The solicitation contained a crony contracting scheme called a project labor agreement (PLA) that would funnel construction contracts to unionized contractors. It was the first time a federal agency attempted a government-mandated PLA on a federal construction project since President Obama issued the controversial Executive Order 13502 Feb. 6, 2009.

However, after ABC member North Branch Construction of Concord, N.H., with ABC support and representation, filed a protest against the illegal, costly and anti-competitive PLA with the Government Accountability Office (GAO), the U.S. DOL cancelled its solicitation to construct the project.

Rather than build the project without the unethical and illegal PLA, the DOL decided to sit on the project and deny local residents services offered by the Job Corps Center and badly needed construction jobs.

Yesterday the stalled project made headlines as it was raised as n issue in the New Hampshire gubernatorial race (“Stephen hits Lynch on stalled Job Corps Center, 6/24″):

Republican gubernatorial candidate John Stephen blasted Gov. John Lynch for failing to move the project forward. The U.S. Department of Labor had halted the bid process in November when a local contractor complained about labor requirements.

“I find it unconscionable that nothing has been done in eight months to move this project forward when we need jobs,” said Stephen at a press conference in the Legislative Office Building yesterday. “Being silent on the issue is not leadership.”

Lynch’s press secretary Colin Manning said Lynch, an early supporter of the project, has been in contact with the Department of Labor since the bidding was halted. He said the governor was told recently that the bidding process would be restarted in 30 to 60 days.

“The governor is very supportive of that center, and is working to get people back to work in this state,” Manning said.

[snip]

Yesterday, Stephen declined to say if he supports or opposes the PLA, but said all sides should sit down and work out their differences so workers could have badly needed jobs. With 50,000 people out of work in the state, the priority must be jobs, he said.

“Gov. Lynch has said he wants to do all he can to create jobs, but for the past eight months, he has been silent on a contract that could be putting hundreds of people to work today,” Stephen said.

Here is more from the Stephen campaign. Nothing from the Lynch campaign.

Either candidate would serve New Hampshire residents appropriately by urging the DOL to deliver the best possible product at the best possible price free from corrupt and costly PLA mandates.

Let’s hope common sense prevails over politics and special interests and the DOL builds the project using fair and open competition without a PLA.

In 2009, just 958,000 members of the U.S. private construction workforce belonged to a labor union, compared to 1.195 million construction union members in 2008. Union membership in the construction industry is at its lowest point since 1995, when 908,000 union members composed 17.7 percent of the U.S. private construction workforce according to the Union Membership and Coverage Database, available at www.unionstats.com.

So how will the decline in overall union membership in the construction industry change the public policy debate surrounding project labor agreements (PLAs) and President Obama’s pro-government-mandated PLA Executive Order 13502?

In short, there will be added pressure on politicians to intervene and help keep Big Labor afloat. I predict that Congress and the White House will attempt to create construction jobs and they will try and steer those jobs to construction union members through PLAs. There will be an increase in wasteful and corrupt PLAs in federal contracting in 2010.

Congress and the Obama administration have already called for additional federal construction spending to stimulate the economy. The next step is to give Big Labor a big advantage on federal construction projects.  This will be achieved by pressing the Federal Acquisition Regulation (FAR) Council to publish their final rule implementing President Obama’s pro-PLA Executive Order 13502 into federal procurement regulations and then pressuring federal agencies to use PLAs as much as possible.

The construction industry’s jobless rate hit its highest level in at least a decade, climbing to 22.7% in Dec. 2009, the Bureau of Labor Statistics has reported. 

Numerous parties have an interest in creating jobs for construction union members.  It’s stating the obvious, but fewer union jobs spells disaster for union institutions, union retirement plans and the politicians that depend on union contributions to get elected and pass public policy favoring Big Labor.

Fewer employed union members translates into less money flowing into union retirement accounts, known in the construction industry as multi-employer pension plans (MEPPs).

