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.

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

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.”

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

New Release

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Merit Construction Alliance alleges that the union officials should have recused themselves when the UMass Building Authority voted in June to require the use of union workers on a massive overhaul of the Boston campus.

The complaint says Francis X. Callahan Jr., president of the Massachusetts Building Trades Council, and Edward W. Collins Jr. of the International Brotherhood of Electrical Workers, represent unions that could collect at least $5.2 million in dues from union workers on the campus project. The Merit Construction Alliance, which represents nonunion contractors and employees, warned after the board’s vote that it would file the ethics complaint against Callahan and Collins, both of whom are appointees of Governor Deval Patrick.

“The union board members were part of an election-year scheme by the Patrick-Murray administration to hand jobs to specials interests, despite the added costs to taxpayers and nonunion workers’’ Ronald N. Cogliano, president of the alliance, said in a statement yesterday.

Callahan told the Globe in June that his lawyers had reviewed his participation in the vote and advised that it would not be a conflict of interest because he will neither sign nor negotiate the contracts involved, nor receive any personal benefit.

In a letter to the Ethics Commission several days before the vote, Callahan asserted that his union’s interests in the project labor agreement were “remote, speculative, and not sufficiently identifiable to require my recusal.’’

“I’m confident there’s no ethical conflict, but I’m not going to comment on the complaint without seeing it,’’ Callahan said yesterday. “I’m not concerned about it.’’

Collins also denied any wrongdoing and called the complaint “a real reach.’’

“I believe I’m in full compliance and my actions as a board member were in full compliance’’ with state ethics laws, he said in an interview yesterday.

The allegation of ethical violations could resonate in the governor’s race because Patrick has strongly supported the union-only work agreement, drawing sharp criticism from his Republican challenger, Charles D. Baker.

Patrick contends that requiring union labor will guarantee a higher quality workforce and eliminate the risk of strikes, thus diminishing the potential for slowing down the complex overhaul and disrupting life on the campus. Baker argues that Patrick pushed the agreement as a favor for politically influential unions, even though it could drive up the cost of the project by $100 million.

The governor has angered many public-sector unions by cutting employee benefits during the economic downturn. He has had better relations with private-sector unions, particularly the construction trades.

In a speech to the Building Trades Council in March, Patrick announced that a labor agreement would be approved for the UMass campus project and that others were being considered for other large projects in the state.

Kyle Sullivan, a Patrick spokesman, declined to comment.

The $750 million in work at UMass Boston is a decadelong undertaking that includes, among other projects, the building of a new science center and the Edward M. Kennedy Institute for the United States Senate.

The 11-member UMass Building Authority, which has five Patrick appointees, approved the agreement on a 9-to-2 vote in mid-June, after Collins and Callahan spoke in favor of the pact.

TheTruthAboutPLAs.com has covered the controversy surrounding Gov. Patrick’s efforts to steer lucrative state construction contracts to his staunchest political supporters: Massachusetts construction trade unions. 

Today the Boston Herald editorial board blasted Gov. Patrick’s orchestration of this anti-competitive and “indefensible” crony contracting scheme. The editorial calls the participation of Big Labor bosses Collins and Callahan in the UMass Building Authority’s PLA vote “fishy” (“Challenging labor,” 8/11):

The Patrick administration’s decision to exclude non-union contractors from $750 million worth of construction projects at UMass-Boston over the next decade is, frankly, indefensible.

According to a group that represents non-union tradespeople, it’s also ethically suspect.

[snip]

It will be up to the Ethics Commission to determine whether a true conflict of interest exists, though on the surface it certainly seems fishy. A reversal of the authority’s vote would be the ideal outcome.

But if the complaint serves simply to renew focus on this horrendous policy decision – which amounts to a giveaway to organized labor that leaves thousands of out-of-work tradespeople still out of work and taxpayers on the hook for millions in unnecessary additional costs – then it will have served a useful purpose.

And if it prompts Gov. Deval Patrick to rethink his plan to expand the use of project labor agreements – which steer public construction work exclusively to unions in exchange for labor “harmony” – then all the better.

Unfortunately for taxpayers and unemployed tradespeople, that seems the unlikeliest of outcomes.

The ethics complaint was filed days after another incumbent Democrat governor’s administration became embroiled in an ethics scandal involving PLAs.

