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.

This bill would require the use of wasteful and discriminatory project labor agreements (PLAs) on all projects costing more than $200,000 that receive some form of support from the District. Coupled with President Obama’s pro-PLA Executive Order 13502, which encourages federal agencies to funnel federal construction contracts exceeding $25 million to Big Labor, the D.C. bill, if passed, will ensure that union contractors and union members will have a monopoly on almost all public construction in the District of Columbia.

Video of the hearing is available here.

One of the most important moments of this nearly nine hour marathon hearing came at just before the two hour mark, when Councilmember Mary Cheh’s (D-Ward 3) questions prompted PLA proponent and Big Labor attorney Gerald Waites to admit that workers have to be members of a union or join a union in order to work on a PLA project.

Minutes later, Cheh’s questioning forces Waites to admit that once an employee joins a union, they are prohibited from working for nonunion contractors unless they give up their union card and forfeit pension contributions earned on the life of a PLA project that are sent to the union-managed pension plans.

Testimony like this exposes the true purpose of wasteful and anti-competitive government-mandated PLA schemes: Big Labor needs the government to create a false choice for local and qualified nonunion employees. They are forced to choose between being forced to join and pay dues to a construction trade union or not work at all.  With just 12 percent of the District of Columbia’s private construction workforce belonging to a labor union, it is easy to see how this false choice would harm the employment opportunities for DC residents.  

This supports the conclusion of a March 31 report on government-mandated PLAs, “The Problem with PLAs in the District of Columbia,” which finds that, “In the context of the current construction economy, government PLA mandates appear likely to have a destabilizing impact on an already depressed industry in the District of Columbia, leading to reduced employment of local residents and considerable harm to small and disadvantaged businesses.”

"The Problem with PLAs in the District of Columbia," Anirban Basu (April, 2010)

Obviously, TheTruthAboutPLAs.com will continue to watch this anti-competitive and harmful measure with close interest.  We hope that D.C. Council members heard enough yesterday to know that this bill is just an attempt to bolster Big Labor’s pocketbook at the expense of D.C. taxpayers and residents seeking good paying jobs.

Also, check out the following media stories for more information:

• Washington Post: Unions, Construction Lobby Wage War over D.C. Council Bill
• Washington Business Journal: Labor Agreements could make Construction more Expensive in D.C.

This legislation would require contractors building District construction projects costing more than $200,000 that receive government assistance to sign wasteful and discriminatory government-mandated project labor agreements (PLAs).

TheTruthAboutPLAs.com has devoted numerous blog posts documenting problems with this legislation and DC’s poor experiences with PLAs.

Coupled with President Obama’s pro-PLA Executive Order 13502, which encourages federal agencies to funnel federal construction contracts exceeding $25 million to Big Labor, the D.C. bill, if passed, will ensure that union contractors and union members will have a monopoly on almost all public construction in the District of Columbia. 

Such political favoritism will have a dramatic impact on the District’s construction industry, where more than 88 percent of the construction workforce does not belong to a labor union. This giveaway to Big Labor won’t help the record unemployment already hurting the D.C. construction industry.

In addition, this legislation will ensure that D.C. taxpayers will pay for four schools, roads and hospitals for the price of five.

A March 31 report on government-mandated PLAs, “The Problem with PLAs in the District of Columbia,” examines existing data indicating whether government-mandated PLAs make sense in the District of Columbia.

Here is a key finding from the report:

“In the context of the current construction economy, government PLA mandates appear likely to have a destabilizing impact on an already depressed industry in the District of Columbia, leading to reduced employment of local residents and considerable harm to small and disadvantaged businesses.”

The study’s compelling economic data allows readers to conclude that PLAs make little sense in the District of Columbia construction market.

Let’s hope that sound policy trumps special interest politics and the D.C. Council kills this bill or makes the appropriate fixes to ensure D.C. construction projects continue to be built using free and open competition.

Here are the highlights (Our emphasis and links added):

There is good reason to be concerned about the viability of Pennsylvania’s merit shop construction contractors and employees in this tough economic climate, where one in four construction workers is unemployed.

