., with ABC support and representation, the U.S. Army Corps of Engineers eliminated a solicitation requirement that would have limited the pool of qualified bidders to contractors willing to sign onto a federal construction project covered by a controversial government-mandated project labor agreement.

“Our company and other quality New Jersey businesses deserve a fair opportunity to provide the public with the best construction product at the best price,” said Wu and Associates President Kirby Wu, AIA. “The wasteful and discriminatory project labor agreement would have cut competition from qualified merit shop contractors and their skilled employees. The U.S. Army Corps of Engineers’ decision is a real win for all taxpayers, as well as for the people of New Jersey.”

“We hope that other federal agencies will heed this example and recognize that discriminatory project labor agreements only result in increased costs, delayed construction and harm to taxpayers,” said ABC President and CEO Kirk Pickerel. “ABC will continue to fight any attempt to impose project labor agreements on federal construction projects in violation of competitive bidding laws.”

A project labor agreement is a special interest scheme that discourages competition from nonunion contractors and their nonunion employees by requiring a construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their nonunion employees will never benefit unless they join a union.

###

Associated Builders and Contractors (ABC) is a national association with 77 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. Visit us at www.abc.org.

On Feb. 6, 2009, President Obama signed Executive Order 13502, which repealed a 2001-2008 prohibition on federal PLAs. The Obama order also encourages federal agencies to require PLAs on federal construction projects whose total costs exceed $25 million. This April, the Federal Acquisition Regulatory (FAR) Council issued a controversial final rule, effective May 13, that implements Executive Order 13502 into federal regulations.

Newspaper editorial boards across the country and the construction community widely viewed the pro-PLA Executive Order 13502 as payback to the construction industry’s Big Labor bosses for their past and continued political support of President Obama and congressional Democrats, as PLAs steer lucrative federal construction contracts to unionized contractors and their union employees.

Big Labor bosses deduct union dues from rank-and-file union members to fund PAC contributions and soft money donations to political campaigns of candidates who support PLAs and other pro-Big Labor policies.

This cycle of corruption costs taxpayers dearly, as studies demonstrate PLAs increase the cost of construction between 12 percent and 20 percent while delivering no additional benefits to construction owners or taxpayers.

The PLA racket also stifles job creation for nonunion contractors and their employees. This is particularly offensive because 85 percent of the U.S. construction workforce does not belong to a union and the industry is suffering from 17 percent unemployment as of July 2010.

ABC and TheTruthAboutPLAs.com have led the fight against similar crony contracting mandates by federal agencies (See U.S. DOL Job Corps Center in Manchester, N.H., the U.S. General Services Administration’s (GSA) Lafayette Building in Washington, D.C. and the U.S. Army Corp of Engineers technical applications center at Patrick Air Force Base in Brevard County, FL).

This is a huge win for taxpayers and the 85 percent of the private construction workforce that chooses not to join a labor union.  Here at TheTruthAboutPLAs.com, we thank the U.S. Army Corp of Engineers for doing the right thing and removing this PLA from the bidding process.

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , , , , , , , | Comments (0)

Yet Another California County Bans Project Labor Agreements

August 25, 2010 – 8:01 am

A third county in California has now prohibited project labor agreements (PLAs) on taxpayer-funded construction projects.

On a 3-2 vote on August 24, the Placer County Board of Supervisors approved a resolution adding a provision to its contracting policies that states “the County shall not require a contractor on a County public project to execute or otherwise become a party to a project labor agreement as a condition of bidding, negotiating, award, or performance of the public project.”  The resolution cited three reasons to adopt the policy: “to promote competition in contracting, to reduce the risk of cost increases in public works projects in Placer County, and to protect the interests of the taxpayers of Placer County.”

Union representatives showed up in force to oppose the resolution, thus demonstrating to county taxpayers that the policy was relevant and needed.  The executive director of the Roseville Chamber of Commerce spoke in support of the resolution as well as a representative of Associated Builders and Contractors (ABC).

