Description
A Project Labor Agreement (PLA), also known as a Community Workforce Agreement, is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.
PROJECT LABOR AGREEMENTS
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PLA Briefing Materials
Talking Points Primer White Paper
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Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
Project Labor Agreements (PLAs)
PLA Construction: Highlights
? Craft Labor Agreements: PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern terms and conditions of employment for all craft labor on a designated construction project. ? Highest Quality Craft Labor: PLAs promote safe, quality, cost-effective delivery by providing project owners with reliable access to the safest, most productive and besttrained skilled craft labor available in any given market. ? Extensive Use in Major Markets: With a long history of success, PLAs have been used by both public and private project owners in virtually all market sectors to deliver several hundred billion dollars worth of capital projects just in the last several years.1 ? A Compelling Case of Success: The economic benefits of PLAs have been confirmed by at least 17 reports and studies from government agencies and respected universities.2 (By contrast, PLA opponents offer only a small handful of purported studies prepared by themselves or their agents that have generally been discredited).3 ? Key Project Tool of Top Companies: Private corporations that routinely use PLAs include Fortune 500 companies such as Toyota, General Motors, Wal-Mart, Bank of America, CVS, Target, Sunoco and Disney -- to name a few.4 ? Major Tool for Public Contracting: In the public sector, PLAs have been used for decades to ensure successful delivery of federal, state and municipal projects. ? Federal agencies, including the Department of Energy and General Services Administration, utilize PLAs regularly to build major capital facility projects. ? As recently documented in the Federal Register -- “Project labor agreements have been used in all 50 States and the District of Columbia . . . [on] an array of construction projects covering an expanding range and size of projects . . . .”5
Driving Forces of PLA Construction
? Quality Control of Craft Labor: By accessing well-funded training centers and craft
labor referral systems of local unions, PLAs guarantee facility owners the best available construction labor for any given project. ? Through a single-sentence bid-specification, owners secure full quality control over the entire craft labor force used on their project and eliminate risks of contactors who use untrained, unskilled workers. ? PLAs also establish uniform terms and conditions for all trades and site contractors, including dispute resolution procedures, which ensure stability, consistency and labor peace throughout the project. ? Timely Project Delivery: The ability of PLAs to help meet time-sensitive schedules and ensure timely delivery is among the key reasons they are used in both the public and private sectors. Key factors that ensure on-time completion include:
? Assurance of reliable and adequate supply of properly qualified craft personnel; ? Uniform rules and work-schedules to promote productivity and maximize efficiency; and ? PLA coordination committees to address scheduling milestones and unique project challenges through coordinated, pro-active planning. ? Cost-Effective Project Delivery: By supplying the highest skilled and, therefore, most productive trades, PLAs provide substantial cost benefits by promoting timely, high quality construction. Additional cost benefits are realized by reducing or eliminating re-work, preventing disruption and delays, and improving labor cost forecasting. Such advantages are confirmed by numerous sources. For example: ? In April 2011, the Los Angeles Bureau of Contract Administration reported that 7 of its last 7 PLA projects came in below the engineer’s bid estimate. Cost savings ranged from 2.75 percent to 21.61 percent of estimated project costs.6 ? Toyota has used PLAs successfully to construct multiple production facilities in the U.S. According to Jeff Caldwell, former Assistant General Manager for Plant Engineering: “[T]he proof is in the results. Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who eschew the use of project labor agreements.”7 ? A 2011 Cornell University study documented numerous public-sector PLAs in New York since 2009 which produced, or were projected to produce, costs savings ranging from 4.88 percent to 19.52 percent of project costs.8 ? PLA Bonus: Local Community Benefits: In addition to offering critical economic benefits to project owners, PLAs offer substantial benefits to local communities, including the following: ? Local Hiring Opportunities: While PLAs generally promote local hiring by utilizing local hiring halls and referral systems, they often include additional specific local hiring requirements or goals to increase benefits for local communities and expand employment for minorities, women and economically disadvantaged youth. ? Skill Training Opportunities: Due to the structure of apprenticeship programs, which rely on a “learn while you earn” approach to training, PLAs also offer valuable education and career opportunities to local residents on every project. ? Future Workforce Development: Since the construction industry has an acute need to train the next generation of skilled craft labor, workforce development is important for every community. When PLAs are used, project owners facilitate investment in and expansion of the best craft training programs in any given community and everyone wins.
See Gerard M. Waites & Scott M. Seedorf, White Paper on Project Labor Agreements (Mar. 2012) (document on file); Building & Construction Trades Dept., AFL-CIO, 50 Billion Reasons Why Project Labor Agreements Work, Dec. 10, 2010 ($50 billion in 2010 alone), at http://www.buildingtrades.org/Newsroom/Blogs/PresidentsMessage/December-2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx. See Hugo S. Rossitter & John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (2011); Richard A. Parker & Louis M. Rea, San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011); Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (2011); Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011); Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (2011); Dale Belman & Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010); UCLA Labor Center, Construction Careers for Our Communities (2010); Los Angeles Department of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010); Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009); Dale Belman, Matthew M. Bodah, & Peter Philips, Project Labor Agreements, ELECTRI International (2007); Dale Belman, Russell Ormiston, William Schriver & Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005); Ralph Scharnau & Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004); Bart Gilbert, Director of General Services, Project Labor Agreement Report, Contra Costa County (2004); John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002); Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001); James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), Construction Law Update (2001); Daniel Rounds, Project Labor Agreements: An Exploratory Study, UCLA Institute for Labor and Employment (2001).
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See e.g., Kotler (2009), supra note 2, at 22 (“Beacon Hill’s conclusions should be dismissed as not credible”); Kevin Duncan, Project Labor Agreements – Denver Update (2009), at 13, (finding “little objective empirical content within [one anti-PLA] study.”); Belman, Bodah, & Philips, supra note 2, at 14 (criticizing Beacon Hill’s studies); Belman, Ormiston, Schriver, & Kelso, supra note 2, at 18-19 (criticizing Beacon Hill’s studies).
See Peter Cockshaw, Private PLAs Become Widespread, Cockshaw’s Construction Labor News & Opinion 35(8), Sept. 2005, at 1-4 (document on file). Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168, 19170 (Apr. 13, 2010), available at http://edocket.access.gpo.gov/2010/pdf/2010-8118.pdf.
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Hugo S. Rossitter and John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (April 2011) (document on file).
Jeff Caldwell, Op-Ed: Project Labor Agreements – Toyota’s Way (emphasis added), available at http://www.plaswork.org/Projects/Project-Focus/Toyota-and-PLAs-(1).aspx Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011), available at http://digitalcommons.ilr.cornell.edu/reports/36/.
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Project Labor Agreements Primer
Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
I.
Introduction
Construction is a highly-specialized, highly-skilled and labor-intensive industry that often requires numerous contractors, subcontractors and crafts to closely coordinate their respective tasks to achieve project goals. For roughly a century in the private sector, and three-quarters of a century in the public sector, projects owners have used Project Labor Agreements (PLAs) to meet this challenge, protect capital investments and ensure timely, cost-effective delivery of high quality construction projects. This primer reviews the key reasons behind the widespread use of PLAs by project owners. As discussed, these include the unique access PLAs provide to the most productive, highest quality craft labor available, the coordinated, pro-active planning that PLAs bring to complex projects, and the important benefits local communities receive from these agreements in terms of skill training, employment opportunities and future workforce development.
II.
Overview
? PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern the terms and conditions of employment for all craft labor on a designated capital construction project. ? PLAs promote safe, quality, cost-effective delivery of construction projects by providing project owners, among other things, with reliable access to the best-trained and most highly-skilled craft labor available across the industry and in any given market. ? PLAs have been used in both the public and private sectors to deliver several hundred billion dollars worth of projects over the last decade, including $50 billion in 2010 alone.1 ? The economic benefits of PLAs, including cost savings, have been confirmed in at least 17 major studies by highly-credible academic and government sources.2 By contrast, PLA opponents have generally relied on a small handful of studies by allies and hired-guns.3 Virtually all of these studies have been discredited by subsequent academic works.4
Project owners use PLAs for several key reasons, the first of which is their ability to provide a reliable supply of the best-trained and most highly-skilled craft labor available. PLAs also include a number of important elements which maximize efficiency and productivity, minimize delay and reduce project costs. These include uniform terms and conditions for all trades and site contractors as well as dispute resolution procedures, no-strike clauses and other anti-disruption provisions which prevent worksite issues from impacting project delivery. While PLAs have long been recognized as one of the most effective planning tools for capital facility construction, reliance on these agreements has also increased markedly in recent years. As noted, PLAs have been used to deliver several hundred billion dollars worth of capital construction over the past decade, including $50 billion in projects during 2010 alone.5 This has been due to major successes achieved by countless project owners, ranging from Toyota to the City of Los Angeles, as well as a large body of recent academic, industry and government research – all of which attest to the value and utility of PLAs in construction project delivery. In Toyota’s case, PLAs have been used to build numerous high quality manufacturing facilities in the U.S. According to the company, this approach reduces total project costs for Toyota by one-third.6 Very few other project delivery tools offer such cost advantages. For the City of Los Angeles, PLAs have produced cost savings upwards of 21.61 percent on 7 of its last 7 PLA projects while also exceeding local hiring and training goals included in these PLAs.7
In addition to Toyota, private sector users of PLAs include leading Fortune 500 companies such as General Motors, Wal-Mart, Bank of America, CVS, Target, Sunoco and Disney – to name a few. Public sector users have ranged from large federal agencies, such as the U.S. Department of Energy and U.S. General Services Administration, to various state and municipal government entities across the country. Indeed, according to the Federal Register, PLAs have been used in all 50 states and the District of Columbia.8 Against this backdrop, President Obama established a strong PLA policy for the federal government by issuing Executive Order 13502 in early 2009, which recognizes the economic efficiency of such agreements and promotes their use by all federal departments and agencies on large-scale public works projects.9
III. PLA-Construction: Key Advantages for Project Owners
PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern the terms and conditions of employment for all craft labor on a designated project. While PLAs are adapted to the needs of a given project, almost every PLA will contain three core elements to ensure quality, timely and cost-effective project delivery. First, PLAs provide project owners with reliable access to the best-trained and most highly-skilled craft labor available across the industry and in any given market. This is accomplished by utilizing hiring halls or referral systems operated by local building trades unions, which provide a caliber of training to their workers that is without equal anywhere in the world. In areas where skilled labor is scarce, these halls and systems are able to bring in skilled labor from neighboring jurisdictions, or opposite corners of the country if necessary. As a result, owners who utilize PLAs have effective quality control over the entire labor force, substantially improving quality and productivity while reducing the risks of shoddy work and delay. Second, PLAs establish uniform terms and conditions for all trades and site contractors to promote project stability and maximize efficiency over the life of the construction process. While large projects almost always have numerous contractors and trades working together on a project, seldom will these contractors and trades have consistent rules and procedures on wages and benefits, work schedules, overtime, holidays, dispute resolution and other issues. This is problematic, not only from an administrative and efficiency standpoint, but also because effective coordination is absolutely essential to successful project delivery. PLAs solve this problem by establishing a single set of rules and procedures for every contractor and craft, thereby providing needed efficiency and stability and reducing administrative costs. Third, PLAs include provisions that are specially-designed to ensure that the project is completed on-time and without costly disruptions or delays. These include dispute resolution procedures that allow on-site issues to be resolved while work continues, a no-strike guarantee to ensure that labor unrest on the project in question or another project in the area does not result in a work stoppage, and other measures, such as joint labor-management PLA committees, to make certain that even the most challenging time schedules are met. As at least seventeen major studies on PLAs confirm, PLAs are able leverage these elements to deliver tremendous economic benefits – benefits which register on every metric of importance to project owners, including quality, timeliness and, as discussed below, cost.10
III.
Evaluating the “Cost” Factor of PLAs
As noted, PLAs deliver substantial costs benefits to project owners by providing reliable access to the best-trained, most productive craft labor available, establishing uniform rules to promote coordination and stability, and including no-strike clauses and other provisions to reduce disruption and delay. As a result of these and other factors, PLAs have an overall net 2
positive impact on project cost. The list of Fortune 500 companies that use PLAs is compelling evidence, in and of itself, of the beneficial impact PLAs have on project delivery costs. Because corporate leaders have a legal duty to maximize shareholder value, decisions regarding facility planning, like most other issues, are effectively based on the bottom-line. If PLAs increased their costs, companies would not, and arguably could not, use them. Of course, we also know PLAs reduce costs from project owners who have actually used them. The testimony of Jeff Caldwell, former Assistant General Manager for Plant Engineering at Toyota, is illustrative: Toyota has constructed numerous automobile, truck, and engine production facilities in the United States, with another vehicle plant currently under construction in Mississippi. Each of these construction projects was completed, or is being completed, under a project labor agreement that ensured that our facilities were built with a steady supply of highly skilled and productive craft workers and with labor harmony. In every instance, this process worked beautifully. And the proof is in the results. Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who eschew the use of project labor agreements.11 In the public sector, project owners like the City of Los Angeles have reported similar cost savings. In an April 2011 report on its experience using PLAs, Los Angeles’s Deputy City Attorney Hugo Rossitter and Inspector of Public Works John Reamer reported data on a series of highway projects that awarded by the City in the prior three fiscal years.12 While 4 of the last 4 projects awarded without a PLA came in over the engineer’s bid estimate, 7 of the last 7 projects awarded with a PLA came in below the engineer’s bid estimate. Cost savings on the PLA projects ranged from 2.75 percent to 21.61 percent of project costs.13 What’s more, the City achieved these cost savings despite including in the PLA – and meeting – local resident hiring and apprentice participation targets of 30 percent and 20 percent.14 These cost savings are by no means limited to the City of Los Angeles. A May 2011 study by Cornell University Professor Fred Kotler reported similar cost savings in New York. This study, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, revealed cost savings of as much as 19.52 percent on numerous PLAs entered into by project owners in New York State since 2009.15 In each case, Kotler’s research shows that the cost savings achieved were attributable to features that are present in almost all PLAs. Such features included, but were not limited to, reliable access to productive skilled labor, safeguards against work stoppages, and uniform schedules, pay and overtime rules, and holidays.16 These are just a few of many examples of cost savings that project owners have achieved using PLAs. Such findings have also been documented by several other major academic and government studies that have evaluated the cost impact of PLA-construction.17 When one considers what PLAs are designed to do – maximize quality and productivity and minimize project risk – the cost savings reported in these cases should not be surprising. For projects subject to prevailing wage laws, these cost savings will be magnified further. This is because the prevailing wage rate for a given trade is frequently the union-rate. In such cases, project owners who decline to use a PLA are essentially committing themselves to significant additional risk without any corresponding reduction in labor costs.