A few years ago, Gov. Ed Rendell promised his political supporters in the Pennsylvania construction unions that the Department of General Services would require contractors to sign project labor agreements (PLAs) that require the use of union labor in order to participate in more than $800 million of upcoming state correctional institution construction work.

This promise was a condition of a deal between DGS and the Pennsylvania Building and Construction Trade Council, in which the council promised to support the prison construction appropriation through the state Legislature in exchange for government-mandated PLAs on the prison work.

This “deal” contained a provision that for individual prisons over $15 million if the Keystone Research Center recommended that a project labor agreement be used, the Department of General Services would require one on the project.

A review of public records reveals the majority of the Keystone Research Center’s 20 board members work for labor unions and that the center received more than $350,000 from organized labor between 2005 and 2008. Of particular note is the fact Frank Sirriani, the Building Construction Trade Council president who signed the letter to the Department of General Services requiring PLAs was a board member of the center.

Even though initial bids on one of the first PLA prison projects were over budget by millions of dollars, Gov. Rendell’s administration keeps fighting to have the project labor agreements attached to these projects.

[snip]

PLAs hurt quality merit contractors and their loyal employees because they require jobs to be awarded only to contractors who agree to recognize unions as representatives of their employees — without a vote from their existing employees.

These schemes require contractors to hire all or most of their labor from union hiring halls, and the few nonunion employees who may be permitted to work on a PLA project would have to pay union dues.

In addition, contractors would have to pay health and pension benefits twice — once to existing benefit plans and once to the union-managed plans — because nonunion employees wouldn’t benefit from employer contributions to union plans unless they joined a union and became vested in its plan.

Other costs loom as well. Nonunion contractors and employees must follow inefficient union work rules, and nonunion contractors must hire unfamiliar union labor from union hiring halls rather than use their current employees.

Simply put, PLAs stifle competition and increase costs, not just for nonunion contractors and employees, but also for taxpayers. In fact, studies demonstrate that project labor agreements increase costs by up to 18 percent when compared with non-PLA projects, even when both types of projects are subject to prevailing wage laws.

Pennsylvania workers and businesses should demand that these special interest handouts on state construction be stopped. The Open Contracting Act (H.B. 2010), by state Rep. John Bear, R-Lancaster, would prohibit these union-favoring agreements on state and state-funded construction projects.

At the federal level, there is growing support for The Government Neutrality in Contracting Act (S.90/H.R. 983), which would ensure that union and nonunion firms have a level playing field, free from PLAs, to compete for federal and federally assisted construction contracts.

Here at TheTruthAboutPLAs.com, we couldn’t agree more.

Visit here for more information about costly and discriminatory PLAs in Pennsylvania.

Here are the highlights:

Callahan and the governor say they want construction work performed by local residents, but the policies they support would make that almost impossible.

According to unionstats.com, 80 percent of Massachusetts construction workers don’t belong to a union. But in a speech last month before the construction unions, Patrick bragged that 80 percent of construction spending controlled by his administration is being carried out by union workers. He noted that the number is 96 percent on the commonwealth’s largest current project, at Worcester State Hospital.

Locking out the local non-union majority will only serve to increase interest among out-of-state union firms. This happened on the Big Dig, and it’s no surprise that almost all the out-of-state contractors working on Massachusetts projects in the Herald report are union.

In his speech, Patrick endorsed the use of project labor agreements (PLAs) on future state construction. That would make the problem even worse. PLAs require unions to be the sole and exclusive source of all job-site labor.

The governor implied that his proposed casinos would be among the projects built under a PLA, saying, “That’s why we push so hard for destination resort casinos, with union jobs at union wages and benefits during construction and operation alike.”

He added that the commonwealth would use a PLA on the new $150 million science facility and other capital improvements at the UMass-Boston campus. He identified the Salem State College library, a courthouse in Lowell, a UMass-Amherst academic building and the second phase of restoration of the Longfellow Bridge, which connects Boston and Cambridge, as additional PLA candidates.