Approval was along party lines, with the three Republicans (Rocky Rockholm, Kirk Uhler, and Robert Weygandt) voting for guaranteed fair and open bid competition, while Democrat Jennifer Montgomery and Decline-to-State Jim Holmes voted against it.  (Holmes quit the Republican Party last year because he was “tired of the rhetoric.”  Apparently he’s more comfortable parroting the rhetoric of Sacramento union bosses, as he did at the meeting.)

Placer County stretches from affluent northeastern Sacramento suburbs to North Lake Tahoe and has a population of 350,000.  In the past several years, the county has been vexed by “greenmail,” in which construction unions hire a law firm to exploit the California Environmental Quality Act (CEQA) and block the permitting of proposed developments.  When the developers agree to sign a project labor agreement with the construction unions, the environmental objections fade away and the project moves forward.

Several other county governments in California are in various stages of considering bans on PLAs, as ABC and its coalition partners advance the “20 in 2010” program to ban PLAs at twenty local governments in California in 2010.  In November 2009, the Orange County Board of Supervisors voted 5-0 for the Prohibition of Anti-Competitive or Discriminatory Requirements in Public Contracts ordinance to ban PLAs.  In March 2010, the San Diego County Board of Supervisors voted 5-0 for an ordinance to ban PLAs.

By Kevin Dayton | Posted in Uncategorized | Tagged , , , , , , , , , , , | Comments (0)

Don’t Forget to YouCut!

August 24, 2010 – 3:19 pm

You still have the chance to tell Congress to say NO to wasteful and discriminatory project labor agreements (PLAs) on the House Republican Whip Eric Cantor’s “YouCut.”

Oklahoma Congresswoman and gubernatorial candidate Mary Fallin’s (OK-5) YouCut proposal to prohibit the federal government from requiring anti-competitive and costly project labor agreements (PLAs) on federal construction projects is back by popular demand.

Text YouCut1 to 68398 to ban government-mandated PLAs on federal construction projects.

The YouCut website, launched May 12 by House Republican Whip Eric Cantor (R-Va.), features a list of five proposals aimed at reducing Congressional spending. The public is encouraged to vote for a proposal they would most like to see eliminated by Congress. After the votes are in and a proposal is chosen, House Republicans will force a vote on the House Floor on whether or not to take up and debate the top vote-getter selected by the public.

In June, the YouCut website featured a proposal to eliminate federal government-mandated PLAs, but it was beaten by Rep. Aaron Schock’s (R-Ill.) suggestion to prevent millions of federal dollars in waste on signs advertising construction projects that are funded by dollars from the American Recovery and Reinvestment Act.

Here is a statement from Rep. Fallin’s press release in support of her anti-PLA YouCut proposal:

“The Executive Order issued by President Obama encourages the use of anti-competitive union favoring contracts, known as project labor agreements, which could increase the cost of government projects by as much as 20 percent,” Fallin said. “This doesn’t improve the quality of projects or create more jobs, it is simply a payback to organized labor. That means in the face of an unprecedented $1.5 trillion deficit, taxpayers are also on the hook for hundreds of millions of dollars wasted on government projects that could have been completed for far less.”

The winning YouCut proposal will be selected after Congress is back from recess, so voting will be open for the next month.

Please visit the YouCut site at http://republicanwhip.house.gov/YouCut/ and vote for proposal #1: “Prohibit Mandated Project Labor Union Agreements That Increase Government Construction” or text “YouCut1” to 68398 on your mobile phone.

Learn Why You Should Vote for This YouCut Proposal After the Jump
Read More »

By Andy Conlin | Posted in Uncategorized | Tagged , , , , , , , , , , , | Comments (0)

Columbus Dispatch: OSFC Director’s Union Bias is Inexcusable

August 19, 2010 – 2:13 pm

Today The Columbus Dispatch published another editorial blasting Ohio School Facilities Commission (OSFC) director Richard Murray for engaging in numerous acts of “union bias” and steering lucrative school construction contracts to union contractors and union members via project labor agreements (PLAs).