IV.
Workforce Development: Using PLAs to Build Tomorrow’s Skilled Workforce
In addition to the cost savings and other economic benefits that PLAs bring, project owners are increasingly using PLAs because of the contributions they make to workforce development. The lack of skill training in the construction industry is at the same time the 3
greatest concern expressed by project owners and the industry’s greatest long-term challenge.18 While there are multiple causes for this lack of training, one major cause is the convergence of increasing baby boomer retirements with inadequate training of apprentices to replace them. Industry stakeholders agree that, unless project owners lead by demanding investments in skill training, every aspect of project delivery will suffer, including quality, cost, productivity and safety. What’s more, projects owners will, quite unfairly, be footing this bill project-by-project. The urgent need for action on training is reinforced by a 2009 study by the U.S. Department of Commerce National Institute of Standards and Technology (NIST), which confirms that deterioration in construction project delivery is already occurring.19 The NIST study reports that labor productivity in construction has trended downward at an average annual rate of -0.6 percent (worst among all non-farm industries) over the past 40 years.20 Today, NIST identifies the availability of skilled labor as one of greatest challenges facing the industry and warns that “this challenge is compounded by the decline in training programs.”21 Due in part to this decline, NIST suggests the industry is already suffering significant losses, not only in increased productivity, but also in turnover, absenteeism, safety and other metrics.22 PLAs are a practical and effective tool that project owners can use to simultaneously protect itself from the training problem in the short-term and combat the problem in the longterm. In the short-term, PLAs offer project owners protection from shortages of well-trained labor by guaranteeing them adequate highly-skilled craft workers through union hiring halls or referral systems. As noted, in cases where too few local skilled workers are available, these systems can call upon workers from surrounding regions and at opposite corners of the county if needed to meet local demands. In the long-term, PLAs increase the long-term supply of craft workers needed for the future by forcing local union referral systems to expand their capacity and recruit and train more workers to meet manpower demand. This, in turn, facilitates the long-term workforce planning and development that is critically needed by the industry. The fact of the matter is that investing in the expansion of union apprenticeship programs, through a PLA or other means, is presently the only viable solution to the lack of training that is taking place in the construction industry. Union programs, which have long shouldered the construction industry’s training burden, invest almost $1 billion annually in training that is state-of-the-art and covers all essential crafts.23 By contrast, studies have shown that the open shop sector provides training in some trades but maintains little or no presence in others.24 As told by the NIST study: “Typically, training programs are funded by both owners and contractors through union and collective bargaining agreements. While open shop training programs exist, they tend to be rare.”25 Given these realities, PLAs are practical and costeffective tools that project owners can use to support workforce development in the industry.
V.
Community Benefits: Local Jobs, Good Wages & Excellent Training
In addition to providing high value to project owners and the industry, PLAs offer many important benefits to local communities affected by capital projects, including local employment opportunities, good wages and benefits and the very best skill training the industry has to offer. A. Local Hiring: PLAs are structured to promote the hiring of local residents because they require all project contractors to obtain their craft labor through local union hiring halls or referral systems. Local hiring is of particular value to public project owners because of the multiplier effect it has on taxpayer investments. They understand that local workers purchase goods and services at local businesses, which, in turn, provide jobs, healthcare and other benefits to other local workers.
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B. Good Wages: By establishing good, livable wages, PLAs ensure that the local workers hired on a project will receive a decent income, which, in turn, supports the local economy and reduces these workers’ need for public assistance. The provision of good wages also helps to attract the best-qualified workers to the project and protect local residents from the unscrupulous practices of companies which hire transient workers at substandard wages and attempt to build projects “on the cheap.” C. Cutting-Edge Skills Training: The apprenticeship training programs operated by local building and construction unions are the very best the industry has to offer.26 Numerous recent studies conducted across the country demonstrate that these union programs attract and graduate far more apprentices than their non-union counterparts, including more minority and female apprentices, and can be counted on to train for all essential construction trades.27 In addition, union programs include advanced training and continuing education for more experienced workers to keep them on the cutting-edge and support meaningful, lifelong careers. D. Health Care & Pension Benefits: Since PLAs will incorporate local union collective bargaining agreements or else independently provide for the payment of fringe benefits, they also ensure that the local workers who are employed on the project receive adequate health care and pension coverage. These benefits promote a better quality of life for local workers and protect local jurisdictions from having to subsidize such benefits for workers who do not receive them from their employers.
V.
Keeping the “PLA Debate” Honest – Sorting Fact From Fiction
Notwithstanding the compelling case for PLAs, certain non-union contractor organizations continue to vigorously oppose these agreements. Their reasons for doing so are relatively simple. The PLA model leverages the best resources and standards available in the industry -- including the best-trained and most highly-skilled labor -- to deliver cost-savings and other economic benefits, i.e., the best value, to project owners. The select groups of non-union contractors which oppose PLAs, on the other hand, subscribe to a model that relies on low-skill, low-cost labor and seeks to undercut the competition in the contracting process by cutting corners on items like training and safety. To these contractors, tools such as PLAs -- which require contractors to do things that all contractors should be doing already -- are “unfair.” Unfortunately, these organizations also have little interest in an honest debate about PLAs. Unable to cite credible facts and evidence in support of their claims, these organizations resort instead to myths and scare-tactics to support their position. One common myth, that PLAs increase costs, is at odds with the experience of project owners such as Toyota and the City of Los Angeles, and with the many credible studies which have examined the issue.28 Likewise, these organizations have falsely maintained that the use of PLAs on federal and other public sector projects will serve to exclude merit shop contractors and non-union workers. However, as countless court decisions have confirmed, this claim is not in accord with reality.29 PLA projects are fully open to bidding by all contractors, union and non-union alike. And, non-union contractors regularly do bid and win work on PLA projects. As told by the California Court of Appeals in one illustrative case brought by the ABC, “an unwillingness, if any, to bid by any ABC member is a case of self-imposed exclusion.”30 Indeed, in that case, seventy-five percent of the contracts awarded under the PLA went to non-union contractors31. Because of these facts, and the clear advantages PLAs offer, federal and state courts have overwhelmingly upheld their use on public works projects.32 What’s more, the seminal 5
rulings in this area, including the leading U.S. Supreme Court case of Boston Harbor -- a 9 to 0 decision -- have stressed that the key focus regarding PLAs in the public sphere must be what is best for the contracting agency and taxpayers -- not the union sector, the open shop or even workers.33 Upon review of the evidence showing that PLAs maximize value for the taxpayer dollar, courts have had little difficulty dispensing with the myths and upholding their use.
VI.
Conclusion
Construction is a high-skill, labor-intensive industry where effective planning and coordination among various contractors and crafts on projects is an absolute must. As a premier planning tool that is specially-designed to meet these needs, PLAs have long been relied on by project owners in the private and public to ensure quality, cost-effective and timely project delivery. In recent years, PLA use has increased markedly as the success stories of companies such as Toyota, and public entities such as the City of Los Angeles, have overpowered the self-serving myths disseminated by certain non-union organizations. The practical consequence of this pro-PLA trend has been several hundred billion dollars of PLA-construction spanning almost every industry and market sector in the United States. As demonstrated herein, the benefits that PLAs provide to projects owners, the industry and local communities are both real and substantial. As word of these benefits continues to spread, reliance on this tool will continue to increase. Good tools prove themselves.
1
See Gerard M. Waites & Scott M. Seedorf, White Paper on Project Labor Agreements (Mar. 2012) (on file with authors); Mark Ayers, 50 Billion Reasons Why Project Labor Agreements Work, Building & Construction Trades Department President’s Message Blog (Dec. 10, 2010), at http://www.bctd.org/Newsroom/Blogs/PresidentsMessage/December-2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx.
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See Hugo S. Rossitter & John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (2011); Richard A. Parker & Louis M. Rea, San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011); Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (2011); Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011); Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (2011); Dale Belman & Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010); UCLA Labor Center, Construction Careers for Our Communities (2010); Los Angeles Department of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010); Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009); Dale Belman, Matthew M. Bodah, & Peter Philips, Project Labor Agreements, ELECTRI International (2007); Dale Belman, Russell Ormiston, William Schriver & Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005); Ralph Scharnau & Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004); Bart Gilbert, Director of General Services, Project Labor Agreement Report, Contra Costa County (2004); John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002); Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001); James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), Construction Law Update (2001); Daniel Rounds, Project Labor Agreements: An Exploratory Study, UCLA Institute for Labor and Employment (2001). For web links to the above studies, please see our White Paper on Project Labor Agreements.
See David Tuerck, Sarah Glassman, Paul Bachman, Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem, Beacon Hill Institute (2009); Rider Levett Bucknall, Project Labor Agreements Impact Study (2009); Tuerck & Bachman, Project Labor Agreements and Public Construction Costs in New York State, Beacon Hill Institute (2006); Tuerck, Bachman & Jonathan Haughton, Project Labor Agreements and the Cost of Public School Construction in Connecticut, Beacon Hill Institute (2004).
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See e.g., Kotler (2009), supra note 2, at 22 (“Beacon Hill’s conclusions should be dismissed as not credible”); Kevin Duncan, Project Labor Agreements – Denver Update (2009), at 13, (finding “little objective empirical content within [one anti-PLA] study.”); Belman, Bodah, & Philips, supra note 2, at 14 (criticizing Beacon Hill’s studies); Belman, Ormiston, Schriver, & Kelso, supra note 2, at 18-19 (criticizing Beacon Hill’s studies).
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Waites & Seedorf, supra note 1.
Jeff Caldwell, Op-Ed: Project Labor Agreements – Toyota’s Way, available at http://www.plaswork.org/Projects/ Project-Focus/Toyota-and-PLAs-(1).aspx.
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See Rossitter & Reamer, supra note 2.
Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168 (Apr. 13, 2010), available at http://edocket.access.gpo.gov/2010/pdf/2010-8118.pdf.
Similar steps have been taken at the state level as well. See e.g., Governor Pat Quinn, Governor Pat Quinn Signs Legislation to Protect Diversity in State Public Works Projects (Jul. 27, 2011), at http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=11&RecNum=9579; Governor Chet Culver, Exec. Order 22 (Feb. 3, 2010), at http://publications.iowa.gov/9655/1/Executive_Order_No22.pdf.
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Supra note 2. Caldwell, supra note 6. Rossitter & Reamer, supra note 2. Id. Id. Kotler, supra note 2, at 55. See id. Supra note 2.
See e.g., The Construction Executive, The Perfect Storm: Factors Come Together Creating a Storm in the Construction Workforce (June 2004), 21-25, at http://www.constructionexec.com/Files/Storm.pdf; Construction Users Roundtable (CURT), Confronting the Skilled Workforce Shortage (June 2004) (document on file with authors).
19
Allison Huang, Robert E. Chapman and Davis T. Butry, U.S. Department of Commerce National Institute of Standards and Technology, Metrics and Tools for Measuring Construction Productivity: Technical and Empirical Considerations (Sept. 2009), available at http://www.nist.gov/customcf/get_pdf.cfm?pub_id=903603. Id. at 39. Id. at 22-23. Id. at 25-26.
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23 Industrial Information Resources, Press Release, America’s Building Trades Unions Set the Standard for Skilled Craft Training, a Feature of “Industry Today” (Sept. 8, 2011), available at http://www.marketwire.com/pressrelease/americas-building-trades-unions-set-standard-skilled-craft-training-feature-industry-1558382.htm. 24 Cihan Bilginsoy, University of Utah, Apprenticeship Training in the U.S. Construction Industry (1998), 9, available at http://www.faircontracting.org/PDFs/prevailing_wage/ApprenticeshipTrainingInTheConstructionIndustry.pdf. 25 26
NIST study, supra note 15, at 23.