Seemingly lost in the rush toward PLAs is the fact that the Massachusetts Supreme Judicial Court has placed strict limits on their use. Philadelphia Mayor Michael Nutter said it best when he described project labor agreements as “creating an environment of economic apartheid.”

Here at TheTruthAboutPLAs.com, we are regularly forced to confront the myth that PLAs ensure a local workforce.  More information is available here.

Read Greg Beeman’s full op-ed after the jump.

Closed shop costs jobs

By Greg Beeman | Thursday, April 8, 2010 | http://www.bostonherald.com | Op-Ed

Responding to a recent Herald report about work on stimulus-funded Massachusetts construction projects going to out-of-state companies, Gov. Deval Patrick said he wants the work done by people in the communities where the jobs are happening. Construction union leader Francis X. Callahan declared that the money was supposed to stimulate the economy in Massachusetts.

Callahan and the governor say they want construction work performed by local residents, but the policies they support would make that almost impossible.

According to unionstats.com, 80 percent of Massachusetts construction workers don’t belong to a union. But in a speech last month before the construction unions, Patrick bragged that 80 percent of construction spending controlled by his administration is being carried out by union workers. He noted that the number is 96 percent on the commonwealth’s largest current project, at Worcester State Hospital.

Locking out the local non-union majority will only serve to increase interest among out-of-state union firms. This happened on the Big Dig, and it’s no surprise that almost all the out-of-state contractors working on Massachusetts projects in the Herald report are union.

In his speech, Patrick endorsed the use of project labor agreements (PLAs) on future state construction. That would make the problem even worse. PLAs require unions to be the sole and exclusive source of all job-site labor.

The governor implied that his proposed casinos would be among the projects built under a PLA, saying, “That’s why we push so hard for destination resort casinos, with union jobs at union wages and benefits during construction and operation alike.”

He added that the commonwealth would use a PLA on the new $150 million science facility and other capital improvements at the UMass-Boston campus. He identified the Salem State College library, a courthouse in Lowell, a UMass-Amherst academic building and the second phase of restoration of the Longfellow Bridge, which connects Boston and Cambridge, as additional PLA candidates.

Seemingly lost in the rush toward PLAs is the fact that the Massachusetts Supreme Judicial Court has placed strict limits on their use. Philadelphia Mayor Michael Nutter said it best when he described project labor agreements as “creating an environment of economic apartheid.”

Patrick also failed to mention the predictable result of barring 80 percent of the marketplace from bidding on state projects. Research from the Beacon Hill Institute at Suffolk University shows that PLAs increase construction costs by 12 percent to 20 percent – hardly a premium we can afford with Massachusetts in the third year of a deep fiscal crisis.

The administration may not be concerned about the added cost of union-only construction, but taxpayers are. When asked in a Suffolk University/7 News poll if private contractors should be compelled to hire all their workers through unions, respondents said no by a resounding 69 percent to 24 percent margin.

Last year alone, Massachusetts lost 18 percent of its construction jobs. Union-only construction would accelerate job losses and result in out-of-state contractors and workers reaping even more of the benefits from Massachusetts projects. If we want to keep more construction jobs local, let’s not adopt policies that discriminate against most of the local industry.

As regular readers of TheTruthAboutPLAs.com remember, Gov. Ed Rendell (D) promised the Pennsylvania construction unions in 2008 that the Department of General Services (DGS) would require contractors to sign wasteful and discriminatory project labor agreements (PLAs) in order to work on over $800 million in upcoming state correctional institution construction.

This promise was a condition of a sweetheart deal between Rendell and the powerful Pennsylvania Building and Construction Trade Council, in which the council promised to support the prison construction appropriation through the state legislature in exchange for government-mandated PLAs on the prison work.

Fast forward to March 2010, despite a significant public relations campaign, a serious legislative inquiry and ridiculously inflated initial bids, the Rendell administration is still fighting to keep their handout to Big Labor attached to the projects.

Here’s an excerpt from a Pittsburgh Post-Gazette article (“Dispute Between Three Builders Delays Prisons,” 3/14) describing the situation:

State officials wanted to start work months ago on the first of three new prisons to ease crowding in the corrections system, a problem that has forced 2,000 inmates to be shipped out of state.

