Friday, December 5, 2008

Project Labor Agreements Likely On Federal Jobs

Now that the election is over, it's pay-back time for the President-Elect. That means, in part, rewarding all the support given to him during the campaign by organized labor. Among the casualties are project labor agreements ("PLAs"). After he was elected, President Bush issued an Executive Order prohibiting PLAs on Federal public works jobs. That Executive Order is likely to be revoked in the first 100 days of the new Obama administration.

For the uninitiated, a PLA is generally a contract between a project owner (public or private) and labor unions requiring that the project be awarded only to contractors and subcontractors who agree to: (a) recognize unions as the representatives of their employees on that job; (b) use the union hiring hall to obtain workers; (c) pay union wages and benefits; and (d) obey the union's oftentimes restrictive work rules, job classifications and arbitration procedures. In exchange, the unions agree to labor peace by not engaging in strikes which could cripple the project.

On private jobs, PLAs typically reduce competition and increase construction costs since union rates (typically 30% higher than private rates which actually may be prevailing in the locality) must be paid. On public jobs, PLAs reduce competition for the work as not every contractor wants to have a relationship with a union, limited or otherwise; on public projects, union rates are typically used as the prevailing wage rate, regardless of how realistic that practice may be.

And so, it begins. PLAs are likely to be utilized on Federal projects, the Employee Free Choice Act is likely to be passed, and several other anti-competitive measures may be imposed to mollify organized labor. Who gets the short end of the stick in of all this? The taxpayers, that's who. Hey, if banks and big business are getting bailouts, why not the unions? Everybody just get in line ... "Next!"

2 comments:

Anonymous said...

Hi Randy
If anyone reading this article wants proof, just go to any D.E.P. bid opening and check the bids against the engineers estimate. The arbitrary requirement for Apprenticeship along with the moritorium on new apprentice programs will eliminate good merrit contractors with good reputations and competitive bidding so that the union companies will over run and overbid every public project.

RANDY L. BRAUN said...

Agreed.