On Aug. 5, the Ohio Inspector General released a report blasting Gov. Ted Strickland’s (D) appointee to the Ohio School Facilities Commission (OSFC), Richard Murray — a former construction union advocate with the Laborers-Employers Cooperation and Education Trust (LECET) and union organizer with Local 423 of the Laborers’ International Union of North America (LIUNA) — who has been strong-arming school districts into using PLAs in order to receive OSFC money for school construction.

The investigation revealed that Gov. Strickland appointed Murray because the prior OSFC director wasn’t doing enough to ensure state contracts were awarded to unionized contractors. Murray was encouraged to steer contracts to union contractors so unions and their members would support Strickland in the upcoming election.

The report documents incredible examples of corruption and unethical behavior. For instance, Murray unilaterally instituted a PLA for Ohio blind and deaf schools that will be a $145,000 windfall for his union and the LECET.  Read all about this clear conflict of interest here and here.

The fascinating twist on this story is that the bids for the deaf and blind schools came in 41 percent - about $11 million – over budget with Murray’s PLA mandate. Ohio law says the schools must be rebid. Big Labor spin-doctors are attempting to convince stakeholders that the PLA was not responsible for the increased costs, but the public isn’t buying it.

There is a chance the schools will be rebid without a PLA, allowing the public to see another real-world experiment (see: case study in Fall River, Mass.) documenting the cost difference between schools bid with and without PLAs.

Three Ohio newspapers have published editorials that attack Strickland and call for Murray to step down as OSFC director. This likely will hurt Gov. Strickland in November.

Govs. Strickland and Patrick are two of  several incumbent Democrat gubernatorial candidates (see: Iowa and Illinois) who have resorted to funneling lucrative state construction contracts to unions via PLAs in order to secure Big Labor’s support in upcoming elections.

Additionally, President Obama was widely criticized for signing a pro-PLA Executive Order 13502 as part of a series of policy moves executed within his first month in office that benefitted Big Labor.  The order and related Federal Acquisition Regulatory (FAR) Council regulationsencourage federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost.

The following op-ed by Rep. John Kline, senior Republican on the U.S. House Education and Labor Committee, appeared in Red State yesterday in response to the president’s remarks.

Rep. Kline says that EFCA and President Obama’s Executive Order 13502, which encourages federal agencies to use government-mandated project labor agreements (PLAs) on federal construction projects exceeding $25 million in total cost, are “part of a disturbing culture of union favoritism” in Washington. 

Rep. Klines says PLAs give, “unionized firms a major advantage while driving up costs for taxpayers. These job-killing policies make American businesses less competitive and less able to expand and hire new workers.”

Read Rep. Kline’s op-ed after the jump. 

In June of 2009, the unemployment rate surged to 9.5 percent for the first time in almost 26 years. Despite some ups and downs, today the unemployment rate continues to hover near 10 percent and 14.6 million Americans are unemployed and searching for work. I see the evidence of this every time I travel back home to Minnesota: inevitably, the first concern my constituents raise is jobs – or the lack thereof. People want to know: Where are the jobs and what is Washington doing to help create them?

Unfortunately, Washington is doing more harm than good by creating a cloud of uncertainty that is hurting job creators and the workers they hope to hire. Tax hikes, record deficit spending, and increasing government control over the economy are forcing small businesses and entrepreneurs to the sidelines of economic activity. In particular, a proposal simmering in Congress, known as “card check,” would replace a secret ballot election with a public sign-up process for workers deciding whether to join a union. As a result, the bill would drive up costs on business, increase workplace conflict, and lead to fewer jobs.

The threat of this proposal is very real. Just yesterday, President Obama promised labor bosses he would remain in the fight to pass card check. Although the proposal has been unable to garner enough support to become law, there are persistent rumors that Democrats plan to convene an end-of-year “lame duck” session in which they could muscle through unpopular measures like card check before the 112th Congress is gaveled into session in January 2011.

It is no secret Big Labor invested heavily to produce a Democrat-controlled Washington. Nor is anyone surprised to learn they’re planning a repeat performance this fall, with two unions alone announcing plans to spend nearly $100 million to help Democrats hold their seats in Congress. And what do they expect from the Democrats they are helping to elect? At the top of their agenda is card check, which has been cleverly – indeed, deceptively – named the Employee Free Choice Act.