Murray has been the subject of an investigation by the Ohio Inspector General’s office TheTruthAboutPLAs.com covered here and here.

The Columbus Dispatch editorial (“Bias is inexcusable,” 8/19):

Commission exec has duty to help schools get best possible deal on projects

Thursday, August 19, 2010 02:56 AM

Whether state law frowns on favoring union contractors or is silent on the issue, to engage in such a bias when spending public dollars is a bad policy that cheats Ohioans.

The purpose of the Ohio School Facilities Commission is to set standards for and monitor the construction and remodeling of billions of dollars worth of school buildings, paid for by a combination of state bond money and local tax dollars. The commission is charged with getting the best deal for taxpayers, not implementing any governor’s labor-relations philosophy. School-construction contracts certainly should not be used to shower unprecedented largess on the current governor’s favorite special interest.

Richard Murray, whom Gov. Ted Strickland appointed as executive director of the commission, is unabashed by the Ohio inspector general’s report that says he has made plain his preference for union labor when working with local school districts trying to build new schools.

Murray, who was employed for 12 years as Ohio director of a union-advocacy group and who remains a member of Local 423 of the Laborers’ International Union of North America, says he doesn’t have to be neutral — that such a requirement “is simply nowhere in law or in rule or in policy of this agency.”

It is, however, the only ethical approach to take when holding the purse strings to about $3 million per day in public spending. Murray is supposed to help local school officials, who aren’t construction experts, make the best deals for their districts. That means soliciting bids and choosing the contractors who can do the work needed for the best price, regardless of whether their employees pay union dues.

The inspector general’s report shows, however, that Murray has pushed districts to sign project-labor agreements, which typically shut out nonunion shops and, consequently, drive up the cost of projects. Such agreements require any workers on the project to be dues-paying union members, if only for the duration of the project.

Nonunion companies often decline to bid rather than comply; fewer companies bidding mean less competition and higher costs.

What were local school-board members and superintendents supposed to think when the union delegation visiting them to lobby for union labor included Murray, the guy who controls the funds? It’s obvious how officials of Scioto County’s Clay Local School District felt, after union bully Gary Coleman, angry that the district was using a nonunion contractor on part of a project, screamed profanities at them in what was supposed to be a business meeting. All that time, Murray sat by silently.

Clay officials eventually signed a project-labor agreement, but they complained to Strickland about Coleman’s and Murray’s behavior.

Murray said later he wasn’t proud of the incident.

He should feel just as bad that his support for unions, rather than for school districts and taxpayers, drives up the cost of projects — even when nobody screams profanities.

Here are some recent articles to put this editorial into context for readers unfamiliar with this controversy:

By BenBrubeck | Posted in Uncategorized | Tagged , , , , , , , , , | Comments (2)

U.S. Army Corps of Engineers Eliminates Project Labor Agreement Gift to Big Labor

August 18, 2010 – 2:20 pm

ABC members, employees and concerned taxpayers helped defeat a costly and discriminatory provision within the United States Army Corps of Engineers’ (USACE) solicitation for construction services that mandated a project labor agreement (PLA) on a $100 million to $250 million technical applications center at Patrick Air Force Base in Brevard County, Fla.

Below is a news release (pdf)  from ABC National about this victory for the merit shop community. It was also the lead ABC Newsline story this week.

New Release

ABC Applauds U.S. Army Corps of Engineers for Removing Costly and Discriminatory Construction Contract Provision

Washington, D.C. – Associated Builders and Contractors (ABC) today applauded the United States Army Corps of Engineers (USACE) for removing a proposed, mandatory project labor agreement (PLA) for the construction of a $100 million to $250 million technical applications center at Patrick Air Force Base in Brevard County, Fla.

A project labor agreement is a special interest scheme that discourages competition from nonunion contractors and their nonunion employees by requiring a construction project to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their nonunion employees will never benefit unless they join a union.