A Sept. 2009 report by Moody’s Global Corporate Finance, “Growing Multiemployer Pension Funding Shortfall is an Increasing Credit Concern,” found construction industry MEPPs are only 54 percent funded with an estimated shortfall of a whopping $72.484 billion.  In other words, for every dollar that these funds owe, they hold only 54 cents of invested assets. Because some union retirement accounts are insolvent, and most depend on incoming cash to fund benefits for retired workers and future beneficiaries, the union plans are under greater pressure because of a lack of incoming revenue due to high construction union unemployment (the U.S. workforce has a similar problem with Social Security funding).

Politicians understand that a lack of union jobs in the construction industry means fewer union dues and “voluntary” political contributions deducted from union members’ paychecks that are funneled into union slush funds and PACs that support Big Labor’s political friends.

The symbiotic relationship (it is called mutualism in nature) between Big Labor and their political supporters cannot continue without healthy union institutions and continued political contributions from labor unions that fuel Big Labor’s political machine.

So the latest union membership numbers, coupled with 22.7 percent unemployment in the construction industry and the complex relationship of entities dependent on union revenue point to a greater need for the government to use PLAs.

There are valid economic and ethical reasons why promoting the special interests of Big Labor, who compose just 14.5 percent of the U.S. private construction workforce, ahead of the needs of the rest of the construction industry through PLAs is a mistake.

PLAs increase the cost of construction and waste taxpayer dollars. With the added cost premium of PLAs, there is less construction money available. And less construction money means fewer total construction projects and construction jobs. So union-favoring PLAs could actually make unemployment in the construction industry even worse.

In addition, there is no compelling reason (other than political self-interest) to create jobs for union members ahead of nonunion employees via PLAs. Nonunion employees deserve just as fair a shot to feed their families as union members. Unions should use the ultra-competitive market and tough economy as an opportunity to retool their product and make it more lean and efficient to compete in today’s marketplace instead of relying on government handouts to stay alive.

The U.S. economy and the construction industry would benefit from free and open competition, without corrupt government-mandated PLAs.

The General Services Administration admitted it made a mistake when it placed a non-competitive, cost-raising, union-pleasing Project Labor Agreement (PLA) on a federal construction project in Washington before the Federal Acquisition Regulation (FAR) Council issued its final ruling on President Obama’s executive order, which encourages the use of PLAs on all federal construction projects worth more than $25 million.

The $100 million Lafayette Building Modernization project is currently the only active federal government-mandated PLA.
Here’s a link to the project (See Section H, 12.02 and Section 16 page 24 on Section H for the PLA language).

After jumping the gun, GSA is now requiring contractors to submit two proposals – one subject to a PLA requirement and one that is not.  The Associated Builders and Contractors criticized this highly unusual two-bid process, saying it puts even more obstacles before the 86 percent of local D.C. contractors, many minority owned, who are non-unionized.

UPDATE: On 2/4, the GSA cancelled this solicitation. Qualified local contractors submited a bid protest with the Government Accountability Office against the GSA’s dual bidding/PLA requirement. Similar to the outcome of the bid protest issued against the U.S. Department of Labor Job Corps Center in Manchaester, N.H., the GSA opted to cancel the solicitation instead of move forward without a PLA.

However, according to the GSA solicitation cancellation notice, “GSA expects to re-issue the Lafayette Building Modernization solicitation in the near future.”

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued Feb. 6, 2009. 

An Associated Press (AP) story appeared in The New York Times, Boston Globe, WBZ38-TV (DE), The News Journal (DE), CBS 4 Denver, Yahoo! News, Seattle Post-Intelligencer, The Miami Herald, The Sacramento Bee, ABC News and other media outlets (“US Labor Dept Reviews NH Job Corps Building Terms, 11/12).

The piece mentions a statement by Republican Senator Judd Gregg, a vocal critic of the discriminatory and costly PLA on this project:

…Thursday, Republican Sen. Judd Gregg, who had lobbied for the Job Corps center, called the Labor Department’s recent decision ”just another unnecessary bureaucratic delay to the progress of this critically important project.”

”This setback clearly illustrates that the administration’s decision to discriminate against successful, independent construction firms because Granite State employees choose to work in a union-free environment simply does not hold water in New Hampshire,” he said.

