As TheTruthAboutPLAs.com readers know, Murray was the subject of a scathing Aug. 5 report by the Ohio Inspector General’s (IG) office in which the IG’s office brought to light Murray’s effort to drive lucrative school construction contracts to Big Labor.  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 were 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.

The new ad, which demands that Gov. Strickland fire Richard Murray, is available here.

ABC of Ohio also released the following statement on the recent developments at the OSFC on Labor Day (Our emphasis added):

Drive up Costs and Unemployment by Breaking the Law

This Labor Day brings sad news to the 20% unemployed construction industry Ohioans desperately in need of an economic turnaround. Governor Ted Strickland prefers to cling to 79 year-old labor policies rather than embrace the current economic realities. Other states have –and they are eating our lunch as a result.

Since Richard Murray’s appointment as executive director of the Ohio Schools Facilities Commission (OSFC) late last year, he has pushed the use of union-only Project Labor Agreements (PLAs) on local school districts hoping to obtain state funding support for local school construction. PLAs are good for unions and bad for taxpayers. PLAs inflate the cost of public construction and put people out of work. Moreover, PLAs are illegal for use on OSFC school construction projects.

A recent report by the Ohio Inspector General’s office detailed how Gov. Ted Strickland fired former state senator and fellow Democrat, Michael Shoemaker at the behest of labor unions. It turns out Director Shoemaker was not aggressive enough in forcing local school districts to accept the use of PLAs.

Upon appointment as the OSFC’s new director, Richard Murray’s actions demonstrated he was a soldier anxious to impress his boss, Gov. Strickland. Mr. Murray quickly set about to get as many local school districts to use their “local authority” to adopt union only PLAs. The Inspector General detailed how Murray used intimidating tactics to obtain these contracts for his former union employers.

Last year the OSFC adopted a policy to allow local school districts choose whether or not they wanted to use union only PLAs for their construction. There is only one problem – the OSFC does not have the authority to supersede state law and grant this local choice.

In 1997 the sixty-six year-old prevailing wage statute was amended to forbid local school districts from paying prevailing wage on their construction projects. They did this because they knew it would save money. And save money, it did. A study by Ohio’s Legislative Services Commission concluded that at least $487.9 million dollars were saved in the first five years after the law was changed.

Two years later Ohio amended the prevailing wage statute again. Because repealing union scale prevailing wage saves so much money, the legislature said county and municipal hospitals will no longer be on the list of public construction projects forced to pay prevailing wage. However, the legislature specifically granted these local public hospitals the right to pay prevailing wage if they choose to do so locally.

No such right of local choice has ever been granted to local school districts by the legislature. And the OSFC, as a creature of the legislature, is not authorized to grant that legislative authority.

Paying prevailing wage as a result of a locally engaged PLA is a ruse concocted by Gov. Strickland’s OSFC so that the will of the legislature prohibiting prevailing wage on school construction could be subverted.

The PLA ruse is not legal, wastes millions of taxpayer dollars and restricts 85% of the commercial construction industry (nonunion contractors) from the chance to work on school construction projects. That is why the Associated Builders and Contractors (ABC) have two law suits pending before the Ohio Supreme Court. We’re asking the Ohio Supreme Court to accept review of the questions as to whether local school districts may require contractors to pay prevailing wage and whether taxpayers living in that same school district have the right to bring a lawsuit.

For sixty-one years ABC has fought for the free market principle that public construction contracts should be awarded to the lowest cost bidder qualified to do the work. The public pays too much for construction when laws, or illegal agency policies, prevent nonunion contractors from bidding on public jobs. Ohio has been slow to learn this lesson and other states stand well poised to steal our companies as a result.

Gov. Strickland, the OSFC and Director Murray are implementing a scheme designed to thwart the will of the legislature. In doing so, they deny open competition and dramatically increase the cost on school construction projects. They also put construction employees out of work.

No one should be surprised that Ted Strickland wants to steer government contracts to his labor union allies. Since Michael Shoemaker was fired by Strickland for not doing the same and Richard Murray has shown he is all too eager to push this illegal policy, it’s up to the courts to defend the separation of powers and win one for the taxpayers.

Please visit our earlier posts for more information on this scandal.

Here is the Tribune-Review’s take (“The Penn Hills PLA,” 9/8/10):

Eight Penn Hills School District board members who voted to require only union labor on a construction project ensured that taxpayers will bear needless additional costs — and set a bad example for students.