“Less than 2 percent of the construction workforce in Florida is affiliated with a labor organization, yet the federal government was willing to increase costs for all taxpayers and discriminate against 98 percent of the industry just to reward special interests,” said ABC President and CEO Kirk Pickerel. “We hope that other federal agencies will heed this example and recognize that project labor agreements ultimately harm taxpayers by reducing competition from the qualified contractors and their skilled employees that have successfully built similar federal projects in Florida and across the U.S.”

Hundreds of ABC member firms in Florida and around the country contacted the USACE to voice their opposition to the proposed PLA on the Patrick Air Force Base project. The USACE deleted the clause that mandated the PLA and substituted new language that makes a PLA submission optional, but specifically states PLAs will not be an evaluation factor.

“ABC will continue to fight any attempt to impose PLAs on federal construction projects, as these special interest schemes violate competitive bidding laws, reduce competition, increase construction costs and needlessly inject political favoritism into the federal procurement process,” said Pickerel.

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Associated Builders and Contractors (ABC) is a national association with 77 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. Visit us at www.abc.org. For more PLA-related information, visit www.TheTruthAboutPLAs.com or www.abc.org/pla

Media Inquiries: Gail Raiman, (703) 812-2073 or Gerry Fritz, (703) 812-2062

TheTruthAboutPLAs.com on this development: 
“By removing the project labor agreement, the U.S. Army Corps of Engineers took the correct step to achieve the goal of delivering to taxpayers the best possible construction project at the best possible price,” said Ben Brubeck, ABC National’s director of labor and federal procurement. “I tip my hat to them because they refused to let politically motivated paybacks to powerful special interests get in the way of ensuring a fair, open and competitive procurement process.”

On Feb. 6, 2009, President Obama signed Executive Order 13502, which repealed a 2001-2008 prohibition on federal PLAs. The Obama order also encourages federal agencies to require PLAs on federal construction projects whose total costs exceed $25 million. This April, the Federal Acquisition Regulatory (FAR) Council issued a controversial final rule, effective May 13, that implements Executive Order 13502 into federal regulations.

Newspaper editorial boards across the country and the construction community widely viewed the pro-PLA Executive Order 13502 as payback to the construction industry’s Big Labor bosses for their past and continued political support of President Obama and congressional Democrats, as PLAs steer lucrative federal construction contracts to unionized contractors and their union employees.

Big Labor bosses deduct union dues from rank-and-file union members to fund PAC contributions and soft money donations to political campaigns of candidates who support PLAs and other pro-Big Labor policies.

This cycle of corruption costs taxpayers dearly, as studies demonstrate PLAs increase the cost of construction between 12 percent and 20 percent while delivering no additional benefits to construction owners or taxpayers. 

The PLA racket also stifles job creation for nonunion contractors and their employees. This is particularly offensive because 85 percent of the U.S. construction workforce does not belong to a union and the industry is suffering from 17 percent unemployment as of July 2010.

ABC and TheTruthAboutPLAs.com have led the fight against similar crony contracting mandates by federal agencies (See U.S. DOL Job Corps Center in Manchester, N.H. and the U.S. General Services Administration’s (GSA) Lafayette Building in Washington, D.C.) but this is the first government-mandated PLA issued after the FAR Council’s final rule took effect May 13.

“The USACE came to its senses and removed the PLA mandate once it realized a PLA would not meet the FAR Council’s directive to implement a PLA only when it promotes the ‘economy and efficiency’ in federal procurement,” said Brubeck.

“The PLA would have reduced competition from a large pool of qualified bidders and likely would have limited the supply of skilled labor needed to build such a large project,” said Brubeck. ”With less than 2 percent of Florida’s private construction workforce belonging to a union, the PLA would have forced contractors to employ out-of-state union labor instead of Florida’s skilled nonunion construction employees. The removal of the PLA is a win for Florida’s economy and it will ultimately benefit U.S. taxpayers and the U.S. Army Corps of Engineers.”

By BenBrubeck | Posted in Uncategorized | Tagged , , , , , , , , , , , , , | Comments (1)
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