See e.g., Sarah S. Etherton, Stephen L. Cook, and Robert V. Massey, Jr., West Virginia University Institute for Labor Studies and Research, Building Trades Apprentice Training in West Virginia: A Comparison of Union and NonUnion Building Trades Programs in the 1990s (2002). See Anneta Argyres & Susan Moir, Labor Resource Center, University of Massachusetts Boston, Building Trades Apprentice Training in Massachusetts: An Analysis of Union and Non-Union Programs, 1997-2007 (2008); Erin Johansson & Fred Feinstein, Apprenticeship Training Programs in Maryland: A Case Study of the Construction Industry, 1990-2003 (2005); Jeff Vincent, Indiana University Institute for the Study of Labor in Society, Analysis of Construction
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Industry Apprenticeship Programs in Indiana (2004); Randy Loomans & Mitch Seaman, Washington State Construction and Building Trades Council, AFL-CIO, Apprenticeship Utilization in Washington State Programs in the Building and Construction Trades (2003); Donald H. Bradley & Stephen A. Herzenberg, Keystone Research Center, Construction and Apprenticeship Training In Pennsylvania (2002); Sarah S. Etherton et. al., West Virginia University Extension Service, Institute for Labor Studies and Research, Building Trades Apprentice Training in West Virginia: A Comparison of Union and Non-Union Building Trades Programs in the 1990s (2002); Cihan Bilginsoy, University of Utah, Apprenticeship Training in the U.S. Construction Industry (1998); William J. Londrigan and Joseph B. Wise, Kentucky AFL-CIO, Apprenticeship Training In Kentucky: A Comparison of Union and Non-Union Programs in the Building Trades (1997).
28 Supra note 2. As noted, while seventeen-plus studies confirm the benefits of PLAs, opponents of PLAs rely on just a handful of studies to support claims that PLAs increase costs and reduce competition. Most of these studies have been authored by the Beacon Hill Institute, a self-described “free-market think-tank.” See Bacon Hill studies, supra note 3. These studies have been criticized and discredited in numerous academic works. Supra note 4. 29
See e.g., Enertech Elec. Inc. v. Mahoning Cty. Comm’rs, 85 F.3d 257, 260 (6th Cir. 1996); Master Builders of Iowa, Inc. v. Polk County, 653 N.W.2d 382, 395 n. 6 (Iowa 2002); Associated Builders and Contractors v. San Francisco Airports Comm’n, 981 P.2d 499, 507 (Cal. 1999); John T. Callahan & Sons, Inc. v. City of Malden, 713 N.E.2d 955, 964 (Mass. 1999); Queen City Construction, Inc. v. City of Rochester, 604 N.W.2d 368, 376 (Minn. Ct. App. 1999). Associated Builders & Contractors, Inc. v. Metro. Water Dist., 69 Cal. Rptr. 2d 885, 888 (Cal. Ct. App. 1997), superseded by grant of review, 951 P.2d 1182 (Cal. 1998), review dismissed, 991 P.2d 750 (Cal. 1999).
31 30
Id. Moreover, Section 8(b)(2) of the National Labor Relations Act requires that hiring halls and referral systems be operated in a non-discriminatory matter, such that non-union workers are free to apply and work under PLAs.
32 See Building and Construction Trades Council v. Associated Builders & Contractors (“Boston Harbor”), 507 U.S. 218 (1993); Johnson v. Rancho Santiago Community College Dist., 623 F.3d 1011 (9th Cir. 2010); Associated Builders & Contractors, Inc. v. Lavin, 431 F.3d 1004 (7th Cir. 2005); Associated Gen. Contractors of Am. v. Metro. Water Auth., 159 F.3d 1178 (9th Cir. 1998); Phoenix Eng’g v. MK-Ferguson of Oak Ridge Co., 966 F.2d 1513 (6th Cir. 1992); Building Industry Elec. Contractors Ass'n v. City of New York, 2011 WL 3427138 (S.D.N.Y. Aug. 5, 2011) (unreported); Sheet Metal Workers Local 27 v. E.P. Donnelly, Inc., 673 F.Supp.2d 313 (D.N.J. 2009); Building Industry Electrical Contractors Ass’n v. City of New York, No. 10 Civ. 8002 (RPP) (S.D.N.Y. Aug. 4, 2011) (unreported); Albany Specialties, Inc. v. Bd. of Educ. of So. Glens Falls Sch. Dist., No. 99-CV-1462 (N.D.N.Y. Oct. 1, 1999) (unreported); Util. & Transp. Contractors Ass’n v. Essex Co. Improvement Auth., No. 98-4408 (D.N.J. Oct. 15, 1998) (unreported); JNS Heating v. Suffolk Co., No. CV-95-5227 (E.D.N.Y. Oct. 4, 1996) (unreported); McGraw's Custom Constr., Inc. v. City of Juneau, No. J96-0003 (D. Alaska Mar. 28, 1996) (unreported); Lott Constructors, Inc. v. Camden Co. Bd. of Chosen Freeholders, 1994 WL 263851 (D.N.J. 1994) (unreported); Enertech Elec., Inc. v. Mahoning Co. Comm’rs, 1994 WL 902493 (N.D. Ohio 1994), aff’d, 85 F.3d 257 (6th Cir. 1996); Associated Gen. Contractors of Am. v. County of St. Louis, 825 F.Supp. 238 (D. Minn. 1993); Laborers Local No. 942 v. Lampkin, 956 P.2d 422 (Alaska 1998); Elec. Contractors, Inc. v. Dept. of Education, 2009 WL 5945554 (Conn. Super. Ct. Aug. 7, 2009) (unreported); Associated Builders & Contractors, Inc. v. S.F. Airports Comm’n, 981 P.2d 499 (Cal. 1999); Associated Gen. Contractors of Am. v. San Diego Unified Sch. Dist., 195 Cal. Rptr. 3d 698 (Cal. Ct. App. 2011); Conn. Associated Builders & Contractors, Inc. v. Anson, No. CV-98-0579841-S (Conn. Super. Ct. Oct. 26, 1998), aff’d, 740 A.2d 804 (1999); Master Builders of Iowa, Inc. v. Polk Co., 653 N.W.2d 382 (Iowa 2002); John T. Callahan & Sons, Inc. v. City of Malden, 713 N.E.2d 955 (Mass. 1999); Util. Contractors Ass’n of New England, Inc. v. Mass. Dept. of Pub. Works, 5 Mass. L. Rptr. 17, 1996 WL 106983 (Mass. Super. Ct., 1996); City of Lansing v. Carl Schlegel, Inc., 669 N.W.2d 315 (Mich. Ct. App. 2003); Associated Builders & Contractors, Inc. v. Minnetonka Indep. Sch. Dist. No. 276, 1999 WL 1261743 (Minn. Ct. App. Dec. 28, 1999) (unreported); Queen City Constr. Inc. v. Rochester, 604 N.W.2d 368 (Minn. Ct. App. Dec. 28, 1999); Associated Builders & Contractors, Inc. v. So. Nev. Water Auth., 979 P.2d 224 (Nev. 1999) (unreported); N.Y. State Chapter, Inc. v. N.Y. State Thruway Auth., 666 N.E.2d 185 (N.Y. 1996); E.W. Tompkins Co., Inc. v. Bd. of Trs. of Clifton Park-Halfmoon Pub. Library, 813 N.Y.S.2d 789 (N.Y. App. Div. 2006); Associated Builders & Contractors, Inc. v. Bd. Educ. of Buffalo, 703 N.Y.S.2d 418 (N.Y. App. Div. 2000); Albany Specialties, Inc. v. County of Orange, 662 N.Y.S.2d 773 (N.Y. App. Div. 1997); Associated Builders & Contractors, Inc. v. Onondaga County, 1999 WL 297696 (N.Y. Sup. Ct., Onondaga Co. Mar. 16, 1999); Flex Elec. Contractors, Inc. v. County of Orange, No. 4256-97 (N.Y. Sup. Ct., Orange Co. Sept. 30, 1997) (unreported); Rondout Elec. v. County of Orange, 1995 WL 791913 (N.Y. Sup. Ct., Orange Co. Dec. 22, 1995) (unreported); Ohio Bldg. & Constr. Trades v. Cuyahoga Co. Bd., 781 N.E.2d 951 (Ohio 2002); Associated Builders & Contractors, Inc. v. Jefferson Co. Bd. of Comm’rs, 665 N.E.2d 723 (Ohio Ct. App. 1995); Hawbaker v. Dept. of Gen. Servs., 405 MD 2009 (Pa. Commw. Ct. Dec. 1, 2009), aff’d, 111 MAP 2009 (Pa. 2011) (unreported); Sossong v. Shaler Area Sch. Dist., 945 A.2d 788, 794 (Pa. Commw. Ct. 2008), appeal denied, 967 A.2d 962 (Pa. 2009); A. Pickett Construction Inc. v. Luzerene Co. Associated Builders & Contractors Inc., 738 A.2d 20 (Pa. Commw. Ct. 1999); North State Mechanical, Inc. v. Dept. of Gen. Servs., No. 122 M.D. 2001 (Pa. Commw. Ct. Jun. 21, 2001) (unreported). 33
See e.g., Boston Harbor, 507 U.S. 218, 231-232 (1993).
8
Project Labor Agreements White Paper
Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
Project Labor Agreements White Paper ******************************
Introduction
For over three quarters of a century, project owners in the public and private sectors have used Project Labor Agreements, or “PLAs,” to maximize efficiency, minimize risks, reduce costs, and meet critical deadlines on capital facility projects. Although each PLA will be tailored to the needs of a given project, almost every PLA will include three essential elements to ensure quality, cost-effective and timely project delivery: 1) A guarantee of adequate well-trained, highly-qualified craft labor to maximize productivity and quality and minimize the need for rework; 2) Uniform terms and conditions governing all contractors and trades to promote consistency and stability and reduce administrative costs; and 3) Dispute resolution, no-strike and other anti-disruption provisions to ensure that the project is completed on-time and without costly delays. As this paper shows, PLAs have been used in recent years to deliver several hundred billions of dollars worth of construction projects. This widespread use has occurred over time on projects of all types and sizes in all 50 States and the District of Columbia. Notable consumers of PLA-construction include Fortune 500 companies such as Toyota, General Motors and Wal-Mart; federal departments and agencies such as the U.S. General Services Administration, the U.S. Department of Energy and the U.S. Army Corps of Engineers; and state and local governments across the United States. Many of these owners, including Toyota, the Illinois Department of Transportation and the City of Los Angeles, have published articles or reports touting the benefits of PLAs. The industry studies discussed in this paper help to explain why these owners have turned to PLAs to deliver their capital projects. Namely, these studies demonstrate that PLAs consistently produce cost savings for owners, maximize work quality, eliminate disruption and delay, and deliver important community benefits. Such findings have also served to dispel many of the myths disseminated by select non-union groups which subscribe to low-wage, low-skill business models and appear to oppose, on that basis, any measures which have the effect of raising or enforcing industry standards. In short, this paper demonstrates what leading project owners in both the private and public sectors have known for many decades: PLAs work.
Table of Contents ******************************
Part I: PLA Reports & Studies
Part II:
Extensive Use of PLA-Construction
Part III:
Federal Policy on Project Agreements
Part IV:
PLAs for Nuclear Construction
Part V:
PLAs by State & Local Government
Part VI:
PLAs for School Construction
Part VII:
PLA News & Journal Reports
Part VIII:
PLAs Impact on Apprenticeship Training
Part IX:
Use of PLAs to Address Construction Industry Skill Shortages
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Part I: PLA Reports and Studies _____________________________________________________________
A. FAVORABLE STUDIES ON PLAS REVIEWED
Organization, Title and Date 1. 2. 3. 4. 5. 6. 7. 8. 9. Los Angeles Bureau of Contract Administration, Using Project Labor Agreements: The City of Los Angeles Perspective (2001) Rea & Parker Research for San Diego Unified School District, Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011) University of California Los Angeles Labor Center, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles (2011) Cornell University School of Industrial and Labor Relations, Project Labor Agreements in New York State: In the Public Interest and of Proven Value (2011) Cornell University School of Industrial and Labor Relations, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers (2011) Economic Policy Institute, Building Better: A Look at Best Practices for the Design of Project Labor Agreements (2010) University of California Los Angeles Labor Center, Construction Careers for Our Communities (2010) Los Angeles Department of Public Works, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010) Cornell University School of Industrial and Labor Relations, Project Labor Agreements in New York State: In the Public Interest (2009)
10. Michigan State University and Universities of Rhode Island and Utah, Project Labor Agreements (2007) 11. Michigan State University School of Labor & Industrial Relations, The Effect of PLAs on the Cost of School Construction in New England (2005) 12. Iowa Policy Project, Project Labor Agreements in Iowa (2004) 13. Contra Costa County, California General Services Department, Project Labor Agreement Report (2004) 14. Harvard University Joint Center for Housing Studies, Project Labor Agreements (2002) 15. California Research Bureau, Constructing California: A Review of Project Labor Agreements (2001) 16. Construction Law Update, The Case for Public Owner Project Labor Agreements (2001) 17. University of California Institute for Labor and Employment, Project Labor Agreements: An Exploratory Study (2001)
B.
MAJOR HIGHLIGHTS OF STUDIES REVIEWED
Document No.
