As industry leaders and pundits anticipate the release of President Trump’s detailed infrastructure plan, Congress should push for a simple policy change that will maximize the plan’s economic impact by increasing competition and ensuring that taxpayers get the best quality product at the best possible price.
Passing the Fair and Open Competition Act (H.R. 1552/S. 622), which was introduced by Rep. Dennis Ross (R-Fla.) and Sen. Jeff FlakeJeff FlakeSenate Dems target potential GOP candidates over ObamaCare repeal Create equal opportunity for entire construction industry to rebuild America Senators say White House hasn’t laid out Syria strategy MORE (R-Ariz.), would allow America’s entire construction workforce, including the 86 percent of the private construction workforce that has chosen not to join a labor union, to compete on a level playing field by ensuring that taxpayer-funded construction cannot be subjected to costly and discriminatory government-mandated project labor agreements (PLAs). This would encourage all qualified contractors to bid on federal and federally-assisted construction projects and put our infrastructure priorities in line with President Trump’s election night pledge to rebuild our infrastructure, inner cities, highways, bridges, tunnels, airports, schools and hospitals in a way that assured “every single American will have the opportunity to realize his or her fullest potential.”
PLAs typically require contractors to replace all, or most, of their existing workforce with unfamiliar union labor, follow archaic and inefficient union work rules and pay into underfunded union pension and benefit plans if they want to win a contract.
Under a PLA, skilled construction workers who have chosen not to join a union are forced to join a union or pay union dues and pay into union fringe benefit plans, even though they are not eligible for union pension and benefit plan distributions unless they join the union and become vested in its plans. Unwanted compulsory contributions into union coffers means less money in workers’ paychecks and raises costs for contractors that already cover their employees’ health benefits and retirement plans.
In short, when government agencies mandate PLAs, they are effectively steering taxpayer-funded contracts to favored unionized contractors. Needlessly limiting the number of potential bidders discourages innovation while driving up costs to taxpayers. A series of academic studies have demonstrated that government-mandated PLAs result in a 12 percent to 18 percent increase in the cost of public construction projects compared to similar non-PLA projects.
The direct impact of government-mandated PLAs on project costs can be seen in the U.S. Department of Labor’s (DOL) Job Corps Center in Manchester, N.H. The DOL first issued a solicitation for construction services with a PLA requirement and, after a successful legal challenge spearheaded by Associated Builders and Contractors, reissued the solicitation without a PLA mandate. The solicitation without the PLA requirement produced three times as many bidders and bid prices were 16 percent lower than when the project solicitation was issued with a PLA mandate, ultimately saving taxpayers more than $6.2 million and allowing a local company to deliver the award-winning project on time and on budget.
Proponents claim that PLAs prevent cost overruns and delays by preventing strikes by union labor. However, the presence of a PLA does not prevent union members from violating the agreement and walking off of jobsites. In June 2006, the company developing President Trump’s $850 million Trump International Hotel and Tower in downtown Chicago sued three construction labor organizations for breaching the terms of a PLA negotiated by the developer and unions after union members walked off the project.
In addition, the PLA mandate on Seattle’s Highway 99 tunnel mega-project has not saved taxpayers from delays, cost overruns, union strikes, featherbedding and labor disputes, nor the employees working on the project from a poor safety record, sexual harassment allegations, violations of state and federal minority contracting rules and colleagues arriving at the jobsite drunk. The issues with the project, which is nearly three years behind schedule, have led the media to dub the project “the West Coast’s Big Dig,” after Boston’s notoriously unsafe, delayed and over-budget project also subject to a PLA mandate.
Proponents of PLA mandates also claim that PLAs are necessary in order to ensure a well-trained workforce. This claim is also not supported by the facts. Quality contractors understand that investing in their workforce is essential to growing their businesses and maintaining a safe and skilled workforce. Associated Builders and Contractors members alone invest more than $1.1 billion per year on workforce training through a variety of industry-recognized programs, including registered apprenticeships and competency-based craft training.
My company, Gaylor Electric Inc., strongly believes that our workforce is our most important resource and competitive advantage, which is why we are committed to workforce safety, training and development programs. This year my company has 242 apprentices that are improving their lives, investing in their futures, and rebuilding their communities. In addition, Gaylor Electric creates career pathways into the construction industry through our pre-apprenticeship program and partnerships with local high schools that provide education, training and skills to tomorrow’s construction workforce as they begin their journey into a good paying and rewarding career.
Gaylor Electric’s 1,100 skilled employees and their families benefit from opportunities provided by fair and open competition on public works projects. However, the government undermines our ability to fairly compete for contracts subject to government-mandated PLAs because it forces us to hire unfamiliar workers instead of the key ingredient that makes our company a safe and efficient industry leader.
America deserves effective and accountable construction spending and investment in infrastructure free from special-interest handouts. Passing Rep. Ross and Sen. Flake’s important legislation will put an end to anti-competitive, costly and unneeded government-mandated PLAs and ensure taxpayer dollars are spent responsibly.
Mr. Goodrich is the president of Indianapolis-based Gaylor Electric Inc. and the 2017 chair of Associated Builders and Contractors.
The views expressed by this author are their own and are not the views of The Hill.