But a groundbreaking date for the first new State Correctional Institution, to be built in Centre County, is still not known, and a major reason can be summed up in three words — Project Labor Agreement.

Rendell administration officials and labor unions favor PLAs, but nonunion builders don’t, and the competition between union and nonunion builders for the lucrative prison construction work has been fierce.

In 2008, Democratic Gov. Ed Rendell’s administration signed a deal with union contractors to use PLAs to build the new prisons. The first prison — SCI Benner, to be located in Benner Township near the existing SCI Rockview — will cost about $200 million and hold 2,000 inmates.

A second new prison will be twice that size — holding 4,000 inmates and costing about $400 million. It will be built near the aging SCI Graterford in suburban Philadelphia and will be the new home for its 3,700 inmates. The current prison is to be emptied and mothballed.

Though the Benner and Graterford projects are months late in getting under way, the state now hopes to award contracts for them this spring and break ground this summer.

A third new prison, holding 2,000 prisoners and also costing about $200 million, is to go in Fayette County, at a site still to be announced. The goal is to have that project under way late this year, with all three prisons to be completed in about three years.

Although the Corrections Department operates the state’s system of 27 prisons, the three construction projects are being handled by the Department of General Services, which has been tangling with a group of nonunion contractors over the labor agreements since last summer.

General Services agreed two years ago with a group of politically powerful labor unions — the Pennsylvania Building and Construction Trades Council — to use the agreements for the prisons.

Construction “will require that labor organizations affiliated with the Building Trades will be the exclusive bargaining agents for all construction labor trades and crafts workers on each such project,” states a letter signed in April 2008 by James Creedon, secretary of the Department of General Services and a Rendell appointee, and Frank Sirianni, president of the state Building and Construction Trades Council.

Despite the obvious need to get this construction underway, both due to prison overcrowding and to help with the staggering unemployment in the construction industry, the Rendell administration continues to insist that PLAs need to be utilized on these projects.

Here is a second excerpt from the Post-Gazette article:

The request for an injunction to stop the Benner project ended in August when the state rejected all six proposals it had received because all of them were too high — meaning they exceeded the $200 million budgeted for the work.

But legal wrangling resumed in September when General Services sought bids for the new Graterford prison. Nonunion firms again sued over the PLA requirement but this time, Judge Pellegrini ruled in the state’s favor, denying the plaintiffs’ request for an injunction to stop the project.

In his ruling, he said, “The public would be harmed” if he granted the injunction because it would delay efforts to ease overcrowded and possibly dangerous conditions in state prisons. The decision is being appealed to the state Supreme Court.

The Benner project now has been delayed for nine months. Mr. Creedon said it’s ironic that with hundreds of construction workers out of work, the opponents of the labor agreements have prevented the prison projects from getting started and putting people to work.

New Benner construction proposals were sought last week and a contract could be awarded by early May.

“We can’t wait around any longer,” Mr. Creedon said, adding that he hoped the Benner prison work would begin by early summer.

PLAs won’t be mandated this time for the Benner prison, a decision that Diane Tokarsky, a lawyer for nonunion builders, called “encouraging.”

However, a PLA will be required when the new bids are sought for the Graterford prison project this spring, said General Services spokesman Ed Myslewicz. The department will do so because it has a court decision affirming the use of the agreement for that project, he said.

This is just another example of PLAs as political payback to Big Labor at the expense of the taxpayers.

The Engineering News-Record (ENR) also covered this story through a reprint of the Pittsburgh Post-Gazette article available here.

On Feb. 12 the Vermont Senate Transportation Committee held a hearing on the Lake Champlain Bridge PLA where Associated General Contractors of Vermont testified against the PLA and ABC National submitted this statement against the Lake Champlain Bridge project PLA. ABC Empire State also issued this press release.

On Feb. 17, the Vermont House referred a joint resolution opposing the Lake Champlain Bridge PLA, J.R.C. 40, to the committee on General, Housing and Military Affairs.