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Los Angeles Bureau of Contract Administration (2011) Using Project Labor Agreements: The City of Los Angeles Perspective
? In April 2011, Los Angeles Deputy City Attorney Hugo Rossitter and Inspector of Public Works John Reamer presented data from the Los Angeles Bureau of Contract Administration (BCA) showing that City PLA projects have consistently come in below engineer’s bid estimates and been used effectively to advance local hiring and training goals. They stated that PLAs complement the BCA’s mission in numerous ways, including by promoting cooperation, minimizing disruptions and delay, providing greater access to skilled craft labor, ensuring that contractors pay proper wages and by combating poverty and unemployment through construction employment and training. In answer to the question “Do PLAs Cost More?,” Rossitter and Reamer pointed to data on 14 highway projects awarded in the previous 3 fiscal years: 4 without PLAs and 10 with PLAs. While all 4 projects awarded without a PLA came in over the engineer’s bid estimate (from 12.58 percent to 30 percent over), 7 of 10 PLA projects -- and 7 of the last 7 PLA projects -- came in below the engineer’s bid estimate. Cost savings on the 7 PLA projects coming in below the engineer’s bid estimate ranged from 2.75 percent to 21.61 percent of estimated project cost. The data also showed that non-union contractors are routinely awarded contracts on PLA projects and are represented on PLA projects to generally the same extent as they are represented on non-PLA projects. Rossitter and Reamer also cited notable successes in using PLAs to promote local hiring and training goals for Los Angeles residents. They reported that 32.84 percent of the work on PLA projects to date had been performed by local residents, while 26.15 percent of the work on such projects had been performed by apprentices. Both numbers exceed the goals set by the BCA of achieving 30 percent local participation and 20 percent apprentice participation on PLA projects.
Source: Hugo S. Rossitter and John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (April 2011), Presented at AFL-CIO Lawyers Coordinating Committee Conference in San Diego, California, April 26-28, 2011 (on file with authors).
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Rea & Parker Research for San Diego Unified School District (2011) Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations
? This study was prepared at the request of the San Diego Unified School District (“SDUSD”) to review construction and labor-related performance on Proposition S projects subject to a Project Stabilization Agreement, or PSA (another name for a PLA). Proposition S, which was approved by voters on Nov. 4, 2008, provided a $2.1 billion general obligation bond to finance the repair, renovation and revitalization of SDUSD schools. The PLA being used to build these projects was executed in July 2009. (p. 2).
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The study found that project costs for PLA-covered SDUSD projects were the same as comparable non-PLA projects that were built prior the execution of the SDUSD PLA in July 2009. (pp. iii & 172). However, while project costs were the same, the study reported that PLA-covered projects outperformed the non-PLA projects in other significant ways. PLA-covered projects demonstrated a “clear advantage” over non-PLA projects in terms of completion time. The study reported that PLA projects were completed on average 28 days faster than non-PLA projects relative to the projects’ estimated completion date. (p. 177). PLA-covered projects also outperformed non-PLA projects in identifying labor and wage law compliance issues, which, the study notes, translates into better protection for workers on SDUSD projects. (pp. 181-183). A final significant way in which PLA-covered projects outperformed nonPLA projects is in promoting local hiring. The SDUSD PLA set “very ambitious” goals for local hiring – specifically, that covered projects employ 35 percent of its workers from economically disadvantaged zip codes, 70 percent from the SDUSD and 100 percent from San Diego County. As of October 2011 the study reported that PLA projects were close to achieving the 35 percent target and making good progress on the other goals. The study notes that its near-achievement of the 35 percent target is “almost entirely due to union referrals.” (pp. 185-190).
Source: Richard A. Parker, Ph.D. & Louis M. Rea Ph.D., San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (Nov. 2011), available at http://www.sandi.net/ cms/lib/CA01001235/Centricity/Domain/138/psastudy12-7-11.pdf.
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University of California Los Angeles Labor Center (2011) Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles
? Uyen Le builds upon previous work done by the UCLA Labor Center previous and evaluates the impact of provisions in the Los Angeles Unified School District (LAUSD) PLA which promote the participation of small and disadvantaged businesses. In addition, Le reviews the performance of the LAUSD “We Build” pre-apprenticeship program operated in connection with the PLA as well as the PLA’s performance in promoting local hiring. (p. 5). Le reports success on all of these fronts. In 2003, the LAUSD Board of Education incorporated a goal of 25 percent small business participation into the LAUSD PLA. Le reports that the LAUSD PLA achieved nearly double that number as of Sept. 2011, with 48 percent of LAUSD project dollars going to small and disadvantaged businesses. He also reports that 44 percent of prime contractors have been small and disadvantaged businesses. (p. 15).
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The study also reported that the LAUSD construction bidding process has been “highly competitive, ensuring that the bids that came in were competitively priced and created a high value for the district.” (p. 16). One former official Le interviewed estimated that LAUSD PLA projects averaged 18 bidders for specialized crafts for each RFP, which is about 13 more bidders than are needed for adequate competition. LAUSD saw their costs fluctuate and increase at times since 2003, but this was due to external factors rather than the PLA. (p. 17). LAUSD launched the “We Build” pre-apprenticeship program in conjunction with the PLA to provide local residents with career opportunities in the construction industry. Since 2004, over 1,628 local residents have graduated from the “We Build” program and 81 percent of those graduates are now working in construction. (p. 18). The LAUSD PLA had achieved 41 percent local hiring within LAUSD and 68 percent local hiring within the County as of the date of the study (p. 18). In addition, 41.5 percent of apprentices of all apprentices working under the PLA were first-year apprentices while 67 percent of the PLA workforce consisted of minority workers. (p. 19).
Source: Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (Nov. 2011), at http://constructionacademy.org/wordpress/wp-content/uploads/2011/11/LAUSDPSA-Small-Business-Participation-CCA-11-18-11.pdf.
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Cornell University, School of Industrial and Labor Relations (2011) Project Labor Agreements in New York State II: In the Public Interest and of Proven Value
? Professor Kotler follows-up his prior 2009 study (below) with new data confirming the benefits of PLAs and a report on the “significant increase in the authorization and use of PLAs for both public and private sector work” he has documented since the 2009 study was published. (p. 1). Part I discusses the broad social and economic benefits that PLAs offer. Kotler discusses factors in the construction industry, such as its mobile workforce and the intermittent nature of the work, that tend, absent PLAs and other safeguards, to lead to a “race to the bottom” on industry, working, and living standards, disadvantage law-abiding businesses, drive up taxpayer costs and otherwise do harm to communities. (p. 6-25). Part II explains why PLAs have been repeatedly upheld as consistent with state competitive bidding laws. Upon review of the record, Kotler reaffirms that the usual claims by anti-union groups – e.g., that PLAs limit the pool of bidders, and drive up costs – “are not supported by PLA experience or by a clear analysis of statutory and case law.” (p. 26-34). Part III details the cost savings that PLAs are providing client owners, citing numerous recent examples in New York State. These recent examples, all of which are supported by due diligence studies, include: o Four New York City PLAs announced by Mayor Bloomberg, worth over $5 billion and projected to save the City $300 million;
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A PLA covering eight City-owned building projects, worth $1.21 billion and projected to yield cost savings amounting to 4.88 percent of total project costs; A PLA covering three projects under the jurisdiction of the City Sanitation Department, worth $661.3 million and projected to cost savings amounting to 6.1 percent of total project costs; A PLA covering seven projects under the jurisdiction of the City Department of Environmental Protection, worth $686.26 million and projected to yield 5.5 percent cost savings; A PLA covering a $5.94 million project for City Parks and Recreations, projected to yield 10.2 percent cost savings; and An Economic Recovery PLA covering over seventy City projects, worth tens of billions of dollars and projected to yield cost savings of 19.52 percent for these projects.
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(pp. 35-59).
Source: Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011), available at http://digitalcommons.ilr.cornell.edu/reports/36/.
Cornell University, School of Industrial and Labor Relations (2011) Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers
? This study reviews the extent to which PLAs are used to promote middle class career opportunities for low income communities, women, minorities and disadvantaged or at risk populations. It finds that PLAs or Community Workforce Agreements (“CWAs”) -- as PLAs which include provisions along these lines are often called – have succeeded in creating these opportunities and that growing numbers of PLAs/CWAs are including provisions targeting the aforementioned groups. (pp. 2-3). The authors analyzed 185 PLAs dated between 1995 and 2010 in order to determine how often community workforce oriented provisions appear. They found that of the 185 PLAs analyzed: o o o o o o o o o (p. 7). 139 included provisions promoting the hiring of veterans; 103 promoted the hiring of minorities and women; 100 promoted the hiring of apprentices; 70 promoted the hiring of local residents; 55 utilized a union pre-apprenticeship program; 45 promoted the hiring of economically disadvantaged workers; 36 promoted women/minority-owned and small businesses; 25 set a percentage goal for local resident apprentices; and 12 involved community-based organizations in recruitment and monitoring of the above provisions.
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As noted, the study also found that community workforce provisions have become more popular over time. For instance, while 17 percent of the PLAs dated before 2004 had zero community workforce provisions, no PLA dated 2009 or 2010 were without such a provision. In addition, while 38.9 percent and 22 percent of pre-2004 PLAs had between 1 to 3 or 4 to 6 provisions, respectively, 51.2 percent and 40.2 percent of the 2009-2010 PLAs had between 1 to 3 or 4 to 6 provisions. (p. 19). PLA/CWA provisions which promote the hiring of veterans have experienced the most precipitous increase in popularity among community workforce provisions. The study notes that these provisions “were nowhere to be found amongst the pre-2004 arrangements, but topped the popularity list in both 2005-2008 and 2009-2010.” (p. 20). The study concludes with three representative cases in which PLAs included community workforce provisions: the Cleveland University Hospital-Cleveland BCTC PLA; Washington, D.C.’s Nationals Stadium PLA; and New York City’s PLA Memorandum of Understanding. In all three cases ambitious local hiring, diversity and other goals were set, and in all three cases most or all goals were met or exceeded. (pp. 30-38).
Source: Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (Oct. 2011), available at http://www.ilr.cornell.edu/news/upload/PLA-REPORT-10-6-2011_FINAL.pdf.
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Economic Policy Institute (2010) Building Better: A Look at Best Practices for the Design of Project Labor Agreements
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This study begins with an overview of PLAs and the value they offer construction owners. The authors explain that PLAs are tailored to the unique challenges and conditions of the U.S. construction industry. These include the occupational or trade-specific structures of the work and of firms, the temporary nature of construction projects, and the presence of numerous trades and employers, each with their own work rules, hours, and wage scales, on larger projects. In addition, the authors identify other more recent challenges which have arisen as union representation in the industry has decreased. These include a declining apprenticeship system and related shortages in skilled labor. (pp. 4-5). Based on research and interviews with industry stakeholders, the authors report that PLAs have been used successfully to bring order to a diverse and decentralized industry while meeting the unique needs of the project at hand. The authors draw upon this experience in offering advice on how PLAs can be designed to: improve efficiency and innovation (pp. 10-14); expand opportunity for local residents and support community development goals (pp. 15-19); improve worker safety and health (pp. 2227); resolve labor disputes and other disruptions that impede the on-time completion of projects (pp. 27-30); and facilitate the participation of nonunion contractors (p. 31-37). The authors conclude with a discussion of best practices for negotiating PLAs. (p. 37-41).
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Source: Dale Belman and Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010), available at http://epi.3cdn.net/179fd74170130cd540_ibm6ib3kd.pdf.
University of California Los Angeles Labor Center (2010) Construction Careers for Our Communities
? This study reviews the successes of three Los Angeles-area PLAs in promoting the hiring of local residents on City-funded construction projects. The three area PLAs analyzed in the study are: the Los Angeles Community College District (LACCD) PLA; the Los Angeles Unified School District (LAUSD) PLA; and the City of Los Angeles PLA. The LAACD PLA covered about $2.2 billion worth of projects at the time of the study and established a local hiring goal of 30 percent. The study found that every one of the 10 community colleges covered by this PLA met the 30 percent local hiring target and that average local hiring under the PLA as a whole was 34 percent. (p. 9). The LAUSD PLA covered about $20 billion in construction projects and established a highly ambitious 50 percent local hiring goal. (p. 11-12). The study reports that, while the former goal had not yet been attained, the LAUSD PLA had made impressive progress, with local hires accounting for 38 percent of total work hours on average, 39 percent of journey-level workers and 41 percent of apprentices. (p. 21 & 25). The City of Los Angeles PLA covered about $380 million in projects at the time of the study and established a 30 percent local hiring goal. (p. 30). The study reported that local apprentices and journey-level workers accounted for 41 percent of workers employed by large contractors; 35 percent of workers by large subcontractors; and 18 percent of workers by small subcontractors. (pp. 40-41). Overall, the study reported local hiring provisions in the three PLAs produced local hiring of roughly 35 to 40 percent and also promoted the hiring of apprentices, including local apprentices. (p. 46). In the case of the City of Los Angeles PLA, the use of a PLA added about 20 percentage points to local workers share of total project hours. (p. 44). While the study demonstrates PLAs are valuable tools for promoting local hiring, it also shows that smaller contractors may need more assistance in meeting these requirements and that all contractors tend to improve their local hiring performance over time. (pp. 24-25 & 46).
Source: UCLA Labor Center, Construction Careers for Our Communities (2010), available at http://constructionacademy.org/wordpress/wpcontent/uploads/2009/08/ConstructionCareersForOurCommunitiesFullReport.pdf.
