CWP: Government-mandated PLAs discourage merit shop contractors from bidding on taxpayer-funded construction contracts and drive up costs between 12 percent and 18 percent, which results in fewer infrastructure improvements, reduced construction industry job creation.
According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, just 12.6 percent of the 2019 U.S. private construction workforce belonged to a union. This means PLAs discriminate against nearly 9 out of 10 construction industry employees who want nothing more than to rebuild their communities at a price that is best for taxpayers.
From Adirondack Daily Enterprise:
(Editor’s note: This is an abridged version of a letter Jeff Luck sent to Matthew Lynch of the state Olympic Regional Development Authority and Christian Calabrese of Gilbane, regarding Luck’s construction company’s bid to reconstruct the Olympic Speedskating Oval in Lake Placid.)
Gentlemen:
When we opened the specifications on the bid to reconstruct the Olympic ice oval, we were extremely surprised and shocked to see that they included a project labor agreement (PLA) as part of the contract agreement. Although conditions vary, PLAs generally restrict the rank-and-file workers to union-only forces. They usually do allow for a contractor’s supervisory personnel and an occasional apprentice, but the rest of the workers must be part of an organized trade association, or union-only labor. This is extremely distressing for a firm like mine, which has a 65-year history of putting local people to work in the North Country. In our local counties, there may be less than 20% of all construction workers who are employed by union companies. Even more distressing, the contract calls for a combined 13.9% goal for M/W/DBE (Minority, Women-Owned, and Disadvantaged Business Enterprises) businesses, and almost all of these minority or veteran subcontractors are non-union. New York state boasts of its program to increase the financial well-being of its minorities and disadvantaged citizens, but a PLA robs those very companies from participating in state projects.
A PLA guarantees that perhaps 85% of the workforce will not come from Clinton, Essex and Franklin counties, the very people who live here and support ORDA. Organized labor say they have the forces in their locals, but you have to understand that most “locals” now include areas as large as half of New York or even statewide. This is flat-out discrimination against local workers and companies like ours who have a proven record of quality work for decades, without being associated with organized labor. If you remember, our firm completed $4 million in projects for ORDA at Mount Van Hovenburg in 2020.
PLAs have been litigated for decades, and the courts have established plenty of precedent that these things are discriminatory and have no place in competitive bid law. However, Big Labor continues to pressure politicians and spread disinformation that PLAs save time and money, when actual studies have proven beyond doubt that just the opposite is true. Civil engineer Dr. Paul Carr has done extensive studies that support the conclusion that PLAs are anti-competitive and actually make jobs more expensive. PLAs cannot help but make projects cost more, simply because they limit competition at bid time; it is easy to understand. In addition, they often promise to “save money” on the very backs of employees by cutting labor rates and various benefits required by the New York State Department of Labor. In that case, they are actually breaking New York state labor law.
Merit shop contractors never experience labor strife or productivity issues that PLAs pledge to cure because our employees work on safe sites, have great-paying jobs where their benefits are paid directly to them, not to cover the cost of abuses by union bosses and politicians. The pay scale is usually better on a standard public wage project than that in a rate-negotiated PLA. Given the stringent regulations of DOL and OSHA, every employee on every job site, PLA or not, is protected against abuse by the law.
There are a number of requirements by state law prior to establishing a PLA on a project, one of which is a due diligence study. This is supposed to take into account the local labor market and review input from the various contractor associations. I can state with authority that no such study invited the input from both Associated General Contractors and Associated Builders and Contractors. These are the two largest contractor associations in New York and comprise well over 1,000 members between them. One such legitimate study was done on the Kingston Central School District project in 2015. That was a job that cost around $30 million, and the due diligence study completed there, in that big city, concluded that a PLA was not justified. How can it be justified on this small project in tiny Lake Placid?
I am extremely angry that this has come to ORDA in Lake Placid because we are so geographically isolated, and yet ORDA chooses to prevent a number of local contractors from bidding the work. This is unconscionable and represents nothing more than this governor once again trying to fulfill promises to his union financial backers. This is just wrong for our three small counties, and it has no place in our communities. Good construction jobs are hard enough to find in upstate New York; we don’t need to stack the deck any more against the people who live here. Also, considering how ORDA is consistently begging for more contractors on their projects, the idea of a PLA is just totally counter-intuitive.
Both AGC and ABC can offer statistical and historical backup of why PLAs have no business in state-funded construction of any kind, and why it is mandatory to get this condition released from the contract as soon as possible. I am personally very passionate in preventing these things statewide because they have so badly hurt the employees of companies like mine over the years.
The timeframe is getting short, and merit shop companies like mine are fighting an extreme uphill battle against political forces with vastly larger financial resources. We need government to finally step in and make the only right decision. Open this and all projects up for all qualified and bonded bidders, union or non-union, and award the project accordingly. Let each and every qualified bidder stand on his or her own merits, and do not reject potential competitors just because of their labor affiliation. This is the way it has worked for decades, and financial and philosophical discrimination has no part in public projects in our state. Do not let taxpayers bear the burden of increased costs due to unfair political partisanship. Please look into this immediately, and take whatever action is required to get this PLA dropped. Thanks for your time.
Jeff Luck is president of The Luck Group of Companies, based in Plattsburgh.
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