The New York State Department of Transportation (NYSDOT) is evaluating whether a PLA is appropriate for this $75 million project, of which 10 percent is being funded by the state of New York, 10 percent by the state of Vermont and 80 percent by a grant from the U.S. Department of Transportation’s Federal Highway Administration (FHWA).

New York Executive Order 49 on PLAs
A 1997 New York executive order (E.O. 49), signed by Gov. George Pataki, requires all state agencies to consider a PLA for state-funded projects but they must show a proper “business purpose” and they must follow “the interests of the State’s competitive bidding statutes” established in AGC v. NY State Thruway Authority.

“…agencies should be mindful that, in the past, the courts of the State of New York have struck down any such agreement wherein a contracting entity was unable to show a proper business purpose for entering into such agreement.

No project labor agreement shall be approved by an agency unless the decision to enter into a project labor agreement has, both as its purpose and likely effect, the advancement of the interests of the State’s competitive bidding statutes.”

A consequence of Executive Order No. 49 is that public agencies considering the use of PLAs prior to large public works projects authorize “studies” in order to determine the cost-effectiveness of a PLA. The studies often justify the need for a PLA and have been criticized by the construction community because they tend endorse the use of PLAs without any accurate analysis of costs, labor market forecasts, construction density and other factors that may vary from region to region. The arguments of PLA opponents are rarely acknowledged or addressed in these studies.

Frequently, firms with an existing bias in favor of PLAs, and/or a clientele of construction labor unions, union contractors and union-only construction owners produce these studies – which adds yet another reason to question their objectivity and importance in determining sound public policy (not to mention the added cost to taxpayers of a farcical study with a pre-determined outcome).

Lake Champlain Bridge PLA Feasibility Report
The NYSDOT hired Arace & Company of Warwick, NY to draft a feasibility report on the PLA for the Lake Champlain Bridge project. As you can see from their website, they strongly support PLAs.

A reader recently sent TheTruthAboutPLAs.com a Jan. 27 version of the report (it is unclear if it is a final version and if it has been submitted to the NYSDOT yet) and not surprisingly, it recommends a PLA.  The draft we reviewed contains numerous errors, faulty logic and baseless assumptions that support the author’s assertion that PLAs offer cost savings to taxpayers.

The report was circulated with this “Standard Project Labor Agreement” by the New York Construction Trades Council.  The the sample PLA contains provisions that force union representation on nonunion workers without a secret ballot election, prevent nonunion employers from hiring most of their existing workforce on the PLA project, and mandates that employers contribute benefits to labor and management run union health and pension plans that nonunion employees will never benefit from unless they join a union. All of these provisions discourage competition from merit shop contractors as outlined in more detail at ”Project Labor Agreement Basics: What is a PLA?” 4/24/09.

Article 4
SECTION 1
PRE-HIRE RECOGNITION

The Contractors recognize the Unions as the sole and exclusive bargaining representatives of all craft employees who are performing on-site Project Work, with respect to that work.

SECTION 2
UNION REFERRAL

A. The Contractors agree to hire craft employees for Project Work covered by this Agreement through the job referral systems and hiring halls established in the Local Unions’ area collective bargaining agreements (attached as Schedule A to this Agreement). Notwithstanding this, Contractors shall have sole right to determine the competency of all referrals; to determine the number of employees required; and to select employees for layoff (subject to Article 5, Section 3). In the event that a Local Union is unable to fill any request for qualified employees within a 48-hour period after such requisition is made by a Contractor (Saturdays, Sundays and holidays excepted), a Contractor may employ qualified applicants from any other available source. In the event that the Local Union does not have a job referral system, the contractor shall give the Local Union first preference to refer applicants, subject to the other provisions of this Article. The Contractor shall notify the Local Union of craft employees hired for Program Work within its jurisdiction from any source other than referral by the Union.

B. A Contractor may request by name, and the Local will honor, referral of persons who have applied to the Local for Project Work and who meet the following qualifications:

(1) possess any license required by New York State law for the Project Work to be performed;
(2) have worked a total of at least 1000 hours in the construction field for the Contractor during the prior 3 years; and
(3) were on the Contractor’s active payroll for at least 60 out of the 180 calendar days prior to the contract award.