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Los Angeles Department of Public Works (2010) Project Labor Agreements (PLAs): Are They Fair and Beneficial?
? In February 2010, the Los Angeles Department of Public Works Bureau of Contract Division made a presentation which addressed the question of whether PLAs are “fair and beneficial” to the City and its contractors. Based on its data and experience from nearly $950 million in PLA construction since 2001, the Department answered in the affirmative. Upon review of PLA projects awarded between March 2007 and July 2009, the Department found that the projects “were for the most part awarded lower than the engineers’ estimate.” It further found that, “on average, all bids submitted after the PLA were either closer or lower than the engineer’s estimate compared to those prior to the PLA.” The Department also observed that PLAs help level the playing field for union and non-union contractors. While both union and non-union contractors are already required to pay prevailing wages on public works contracts, the PLA further levels the playing field by requiring these contractors to abide by the same rules and requirements on the project. While the Department conceded that PLAs may cost more for non-union contractors who do not otherwise pay fringe benefits for their workers, it noted that these added costs come with added benefits. The non-union contractors’ workers are afforded the same benefits and protections as union workers during their time on the project, while non-union contractors are granted access to a skilled union workforce. Among other cited benefits, the Department noted that its PLAs include provisions which promote local hiring and provide residents with access to apprenticeship programs that lead to well-paying construction careers.
Source: Los Angeles Dept. of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (Feb. 2010), at http://www.portoflosangeles.org/Board/2010/June/ 061710_Item6_trans2.pdf.
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Cornell University, School of Industrial and Labor Relations (2009) Project Labor Agreements in New York State: In the Public Interest
? Professor Kotler reports that PLAs have proven to be a useful management tool for achieving cost-savings as well as on-time, on-budget, and quality construction. Because they are negotiated pre-bid and tailored specifically to the particular needs of a single project, PLAs also allow project owners, contractors, and trade unions to anticipate and avoid potential problems. This report shows that PLAs serve to maximize project stability, efficiency, and productivity and minimize the risks and inconvenience to the public that often accompany large public works projects, which is why PLAs are increasingly being used by state, county and municipal agencies.
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For projects reviewed in the report, decisions to use PLAs were based on economic feasibility or due diligence studies that evaluated cost savings, risk avoidance, and other related issues.
Source: Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009), available at http://digitalcommons.ilr.cornell.edu/reports/22/.
Report from Professors of Michigan State, Rhode Island, Utah (2007) Project Labor Agreements
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This study provides a detailed overview of PLAs, observing at the outset that PLAs have been used in the private and public sectors without controversy for most of their history. (p. 5). Although President George W. Bush helped to reverse this trend with an anti-PLA Executive Order in 2001, private sector use of PLAs did not slow during his administration. (pp. 12-13). This is significant because the private sector is by far the largest consumer of PLAs, accounting for 75 percent PLA use. The authors find major flaws with some of the previous PLA research done by the non-union contractor association ABC, the conservative free-market Beacon Hill Institute and others. For example, the authors report that the Beacon Hill’s studies in 2003 and 2004 “did an insufficient job at controlling for variables that affect construction costs. Hence, much of what was attributed of the presence of a PLA is actually explained by other variables, such as project location (e.g. the inner city) and building amenities (heating systems, swimming pools, etc.).” (p. 14). The authors interviewed approximately forty individuals with experience working with PLAs, including public and private users and contractors. Among the benefits of PLAs cited were their ability to assure the timely completion of a project (p. 27-28), the savings produced in the final cost of a PLA project (which are not necessary reflected in the bid price) (pp. 28, 29-30), enhanced minority participation and the facilitation of worker training (pp. 28-29), and the emphasis on safety on PLA jobs (p. 29). The authors then examined the effect of PLAs on bidding by looking at bidding behavior in adjacent San Jose, California school districts, and on costs by studying 108 school construction projects in New England. On bidding, the data showed “that the presence of a PLA has no statistically significant effect on the number of bidders per bid opening.” On costs, the authors lodged heavy criticism at various aspects of the Beacon Hill Institute’s research, most notably Beacon Hill’s failure to consider that PLA projects may be more complex and have more amenities (“why projects are build with PLAs in the first place.”) (p. 37). Contrary to Beacon Hill’s research, the authors’ thorough study of the 108 school projects revealed no impact of PLAs on project costs. (p. 37).
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The authors conclude with a number of case studies that show how PLAs can be adapted to meet a number of challenges, including tight schedules and labor markets, lightly unionized regions, sites that have to remain operational during construction (e.g., airports), and community-based needs regarding career training in the trades. (p. 39-59).
Source: Dale Belman, Matthew M. Bodah, and Peter Philips, Project Labor Agreements, ELECTRI International (2007), available at http://builtbest.org/ sites/builtbest.prometheuslabor.com/files/PLA_NECA_Report%5B1%5D.pdf.
Michigan State University, School of Labor & Industrial Relations (2005) The Effect of PLAs on the Cost of School Construction in New England
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This study revealed major flaws in anti-PLA studies conducted by the conservative Beacon Hill Institute, finding that when more complete data models are used, the evidence shows that PLAs do not raise the cost of school construction projects. (pp. 19-21). The authors examined the cost of 92 school construction projects in and around Massachusetts using a number of statistical models in order to examine the models’ conclusions about the cost impact of PLAs. When an overly-simplistic data model similar to the Beacon Hill Institute’s model was used, the study showed PLA projects being more expensive. However, as the authors applied progressively more complete models, accounting for differences in project characteristics such as type of school, location of the project, and other criteria, the so-called PLA cost premium disappeared. The most complete model, which incorporated all of these characteristics, showed that PLAs did not raise project costs. (p. 21). Among the serious flaws in Beacon Hill’s research was its failure to consider that PLA projects tend to be larger and more complex, a fact that is well-known in the construction industry. For example, the data showed that PLA schools tended to be much taller, were more than twice as likely to be amenity-intensive vocational schools, and always required demolition work as compared to just half of the non-PLA schools. (p. 6-8). Beacon Hill’s model also failed to consider other common-sense facts, such as the fact that high schools are more expensive and require more elaborate facilities, and the fact that urban schools cost more to build (substantially so) because of more exacting codes and the need in some cases for services such as 24 hour police protection. (pp. 10-13). The authors also noted that Beacon Hill’s second study corrected a few problems and added a few variables to its data model. These marginal improvements to the data model alone reduced Beacon Hill’s estimate of the cost impact of PLAs by 41 percent (p. 19).
Source: Dale Belman, Russell Ormiston, William Schriver, and Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005), available at http://www.lir.msu.edu/faculty/workingpapers/.
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Iowa Policy Project (2004) Project Labor Agreements in Iowa: An Important Tool
? ? Report by the non-profit, non-partisan Iowa Policy Project discusses how PLAs fit into the fabric of federal labor and state competitive bidding laws. Makes the case that PLA use should be expanded in the public sector because they have proven to be cost-effective, efficient, and reliable mechanisms for large or complex project delivery. Dispels many of the myths used by PLA opponents and shows how PLAs are common-sense management tools that facilitate successful construction project delivery and provide public and private project owners with greater value for capital investments.
Source: Ralph Scharnau and Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004), available at http://www.iowapolicyproject.org/20022004docs/041201-PLAs.pdf.
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Contra Costa County, California, Director of General Services (2004) Project Labor Agreement Report
? In January 2002, Contra Costa County Board of Supervisors adopted a policy requiring every county-funded construction projects with a budget of or over $1 million to include a PLA. Contra Costa County Director of General Services reports that union contractors submitted 44 of 62 bids for 8 projects between May 2002 and November 2003 and that bids for 5 of 8 projects subject to the PLA policy were lower than the architect/engineer’s cost estimate.
Source: Bart Gilbert, Director of General Services, Project Labor Agreement Report, Costa County (Jul. 7, 2004), available at http://www.lecet.org/Clearinghouse_Public/LECET/PLA/ contra_costa.pdf.
Contra
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Harvard University: Joint Center for Housing Studies (2002) Project Labor Agreements
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Professor John Dunlop provides a historical overview of PLAs, which have their roots in construction developments during World War II and in the post-war era at atomic energy, space, and missile sites. Discusses the benefits of PLAs, including attainment of efficiency through standardized terms and conditions, clear channels of communication and direction, and a steady and reliable supply of skilled labor. States that it is curious that no legal or public relations assault has been made on PLAs in the private and non-profit sectors, and suspects this is because PLAs have passed the private market test.
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Notes that PLAs have been used by various private organizations, including Toyota, Boeing, Inland Steel, Arco, among others—and that many of the private owners are repeat users. Such private experience, the author submits, should validate the public PLAs and override criticism.
Source: John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002), available at http://www.jchs.harvard.edu/ publications/industrystudies/W02-7_dunlop.pdf.
California Research Bureau (2001) Constructing California: A Review of Project Labor Agreements
? Johnston-Dodds of the California General Assembly’s Research Bureau provides a historical overview of PLAs in California beginning with the successful Shasta Dam project which ran from 1938 to 1944. (p. 9). Reports private construction projects in California are much more likely to use PLAs than public projects. In fact, 72 percent of the 84 California PLAs reviewed were for private sector projects. In addition, 22 out of 23 private cogeneration electricity plants were built under PLAs. (p. 13). Finds that owner preference is a key driver of PLAs, stating that: “Owners increasingly want PLAs in order to meet their speed-to-market demands and to ensure against delays that can be caused by worker shortages, work stoppages, or collective bargaining negotiations.” (p. 59). Study presents the views of both union and non-union contractors, public agencies, and others on PLAs. Discusses in some detail the experience that Bechtel, one of the world’s largest contractors, has had with PLAs: o Bechtel has used PLAs on more than 100 large construction projects over the last 25 years; 85 percent of PLAs used on Bechtel projects are in the private sector. (p. 38). Bechtel states that centralized union referral systems, training and apprenticeship programs are “positive . . . well-proven systems,” especially on larger, complex projects. (p. 58). o In addition, Bechtel indicates that PLAs facilitate increased cooperation and communication between management and construction workers and permit use and testing of innovative safety programs. (p.38). o For example, one Bechtel PLA included a self-inspection safety program for the Shell Project during the mid-1990s. Development of this program was made possible by the PLA; after 2 million man-hours, no worker suffered an injury serious enough to warrant missing a day’s work. Bechtel now uses this program all over the world. (p. 38). ? Johnston-Dodds also highlights an innovative Port of Oakland PLA, which includes various economic development, community capacity building, and social justice provisions aimed at creating opportunities for historically disadvantaged local residents and businesses. (pp. 41-51).
Source: Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001), available at http://www.library.ca.gov/crb/01/10/01-010.pdf.
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2001 Construction Law Update The Case for Public Owner Project Labor Agreements (PLAs)
? Authors make the case for PLAs on public works projects based on support gleaned from court decisions as well as the authors’ extensive hands-on experience with PLAs, including their “cradle-to-grave” experience exploring, drafting, and administering the well-known Tappan Zee Bridge PLA. Chapter begins with an explanation of what a PLA is and is not. For example, a PLA is typically limited in time and scope to the project for which it was negotiated, (p. 114), and is not a “union only” agreement that requires contractors to be unionized in order to bid or perform work. (p. 116). Chapter proceeds to a succinct analysis of the litany of court decisions upholding PLAs on public works projects and, thereafter, to a discussion of the authors’ own hands-on experience on the Tappan Zee Bridge project as well as ten other major public projects. On the Tappan Zee Bridge project and six of the other projects, the authors recommended a PLA; on three others they did not recommend PLAs. (p. 127). On projects authors were involved with and in which PLAs were used, they report, among other things, “that in highly unionized areas, not only did PLAs save substantial amounts in construction costs, but the amounts could be quantified for each cost-saving PLA provision.” (p. 127). Overall, the authors submit that “[p]robably the best argument for PLAs in the public sector is that they have been for decades, and still are, used in the private sector by large, sophisticated, experienced developers, owners, construction managers and contractors, all of whom are driven by the profit motive.” (p. 129).
Source: James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), in 2001 Construction Law Update (Neal J. Sweeney ed., Aspen Publishers, Inc. 2001), 111-162 (on file with authors).
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University of California, Institute for Labor and Employment (2001) Project Labor Agreements: An Exploratory Study
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Daniel Rounds conducted a pilot study to evaluate arguments made by proponents and opponents of PLAs. Specifically, the author investigated project performance at three PLA sites: two private and one public. Study concludes, based on research and interviews conducted at the three sites, that PLAs facilitated workplace cooperation, delivered highly skilled labor, did not increase costs and reduced the likelihood of labor unrest.
Source: Daniel Rounds, Project Labor Agreements: An Exploratory Study (UCLA Institute for Labor and Employment 2001) (on file with authors).
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_______________________________________________________________________
Part II: Extensive Use of PLA Construction _____________________________________________________________
$50 Billion in Public & Private PLAs in 2010 Alone
? Over 300 public and private sector PLAs, covering construction work in excess of $50 billion, were negotiated in 2010 alone, according to data collected by the Building and Construction Trades Department, AFL-CIO.
Source: Mark Ayers, 50 Billion Reasons Why Project Labor Agreements Work, Building & Construction Trades Department President’s Message Blog (Dec. 10, 2010) at http://www.bctd.org/Newsroom/Blogs/Presidents-Message/December2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx.