Those eight are guilty of “failing to do their homework” before voting for the project labor agreement (PLA) on Penn Hills’ $130 million high school and elementary center project, as Bob Glancy put it. He’s chairman of Associated Builders & Contractors of Western Pennsylvania, whose members employ the 85 percent of area construction workers who aren’t unionized — firms and workers who are unfairly denied opportunities by PLAs.

The group, whose lawsuit over another PLA prompted Community College of Allegheny County to halt bidding on a science center project, is considering suing the school district, too. So one way or another, Penn Hills taxpayers will pay more — either for district legal costs or for costs that the district’s PLA will add to its project, as studies prove that PLAs do.

Still, it’s a “teachable moment.” Penn Hills students get real-world lessons about the consequences of blowing off homework and disregarding basic economics — lessons their elders on the board should have learned long ago.

As usual, the Tribune-Review is right on point.

If you live in this school district, we strongly encourage you to contact your school board members at 412-793-7000 and tell them that taxpayers deserve the best construction product for the best price.  Say NO to wasteful and discriminatory PLAs.

UPDATE: Here is a great blog post from a Penn Hills resident that is not happy with their school boards “sop” to Big Labor: http://www.libertyreborn.com/2010/09/09/penn-hills-school-district-lays-down-with-dogs/

In February 2009, President Obama issued Executive Order 13502, which encourages agencies to require the use of wasteful and discriminatory project labor agreements (PLAs) on federal construction costing more than $25 million.  This order also overturned a federal policy that prohibited these types of Big Labor handouts on federally-funded work since 2001 – with positive results for taxpayers.

Ms. Malkin correctly points out that the Obama order is likely to be used to ensure that as many of the projects constructed with funds from this proposed infrastructure bank as possible bear the union labor – at the expense of the 85 percent of the construction workforce that choose not to join a labor union.

Here is an excerpt from Ms. Malkin’s piece (“The Mother of All Big Dig Boondoggles,” 9/8/10):

But here’s the rub: Not all workers are equal in Obama’s eyes. And most of them will remain “idled” by the Democrats’ own design. The key is E.O. 13502, a union-friendly executive order signed by Obama in his first weeks in office, which essentially forces contractors who bid on large-scale public construction projects worth $25 million or more to submit to union representation for its employees.

The blunt instrument used to give unions a leg up is the “project labor agreement (PLA),” which in theory sets reasonable pre-work terms and conditions — but in practice, requires contractors to hand over exclusive bargaining control; to pay inflated, above-market wages and benefits; and to fork over dues money and pension funding to corrupt, cash-starved labor organizations. These anti-competitive agreements undermine a fair bidding process on projects that locked-out, nonunion laborers are funding with their own tax dollars. And these PLAs benefit the privileged few at the expense of the vast majority: In the construction industry, 85 percent of the workforce is nonunion by choice.

We don’t need to theorize about how this shakedown works in the real world. Boston’s notorious Big Dig was a union-only construction project thanks to a Massachusetts government-mandated PLA. The original $2.8 billion price tag for the project skyrocketed to $22 billion in state and federal taxpayer subsidies thanks in no small part to ballooning labor costs. In February, the Bay State’s Beacon Hill Institute found that PLAs added 12 percent to 18 percent to school construction costs in Massachusetts and Connecticut. In Washington, D.C., the Department of Veterans Affairs commissioned an independent study showing that PLAs would increase hospital construction costs by as much as 9 percent in some markets.

In short, Obama’s new Union Infrastructure Rescue Plan is a political favoritism scheme that raises the cost of doing business and bars tens of thousands of skilled, nonunion laborers who choose to run open shops from securing work. In the name of patching up America’s highways and byways, Mr. Fix It would create another gaping fiscal sinkhole to appease his special interest donors. Recovery Summer turns to Union Payback Fall.

There is no question that Executive Order 13502 and the prospect of federally mandated PLAs will likely lead to additional government waste and discrimination.

A typical PLAs includes provisions designed to drive lucrative construction projects to Big Labor.  These provisions include:

• Despite the fact that contractors have their own benefit plans, PLAs require merit shop contractors to pay their workers’ health and retirement benefits to union trust funds. Thus, companies have to pay benefits twice: once to the union and once to the company plan. Nonunion employees never see any of the benefit contributions sent to union plans unless they decide to join a union and remain with the union until vested in plans.
• Paying into underfunded and mismanaged union pension plans can also expose merit shop contractors to significant pension withdrawal liabilities.  Signing a PLA and exposing a company to pension liabilities could bankrupt a contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.
• PLAs require merit shop companies to obtain apprentices exclusively from union apprenticeship programs. Participants in federal and state-approved nonunion apprenticeship programs cannot work on a job covered by a PLA. This means craft professionals enrolled in all apprenticeship programs other than those offered by the union are excluded from work in their hometowns.
• PLAs require merit shop companies to obtain their workers from union hiring halls. This means a merit shop company has to exclude their hard working employees from specific jobsites and exclusively use unfamiliar union workers.  In other instances, merit shop employers can use a limited number of their own employees, but employers must send their nonunion employees to the union hiring hall and hope the union sends the same workers back to that specific jobsite.
• Nonunion employees may have to pay union dues and fees or join a union in order to work on a PLA project.