In September, Gregg had urged the department to reconsider its decision, saying that only 8.7 percent of the construction workers in New Hampshire were unionized…

Additional coverage from the Concord Monitor, Job Corps Site Sits in Silence (11/12), explains why this project is so important to qualified New Hampshire contractors who oppose the discriminatory and costly PLA:

Kenneth Holmes, president of North Branch Construction, which filed the protest that lead to the bid delay, said he hoped his firm could qualify for the project. He said that he had laid off about 18 workers in the past couple of years because of the economy but that a big project such as the Job Corps center might require him to call some of them back.

“I’ve got 40 workers, and I’d like to put them to work,” Holmes said.

Additional coverage, besides the stories linked here and here, include:

• (BNA) Construction Labor Report: Labor Department Cancels Bid Solicitation Under Challenge in New Hampshire for PLA,” 11/12 (password required)
• The Nashua Telegraph: Labor Dept Examining Requirement for NH Jobs Corps, 11/12
• OpenMarket.org: Obama Administration Hits Brakes on Project Labor Agreement, 11/12

Let’s hope that the increased media attention will shed some light on Executive Order 13502 and PLAs, which are special interest giveaways to Big Labor and have no place in fair and effective public policy.

North Branch Construction challenged the PLA as unlawful and discriminatory. 

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued.

Yesterday’s Amendment No. 10 to the DOL solicitation offers an explanation why the solicitation was cancelled:

Nov. 9, 2009 Federal Business Opportunities Notice re the Manchester, NH Job Corps Center Construction Project

 As announced in our November 5, 2009 notice, the Department of Labor (DOL) has canceled the Manchester New Hampshire Job Corps Center construction solicitation. This solicitation included a requirement that each bidder have in place a Project Labor Agreement (PLA) at the time of submission of its bid to DOL. The solicitation was cancelled because DOL believes that it is in the public interest for the Department to further evaluate the issues involved in the PLA requirement. The PLA requirement is a new issue for DOL.

The solicitation was also the subject of a bid protest before the Government Accountability Office challenging the PLA requirement. The Department of Labor is currently considering next steps for building a new Job Corps Center in Manchester, New Hampshire.

This cancellation shall be recorded in accordance with 48 C.F.R. § 14.403(d).

An article by the Daily Reporter notes the practical implications of the cancelled solicitation ( ”Canceled Contract Delays PLA Resolution,” 11/10):

A federal decision to delay bidding out a New Hampshire project sidesteps a legal challenge over whether such contracts can include project labor agreements…

…The decision to cancel the contract also terminates the opportunity PLA opponents had to challenge the legality and merits of using the agreement on federal contracts.

The good news is that the DOL has not abandoned the project entirely, and has acknowledged the need to “further evaluate” a PLA on this issue.  The bad news is that the legality of these giveaways to Big Labor on federal contracting remains unsettled. 

Time will tell if  the DOL’s cancelled solicitation is an admission that discriminatory and costly government-mandated PLAs have no place in federal contracting, or if the cancelled solicitation is simply a special interests-driven tactic to avoid an unfavorable ruling against PLAs and Executive Order 13502.

ABC and a coalition of associations, taxpayers, employees and businesses who champion free and open competition on government construction contracts will continue to fight government-mandated PLAs at the local, state and federal level.

The development is a win for taxpayers and proponents of fair and open competition.  However, the cancelled solicitation rendered the pending bid protest before the GAO moot.  A GAO ruling on the bid protest may have addressed the legality of federal government-mandated PLAs and Executive Order 13502.

The Labor Department has not disclosed why the solicitation was cancelled but is required by FAR regulations to provide cause.

Here is a summary of media coverage since Friday:

• New Hampshire Union Leader: Job Corps Center Plan Hits Wall in Bid Process
• WMUR 9: Feds Cancel Bidding on Manchester Job Corps Center
• Daily Reporter: Proposed PLA Project Canceled
• National Right to Work Blog: Obama Administration Backs Down (For Now) Rather than Defend Discriminatory Project Labor Agreements

The Union Label Blog post, Victory Against Obama’s Unionism in New Hampshire, provides a practical explanation of the relationshop between PLAs and politics. 