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Cockshaw’s Report: Private Sector PLAs Become Widespread
? ? ? A leading industry report shows have become widespread in the private sector, including substantial use by many Fortune 500 companies. Cites the use of PLAs by Bank of America, CVS, Disney, IBM, Loews, Marriott, Sunoco, Target, Toyota, U.S. Airways, Wal-Mart and Xcel. Notes a study by the California Research Bureau which found private sector PLAs outnumbered public PLAs in California, and its conclusion that “private owners specifically request that contractors use PLAs for economic reasons, labor stability and cost and scheduling factors.”
Source: Peter Cockshaw, Private PLAs Become Widespread, Cockshaw’s Construction Labor News & Opinion 35(8), Sept. 2005, at 1-4, available at http://www.buildri.org/stuff/contentmgr/files/c1f488859b6395396289bcdb03ccf84b/ doc/2005.cockshaw__s_sept_2005.pdf.
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Housing Trust Supports Billions in PLA Work Over 45 Year Tenure
? Since its inception, the AFL-CIO Housing Investment Trust (HIT) and its predecessor have leveraged more than $6 billion in capital to support housing construction projects built under PLAs and PLA-type agreements These investments have generated some 69,000 good paying construction jobs, over 100,000 housing units to revitalize communities, and aboveaverage returns for investors.
Source: AFL-CIO Housing Investment Trust, Socially Beneficial Impact, at http://www.aflcio-hit.com/wmspage.cfm?parm1=140 (last visited Aug. 22, 2011).
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Building Trust Relies on PLAs to Protect Over $4 Billion of Investments
? Since 1988, the AFL-CIO Building Investment Trust (BIT) has participated in over $4 billion in real estate investment transactions. (p. 6).
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BIT has relied on PLAs and PLA-type agreements to deliver projects across the country and support some 54 million man-hours of construction work. It’s investments continue to yield above-average returns. (p. 6).
Source: AFL-CIO Building Investment Trust, Annual Report 2008, available at http://www.aflcio-bit.com/AFL-CIO-BIT/files/6a/6aa9366e-c5c2-4280-981d2eded6e13117.pdf.
Multi-Employer Trust Uses PLAs for Billions of Dollars in Projects
? The Multi-Employer Property Trust’s (MEPT) development, renovation, and other investments have generated over $13 billion in economic activity through projects built under PLAs and PLA-type agreements. These investments have generated over 67 million man-hours of construction work while producing above-average returns for investors.
Source: Multi-Employer Property Trust, Job Creation, available http://www.mept.com/union/job_creation.php (last visited Aug. 22, 2011). at
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Part III: Federal PLA Policy _____________________________________________________________
Executive Order 13502: Use of PLAs for Federal Construction Projects
? President Obama’s Executive Order of February 6, 2009 encourages federal agencies to use PLAs for large-scale federal construction projects to promote timely and efficient completion of such projects. This Executive Order also directs federal agencies to develop PLA implementation plans and tasks the Office of Management and Budget with conducting a study on broader future use of PLAs.
Source: Exec. Order No. 13,502, 74 Fed. Reg. 6,985 (Feb. 6, 2009), available at http://edocket.access.gpo.gov/2009/pdf/E9-3113.pdf.
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Final Rule on Federal PLAs Documents PLA Successes in Public and Private Sectors and Facilitates Use for Federal Projects
? On April 13, 2010, the Federal Acquisition Regulation (FAR) Council issued a final rule implementing E.O. 13502, removing legal and administrative roadblocks that precluded consideration of PLAs by many federal agencies. The final rule gives federal agencies broad discretion to require contractors to execute and abide by a PLA as a condition of performing work on a large-scale federal project. (p. 19172). The background section of the rule documents the long and extensive use of PLAs by governmental bodies and private corporations for all types of construction. It notes that PLAs “have been used by the private sector for a variety of construction projects that are similar in nature to those undertaken in the public sector, including for manufacturing plants, power plants, parking structures, and stadiums.” (p. 19170).
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The rule also notes that PLAs have been used by the federal government on dams, defense installations, atomic energy facilities, and other projects for “many decades” -- as well as by State and Local governments “in all 50 States and the District of Columbia . . . [on] an array of construction projects covering an expanding range and size of projects—from schools, hospitals, roads, bridges, and police buildings, to convention centers, courthouses, manufacturing facilities, airports, power plants, transit systems, stadiums, and a prison.” (p. 19170). The U.S. Department of Energy (DOE) uses PLAs at most of its key sites, including the Hanford Site in Washington State, the Savannah River Site in South Carolina, the Oak Ridge Reservation in Tennessee, the Nevada Test Site (NTS) (PLA in place since 1964), and the Idaho National Laboratory. In fact, as of the summer 2009, 21 of 25 DOE construction projects were either covered or slated to be covered by PLAs. (p. 19169-19170). The rule makes it clear that DOE’s experience with PLAs has been positive, stating specifically that: Current and past DoE representatives have stated that project labor agreements have contributed to economy and efficiency of DOE construction projects, including completion of projects on time and within budget, by, among other things— ? ? Providing a mechanism for coordinating wages, hours, work rules, and other terms of employment across the project; Creating structure and stability through the use of broad provisions for grievance and arbitration of any disputes that may arise on site, including procedures for resolving disputes among the construction crafts; Prohibiting work stoppages, slowdowns, or strikes for the duration of a project and obligating senior union management to use their best efforts to prevent any threats of disruptions of work that might arise; and Ensuring expeditious access to a well trained, assured supply of skilled labor, even in remote areas where skilled labor would have otherwise been extremely difficult to find in a timely fashion.
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(p. 19170). ? Also noteworthy is the fact that the Tennessee Valley Authority (TVA) has used PLAs successfully on its construction projects for almost 19 years. “In the nearly 200 million man hours of work on TVA construction projects using project labor agreements, there have been no formal strikes or any organized work stoppages.” (p. 19170). Further, “[t]he rate of injury on TVA projects has also been significantly reduced, especially over the last approximately 5 years.” (p. 19170).
Source: Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168 (Apr. 13, 2010), at http://edocket.access.gpo.gov/ 2010/pdf/2010-8118.pdf.
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General Services Administration Jumpstarts Federal PLA Construction With 7 Projects Totaling Over $760 Million
? The U.S. General Services Administration (GSA), one of the largest federal purchasers of construction services, now has over $760 million in PLA construction in effect. GSA began using PLAs to coordinate some of its largest and most important projects following the Federal Acquisition Regulation (FAR) Council’s completion of a final rule implementing President Obama’s PLA executive order.
Sources: The projects for which PLAs are being used are as follows: A.J. Celebrezze Federal Building, Cleveland, OH ($115M), at https://www.fbo.gov/spg/GSA/PBS/5PCI/GS_05P_09_GBC_0035/listing.html Peter Rodino Federal Building, Newark, NJ ($142M), at https://www.fbo.gov/spg/GSA/PBS/2PCB/GS-02P-09-DTC-0018(N)/listing.html 50 United Nations Plaza, San Francisco, CA ($101M), at https://www.fbo.gov/spg/GSA/PBS/9PCS/GS-09P-09-KTC-0065/listing.html Prince Kuhio Kalanianaole Federal Building, Honolulu, HI ($80M), at https://www.fbo.gov/spg/GSA/PBS/9PCS/GS-09P-09-KT-C-0103/listing.html Edith Green-Wyndell Wyatt Federal Building, Portland, OR ($125M), at https://www.fbo.gov/spg/GSA/PBS/10PDC/GS-10P-09-LT-C-0052/listing.html Lafayette Building Modernization, Washington, DC ($106M), at https://www.fbo.gov/spg/GSA/PBS/WPC/GS11P10MKC0061/listing.html Consolidation of DHS at St. Elizabeth’s, Washington, DC ($93M), at https://www.fbo.gov/spg/GSA/PBS/WPC/GS11P10MKC0059/listing.html ***Estimated project values based on GSA Public Buildings Service Procurement Instructional Bulletin, 09-02, (Aug. 11, 2009) (on file with authors).
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U.S. Navy Adopts Military’s First-Ever PLA in Washington State
? In December 2011, the U.S. Navy announced that it will be using a PLA to build a $715M explosives handling wharf in Washington State. The PLA is reportedly the first to be adopted by the U.S. Department of Defense or any of its constituent departments or agencies. In support of its decision, the Navy cited the ability of the PLA to assure timely completion of the project, promote economy and efficiency, contain costs and promote the hiring of local workers. Construction is expected to get underway in the summer 2012. However, the Navy must first complete an environment impact statement and issue a record of decision for the project.
Sources: Ed Friedrich, Navy to Hire Local Workers for Second Explosives Handing Wharf, Kitsap Sun (Jan. 1, 2012), available at http://www.kitsapsun.com/news/2012/jan/01/navy-to-hire-local-workers-forsecond-explosives/.
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Department of Labor Requires PLA for New Hampshire Jobs Center
? Pursuant to a bid solicitation issued in December 2011, the U.S. Department of Labor is requiring the use of a PLA to construct a new Jobs Corps Center in Manchester, New Hampshire. The project is valued at upwards of $50 million. (Solicitation). The PLA itself, which is included in the solicitation, cites the Department’s desire to “promote economy and efficiency in Federal Procurement pursuant to Executive Order 13502” along with numerous specific benefits that the PLA will bring to the Project. (PLA at 1). Among other cited benefits, the PLA is said to provide: o o o o o o The most cost effective construction, including direct savings; Standardized employment terms and conditions; Appropriate mechanisms to resolve worksite disputes; A reliable source of skilled and experienced labor; Assurances against misclassification and payroll issues; and Maximum safety for both workers and the community.
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(PLA at 1-2).
Sources: U.S. Department of Labor, Solicitation: Construction of New Job Corps Center in Manchester New Hampshire (Last retrieved Feb. 2, 2012), at https://www.fbo.gov/notices/64b6788bb0c78a44c9ae5e13b85f8886; Job Corps Center PLA, at http://www.solicitationattachments.com/newhampshire/1pla.pdf.
Army and Army Corps of Engineers Adopt PLA with “Helmets to Hardhats” Clause to Promote Veterans’ Training and Recruitment
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In August 2011, the Building & Construction Trades Department, AFLCLO, and Walbridge ratified an innovative PLA that utilizes the “Helmets to Hardhats” program to facilitate the entry of veterans and members of the National Guard and Reserves into careers in the building and construction industry. This PLA will cover an Army/Army Corps of Engineers project at Arnold Air Force Base in Tennessee. The Helmets to Hardhats Program was founded by America’s Building Trades Unions to connect veterans and transitioning active-military to industry-best skill training and good job opportunities in the building and construction trades. Since 2007, it has placed over 5,000 veterans in craft apprenticeship programs and employment throughout the United States. Under the Army/Army Corps PLA, veterans and soon-to-be veterans working on the project will receive a range of services, including preliminary orientation, aptitude assessments, referrals to apprenticeship programs, counseling and mentoring, and job opportunities.
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Helmets to Hardhats, along with the United Association’s Veterans in Piping (VIP) Program, another top program promoting veterans training and recruitment, have garnered national attention and praise, both in- and outside of the military, for the invaluable service they render to veterans.
Sources: Building and Construction Trades Department, AFL-CIO, BCTD Now 8/22/11, at http://www.youtube.com/watch?v=6z6uF9pNUV8; see Helmets to Hardhats, at http://www.helmetstohardhats.org; see also United Association Veterans in Piping (VIP) Program, at http://www.uavip.org/.
Extensive Use of PLAs by U.S. Department of Energy
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The U.S. Department of Energy (DOE) has required PLAs, which it refers to as “Site Stabilization Agreements,” for billions of dollars worth of construction projects on DOE sites. These agreements have been used at virtually all DOE’s main nuclear sites, which include: Hanford Site in Washington State, Savannah River Project in South Carolina, Oak Ridge Reservation in Tennessee, the Nevada Test Site and Tonopah Test Range (Area 52), Rocky Flats Plant in Colorado, and the Idaho National Laboratory (INL). A review of project data at three of these sites indicates that over last several decades approximately 8.2 million man-hours have been worked under these agreements (Savannah River/2,830,000 manhours; Oak Ridge/2,300,600 man-hours; and Handford/3,148,000). One example is the Idaho National Laboratory agreement, entitled “INL Site Stabilization Agreement,” which was entered into as early as 1984.
Source: (1) INL Site Stabilization Agreement (Mar. 1, 2007), available at https://idahocleanupproject.com/portals/0/documents/dmcs/brown/Site_Stabiliz ation_Agreement.pdf; (2) Statement of John Koskinen, OMB Deputy Director for Management, Before the Committee on Labor and Human Resources, U.S. Senate (Apr. 30, 1997), available at http://georgewbushwhitehouse.archives.gov/omb/legislative/testimony/19970430-23262.html.
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Energy Bill Would Require Use of PLA on ANWR Projects
? On January 5, 2011, U.S. Rep. Don Young (R-AK) introduced the American Energy Independence and Price Reduction Act, H.R. 49, which would increase domestic oil production by opening additional coastal waters and Alaska’s Arctic National Wildlife Refuge (ANWR) for drilling. Section 6(b) would require lessees of land in ANWR to use PLAs for all on-site production, maintenance and construction. According to the bill, the PLA requirement is based on “the Government’s proprietary interest in labor stability and in the ability of labor and management to meet the particular needs and conditions” of such projects.” Rep. Young’s bill currently has 123 co-sponsors.