Secret ballots are a fundamental principle of American democracy. They remove intimidation and coercion from the voting booth and allow men and women to vote their conscience freely. Despite the bill’s lofty name, removing the secret ballot from union elections will give workers anything but freedom. If a secret ballot is good enough for electing Presidents and Members of Congress, it is should be good enough for workers trying to make ends meet and provide for their families.

While leaders of Big Labor claim this proposal is necessary to economic recovery, the facts suggest otherwise. One academic study estimated this proposal would cost our economy 1.5 million jobs in the first year if the unionization rate increased by just three percentage points as a result of card check’s public sign-up and forced government contracts. We have lost more than seven million jobs since the recession began. Card check would wipe out the job gains we have seen in recent months and the hopes of many unemployed Americans looking for work.

Card check is part of a disturbing culture of union favoritism that puts the whims of union bosses ahead of the best interests of rank-and-file workers. Already the Obama administration has weakened commonsense rules that would have helped shed light on how unions spend members’ dues. At the same time, the administration has called for Project Labor Agreements to be used on large federal construction projects, giving unionized firms a major advantage while driving up costs for taxpayers. These job-killing policies make American businesses less competitive and less able to expand and hire new workers.

Although Democrats have controlled all the levers of power in Washington since January of last year, Republicans have consistently offered better solutions to the challenges facing our country. One such solution is the Secret Ballot Protection Act. This proposal will ensure no one takes away a worker’s right to a secret ballot, protecting workers against coercion or intimidation at the ballot box and eliminating a union’s ability to force an employer to agree to card-check recognition.

Today, at AmericaSpeakingOut.com, I encourage you to let your voice be heard on this important issue. America Speaking Out is an innovative tool bringing the wisdom and wishes of the American people to their nation’s capital. Over the next several weeks, House Republicans will use every resource available to hear from the American people and use their commonsense ideas to draft a new governing agenda for our country. With your support at America Speaking Out, we can put forward a new agenda that protects workers and provides employers the certainty they need to create jobs.

When the Department of Labor releases the unemployment numbers for the month of July, we will learn whether job creators are back in the game or still seeing clouds of uncertainty. With your help we can take card check off the table and give job creators a reason to move forward confidently on behalf of their businesses and American workers.

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

Besides the obvious corruption inherent in such crony contracting, the real outrage is that taxpayers are forced to shoulder exorbitant premiums - sometimes a 20 percent markup – resulting from inefficient union work rules and a lack of competition from qualified merit shop contractors and their skilled and local nonunion employees who are effectively prevented from competing for contracts because of union-favoring PLAs.

Unfortunately, the PLA crony contracting isn’t limited to Ohio. In one of his first acts after taking office, President Obama signed Executive Order 13502, which encourages federal agencies to require PLAs on federal construction projects exceeding $25 million in total cost. It was widely viewed as a favor to Big Labor after they poured hundreds of millions of dollars into the campaign coffers of Democrats running for office in Congress and around the country during the last election cycle. 

Released this morning, the Ohio Inspector General’s report (and supporting evidence, see exhibit 1-12 and 13-26) is remarkable because the investigation is thorough, the evidence is overwhelming and the findings echo the hundreds of stories and emails sent to TheTruthAboutPLAs.com since we launched this blog in April of 2009 from concerned citizens, elected officials, contractors and construction employees and their families victimized by Big Labor’s special interest PLA racket.

The public and honest elected officials need to understand that this is the unfortunate and frequent reality when building trades union officials with a bias towards union members and union contractors are elected or appointed to positions of public trust.

Check out some key excerpts from Ohio Inspector General’s report after the jump:

• Our investigation found that the administration removed its previous OSFC director and appointed Murray in September 2009, in part, to improve relations with unions and ensure that unions were regarded as “constituents” or “stakeholders” at the OSFC. Murray had been a longtime union leader when he was appointed OSFC director. Rather than put unions on equal footing, we found that Murray provided them with undue access and accommodations. In ways large and small, Murray repeatedly failed in his responsibility to remain neutral on union matters.
• On April 22, 2010, Murray announced to the Commission that he would engage in a PLA for a $37 million project at the combined Columbus campuses of the Ohio School for the Deaf, and the Ohio State School for the Blind. In the absence of a local school district partner, the General Assembly granted the OSFC sole management authority. For Murray, adopting a PLA was more than a controversial policy decision; it posed what we believe to be an appearance of impropriety. Typical of PLAs, the agreement dictates a certain amount of each union employee’s hourly wages will be deducted for the local union hall, as well as for regional and state union umbrella groups. However, in this case, Murray belongs to Local 423, one of the unions engaged in the PLA. Local 423 will receive union dues from employees on the project; and, under the terms of the PLA Murray signed, Murray’s former employer, LECET, also will be paid for each hour of employee work. Separately, LECET’s partner organization, the Ohio Laborers’ District Council, also will receive a portion of each union employee’s wages. While the precise value of the PLA for these three union groups will not be known until the project is completed, we conservatively estimate the payouts could total $145,000. Given his ties to these groups, Murray should not have been involved in negotiating this PLA, nor should he have signed it.
• Encouraging union workers, regardless of whether they worked on a job site, to snoop on non-union contractors was an abuse of Murray’s authority on several levels. Not only was Murray inappropriately making plain his preference for union construction, he literally mobilized union labor against non-union contractors. These two factions compete for OSFC work and sometimes work side-by-side on projects. Promoting discord and taking sides demonstrated exceedingly poor judgment on Murray’s part.
• On numerous occasions Murray also accompanied union officials when they attempted to persuade local school officials to adopt a PLA. During one such meeting, the union representative berated school officials with profanities and racial slurs for 15 minutes while Murray sat silently by his side.
• Murray also made significant personnel and building-design decisions, based solely on complaints from union or trade representatives, without making any effort to substantiate the complaints. Murray immediately fired the OSFC chief legal counsel, who was unpopular with organized labor, and boasted about it at union meetings. When a union official complained about personality clashes with an OSFC project administrator in southern Ohio, Murray pulled her off several projects without verifying the complaint or even reviewing her work history or personnel file.
• Similarly, the Ohio Masonry Association, which represents union and non-union masons, complained about some school districts opting for OSFC-approved poured concrete walls, which eliminate the need for masons and bricklayers. Murray promptly suspended their use. Murray made the decision without checking the association’s claims about poured walls being inferior or soliciting opposing viewpoints.
• On January 8, 2010, Murray sought an Ohio Ethics Commission advisory opinion about whether he could work as a paid consultant for LECET [Murray was previously employed by a construction union advocacy group, the Laborers-Employers Cooperation and Education Trust]. Murray withdrew the request before the Ohio Ethics Commission could issue a determination, but for Murray to even consider such an arrangement was an astonishing indication of his divided loyalties.
• In the course of our investigation, we determined that the OSFC, which spends more than $1 billion a year, relies on a system prone to oversights and inconsistencies in the bidding process. The system, while predating Murray’s tenure, enabled Murray to impose his pro-union biases where there should have been better-defined policies and procedures. In particular, the OSFC lacks a uniform process for evaluating bids and disqualifying bidders that performed poorly on past OSFC projects. These shortcomings made the OSFC and Murray vulnerable to allegations of wrongful acts and omissions, and left them poorly positioned to defend themselves. As part of this report, we are making several recommendations, including standardization of the OSFC’s bid evaluation process, the documentation of contractors’ past performance, and clarification of the process for disqualifying “non-responsible” bidders. We also are recommending that the Commission take action to ensure the executive director demonstrates neutrality regarding school districts’ selection of contractors, regardless of prevailing wage or PLA matters.

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.”

Fagan uses a government-mandated project labor agreement (PLA) implemented via legislation called the Alaska Gasline Inducement Act (AGIA) to ilustrate his point. The PLA would apply to one of the competing proposals to build a $20 billion natural gas pipeline in Alaska.

The picture to the left is one of the most telling pictures taken in the state of Alaska in the past 20 years. It is of former Governor Sarah Palin signing the AGIA legislation. You’ll notice to her left is AFL-CIO boss Vince Beltrami.

Someone asked me the other day who I thought were the three most powerful people in Alaska. The answer is easy I said. Vince Beltrami, Vince Beltrami, and then there is Vince Beltrami.

One of the best-kept secrets in Alaska is it’s not “Big Oil” running the state. It’s not the Republican Machine. It’s not even the liberal media. No Alaska’s most powerful force when it comes to policy is “Big Labor.”

