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.

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.

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.”

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:

• Columbus Dispatch: “Blind, deaf schools project to be cut back,” 8/14
  • NBC 4 Video here.
• Columbus Dispatch: “Official says his union bias is allowed,” 8/14
• Columbus Dispatch: “School facilities leader OK with labor agreements,” 8/17

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.

###

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.”

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.

As readers of TheTruthAboutPLAs.com have come to find out, project stabilization agreement is just another term for a project labor agreement (PLA).

In other words, new name…same old waste and discrimination.

In response to the PLA requirement in the bid documents, several contractors that would have bid this work and the Western Pennsylvania Chapter of Associated Builders and Contractors (ABC) filed a lawsuit against the community college to seek an immediate injunction barring the school from requiring a PLA as a condition of working on the project.

On Tuesday, August 10, in response to this lawsuit, the college cancelled the bids and put the project on hold while they assess their next move.  This development was covered by the Pittsburgh Tribune-Review (“CCAC Campus Project Bidding on Hold,” 8/11/10), here is an excerpt from their story:

Associated Builders & Contractors of Western Pennsylvania, the trade group that sued Monday, asked a judge to delay construction on the science center because of a so-called project labor agreement that would require 90 percent of workers to belong to labor unions.

College officials have said the requirement mirrors one Allegheny County uses, but county officials said they do not require agencies to use a specific percentage of union labor. Construction of the center relies heavily on state taxpayer funding.

[snip]

The Tribune-Review detailed the issue in a story Sunday (“CCAC Project Labor Mandate Irks Competitors,” 8/8/10).

Several Pittsburgh-area business owners who are part of the lawsuit said they felt excluded by CCAC’s requirement to include so many union workers, which they said is unfair, hurts competition and increases costs.

“The decision of CCAC to halt bidding may appear to be a success, but does not ensure that future projects will not have a (project labor agreement),” said ABC President Eileen Watt, a former Republican member of Allegheny County Council.

The Pittsburgh Post-Gazette also picked up the story (“CCAC Cancels Bid Deadline for New Science Building,” 8/11/10).

Despite the CCAC Board of Trustees’ wise decision to take a closer look at the procurement process for this particular project, the fact remains that the threat of PLA activity on future construction on the CCAC campus is still very real.

As a result, the ABC Western Pennsylvania Chapter announced Tuesday that they plan to continue their effort to educate the public about the true nature of wasteful and discriminatory PLAs.

Here is an excerpt from the chapter’s August 10 press release:

In response to CCAC’s decision, ABC urges the CCAC board to turn their words into action, more specifically – policy.

“The decision of CCAC to halt bidding may appear to be a success, but does not ensure that future projects will not have a PLA,” said ABC President, Eileen Watt. “This is a political stunt to appease small businesses in order to save elections,” continued Watt. Originally, CCAC intended to issue blanket PLA’s which would apply to all future construction projects – not just the science building.

“ABC will not consider this a victory until we see a policy that rejects PLA-only bids for all CCAC projects in the future,” said ABC Chairman, Robert Glancy, of R.A. Glancy & Sons. In the 2009 general budget, Allegheny County funded $22 million dollars to CCAC. ABC believes that only a vote from County Council or an executive order from Chief Executive, Dan Onorato, will truly protect taxpayer and student tuition. By allowing competition and keeping markets open, prices will be kept down on projects and the taxpayers will then have a win. ABC argues that until Allegheny County Council and Chief Executive Dan Onorato establish a policy in writing that rejects PLA-only projects, there is no victory for the taxpayers of Allegheny County.

It turns out that the ABC Western Pennsylvania Chapter and its members aren’t the only ones opposed to potential PLA mandates on CCAC projects.  The Pittsburgh Tribune-Review’s editorial board weighed in on August 11 (“A Rotten Deal,” 8/11/10).

Here are the highlights.

The nonunion Associated Builders and Contractors Inc.’s legal challenge to Community College of Allegheny County’s 90-percent union labor requirement for a $21 million science center project is a textbook case of the unfairness of project labor agreements (PLAs) to taxpayers and nonunion workers.

Citing the lawsuit, CCAC has canceled the bid deadline.

The college’s labor agreement places nonunion firms and their employees at an unfair disadvantage that cries out for elimination. Nonunion contractors should be able to bid without hiring union members. And the public deserves better, too, with study after study showing PLAs needlessly raise costs borne by taxpayers.

Even PLAs that don’t require a percentage of union labor but do require that contractors pay “prevailing wages” — such as those used by Butler and Westmoreland counties’ community colleges — inflate taxpayers’ bills. Set artificially high by union-beholden politicians, prevailing wages help maintain unions’ stranglehold on taxpayer-funded construction jobs.

In challenging the CCAC deal, the contractors group (which also is appealing Commonwealth Court’s approval of a PLA for a $400 million prison to the state Supreme Court) — is fighting for fairness and equity and the best bang for the taxpayers’ buck.

There are clearly more developments to come as this situation continues to develop.

This situation is also an important reminder for why it is essential for the Pennsylvania General Assembly to take action on Rep. John Bear’s (R-Lancaster) H.B. 2010, the Open Contracting Act.  This bill would prohibit PLAs on any commonwealth funded construction projects, which would include this new science center on CCAC’s campus.

Please check out our earlier post for more information on wasteful and discriminatory PLAs on Pennsylvania.