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Federal Support Of Project Labor Agreements Under Fire

Members of two Washington, D.C.-based contractor groups have challenged government endorsement and promotion of project labor agreements on building and

Members of two Washington, D.C.-based contractor groups have challenged government endorsement and promotion of project labor agreements on building and transportation work.

ASSOCIATED BUILDERS AND CONTRACTORS

As of late September, 402 ABC member companies, plus 504 of their employees, submitted comments to the White House opposing implementation of President Obama's Executive Order 13502, encouraging agencies to consider union-only project labor agreements (PLAs) on federal construction contracts exceeding $25 million. In comments filed with the Federal Acquisition Regulatory Council, ABC members argued that their companies would be discouraged from bidding on projects because PLAs discriminate against their employees. Under PLAs, employees said that they would a) be forced to pay union dues; b) not benefit from employer contributions into union pension plans unless they were to join a union; and, c) may be denied employment under union hall hiring requirements.

Government-mandated PLAs hurt competition on construction contracts from nonunion contractors and their employees, which comprise 84 percent of the U.S. construction workforce, said 2009 ABC National Chairman Jerry Gorski (Gorski Engineering, Inc., Collegeville, Pa.). When the federal government sets aside work for a favored few, hardworking taxpayers pay the price. PLAs increase the cost of construction by mandating inefficient and archaic union work rules and limit the pool of potential quality bidders, all without any increased economy or efficiency to federal procurement.

Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem, a Beacon Hill Institute/Suffolk University study released Sept. 23, confirms that PLAs significantly increase federal project construction costs. Its review of federal construction projects from 2001-2008, during which government-mandated PLAs were prohibited, reveals no instances of labor disruption that resulted in significant project delays or increased costs. The study is downloadable at www.beaconhill.org/BHIStudies/PLA2009/PLAFinal090923.pdf.

ASSOCIATED GENERAL CONTRACTORS OF AMERICA

AGC is asking the U.S. Department of Labor to justify its PLA requirement for a $10 million Job Corps Center in Manchester, N.H., contending the decision effectively shuts out a majority of local contractors. AGC represents nonunion and union contractors, the latter accounting for 10.9 percent of New Hampshire's construction workforce. How does severely restricting competition for federal work benefit taxpayers, help construction workers or support economic recovery? asks AGC CEO Stephen Sandherr.

The Labor Department's move follows an executive order proposing that agency officials consider mandating PLAs on all federal construction contracts exceeding $25 million. The agreements typically set above-market wage rates for site workers, including drivers delivering supplies, and force contractors to hire through union halls. Even union contractors may find the government's terms for the Manchester Job Corps Center too prohibitive, Sandherr observes, adding that GAO has found little evidence of PLAs delivering cost savings, easing work-place tensions, or protecting against construction delays.