Sources: American Energy Production and Price Reduction Act, H.R. 49, 111th Cong. (2009), available at http://www.opencongress.org/bill/111-h49/show; American Energy Production and Price Reduction Act, H.R. 6107, 110th Cong. (2008), available at http://www.opencongress.org/bill/110-h6107/show.
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Office of Management and Budget Touts Benefits of Pro-PLA Policy
? Former OMB Deputy Director for Management John Koskinen testified before the Senate Committee on Labor and Human Resources in support of federal PLAs in 1997, noting they have proven valuable in the public and private sectors because they “help ensure projects are completed ontime and on-budget—without accidents, delays, and unexpected costs.” Mr. Koskinen reported that the federal government has used PLAs to build dams, defense installations and atomic energy facilities and had a particularly successful track record at DOE sites. He stressed that the federal government should be able to reap the same benefits that private firms and state and local governments achieve from PLAs.
Source: Statement of John Koskinen, Before the Committee on Labor and Human Resources, U.S. Senate (Apr. 30, 1997), available at http://georgewbushwhitehouse.archives.gov/omb/legislative/ testimony/19970430-23262.html.
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______________________________________________________________________
Part IV: PLAs for Nuclear Construction ____________________________________________________________
PLA to Govern $14.5 Billion Construction of Two New Nuclear Reactors at Southern Company’s Vogtle Electric Generating Plant
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In April 2010, the Building & Construction Trades Department, AFL-CIO,
and Stone Webster Construction agreed to use a PLA for the construction of the two new nuclear units at Southern Company’s Vogtle Electric Generating Plant near Waynesboro, Georgia. In February, the project received the backing of the Obama Administration, which awarded Vogtle $8.33 billion in federal loan guarantees.
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Among other things, the PLA will ensure that the project is staffed by local workers and provide specialized training programs so that the skills honed at Vogtle can be leveraged on other nuclear projects across the country.
Source: Rob Pavey, Unions in Deal to Train Workers, The Augusta Chronicle, Apr. 20, 2010, available at http://chronicle.augusta.com/news/metro/2010-0420/unions-deal-train-workers.
Nuclear Innovation North America LLC Chooses PLA for $13 Billion Construction of Two New Nuclear Units at South Texas Project (STP)
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In April 2010, Nuclear Innovation North America LLC (NINA), a company
jointly owned by NRG Energy, Inc. and Toshiba Corporation, announced an agreement with the Building & Construction Trades Department, AFLCIO, to use a PLA for the $13 billion construction of two new nuclear units at the South Texas Project (STP) in Matagorda County, Texas. The new units, commonly referred to as STP 3&4, are scheduled to come online in 2016 and 2017, respectively. (Press Release; Fact Sheet).
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“Clean reliable nuclear energy is key to meeting the environmental challenges we face as well as reducing our nation’s dependence on foreign energy,” said Steve Winn, CEO of NINA. “To ensure we can achieve these important goals and can build STP 3&4 and the many new nuclear units to follow, it is critical that we have a skilled pool of American workers. This agreement and the skilled labor it represents will help make that possible.” (Press Release).
Sources: (1) Press Release, NRG Energy, Inc., Project Labor Agreement with America’s Building Trades Unions Announced for South Texas Project Nuclear Power Expansion (Apr. 8, 2010), available at http://finance.yahoo.com/news/ Project-Labor-Agreement-with-bw-1526648672.html?x=0&.v=1; (2) NRG Energy, Inc., South Texas Project Fact Sheet, Jan. 2010, available at http://www.nrgenergy.com/pdf/factsheets/ factsheet_stp1-4.pdf.
Bechtel Construction Co. and Building Trades Unions Announce PLA for Construction of New $4 Billion Nuclear Unit at Calvert Cliffs Plant
? In June 2009, Bechtel Construction Company announced that it had entered into a PLA with the Building & Construction Trades Department, AFL-CIO, and the National Construction Alliance II for the construction of a new nuclear unit at the Calvert Cliffs Nuclear Power Plant in Lusby, Maryland. (Press Release). According to Bechtel, the PLA guarantees skilled and qualified workers for the project in exchange for fair wages, benefits and working conditions for those workers. (Press Release). The estimated cost of the new unit is $4 billion. (Pelton). "This is an historic agreement,” said Carl Rau, Bechtel Nuclear president. “It not only benefits labor and Bechtel, it benefits the entire nuclear industry as it grows to meet the country’s increasing demand for clean energy. The success of this agreement will point the way for the construction of future nuclear energy projects.” (Press Release).
Sources: (1) Press Release, Bechtel Construction Company, The Building and Construction Trades Department, AFL-CIO; The National Construction Alliance II; and Bechtel Construction Approve Historic Project Labor Agreement (Jun. 1, 2009), available at http://www.bechtel.com/2009-06-01.html; (2) Tom Pelton, Nuclear Power Has New Shape, Baltimore Sun, Dec. 25, 2007, available at, http://articles.baltimoresun.com/2007-12-25/news/ 712250014_1_reactor-nuclearpower-calvert-cliffs.
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Part V: PLA Construction by State & Local Governments _____________________________________________________________
Alaska Gov. Palin Endorses Use of PLA for Gasline Construction
? ? In an April 2007 article of Alaska Economic Trends, Gov. Sarah Palin explains her support for PLAs as part of the Alaska Gasline Inducement Act. Gov. Palin emphasizes that PLAs provide host of assurances for both management and workers, including labor stability which results in less cost overruns, no-strike provisions which assure timeliness, opportunities for Alaskans to learn on the job with pay and benefits and a bidding process that is open to union and non-union firms alike.
Source: Sarah Palin, The Alaska Gasline Inducement Act and Alaska Hire, Alaska Economic Trends, Apr. 2007, at 3, at http://labor.state.ak.us/trends/apr07.pdf.
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Arizona/Nevada PLA Used to Build Landmark Hoover Dam Bypass Bridge
? In October 2010, work was completed on the $240 million Hoover Dam Bypass Bridge, designated by Congress as the Mike O'Callaghan-Pat Tillman Memorial Bridge, in budget and on-schedule. Like the Hoover Dam itself, this landmark project was built under a PLA. (LIUNA!). The Federal Highway Administrator dubbed the project “a modern engineering marvel” while Popular Mechanics Magazine has cited it as “an example of big-ticket civil engineering done right” at a time when “people expect mega-engineering projects to be over budget—and, often, underwhelming.” (Popular Mechanics). As described by U.S. Transportation Secretary Ray LaHood: “This majestic bridge is the longest of its kind in the Western Hemisphere. It rests on the tallest precast concrete columns ever constructed. And it reaffirms a powerful idea: Americans can still build great things not just in spite of enormous economic challenge, but as the means of overcoming it.” (LaHood).
Sources: (1) LIUNA! Website, at http://www.liunabuildsamerica.org/project-laboragreements-work; (2) Erik Sofge, Lessons from the Hoover Dam Bypass, Popular Mechanics, Dec. 15, 2010, at http://www.popularmechanics.com/technology/ engineering/infrastructure/lessons-from-the-hover-dam-bypass; (3) Ray LaHood, Hoover Dam Bypass Bridge, A Symbol of American Ingenuity, DOT Fast Lane Blog, at http://fastlane.dot.gov/2010/10/hoover-dam-bypass-bridge-a-symbol-ofamerican-possibility.html.
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California Governor Brown Signs Bill to Preserve Local Government Access to PLAs ?
On October 2, 2011, Governor Jerry Brown signed into law SB 922, which denies state construction dollars to local jurisdictions that have approved blanket bans on PLAs, empowers local jurisdictions to decide on a projectby-project basis whether a PLA is appropriate, and establishes parameters for using PLAs on publicly-funded projects. In a joint statement on SB-922, its authors, California Senate President Pro Tem Darrell Steinberg and General Assembly Speaker John A. Perez, pointed out that the law does not require any local jurisdiction to use PLAs. It simply prohibits them from barring consideration of, and access to, this tool. “We will not allow a few cities to throw away our scarce taxpayer dollars, unfairly tying the hands of their elected officials from considering a method which can give taxpayers the most bang for the buck,” they said. Steinberg and Perez added PLAs “have been used by both business and government to save money on construction of municipal projects for over 70 years. Governments also use them to achieve additional goals such as local hiring, assuring our returning veterans a job on a project, and creating viable apprenticeships and other training programs for the community.”
Sources: (1) Office of Governor Edmund G. Brown, Governor Brown Issues Legislative Update, Oct. 2, 2011, at http://gov.ca.gov/news.php?id=17251; Office of John A. Perez, Joint Statement: Pro Tem Steinberg and Speaker John A. Perez Set the Record Straight on SB 922, Oct. 12, 2011, at http://asmdc.org/speaker/news-room/press-releases/item/2695-joint-statement-protem-steinberg-and-speaker-john-a-p%C3%A9rez-set-the-record-straight-on-sb-922.
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PLAs Used to Construct 96 Percent of California’s Power Plants
? In June 2011, Industrial Information Resources (“IIR”), a market intelligence firm, published research showing that 53 power plants in California have been built under PLAs in the past 15 years. These 53 power plants constitute 96 percent of all power plants built during this time and represent more than 30 million hours and $15 billion worth of work. According to IIR, this trend owes to the superior training programs and productivity of the California Building Trades and to project owners’ desire to secure higher returns on their investments. IIR adds that: “[w]hile the 53 California power plants built using union labor were completed on time and on budget, other non-PLA power projects have suffered multiple cost and time overruns, resulting in a cascading series of lawsuits and unpaid contractors and subcontractors.”
Source: Industrial Information Resources Press Release, Project Labor Agreements Work for California Power Industry – and More (Jun. 17, 2011), available at http://www.marketwire.com/press-release/project-labor-agreements-work-californiapower-industry-more-feature-industry-today-1528086.htm.
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Los Angeles Transit Board Inks Landmark Transit & Highway PLA
? On Jan. 26, 2012, the Los Angeles County Metropolitan Transportation Authority (“MTA”) announced that their Board of Directors had unanimously approved a Project Labor Agreement which will cover all MTA and transit and highway projects with a cost over $2.5 million. Immediate funding for covered projects will come largely from Measure R, a $30 billion ballot measure approved in Nov. 2008. However, the MTA states the PLA could cover upwards of $70 billion in work over the next three decades if it fully implements its Long Range Plan. The PLA is believed to be the first of its kind for a transit agency and includes provisions which promote training and career opportunities for economically disadvantaged and youth populations in Los Angeles. Specifically, the PLA calls for 40 percent of work hours on covered projects to be done by economically disadvantaged workers and 10 percent of work hours to be done by individuals struggling with poverty, chronic unemployment and other hardships. In addition, registered apprentices are to comprise at least 20 percent of the workforce. Mayor Antonio Villaraigosa praised the MTA Board’s decision to adopt the PLA. “I am proud that the MTA Board voted unanimously to become the first transit agency in the nation to use federal and local dollars to create jobs targeted at economically disadvantaged communities and individuals," he said. "This landmark program is part of a strategy to deliver public transit projects while creating jobs that will lift people out of poverty and into the middle class."
Source: Los Angeles Metropolitan Transportation Authority Press Release, Metro Board Approves Project Labor Agreement for Metro Construction Projects (Jan. 26, 2012), at http://www.metro.net/news/simple_pr/Metro-Board-approvesPLA-for-Metro-Construction-Pr/.
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Citing PLAs as “Best Path to Success” Towards Goals, Los Angeles Community Redevelopment Agency Reports $1.44 Billion in PLA Projects ?
In October 2009, the Community Redevelopment Agency of the City of Los Angeles presented “Project Labor Agreements: The Los Angeles Experience” to the Department of Energy Contractor Attorneys' Association (DOECAA). The Agency cited data showing that the “PLA is the best path to success” in fulfilling its goals on public works construction of strengthening the Los Angeles economy through local investment and expanding opportunity for people with barriers to employment. Under the Agency’s Construction Careers Policy, PLAs are required for public improvements valued at $500,000 or more, projects on Agency land, and projects in which the Agency invests $1 million or more. 30 percent of total work hours, and 30 to 40 percent of apprentice hours, must be performed by community or high-unemployment area residents, while 10 percent of hours are to be performed by disadvantaged workers.
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According to the Agency, the public interests served by PLAs include: safe and quality construction delivered on time and on budget; rebuilding the middle class; expanding opportunity for minorities; improving the tax base and encouraging community reinvestment; decreasing the reliance of residents on public assistance; and building a trained workforce. As noted, the data presented by the Agency attests to their success in using PLAs to advance these interests. At the time of the presentation, there were 23 PLA projects worth $1.44 billion in Los Angeles. Among other benefits highlighted by the Agency: 30.55 percent of work hours on PLA projects were performed by local residents; almost $50 billion in wages and benefits had been reinvested back into the Los Angeles economy; and average contractor bids and contract awards in recent years had consistently come in below the engineer’s bid estimates:
Source: Community Redevelopment Agency of the City of Los Angeles, Project Labor Agreements: The Los Angeles Experience, 2009 DOECAA Conference Presentation (on file with authors).