Think about it for a second. The Palin/Parnell administration and the legislature has declared an all out war on “Big Oil.” That proves the industry has little clout in Juneau.

But what has happened under Palin/Parnell? The size of state government, especially the operating budget, has exploded. What’s the biggest agenda of “Big Labor”? Grow government. It’s the only sector of the economy they still control.

But not only is “Big Labor” getting its way in the government sector, thanks to government, union bosses are making strides in the private sector through what are called project labor agreements.

A project labor agreement, or a PLA as it is called, is an agreement between union bosses like Beltrami and the government requiring non-union workers to first give union bosses like Beltrami cash before working on a job.

AGIA has a PLA built in it meaning anyone in the construction workforce wanting to build the AGIA line, must first give “Big Labor” bosses cash. The problem is more than 70 percent of the construction workforce in Alaska does not belong to a union.

Now you are getting why the Beltrami hovering over Palin as she signs the AGIA legislation picture is so telling.

You may ask why would any politician ever sign into law such a ridiculous policy as a PLA. After all a PLA is nothing more than legalized extortion. Forcing those who chose not to join a union to give the union cash just to work.

We know why Democrats would enact such an immoral policy. They are legally bought and paid for by “Big Labor”. But here’s why “Big Labor” is so powerful in Alaska. So are many Republicans.

Did you know Republicans Nancy Dahlstrom, Carl Gatto, John Harris, Mike Hawker, Bob Lynn, and Bill Stoltz all voted to put a PLA in AGIA. Of course the Palin/Parnell administration lobbied to have the extortion producing provision in the bill.

Yes “Big Labor” is so powerful in Alaska it has now infiltrated even the Republican Party.In fact only 13 Republicans in the house voted against the PLA in AGIA. One of them is running for governor, Ralph Samuels.

“Big Labor’s” reach extends beyond politicians. Have you noticed how favorable the coverage of AGIA has been from the Anchorage Daily News? That’s because if “Big Labor” is behind it, so is the Daily News.

And “Big Labor” adores AGIA. And why shouldn’t labor bosses love AGIA. It will force 70 percent of the state’s workers to hand over cash if they want to work on the pipeline. And what if the non-union workers refuse to be extorted from. Then “Big Labor” bosses will bring their union buddies up from other states to fill the pipeline jobs.

Hey Vince, it’s good to be king.

It’s hard to fathom politicians as polarizing as Sarah Palin and President Obama share a common position on such a controversial policy as government-mandated PLAs. 

Sarah Palin supported a PLA benefiting Alaska’s Big Labor bosses via AGIA and in one of his first acts in the White House, President Obama signed Executive Order 13502 Feb. 6, 2009, which encourages federal agencies to use anti-competitive and costly PLAs on a case-by-case basis when agencies build federal construction projects exceeding $25 million.

On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule, effective May 13, implementing President Obama’s pro-PLA Executive Order 13502 into federal procurement regulations.

The clear takeaway from Fagan’s analysis is that despite the lip service to the contrary, Parnell is in the pocket of Big Labor’s special PLA interests, while candidate Ralph Samuels has a clear record of supporting fair and open competition.

One of President Barack Obama’s first acts in office was signing Executive Order 13502, which urged agencies to consider requiring that contractors who do government work use unionized workers. Construction workers everywhere have seen hard times in this recession, but Obama gave preference to those who pay union dues that eventually support Democrats’ election campaigns.

This wasn’t exactly what voters expected from the man who promised to change the tone of Washington, but it got worse. Obama launched a dizzying flurry of actions designed to reward organized labor at the expense of everyone else.

Perhaps the low point was his attempt to appoint Becker to the National Labor Relations Board.

The NLRB is the panel responsible for issuing judgments in disputes between workers and private-sector employers. Specifically, the board is responsible for protecting the bargaining and organizing rights of workers as defined by the National Labor Relations Act of 1935, which sets limits on the practices of unions and employers…

Be sure and read the entire article to understand the advantages Big Labor is getting from the administration.

Brubeck was invited onto the program to discuss how the free market is being distorted by anti-competitive and costly government-mandated project labor agreements (PLAs) and President Obama’s pro-PLA Executive Order 13502, which encourages federal agencies to funnel lucrative federal construction contracts exceeding $25 million to unionized contractors and their union employees via PLAs.

Listen to the interview here at the 29:15 mark.