The Truth About Project Labor Agreements

TheTruthAboutPLAs.com has covered how former Big Labor Boss Richard Murray, Ohio Gov. Ted Strickland’s (D) appointed Director of the Ohio School Facilities Commission (OSFC), is under investigation for forcing school districts to utilize anti-competitive project labor agreement (PLA) schemes that funnel lucrative school construction contracts to unionized contractors and union labor after these special interest groups have contributed hundreds of thousands of dollars to Strickland’s campaign.

We’ve repeatedly warned that this government corruption is going to saddle taxpayers with additional construction costs and deny Ohio businesses and their employees a fair shot at competing for jobs created by construction projects funded by their tax dollars because they are not union. There is no rational basis for this discriminatory policy.

Well, recent reports by The Columbus Dispatch indicate our predictions were correct (“High bids for deaf, blind schools raise labor issue,” 7/28/10):

The Ohio School Facilities Commission will have to rebid contracts to replace the state’s schools for the blind and deaf after bids came in at least 41 percent over the estimated cost of construction.

Some are blaming the “project labor agreement” that steers the work to companies with union members, but a commission spokesman disputed that.

Bids opened last week for the two schools, which sit side by side in Clintonville, were, at best, $11.4 million over the state’s $28 million estimate to construct the buildings, which is the major part of the $37.1 million project.

State law requires rebidding any contract in which bids are at least 10 percent higher than the estimate. School Facilities Commission officials plan to meet Friday with the architect and construction manager to discuss why the estimate was so different from the bids, spokesman Rick Savors said.

How could you be that wrong?” asked Bryan Williams, a lobbyist for the nonunion Associated Builders and Contractors of Ohio.

If the project labor agreement – which requires all workers to join a trade union, even if temporarily – were tossed out, the cost overruns “if not evaporating totally, will come down considerably,” Williams predicted.

To be sure, there could be other reasons the contractors thought the design was more expensive to build than the architect and state managers.

The commission doesn’t think the project labor agreement is to blame because “the PLA is going to be built into the estimate anyway,” Savors said, meaning the problem is likely in the design or the materials the state wants contractors to use.

When the commission’s director, Richard Murray, decided in May that the deaf and blind schools would be built under a project labor agreement, nonunion companies complained. Before being chosen by Gov. Ted Strickland to head the commission, Murray spent 13 years as the head of an organization dedicated to helping trade unions get construction contracts.

Murray has said his decision was primarily for the safety of the deaf and blind students.

He is being investigated by the Ohio Inspector General after some school districts said he pushed them to accept project labor agreements for school projects co-funded by the state. No findings have been released.

Update: Ohio residents agree that Ohioans shouldn’t be forced to join a union to get a job, as is the case with government-mandated PLAs on the deaf and blinds schools.  July 28 the Buckeye Institute for Public Policy Solutions released a statewide poll of 1,800 registered voters. On one question, 85 percent of those surveyed said workers should be free to choose whether to join a labor union to get a job.

It’s time for the corruption and waste to take a back seat to fair and open competition. The OSFC needs to rebid this project without a PLA.

In 2006 the City of Fall River, Mass. bid the Kuss school construction project under a PLA (state law required union and nonunion contractors to follow union prevailing wage and benefit rates with or without a PLA). After attracting few bidders — with those providing bids coming in well above the projected budget – the city canceled the PLA and reopened the bidding process. Reports stated that Fall River saved $5.8 million on total construction bids by removing the PLA and bidding the project using free and open competition.

It was a real-world experiment measuring the cost of PLAs – right in the backyard of the Big Dig (the most infamous PLA project of all time) – and its results clearly demonstrate that PLAs cut competition and increase costs.

Read the newspaper accounts of the Fall River PLA experiment here.

There are a number of similar stories across the country that serve as good experiments to measure the cost of PLAs. Big Labor spin-doctors will try and explain away the increased PLA costs by blaming the architect, blaming material costs or the labor market. These are all tactics of deception, just like the arguments PLA proponents use to promote these costly and anti-competitive schemes via their chums in public office.

If the PLA is such a great tool, contractors should voluntarily use them to produce the most competitive possible bid instead of having the the government mandate them and choke competition from merit shop contractors. It is pure corruption.

It is time to give PLA-free fair and open competition a shot on these two schools.