C. No more than twelve per centum (12%) of the employees covered by this Agreement, per Contractor by craft, shall be hired through the provisions of this paragraph B. Under this provision, name referrals begin with the eighth employee needed and continue on that same basis.

Learn how the following pension provision in typical PLAs harms nonunion employees and employers here and here. 

Article 11
SECTION 2
EMPLOYEE BENEFITS

A. The Contractors agree to pay promptly contributions on behalf of all employees covered by this Agreement to those established jointly trusteed employee benefit funds designated in Schedule A (in the appropriate Schedule A amounts).

B. The Contractor agrees to be bound by the written terms of the legally established jointly trusteed Trust Agreements specifying the detailed basis on which payments are to be paid into, and benefits paid out of, such Trust Funds with regard to Project Work done under this Agreement for those employees to whom this Agreement requires such benefit payments.

If the NYSDOT evaluates the feasibility report and finds it sufficient to justify a PLA and comply with existing state law, the NYSDOT will have Big Labor draft a similar PLA for this project, approve the PLA and then present the study and the draft PLA to the FHWA to make sure the PLA complies with federal competitive bidding laws and other federal strings attached to the FHWA’s federal assistance.

But the report and PLA will meet fierce opposition and perhaps a legal challenge according to some of the recent media coverage listed below and in a recent article in The Post-Star (Glens Falls, NY) (“Lawsuit Could Delay Bridge Construction,” 2/19).

General Contractors President AJ Castelbuono said the goal is to prevent a PLA from being mandatory on the $75 million job.

“If this is such a great document and if a union contractor wants to sign it then great, but if a non-union contractor thinks he doesn’t need it that’s great, too. Why impose it on everybody?” he said.

Although Castelbuono said the people in and around Crown Point are in a dire need of a fix for their transportation woes, he said he can’t let the project move forward if a PLA is going to be used.

“A lot of the bridge builders in the community and surrounding communities happen to be non-union, open shop. This effectively means they really can’t bid the job without changing their labor policies and without giving up their crews. After all that’s how contractors bid work, based on their historical productivity of their crews,” he said.

…Castelbuono wouldn’t release his source, but said he received a copy of the study and said it recommends a PLA for the bridge project.

“I literally personally negotiate the labor agreements that cover that bridge and the consultant never talked to me about the agreement or the cost of the agreements. He’s only spoken to organized labor. The study is skewed and vacillated from fantasy to fabrication,” he said.

In a Feb. 12 letter to FHWA Administrator Victor Mendez, Associated General Contractors Chief Executive Officer Stephen Sandherr asked FHWA “to deny New York’s request to mandate a project labor agreement” on the Lake Champlain Bridge project.

ABC, AGC, and their respective chapters in NY and VT, concerned taxpayers, construction employees and other groups will continue to oppose a special interest government-mandated PLA and promote free and open competition on the Lake Champlain Bridge project. We want this project built immediately by local employees and qualified companies that can build the best possible quality project at the best possible price.

Additional coverage:
ABC Empire State’s press release opposing the Lake Champlain Bridge PLA
The Times of Ti (Contractors oppose possible union deal on bridge,” 2/23).
WNZB.com (“Senators, Organizations Spar over Bridge Project Labor Agreement,” 2/22).
North County Gazette (“Myths Dispelled About PLAs & Champlain Bridge,” 2/20).
The Press Republican (“New Champlain Bridge Could See Lawsuit,” 2/16).
Albany Times Union (“Threatened lawsuit could delay Champlain Bridge rebuild,” 2/15).
Albany Times Union (“Blowup over a blowup,” 12/28/09).

As regular readers recall, DGS lead on effort on behalf of the Rendell Administration to require PLAs on over $800 million of prison state construction.

Click here for more information on this issue and other PLA developments in Pennsylvania.

Senator Smucker’s statement on PLAs for the Rockview prison project in Centre County is available here.