A PLA ruling either outright excludes non-union companies…   …or forces them to be hobbled under union rules, but PLAs are nothing less than a government payoff to unions. In essence a PLA is a direct transfer of government money to union coffers and that is precisely why President Obama decreed via Executive Order that henceforth all government construction projects would be forced to proceed under PLAs

While the Obama order does not subject ALL federal construction projects to a PLA, it encourages federal agencies to require PLAs on appropriate federal projects exceeding $25 million. 

Section 7 of the executive order may expand a PLA encouragement or mandate to local and state construction users receiving federal assistance (grants, loans, tax breaks etc.).  Forcing federal special interests onto state and local procurement officials is a recipe for discrimination, corruption and increased costs on local and state budgets already strained by weak revenue due to the sagging economy.  States should not be hoodwinked into paying for four schools, bridges and hospitals for the price of five (the federal government shouldn’t tolerate this waste either, but that’s politics).

In addition, in states with low construction union density and/or a tight labor market, out of state union workers will take the jobs of qualified in-state nonunion workers under PLA mandates.

David Denholm’s blog post, Obama/Labor Bid Rigging Scheme Unravels, provides a sharp analogy of PLAs:

PLAs are bid rigging and protection racket schemes under which the construction owner agrees to use only union labor, thus driving up the cost of the project at the public’s expense, while the unions guarantee “labor peace.”

To put this in perspective, picture a thug at a candy store in Chicago telling the store’s owner that for a weekly payoff his windows won’t be broken and his customers will not be molested. The cost of the weekly payoff is, of course, passed along in higher prices to the purchasers of candy. The thug has the additional economic responsibility to impose the same terms on all other candy stores in the area so that his client won’t be at a disadvantage.

 Stay tuned for more updates and coverage.

Below is a news release from ABC National.

New Release

ABC Defeats Unlawful and Discriminatory New Hampshire Construction Contract

 Move Comes in Response to ABC Member Protest

Washington, D.C. – Associated Builders and Contractors (ABC) today announced that the U.S. Department of Labor (DOL) has cancelled its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement (PLA). The cancellation came in response to a protest filed with the Government Accountability Office (GAO) by ABC member North Branch Construction of Concord, N.H., with ABC support and representation. North Branch Construction challenged the PLA as unlawful and discriminatory.

“This is a real win for the principle of fair and open competition in government procurement,” said North Branch Construction attorney Maurice Baskin of Venable LLP, ABC’s General Counsel. “It is no coincidence that the Department of Labor cancelled its unlawful PLA mandate the day before the agency was required to file a response to our bid protest. We demonstrated that there was no justification for imposing a PLA on this project and that the PLA mandate violated the Competition in Contracting Act and other longstanding federal procurement requirements.”

“There is no justification for playing favorites in the government procurement process,” said ABC President and CEO Kirk Pickerel. “We hope that other federal agencies will heed this example and recognize that PLAs only result in delayed construction and harm to taxpayers. ABC will continue to protest any attempt to impose PLAs on federal construction projects in violation of competitive bidding laws.”

“The Department of Labor can still move this project forward by abandoning this illegal PLA,” said Ken Holmes, president of North Branch Construction. “Our company and other New Hampshire businesses deserve a fair opportunity to provide the public with the best construction product at the best price and we hope the Labor Department will build this project without a PLA in early 2010.”

A PLA is a contract 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 employees will never benefit unless they join a union.

The bid protest challenged the legality of the federal government’s recent shift in federal procurement policy concerning the use of discriminatory and costly PLAs. On Feb. 6, President Obama signed Executive Order 13502, which repealed a 2001-2008 prohibition on federal PLAs and encourages agencies to require PLAs on federal construction projects whose total costs exceed $25 million. The Federal Acquisition Regulatory (FAR) Council is in the process of reviewing public comments on its controversial July 14 proposed rule that would implement Executive Order 13502 into federal procurement code. ABC filed detailed comments challenging the implementation of Executive Order 13502.

The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since Executive Order 13502 was issued.

###

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

TheTruthAboutPLAs.com on this development: Rather than build this project without a discriminatory and costly (and probably illegal) PLA – and generate the related economic benefits this project would create for New Hampshire taxpayers - the DOL has inexplicably cancelled this project. 