Numerous studies show that PLAs not only have a negative impact on the 85 percent of the construction workforce that is essentially barred from building these projects, but hardworking taxpayers as well.  Studies prove that PLAs increase construction costs by as much as 18 percent.  On a proposed $50 billion worth of projects, this could mean nearly $5 billion wasted.  And as Ms. Malkin points out, there is certainly anecdotal data that supports this point as well.

Taxpayer funded construction should be about the best products at the best price, not handouts to politically connected special interest groups.  To learn more, please visit our earlier posts:

Project Labor Agreement Basics: What is a PLA

PLA Final Rule Takes Effect Today: Let the Waste, Cronyism and Discrimination Begin

Required Reading on Multi-Employer Pension Plan Crisis

The Most Infamous PLA Job: Lessons from Boston’s Big Dig

Understanding the Merit Shop Contractor Cost Advantage

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.

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.

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.

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.

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.

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

Do you want to save the federal government up to $2.6 billion a year?

Do you want to eliminate the influence of special interests and corruption in federal contracting?

Do you want to create employment opportunities for all skilled and qualified professionals in the construction industry, regardless of their affiliation with labor unions?

Are you opposed to forcing taxpayers to join or be represented by a union in order to get a job?

Do you want the federal government to deliver to taxpayers the best possible construction product at the best possible price?

If you answered yes to any of these questions, 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.

PLAs are designed to funnel lucrative federal construction contracts to unionized contractors and Big Labor bosses that send campaign contributions to politicians who promote these schemes.

President Obama’s Executive Order 13502 encourages federal agencies to mandate wasteful and discriminatory PLAs on federal construction projects exceeding $25 million in value.  PLAs are special interest schemes that hit taxpayers in the wallet and reek of political favoritism.

An April 14 Wall Street Journal editorial, “Crony Contracts,” blasts the Obama administration’s costly gift to Big Labor saying:

“Only 15% of the nation’s construction workers are unionized, so from now on the other 85% will have to forgo federal work for having exercised their right to not join a union. This is a raw display of political favoritism, and at the expense of an industry experiencing 27% unemployment … It’s also a rotten deal for taxpayers.”

Here are some important reasons why you should vote today to ban government-mandated PLAs on YouCut.

Wasteful PLAs harm taxpayers and the construction industry.

PLAs force contractors to follow archaic and inefficient union work rules that increase the cost of construction and make it difficult for nonunion contractors and their employees to compete against union contractors on a level playing field.

PLAs require contractors to hire most or all of their employees from union hiring halls, which effectively limits the pool of available bidders on federal projects to union contractors and union employees.

According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, in 2009 only 14.5 percent of America’s private construction workforce belonged to a union. That means PLAs discourage more than eight out 10 U.S. construction employees from building projects paid for by their tax dollars.

Studies demonstrate that PLAs result in a lack of competition, increased costs and inefficiencies caused by union work rules that inflate the cost of construction between 10 percent and 20 percent when compared to similar projects without PLAs.

According to a September 2009 study by The Beacon Hill Institute at Suffolk University in Boston, PLAs significantly increase construction costs on federal projects without adding benefits for taxpayers. The study found that if President Obama’s Executive Order 13502 were in effect in 2008, federal construction costs would have increased as much as $2.6 billion because of PLAs. Americans can expect greater levels of waste in FY 2010 and 2011 construction spending due to a significant increase in infrastructure investments through the American Recovery and Reinvestment Act.

Employees who don’t belong to a union don’t benefit from PLAs.

An October 2009 report by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements,” found that employees of nonunion contractors forced to work under government-mandated PLAs suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.

PLAs force employers to pay employee benefits into union-managed funds, but employees do not see the benefits of the employer contributions unless they join a union and become vested in these plans.

Employers that offer their own benefits, including health and pension plans, often continue to pay for both existing programs and union programs under a PLA.

The McGowan report found that nonunion contractors are forced to pay in excess of 25 percent in benefits costs above and beyond existing prevailing wage laws as a result of this “double payment” attached to PLAs.  These added costs make it impossible for nonunion contractors to compete and results in increased construction costs. It is also unfair to employees who have earned this money for a secure retirement.

