Tag: project-labor agreements

The Final Rule on Project Labor Agreements

In today’s Federal Register is the final rule, “Federal Acquisition Regulation; FAR Case 2009-005, Use of Project Labor Agreements for Federal Construction Projects.” The rule directs federal agencies to favor PLAs on federal building projects, agreements that will increase the costs of taxpayer-funded construction while extending the reach and resources of organized labor. Sure, just what’s needed for a construction industry where one out of four workers is unemployed.

The final rule fleshes out one of President Obama’s first executive orders, Executive Order 13502, issued Feb. 6, 2009, which revoked President Bush’s 2001 executive order which required neutrality toward PLAs. Thus, no longer will PLAs be judged on their merits; the presumption in federal contracting policy is that they are a good thing.

Tell that to the taxpayer. As the Beacon Hill Institute at Suffolk University reported last September:

By their nature, PLAs are anti-competitive since they discourage open shop firms from bidding in the first place. Previous research from the Institute has shown that PLAs add 12-18% to construction costs. Over the course of the Bush Administration, the federal government spent $147.1 billion on federal construction projects. Of that $147.1 billion, approximately $60 billion would have been subjected to President Obama’s Executive Order encouraging the use of PLAs.

Moreover, had President Obama’s Executive Order 13502 been in effect in 2008, and all federal construction projects worth $25 million or more been subject to PLAs, the cost to federal taxpayers would have increased by $1.6 to $2.6 billion.

An especially forceful critic of Project Labor Agreements is the trade association, Associated Builders & Contractors, which issued a statement Monday, “Obama Administration Issues Policy that Discriminates Against 85 Percent of the Construction Workforce.”  ABC’s National Chairman Jim Elmer, president of James W. Elmer Construction Co., in Spokane, Wash., said:

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 taxpayers’ expense. 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.

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.

 

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Card Check: Sure, No Need Employees to Fear Union Intimidation

From the Truth About PLAs blog, notice of a news conference held by Pennsylvania legislators and the Keystone chapter of Associated Builders and Contractors about new legislation prohibiting project labor agreements (PLAs) on public construction in Pennsylvania.

The follow-up blog post notes that local union workers were paid to disrupt the news conference. Included is a report from the Pennsylvania Commonwealth Foundation:

[When] Rep. Bear got up to speak he was catcalled and booed by the mob of union members. His message was drowned out; in typical fashion organized labor used tactics of intimidation to silence the voice of opposition. What’s worse is that we overheard union members mentioning that they were being paid $26 an hour to protest. In contrast, most of Rep. Bear’s supporters were contractors who took time off of work to stand on principle. And yet the union members had the nerve to persistently ridicule supporters as clueless businessmen in suits bought off by special interests.

So organized labor, which pays members to disrupt public events, claims employees shouldn’t fear intimidation if the Employee Free Choice Act eliminates secret ballot elections?* Well, disruption speaks louder than words.

* Various “compromises” touted by Senate supporters of the Employee Free Choice Act have supposedly dropped the card check provisions. But at this point, all we hear are rumors of spin of Senator Specter portents.

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The Costs of Project Labor Agreements

One of the first actions that demonstrated — removed any doubt — that a newly elected President Obama was going to align himself with organized labor was the President’s issuance of an executive order on February 6 (Executive Order 13502) instructing federal agencies to favor “project labor agreements” (PLAs) in federal construction projects of $25 million or more. The order revoked President Bush’s 2001 executive order which required neutrality toward PLAs. Yes, elections have consequences.

PLAs are agreements that govern general contractors’ handling of projects, and in practical terms they force the use of union labor in all phases of a project with no consideration of costs — or the taxpayers who are paying the bill. The argument for the PLAs is that they promote harmonious management-labor relations with efficiency the result.

But a new study by the economists at the Beacon Hill Institute in Boston disproves the premise and reinforces the negatives effects of the agreements. The Institute reviewed comparable projects from the Bush era and found no examples of labor strife that added to costs. From the news release, “New Study Reveals That President Obama’s Executive Order for Project Labor Agreements Will Harm Federal Taxpayers,” quoting David G. Tuerck, one of the study’s authors and the Beacon Hill Institute’s executive director.

“If President Obama, who used the labor peace argument in justifying PLAs, is to be believed on this matter, it should be possible to find dozens of examples of slowdowns and significant cost overruns that occurred during the Bush Administration,” said Tuerck. “Yet, we found no such examples.”PLAs do add to construction costs.”

By their nature, PLAs are anti-competitive since they discourage open shop firms from bidding in the first place. Previous research from the Institute has shown that PLAs add 12-18% to construction costs. Over the course of the Bush Administration, the federal government spent $147.1 billion on federal construction projects. Of that $147.1 billion, approximately $60 billion would have been subjected to President Obama’s Executive Order encouraging the use of PLAs.

Moreover, had President Obama’s Executive Order 13502 been in effect in 2008, and all federal construction projects worth $25 million or more been subject to PLAs, the cost to federal taxpayers would have increased by $1.6 to $2.6 billion.

The final rule to force PLAs onto federal projects funded by Housing and Urban Development goes into effect September 28. More expensive HUD projects help whom, exactly? It sure isn’t the taxpayer.

UPDATE and clarification: The HUD rule had to do with the repeal of the Bush Administration executive order. More significant and of broader application is the proposed rule from the Federal Acquisition Regulation (FAR) agencies to implement the new executive order. [FAR Case 2009-005; Docket 2009-0024; Sequence 2] Comments closed on that on September 23, and a final rule will come out later this year.