This unfortunate decision also stopped the bid protest pending before the Government Accountability Office (GAO) that would have addressed the legality of federal government-mandated PLAs and Executive Order 13502.

Justice delayed, is justice denied.

Holmes filed a bid protest with the Government Accountability Office about the discriminatory and costly government-mandated project labor agreement (PLA) on the new U.S. Department of Labor Job Corps Center in Manchester, New Hampshire.  It is the first government-mandated PLA issued on a federal construction project since President Obama signed Executive Order 13502.

KH on the impact of a PLA on his local New Hampshire workforce:

•Q: How did your employees feel about being shut out of a project in the middle of their own state? You had looked at the project as a way to get some of your guys back to work, right?

•A: That’s correct. We’ve actually had in the last year at least a couple of layoffs. … And to answer your question, our employees are, of course, annoyed, particularly when it’s their dollars that are paying for this project and it essentially shuts us out of the game. And this is the type of project that would be right up our alley, so this was a project that we clearly had expressed interest in and wanted to bid and wanted to put our own people to work on. And we’re not being allowed to. From our perspective it’s arbitrary and … incredibly discriminatory. We just don’t understand it at all.

KH on why government-mandated PLAs are special interest “paybacks” to Big Labor:

•Q: President Bush had barred agencies from using PLAs and then Obama quickly repealed that executive order. Some folks see that as political payback. Do you agree?

•A: That’s certainly my opinion. … President Obama issued the executive order encouraging agencies to consider using PLAs, but they haven’t even put the guidelines or rules in place as to when it’s appropriate to consider — or even under what circumstances. Now, from my perspective, I can’t see that there would ever be an advantage to a PLA. We’ve been building for literally decades — my company has been in business in New Hampshire for 51 years — and there’s never been a need to have a PLA. Our projects get built, they are on time or ahead of schedule, they are on budget. We don’t have work force issues here in New Hampshire, so I don’t understand it. But be that as it may, what’s particularly perplexing is the public comment period hadn’t even ended on how President Obama’s executive order would be implemented and they came out with this project making it a mandatory PLA. … The only explanation that comes to my mind is that it’s political payback

KH on Big Labor’s bogus claim that a PLA guarantees high wages and benefits for all workers:

•Q: Doesn’t the Davis-Bacon Act mandate prevailing wages for federal projects?

•A: It does. … So when somebody has said, “Well, wouldn’t a worker for the union get paid more than one of your workers on this project?” the answer is no. The actual worker’s take-home would be the same or quite possibly even higher for my workers because union workers have to pay so much money in for union dues and so forth, which our workers don’t pay. Our workers get it in terms of actual gross pay. They actually get a paycheck that equates to the Davis-Bacon wages.

KH on why PLAs waste taxpayer dollars and why everyone should oppose government-mandated PLAs:

•Q: A Beacon Hill Institute study concluded that had PLAs been in place in 2008, the cost of federal construction projects exceeding $25 million would have increased by as much as $2.6 billion. In this economy a lot of projects might not get built, right?

•A: It’s been suggested that if you only have $100 million and the PLA is going to cost, say it’s 15 percent or 18 percent more, instead of building five $20 million projects you are going to end up building four $25 million projects. So I have heard a suggestion that that means for the same amount of dollars you are going to build less schools or less job corps centers or less courthouses or what have you. It certainly seems like a rip-off of the American taxpayer to me.

Let’s recap. This PLA is a rip-off of the American taxpayer, will shut out qualified local workers that are unemployed, is not responsible for high wages and benefits, and a special interest payback.  And President Obama wants more PLAs on federal construction projects?  Let’s hope a ruling from the GAO will put an end to this bad public policy.

The Concord Monitor ran a piece that features a quote from a qualified New Hampshire nonunion business, demonstrating that a PLA cuts competition (“Builder Confronts Union Law,” 10/8).

At least one New Hampshire company has withdrawn its stake in the project as a result of the labor agreement requirement. Pro Con Construction in Hooksett had put its name on a list of interested bidders early on.