McGowan found that had President Obama’s pro-PLA Executive Order 13502 applied to federal contracts in 2008, additional costs incurred by employers related to wasteful PLA pension requirements likely would have ranged from $230 million to $767 million and would reach higher levels in future years.

Lost wages for nonunion construction workers would have ranged from $184 million to more than $613 million, depending on the assumptions made for companies executing contracts via PLAs. In total, the move to PLAs would have cost nonunion workers and their employers $414 million to more than $1.38 billion in 2008.

Solutions to Waste and Cronyism in Federal Construction Contracting

Lawmakers and taxpayers can restore accountability and fiscal discipline in federal construction contracting by passing The Government Neutrality in Contracting Act (S.90/H.R. 983).

Taxpayers can urge Congress to restore fairness and accountability in federal construction contracting today by texting “YouCut1” to 68398 or by voting online for proposal #1: “Prohibit Mandated Project Labor Union Agreements That Increase Government Construction.”

Here’s an excerpt from the Pittsburgh Tribune-Reviews coverage of Onorato’s announcement (“Onorato: CCAC bid limits ‘probably wrong,” 8/15/10) :

“Union, nonunion — everybody has a right to bid,” Onorato told reporters gathered for a news conference on the roof of the County Office Building. “To put a specific percentage on it was probably wrong, and that’s why they were pulled back.”

[snip]

That means nonunion business owners, in some cases, would have to lay off employees to hire from union halls to qualify for the work.

When asked whether it was the college’s decision to require high union participation or the college was following policies of his office, Onorato speculated that CCAC officials may have looked at “old language” from county guidelines.

The Western Pennsylvania Chapter of Associated Builders and Contractors has some thoughts on Mr. Onorato’s recognition that PLA requirements are outdated and “probably wrong.”

Here are the highlights from the chapter’s Aug. 16 press release:

ABC Points Out Additional Projects Where Onorato was “probably wrong”

Pittsburgh, PA – Associated Builders and Contractors (ABC) of Western Pennsylvania are challenging Chief Executive Dan Onorato on more than just the CCAC project and ABC is demanding answers on past practices. In a recent press conference, Chief Executive Dan Onorato stated, “to put a specific percentage on it [project labor agreements] was probably wrong, and that’s why they were pulled back.” Onorato has switched gears since ABC challenged Allegheny County to stop the usage of PLAs on publicly funded projects. Onorato then placed blame on the Community College of Allegheny County (CCAC) by saying they probably looked at “old language” when writing the bidding proposal. The “old language” used in past practices called for Stabilization Agreements, which did not contain PLAs, contrary to the Chief Executive’s words.

“It’s interesting how the Chief Executive is now against PLAs since receiving pressure from voters,” said Eileen Watt, President of ABC. “Dan Onorato has a history of using unfair bidding practices, cutting out 85% of the construction work-force, and favoring special interests on construction projects. If Onorato is willing to cut out competition, which drives up project costs in Allegheny county, he will do the same for the Commonwealth as Governor,” continued Watt. Allegheny County currently has a $30 million dollar deficit, for which the Chief Executive manages. At a time when the County is seeing a deficit in revenue streams like Three Rivers Casino, additional costs from project labor agreements are wasteful towards taxpayer money.

A sampling of projects which have cut out small businesses by using a PLA include: Kane Hospital last year, Allegheny County Sanitary Authority (ALCOSAN) two months ago, and Hartwood Acres a few weeks ago – all under Onorato’s leadership. ABC calls on Onorato to admit all projects were “probably wrong” and stop PLAs on all future construction projects.

There is no question that Mr. Onorato’s comments are an important development for those defending free enterprise and open competition on taxpayer funded construction in Pennsylvania.  It appears that these comments show that Mr. Onorato recognizes the discriminatory nature of PLAs and believes that everyone should have an opportunity to compete for public projects.

We call on Mr. Onorato to clarify his remarks.  If he legitimately believes that taxpayer funded construction should be about more than providing handouts to Big Labor and that everyone in the construction industry should have an equal opportunity to compete (not just bid) for public projects, then he should make a strong statement against PLAs and pledge to prohibit government-mandate PLAs on Commonwealth funded projects should he be elected governor.

This is a true test of leadership for Mr. Onorato.  This is an opportunity for him to show that he is not beholden to special interest groups, but truly believes that taxpayers should get the best construction for the best price.  We encourage him to stand up for Pennsylvania taxpayers and say no to PLAs.