Clearly on behalf of Big Labor, District Council member Michael Brown recently introduced legislation that would require wasteful and discriminatory project labor agreements (PLAs) on District construction projects valued at more than $200,000 that receive government assistance.

PLAs have history of failure in D.C., which Mr. Brown seems interested in replicating.

The most recent high profile PLA failure involved the over $600 million, taxpayer funded Washington Nationals’ baseball stadium project in Southwest D.C.

With D.C. providing the funding for the project, many council members wanted to be sure the baseball team didn’t get a free pass (or a walk, if you will) on providing jobs for D.C. residents.  Big Labor promised that if a PLA was required on the project, it would guarantee a local workforce.  D.C. leaders swallowed the hook.

Regular readers of TheTruthAboutPLAs.com know that Big Labor’s claim that PLAs ensure local workforces for construction projects is completely bogus.  And sure enough, union promises failed to come true on this project as well.

“Broken Promises, Big Losses,” a 2007 study commissioned by the District Economic Empowerment Coalition, (DEEC) outlines how the Nationals’ stadium PLA failed to achieve any of its four stated objectives: (1) 50 percent of journeyperson hours be performed by D.C. workers; (2) 100 percent of apprenticeships go to city residents; (3) at least 25 percent of total work hours be performed by apprentices; and (4) 51 percent of all new hires be D.C. residents.

According to the report, non-D.C. residents worked 506,926 journeyperson hours (71.1 percent of total journeyperson hours), while D.C. resident worked just 206,444 journeyperson hours (28.9 percent), far below the PLA requirement that D.C. residents work 50 percent of total journeyperson hours.

The study also found that half of the contractors involved in the project hired no new apprentices, and of those companies that did hire new trainees, only 17 (of 56) met the PLA requirement that 100 percent of new apprenticeships go to D.C. residents.

Needless to say, the Nationals’ stadium PLA wasn’t exactly a home run.

The Washington City Paper covered the introduction of this bill in their Feb 12 article, “Friends Like These.” Here are some excerpts.

From Big Labor (Our emphasis added):

The political stakes are sky-high-especially in an election year. Labor will be whipping their votes hard, Powell says. “This is the No. 1 priority for labor in 2010,” he [Rick Powell, political director for the Metro Washington Labor Council AFL-CIO] says. “We’re judging everybody based on where they come down on this bill.”

From opponents of this bill:

Eric J. Jones, the ABC’s [Associated Builders and Contractors, Metro Washington Chapter] chief D.C. lobbyist, estimates that the bill would cover “90 to 95 percent of all projects in the city,” and with less than 20 percent of the city construction workforce by his count belonging to a union, any union-only stricture could be devastating to local jobs.

“There’s no way the local construction industry could survive,” Jones says. “Companies just could not work in the city.”

Sam Brooks, the former D.C. Council candidate turned green-building entrepreneur, calls the bill’s effects “potentially devastating” to job creation. “I do understand and respect that organized labor is trying to represent their members’ interest,” he says. “I just hope that everyone realizes this is moronic.”

And from the D.C. Chamber of Commerce:

Barbara Lang, the CEO of the D.C. Chamber of Commerce, says Brown’s support of a PLA requirement leaves her “concerned.” She says of Brown, “I appreciate that he has a constituency that he needs to support.”

It is clear from all of these quotes that this legislation is about politics and preserving union jobs at the expense of the D.C. taxpayers.  Evidential, Mr. Brown is more interested in replicating the failure of the Nationals’ stadium PLA than ensuring value on D.C. funded work.

PLAs are nothing more than special interest handouts to a politically-connected interest group, Big Labor.  If you live in the District of Columbia, contact your councilmember and tell them to say no to Bill 18-650 and wasteful and discriminatory PLAs.