The company is too large to qualify, but Executive Vice President Dan Dal Pra said it could have entered into a joint venture with a smaller contractor. The requirement for a labor agreement ruled that out.

“It would require that we change our whole way of doing business,” Dal Pra said. “It’s a good-sized job, and it seems that it’s a shame to cut out qualified contractors because they’re not union.”

The Washignton Examiner’s follow-up piece to this by Barbara Hollingsworth chronicles how PLAs discriminate against local and qualified construction employees (“NH firm files protest with GAO over PLA,” 10/7).

Ken Holmes, president of North Branch Construction, told The Examiner that “one of the requirements of the bid is that it is subject to a PLA, which very specifically requires general contractors to use exclusively union workers. But virtually every major contractor and subcontractor in New Hampshire is non-union. This basically knocks all of us out of the ballgame. We believe it’s discriminatory and violates the federal Competition in Contracting Act.”

Like all federally financed projects, Holmes says, the project is already required to pay Davis-Bacon wages. “Problem is, none of our employees could work on the job if the PLA stays on the contract.”

Holmes says his employees are “outraged” at being shut out of a construction project in their own state. “We all pay our federal taxes. With unemployment skyrocketing in New Hampshire over the last year and a half, they’d like to be able to work on a project right here,” Holmes said. “PLAs are special interest handouts that deny taxpayers the accountability they deserve from government contracts.”

Well said Ken Holmes. Executive Order 13502 and government-mandated PLAs are bad public policy.

The Union Label blog (“Obama’s Stimulus for Unions,” 10/8) provides an interesting persepctive about what a PLA means to taxpayers.

But even worse than that, these forced union sops will drive up the costs of the project, cause delays, and fill the pockets of corrupt union officials. So the federal dollars going to these projects will not be cost effective. It should be also remembered that these projects are being funded by the taxpayers.

In the end, this is neither about jobs, nor stimulus. In truth, this is simply a massive payoff from Obama to his supporters in the unions made at the expense of the national treasury as well as the exclusion of New Hampshire’s successful small businessmen.

With such a small union workforce available, it makes it virtually impossible for a New Hampshire contracting firm to have unionized employees to fill this requirement.  Furthermore, the Department of Labor requests that contractors exhibit three previous successful PLA projects, a request no New Hampshire contractors can meet.  And while the Department of Labor has designated this as a small business project, which would normally increase competitiveness for New Hampshire contractors, having the PLA requirement essentially prevents New Hampshire contractors from being able to successfully bid for this $35 million in-state construction project.

Senator Gregg stated, “The Administration’s decision to discriminate against successful and independent construction firms simply because New Hampshire employees choose to work in a union-free workplace and not bow down to the demands of big labor is extremely unfair to our state.  The request for bids issued by the Department of Labor requires that contractors employ a Project Labor Agreement (PLA) and requests they provide proof of completion of three prior PLA projects.  However, under these conditions there is not a single firm in our State that would be eligible to bid on this multimillion dollar construction project.  In a time of economic hardship, it is simply absurd to discriminate against local contractors and construction workers for the benefit of national labor unions.

“Further, this unfair practice could result in a lawsuit, which would only delay the beginning of construction for this critical project.  The Administration’s actions on this issue are completely backward.  Instead of expediting the construction of a Job Corps Center that will train and equip New Hampshire residents, while potentially creating New Hampshire construction jobs in the interim, the Administration has knowingly placed a roadblock on job training and increased economic activity in the Granite State. I urge the Administration to quickly reconsider this serious lack of judgment so we can get started on this essential project.”

The TruthAboutPLAs.com agrees with Senator Gregg’s sound evaluation of this discriminatory and costly PLA.

However, according to an article in the Manchester Union Leader, union officials disagree with Senator Gregg’s assessment of the PLA (“Gregg: Union rule threatens job center,” 9/18). The comments of Mark MacKenzie, president of the New Hampshire AFL-CIO, demonstrate an unrealistic and myopic point of view that represents narrow union special interests over those of qualified local non-union contractors and workers that deserve a fair shot at competing for work in their own state paid for by their own tax dollars.

“It may be an out-of-state contractor that bids the work, but it’s going to be New Hampshire people who work on the project,” MacKenzie said.