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Card Check: Punishing Enemies, Rewarding Friends

As noted yesterday, the incoming AFL-CIO president, Richard Trumka, is free with his threats. In prepared remarks for delivery to the left-leaning Center for American Progress, Trumka said, “Today, more than ever, we need to be a labor movement that stands by our friends, punishes its enemies, and challenges those who, well, can’t seem to decide which side they’re on.”

So what reception will the AFL-CIO offer when President Obama addresses its national convention in Pittsburgh on September 15? After all, the President has done no heavy lifting on behalf of organized labor’s top priority, the undemocratic and unpopular Employee Free Choice Act.

Well, in politics you don’t politically threaten — even obliquely — the President when you’ve invited him to address your national convention. And for all the disappointment over EFCA, the labor bosses have much to happy about. For example:

So lots to be happy about if you’re a Big Labor Boss, and we imagine the Pittsburgh welcome will be a warm one for President Obama. The threats? Trumka will just issue them to members of Congress.

P.S. The Truth About EFCA blog makes the obvious and necessary point about Trumka’s bullying: “If union officials will talk this openly about punishing people who disagree with them, why would we want to expose workers to intimidation by denying them a secret ballot vote when deciding whether to join a union?”

 

 

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White House Executive Order, Project Labor Agreements

On Friday, President Obama signed an executive order to encourage the use of project labor agreements in federal construction projects. The order was expeditiously posted to the White House website, “EXECUTIVE ORDER: USE OF PROJECT LABOR AGREEMENTS FOR FEDERAL CONSTRUCTION PROJECTS.

The White House didn’t promote the signing, at all, but the executive order was expected. Labor leaders thought it would be included among the union-supported orders signed last Friday, revoking President Bush’s order (or orders) limiting PLAs. (See this February 17, 2001 order.)

It’s a big win for labor, a loss for the taxpayers and efficient construction of federally funded projects. Associated Builders and Contractors issued a news release denouncing the order (ABC’s verb). Excerpt:

“Today’s decision to repeal Executive Order 13202 opens the door to waste and discrimination in federal and federally funded construction contracts,” said ABC President and CEO Kirk Pickerel. “This action removes the safeguards that prohibited discrimination based upon union affiliation in the awarding of federal contracts.

“Construction contracts subject to union-only PLAs are designed to be awarded exclusively to unionized contractors and their all-union workforces,” said Pickerel. “Absent the economic benefits of competitive bidding, union-only PLAs are known to increase construction costs between 10 percent and 20 percent and discriminate against minorities, women and qualified construction workers who have traditionally been excluded from union membership.

“Union-only PLAs drive up costs for American taxpayers while unfairly discriminating against 84 percent of U.S. construction workers who choose not to join a labor union,” added Pickerel. “All taxpayers should have the opportunity to compete fairly on any project funded by the federal government.”

More from ABC:

Federal Construction Performed Without PLA as a Result of Executive Order 13202 Between 2001 and 2007, Executive Order 13202 ensured that at least $123.1 billion worth of federal construction projects was bid without discriminatory and wasteful union-only PLAs.  This saved American taxpayers 10 percent to 20 percent on each project and provided women, minorities and other qualified craft professionals the opportunity to work in their communities.

So what labor victory should we expect coming from the White House next Friday?

UPDATE (3 p.m.): Friday release achieves sparse news coverage. There’s a reference at the Boston Globe blog, “Obama sends labor another bouquet,”
and an AP brief. Good timing. Call it temporal transparency.

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President Obama and Organized Labor, III

From the President’s statement today:

So I’m going to be signing three executive orders designed to ensure that federal contracts serve taxpayers efficiently and effectively.  One of these orders is going to prevent taxpayer dollars from going to reimburse federal contractors who spend money trying to influence the formation of unions.  We will also require that federal contractors inform their employees of their rights under the National Labor Relations Act.  Federal labor laws encourage collective bargaining, and employees should know their rights to avoid disruption of federal contracts.

And I’m issuing an order so that qualified employees will be able to keep their jobs even when a contract changes hands.  We shouldn’t deprive the government of these workers who have so much experience in making government work.

Thus, NOT a reversal of the four executive orders from President Bush circa February 2001. No mention of Project Labor Agreements. And, as we read it,  the reference to a measure to “prevent dollars from going to reimburse federal contractors who spend money trying to influence the formation of unions,” engages the issues that came up in “Chamber of Commerce of the United States v. Lockyer.” A California law sought to bar a employer who received state grants or funds from using that money to take a position in union organizing. The 9th Circuit upheld the law, but federal labor law supersede state law, and the Supreme Court reversed and remanded. 

It would really help if the executive orders were online. News accounts like this piece from The New York Times are too skimpy, and obviously our speculation about substance turned out to be wrong.

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President Obama and Organized Labor, II

The AP describes the executive orders signed by President Obama this morning as follows:

  • Require federal contractors to offer jobs to current workers when contracts change.
  • Reverse a Bush order requiring federal contractors to post notices that workers can limit financial support of unions.
  • Prevent federal contractors from being reimbursed for expenses meant to influence workers deciding whether to form a union.

No mention of reversing President Bush’s executive order on project labor agreements in federal contracts, as mentioned below.

The White House website has an item about the Middle Class Task Force being created, but no listing yet of the executive orders. We’ll post the orders when they get around to posting them at WhiteHouse.gov.

 

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