Why Do Some Politicians Reject PLAs? It Can’t Be Good.
When pols reject project labor agreements for public projects, they reject the laws we have all agreed are in our mutual best interest.
Governor Janet Mills of Maine has flip-flopped on her promise to support Project Labor Agreements that would help her state manage the large energy projects about to be started.
Project labor agreements (PLAs) are important pre-hire level-setting pacts that allow contractors to bid on and then work on a project based on some established rules of engagement between labor and management. They’re often employed on large state-run projects and they apply to all contractors and managers who will touch the job.
When the state of Maine decided to build off-shore wind energy facilities the governor, Janet Mills, agreed to the idea of creating PLAs to manage the project. But she has since done a 360 on that commitment because she said that enforcing a PLA will have “a chilling effect” on all the non-union contractors who may want to bid on the energy projects. But there is no language in the energy project PLAs that bans non-union contractors from vying for jobs.
Governor Mills is not alone in her trepidation to enforce PLAs. According to Construction Dive, an online periodical dedicated to construction in New York, there are 24 states that have outlawed the use of PLAs in governing state construction, with many of them calling PLAs unfair and restrictive against open-shop, non-union contractors.
What is in PLAs that has 24 states and Governor Mills in Maine so spooked? What about them makes it harder for a non-union contractor to offer a bid? Well lucky for you, we have an idea what’s got them in a tizzy.
Twenty four U.S. states have enacted laws prohibiting the reliance on PLAs to govern construction projects.
It’s about money
Here’s one example of what’s typically in a PLA fashioned by a state. All bidders are usually required to follow local and federal safety standards. Adhering to these rules costs money. For example the Occupational Safety and Health Administration (OSHA), the national workplace safety oversight agency, has rules regarding fire safety that require watchers be present for many types of welding.
A fire-watcher must supervise a weld in situations where random sparks may cause a large scale fire. That’s because the licensed welder must remain extremely focused on the important task immediately in front of them and can’t be expected to also supervise the surrounding area of the worksite. The fire-watcher must be equipped with the tools to suppress a fire that may occur and have access to a close by fire alarm.
We spoke with one construction project estimator based in New York City who broke down for us the financial implications of this requirement. He chose anonymity because he works with both union and non-union contractors and didn’t want to jeopardize his standings.
I can probably have a laborer do that weld for me, pay a lot less for that. But it may not be done perfect because the guy’s not really a welder. Oh well.
– Construction project estimator
He said, “If I’m non-union, I say, ‘First off, if I need someone who is licensed to weld, that’s additional training and probably drives the cost up for that person. I can probably have a laborer do that weld for me, pay a lot less for that. But it may not be done perfect because the guy’s not really a welder. Oh well. Second, I can’t have some guy standing around just watching. That costs me. I’ll tap some other worker who is working in that area and have him just sort of look over his shoulder now and then at the weld. So, no watcher. Third, there’s a lot of redundant costs in having that extra fire equipment on the site. Because, you know, I could be welding on multiple floors at the same time. I’ll just make sure we have extinguishers and alarms on the job site somewhere, and move them into place if we get inspected.
“’If there’s no PLA explicitly laying out these requirements, even though there are laws on the books about them, I can plan to cut the corners and offer a much lower bid to win the job. And I’m willing to do that because getting caught skimping on this stuff is very unlikely. Once we’re hired, everybody wants this job done quickly and without incident. So if there’s no PLA, no one is asking about these sort of details.’”
Construction workers in New York know that PLAs protect them, their wages, and their benefits.
It's about pay scale
Another example of state-created PLAs is the stipulation to pay the prevailing wage to workers. We asked the estimator whether this requirement would cause non-union contractors pause? “Absolutely,” he said. “Non-union contractors look for every way they can to lower their costs, and labor is one of their biggest expenses. So they’ll want try to hire fewer people and pay them a lower hourly, or won’t pay them OT when they work OT, or won’t offer health benefits. A good PLA won’t allow that. This is why a PLA could have a ‘chilling effect’ on non-union contractors.”
He said, “All of this is why developers look at PLAs and think they’re union-friendly, because unions follow the rules and do great work as a result. But does the lack of a PLA make a job site more dangerous and produce lower quality construction? Yes it does.”
Maine has no prohibition in place against PLAs. So, why is Governor Mills backpedaling on instituting PLAs for the off-shore wind project? Why does she think non-union can’t compete against union contractors on bids when the rules are established equally for everyone?
Our estimator contact answered those questions this way. “I mean, it seems obvious to me. The non-union bosses are wealthy people. They’re donors to politicians. They have influence. It’s that way here in New York big time. I’m not saying they have that governor’s ear, I don’t know about Maine, but they can make a lot of noise among her colleagues and that can force a politician to get cold feet.”
He concluded, “If a civic leader’s obligation is to their constituents, the PLAs protect their constituents and their communities. If they’re objecting to using PLAs, then they’re probably listening to someone who has a lot of money who doesn’t want a PLA because that person won’t be able to make as much on a project.”
A comprehensive study on the impact of PLAs on cost, efficiency, safety and more was conducted by a team of university experts. It concludes that PLAs do not hinder any contractor from bidding and they do not result in higher costs.
A comprehensive study of PLAs and their impact on budgets, hiring and efficiency was completed by experts at Michigan State University, the University of Rhode Island, and the University of Utah. Their conclusion is clear. “We find that there is no substantial evidence that PLAs decrease the number of bidders or change the costs of construction projects.”
Let your representatives know you want PLAs to govern any new government-funded project. They protect the developers, contractors, and all New Yorkers.
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