Unfortunately, MacKenzie ignores an inconvenient truth about PLAs: local union workers have preference over non-union local workers who are equally as qualified. In addition, typical PLAs give preference to non-local union members over quality local non-union workers.  These workers are called “travelers” and unless a PLA specifies that no travelers can be used, union workers from Boston will build this project instead of qualified New Hampshire contractors and their local workforce.

In other areas of the country, unions are quick to criticize the concept of out of state contractors winning local jobs, but in instances such as this, they conveniently amend their principles to suit their self-serving interests.

According to the article, PLA apologists such as Pat Long, former vice present of the New Hampshire Building Trades Council and a Democratic state representative, unwittingly makes an argument against PLAs:

“Under a PLA, a contractor would have to pay $37 an hour for ironworkers.

About $21 would go toward wages and the remainder toward retirement, health insurance and other benefits, he said. A non-union worker would get paid between $25 and $30 an hour, but get no benefits, Long said.”

Long is refering to a Basic Truth About PLAs that is offensive to non-union employees and their employers. If a non-union contractor signs a typical PLA, all employer contributions to an employee’s health, welfare and other benefit funds must be paid to union managed funds as stipulated in a PLA and applicable union collective bargaining agreements. 

Non-union employees will never benefit from employer contributions into union benefit funds unless they join a union and/or become vested in the benefit plans. Benefit plan vesting schedules are much longer than a typical construction project. In short, this scheme is a windfall for union plans because they don’t have to account for future liabilities and costs for the contributing non-union employee.  What’s worse is that PLAs prevent non-union employees from having benefits for the life of a project, unless their non-union employer continues to pay existing non-union benefit plans. This “double payment” of benefit costs is one of the reasons why taxpayers lose with PLAs -non-union contractors can’t give their best possible bid for a quality construction project.

PLA proponents often claim that without a PLA, non-union employees would not get health and reitrement benefits. That statement is absurd and is a misleading scare tactic. Non-union contractors offer attractive health and benefit packages. How else would they maintain a skilled and competent workforce to build the majority of public and private construction projects? And if non-union contractors didn’t offer competitive wages and benefits, wouldn’t more than  just 8.7 percent of New Hampshire’s construction workforce join a union?

In addition, because this is a federal construction job subject to Davis-Bacon wage rates, all contractors, regardless of their union affiliation, have to pay all construction workers in their specific trade (such as an ironworker) a set wage and benefit amount.

If you visit www.wdol.gov, you can look up the wage rates for a ”Building” Construction Type in Hillsborough County, New Hampshire and see that the last federal Davis-Bacon Wage determination for ironworkers in that county was made on 3/15/08 and it requires that ironworkers be paid $21.15 in wages and $16.75 in benefits. The total package is $37.90 per hour. All workers have to be paid that amount in cash if a contractor does not offer a benefit program, otherwise, a worker is paid $21.15 per hour in cash and $16.75 per hour in benefits goes into a contractor’s existing health, retirement and benefit programs.  If employers pay ironworkers less than a total wage and benefit package of $37.90 per hour, they are breaking the law. (An ironworker’s salary and benefit totals about $79K per year ($37.90 * 40 hours per week * 52 weeks per year) if there is full year-round employment on a federal construction project in this county.)

Arguments such as, “non-union workers don’t get paid a fair wage [even though there is a federal law that addresses this issue], therefore, PLAs are necessary” are fallacies that need to be challenged.

The bottom line is that a PLA on this project is a barrier to much needed jobs for qualified New Hampshire construction employees. Employees should not have to pay forced union dues, obey restrictive and inefficient union work rules and forfeit employer benefit contributions to union benefit and pension plans unless they join a union in order to work on a PLA construction project paid for by their own tax dollars.  A PLA will actually prevent a non-union employee from receiving benefits for the life of a construction project.

Senator Gregg is correct. A PLA has no business on this project.

Update: View the U.S. DOL’s “sources sought” notice for this project (Solicitation Number: DOL009RI20791) here.  You can view the presolicitation notice (Solicitation Number: DOL099RB20811) here. The soliciation is scheduled to be published on 10/1.