The report includes this summary of ABC of California’s testimony at a January 20 committee oversight hearing:

Kevin Dayton represented the Associated Builders and Contractors of California on this panel. Dayton told the Committee that his group does not oppose the design-build concept, but it has opposed design-build bills in the past because of three standard provisions ABC considers to be unnecessary and disadvantageous to non-union contractors. Nevertheless, he was “optimistic” that objectionable statutory provisions will go away. First, the current labor compliance program provision will be phased out because of SB 9xx (Padilla, 2009). Second, the LAO has recommended changes to best value criteria that include the possible elimination of provisions concerning safety records and skilled labor force availability. Dayton criticized the project labor agreement signed as part of the design-build process for the San Joaquin County administration building. His group had difficulty obtaining public records such as subcontractors’ bid lists and payroll records for this project. Dayton recommended that future design-build laws insure timely public access to those documents, and submitted specific draft language. After the hearing, Dayton provided the Committee with six specific proposed amendments to the design-build statutes.

ABC of California’s written submission to the committee, also included in this report, elaborates on the experience of the PLA on the San Joaquin County Administration Building:

We would also like to comment on our observations and experiences with a specific county design-build project – the San Joaquin County Adminstration Building. All contractors on this project were required to sign a Project Labor Agreement with construction unions, and county staff admitted at a meeting of the San Joaquin County Board of Supervisors on July 3, 2007 that the union agreement was imposed because of the relevant provision in the state’s design-build authorization law for counties.

Because of this Project Labor Agreement, our organization was interested in some of the characteristics of the project, in particular to evaluate union claims that the Project Labor Agreement would ensure local contractor participation and contractor compliance with labor laws. As a result, we filed Public Records Act requests with the county at various times to obtain subcontractor bid lists and certified payroll records.

We had a lot of difficulty obtaining the records, because county officials repeatedly claimed that records were in the possession of the design-build entity and they couldn’t provide them. We received such statements as “Since this is private bidding, the contractor is not providing the amounts of the bids to us. He is only giving us the name of the low bidder and who bid it” and “the County is unable to comply with your request, as it seeks a document which is not presently within the County’s possession, custody or control” and “the County is unable to comply with your request, as it seeks a document which is not presently in the possession of the Coun

The legislature should take note that it is granting counties and other public entities an exemption from the state’s traditional competitive bidding laws in order to promote the design-build bidding procedure. We must all admit that using best value criteria to determine winning bids introduces a higher degree of subjectivity into the bidding process, and for this reason there is a new opportunity available for favoritism, fraud, and corruption in public contracting.

Section 100 of the Public Contracting Code states explicitly that the purpose of the code is (a) to clarify the law with respect to competitive bidding requirements, (b) to ensure full compliance with competitive bidding statutes as a means of protecting the public from misuse of public funds, (c) to provide all qualified bidders with a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices, and (d) to eliminate favoritism, fraud, and corruption in the awarding of public contracts. In order to fulfill these objectives, ABC of California recommends that future laws authorizing design-build include a specific mechanism for insuring the public has reasonable and timely access to public records requests, as required by law.

ABC of California also recommends that the legislature continue to direct the Legislative Analyst to evaluate the use of design-build, with more attention paid to transparency and the details of how contractors and subcontractors are selected. We groan at the egregious case in 2004 of the University of New Mexico giving bidders additional points on their best value scores if they donated to the athletic department! The biggest threat to the future of design-build in this state is an expensive high-profile project that is found to be riddled with cronyism and corruption. Accountability of public entities to the Legislative Analyst may reduce the chances of such a case occurring.

ABC of California will be watching Senate Bill 879 (2010), introduced by Senate Local Government Committee Chairman Dave Cox (R-Roseville), which will be the legislative vehicle for reauthorization of design-build for counties. It may even become a bill that makes significant amendments to all five sections of the Public Contract Code and Education Code that authorize design-build contracting for various types of local governments. We hope these amendments include the elimination of language encouraging the use of ‘a collective bargaining agreement that binds all of the contractors performing work on the project.’

Incidentally, this may be the most comprehensive report ever assembled about the public policy issues surrounding the implementation and practice of design-build contracting.

Additionally, the February 4 Central Valley Business Journal reported on the union-backed language in design-build authorization laws, including the Project Labor Agreement incentive.

See the full report here: Faster, Cheaper, Better: How Counties Use Design-Build Contracting – The Summary Report from the Oversight Hearing.