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Contractors Pull No Punches Responding To Obama Project Labor Agreement Rule

Two leading contractor groups offered scathing criticism of a rule, effective April 13, encouraging federal agencies to impose project labor agreements (PLA) on federal construction projects exceeding $25 million

Sources: Associated Builders and Contractors, Associated General Contractors of America, Washington, D.C.; CP staff

Two leading contractor groups offered scathing criticism of a rule, effective April 13, encouraging federal agencies to impose project labor agreements (PLA) on federal construction projects exceeding $25 million.

PLAs can drive up the cost for public construction by nearly 20 percent, while unfairly discriminating against the more than 85 percent of the U.S. construction workforce that chooses not to join a union, contends ABC 2010 Chairman Jim Elmer (James W. Elmer Construction, Spokane, Wash.). Anti-competitive project labor agreements are special interest kickback schemes that end open, fair and competitive bidding on public projects. Government-mandated PLAs are a handout to a politically connected special interest group and come at the taxpayersÌ expense.

With the construction industry facing a staggering unemployment rate of 25 percent, this is the worst possible time for politics to trump sound public policy. This final rule shows that the Obama administration is more concerned with paying back its political allies than putting America's entire construction workforce back to work.

ABC believes the final rule implementing the February 2009 Executive Order 13502 exceeds the president's statutory authority and violates the Competition in Contracting Act, as well as other procurement laws and regulations, says Elmer, noting, We will exhaust every opportunity to challenge this policy, which is effectively a federal government endorsement of union set-asides.

We strongly oppose any effort by government officials, who often have little or no experience in construction labor relations, to undermine existing relationships between contractors and construction workers by imposing project labor agreements, adds AGC Chief Executive Officer Stephen Sandherr. Any comprehensive review of existing construction worker benefits and current federal contracting guidelines will prove that government-mandated labor agreements are as unnecessary as they are costly and counterproductive. We will continue to encourage agency officials to exercise the broad latitude provided by these rules to avoid imposing these agreements.