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San Francisco 49ers to Build New $1 Billion Stadium Under PLA
? On Feb. 28, 2012, the National Football League’s San Francisco 49ers announced that they had entered into a PLA to facilitate the construction of a new $1 billion, 68,500-seat stadium on land leased by the City of Santa Clara. The project will employ thousands of local workers. 49ers CFO Larry McNeill said the PLA was essential to ensuring the highest quality product. “Everything we do within the 49ers is based on quality and performance,” he said. “We have very high expectations for the new stadium, and this PLA gives us confidence that we will have a quality job that will come in on time and on budget.”
Source: State Building & Construction Trades Council of California, Press Release, PLA Finalized for New 49ers Stadium (Feb. 28, 2012), available at www.sbctc.org/doc.asp?id=4085.
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BNSF Railway and Los Angeles/Orange County Building Trades Ink $255 Million PLA for Southern California International Gateway
? On October 25, 2011, BNSF Railway and the Los Angeles/Orange Counties Building & Construction Trades Council announced that they had executed a $255 million PLA to govern construction of the Southern California International Gateway (SCIG), a state-of-the art, near-dock intermodal rail facility. Upon completion, BNSF asserts that SCIG will be “the greenest Intermodal facility in the United States.” (BNSF). The PLA will regulate, among other things, safety, quality and timely construction of SCIG while providing job and apprentice opportunities to qualified local residents. Construction is expected to begin in 2013, after the Port of Los Angeles completes its environmental review. (ENR).
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Sources: (1) BNSF Railway, Press Release, BNSF Railway and LA/Orange Counties Building and Construction Trades Council Sign $255 Million Labor Agreement for Construction of Proposed Intermodal Facility, Oct. 25, 2011, available at http://www.marketwatch.com/story/bnsf-railway-and-laorange-counties-building-andconstruction-trades-council-sign-255-million-labor-agreement-for-construction-ofproposed-intermodal-facility-2011-10-25; (2) ENR California, BSNF Railway, LA/OC Labor Council Sign $255M PLA for Intermodal Port Project, Oct. 26, 2011, at http://california.construction.com/california_construction_news/2011/1026bnsfrailwaylaoclaborcouncilsign255mplaforintermodalportproject.asp.
PLA Successfully Employed in Solano County Government’s $113.5 Million ‘Smart-Growth’ Consolidation Effort
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In July 2005, Solano County brought together 16 departments from 15 different locations under one roof, a Government Center, as part of a $113.5 million ‘smart-growth’ consolidation effort, the largest undertaking in the 155 year-old county’s history. Fast-track schedule was achieved in part because of PLA. Government Center project logged 400,000 man-hours over 2.5 years without single lost-time injury. Since 80 percent of workforce came from local hiring halls or referral system, project cost was reinvested into the community.
Source: Tony Illia, Government Center Blends Bridging, CM and PLA, Design Build, May/June 2005, at 10, available at http://designbuild.construction.com/features/archive/2005/0506_cover.asp.
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Port of Long Beach Approves PLA for Initial Phase of $750 Million Modernization
? In a unanimous March 1, 2010 decision, the Port of Long Beach Board of Commissioners voted to adopt a PLA for the initial phase of a six year, $750 million port modernization effort. The initial phase will be approximately 15 months and employ 1,000 to 1,200 workers. The Board is using this initial phase to “test” the PLA concept, and considering a PLA for the entire six-year project if successful.
Source: Tom Gilroy, Long Beach Port Approves PLA to Cover First Phase of Port Modernization Project, 56 Constr. Lab. Rep. (BNA) No. 2760 at 60 (Mar. 11, 2010).
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Riverside Community College Adopts Standard PLA for Measure C Projects Over $1 Million
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On March 16, 2010, the Board of Trustees of California’s Riverside Community College District approved a standard PLA for use on all projects which cost over $1 million and draw funding from Measure C, a $350 million bond measure that was approved by voters in 2004. Thirteen projects are immediately subject to the PLA.
Source: Imran Ghori, Riverside Community College District Seeking Consultant for Key Labor Accord, Press Enterprise, Apr. 7, 2010, at http://www.pe.com/ localnews/riverside/stories/PE_News_Local_W_pla07.47edfa7.html.
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PLA Reports From Various Public Owners in California
? Booklet presents succinct testimony from various public project owners in the State of California regarding their successful experiences using PLAs to build public works construction projects in various parts of the state.
Source: Bill Rickman, Project Labor Agreements (State Building and Construction Trades Council of California 2002), available at http://builtbest.org/sites/builtbest.prometheuslabor.com/files/669.PLAbookletCA.pdf.
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Connecticut State Legislation Requires PLAs and Local Hiring for Development Properties or Compliance with Prevailing Wage Law
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Mandates the use of a PLA or compliance with prevailing wage law in connection with construction of the Adrian’s Landing and Rentschler Field (UCONN) projects.
Source: Conn. Gen. Stat. § 32-656 (2006), available at http://law.justia.com/connecticut/codes/title32/sec32-656.html.
Illinois Illinois Enacts Project Labor Agreements Act to Secure Highest Quality at Lowest Cost and Full Participation on Public Works
? On July 27, 2011, Illinois Governor Pat Quinn signed the Project Labor Agreements Act, which requires State agencies to use a PLA where it is “determined that the agreement advances the State's interests of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, or the State's policy to advance minority-owned and women-owned businesses and minority and female employment.” (Public Act). At the bill signing ceremony, Quinn stressed the ability of PLAs to ensure that projects are completed “on time, under budget, and in a proper way that encourages the participation of all of our workers . . . .” (Press Release). The text of the Act, which was passed by the Legislature as House Bill 2987, cites the State’s interests in securing “the highest standards of quality and efficiency at the lowest responsible cost” and in making certain “that a highly skilled workforce [is] employed on public works projects to ensure lower costs over the lifetime of the completed project for building, repairs, and maintenance to ensure lower costs over the lifetime of the completed project for building, repairs, and maintenance.” Further, the Act notes that PLAs can be used to more accurately predict project costs and are particularly beneficial on complex projects. (Public Act). The Act also promotes minority and female participation on public works projects by requiring State agencies adopting a PLA to include goals regarding the number of apprenticeship hours that will be completed by minorities and females on the project in question and to file progress reports concerning the actual participation of these groups. (Public Act).
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Sources: (1) Illinois Public Act 097-0199 (HB 2987 Enrolled), available at http://www.ilga.gov/legislation/publicacts/97/PDF/097-0199.pdf; (2) Office of Governor Pat Quinn, Press Release, Governor Pat Quinn Signs Legislation to Protect Diversity in State Public Works Projects, Jul. 27, 2011, at http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=11&Re cNum=9579.
Illinois DOT States That PLAs Have “Worked Exceptionally Well” In Report Documenting Over $878 Million of PLA Construction
? On January 27, 2011, the Illinois Department of Transportation (IDOT) issued a revised report showing that it has used PLAs to build over $878 million in construction projects since 2004. Notably, the report data shows that IDOT has dramatically increased its use of PLAs in recent years, with over $605 million of PLA construction in 2010 alone. The report indicates that this dramatic increase in PLA use is based on IDOT’s positive experience with these agreements since the issuance of Executive Order 2003-13, which authorized the use of PLAs on public works projects when they advance the state’s interests. IDOT’s experience using PLAs, in its own words, has been as follows: “Project Labor Agreements are essential in promoting efficiency of construction operations and providing for peaceful settlement of all labor disputes without strikes or lockouts. This helps to ensure that state and federal construction projects are completed in a timely and economical manner. In order to accomplish this objective, all contractors are bound by the terms of the Collective Bargaining Agreements and amendments to the local trade council. This prevents con?icts from occurring between union and non-union ?rms.” .... We have found the agreements to be beneficial to all parties involved in the construction process. Contractors are assured high-quality craft persons without strikes or work stoppages. Unions are guaranteed the contractor will employ their members and all jurisdictional disputes will be settled at monthly meetings.” ? All told, IDOT reports that PLAs have “worked exceptionally well throughout the state, by allowing the labor and contractors to interact together to assure a timely completion of our projects.”
Source: Illinois Department of Transportation, Project Labor Agreements, Revised Jan. 27, 2011, p. 8, at http://www.dot.state.il.us/desenv/PLA-Master-012711.pdf.
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Illinois Capital Development Board Touts PLA Program
? Reports from IL Capital Development Board show as of Jan. 20, 2009: o o o 86 active projects with PLAs worth over $259.4 million in total. 141 completed projects with PLAs worth over $1.2 billion in total. 227 total projects with PLAs worth $1.4 billion in total.
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Capital Development Board states that it has found PLAs “to be beneficial to all parties involved in the construction process” and have “worked exceptionally well throughout the State by allowing labor and contractors to interact together to assure a timely completion of our projects.” Illinois Department of Transportation has a PLA program similar to the Capital Development Board for state road and highway projects.
Source: Illinois Capital Development Board, Project Labor Agreements (Jan. 2009), available at http://www.cdb.state.il.us/forms/download/PLAbooklet.pdf.
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State Legislation Requiring Grant Recipients in Renewable Fuels Development Program to Enter PLA
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Requires grant recipients under Illinois’s Renewable Fuels Development Program to enter into a PLA as a condition of receiving grant funding.
Source: 20 Ill. Comp. Stat. 689/15 (2005), available at http://law.justia.com/ illinois/codes/chapter5/2439.html.
Executive Order 2003-13 Requiring Evaluation of PLAs for Works and Adoption Where PLA Advances State Interest
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Requires executive agencies, on project-by-project basis, to include a PLA on public works projects where agency determines that a PLA advances the state’s interests in terms of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability or the state’s policy to advance minorityand women-owned businesses and minority and female employment. Cites as basis for E.O. the state’s compelling interest in securing highest standards of quality and efficiency at the lowest responsible cost on public works projects and the capacity of PLAs to deliver on these objectives.
Source: Ill. Exec. Order No. 2003-13 (May 7, 2003), available at http://www.faircontracting.org/NAFCnewsite/pla_pdf/Illinois-Executive-Order-onPLAs-2003.pdf.
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Indiana $700 Million Lucas Oil Stadium Successfully Delivered Under PLA
? In Feb. 2012, Industrial Information Resources (IIR) unveiled an article and video report highlighting the successful delivery of the Indianapolis Colts’ new Lucas Oil Stadium, the site of Super Bowl XLVI, under a PLA. IIR reported that the $700 million stadium was completed on-time, onbudget and safely because of the PLA. According to IIR, the PLA was beneficial because it enabled the Colts and Indiana taxpayers to secure 1,500 highly-skilled workers representing all essential crafts and bring these workers under a single set of rules for the duration of the project.
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Barney Levengood, Executive Director of the Indiana Convention Center and Lucas Oil Stadium, touted the quality of labor under the PLA. “They're trained.” He said, “They go through an apprenticeship program. They have skills and are very incredibly safety-oriented."
Source: Industrial Information Resources, Super Bowl XLVI Stadium Crafted By Building Trades Union Project Labor Agreement (Feb. 2011), available at http://www.industrialinfo.com/radio/industrytoday.jsp?guest=bctd05.
State Legislation Requiring PLA Construction of Projects by Indiana’s Stadium and Convention Building Authority
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Directs the Indiana Stadium and Convention Building Authority, as a prerequisite to the issuance of bonds for the construction, improvement, or renovation of facilities, to ensure that each associated contract or subcontract requires a PLA.
Source: Ind. Code Ann. § 5-1-17-18 http://law.justia.com/indiana/codes/title5/ar1/ch17.html. (2006), available at
Iowa New Iowa Corrections Projects Will Be First State PLAs
? Iowa Gov. Chet Culver signed a March 16, 2010 letter committing to requiring PLAs for the construction of the new Iowa State Penitentiary and for improvements to a women’s facility. They will be the first state projects to use PLAs; the combined cost of the projects is nearly $200 million.
Source: Mark Wolski, Governor Culver Signs Letter Requiring PLAs for Two Corrections Department Projects, 56 Constr. Lab. Rep. (BNA) No. 2762 at 120 (Mar. 25, 2010).
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Gov. Culver Signs Executive Order Encouraging Use of PLAs
? On Feb. 3, 2010, Iowa Gov. Chet Culver signed pro-PLA Executive Order 22. The order, similar to Obama’s E.O. 13502, encourages state agencies to consider using PLAs on state projects costing $25 million or more. Gov. Culver’s order came in the midst of planning for several important state projects, including projects at two correctional facilities, a veterans’ home, and the University of Iowa.
Source: Mark Wolksi, Culver Signs Executive Order Requiring State Agencies to Consider Using PLAs, 55 Constr. Lab. Rep. (BNA) No. 2756 at 1589 (Feb. 11, 2010).
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Minnesota Minnesota Vikings Choose PLA to Build $1 Billion New Stadium
? On Feb. 6, 2012, the Minnesota Vikings and the Minneapolis Building and Construction Trades Council announced a landmark PLA that will govern the construction of the Vikings’ new stadium, if the stadium is constructed in Minneapolis as advocated by Governor Mark Dayton. The stadium would be the largest construction project in state history.
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Assuming Minneapolis is selected for the stadium site, state and local government officials will still need to finalize additional details, including financing for the project and the share of the project costs that will borne by Minnesota taxpayers and the Vikings organization.
Source: Mark Wolski, Minnesota Unions Tout Deal For Labor Agreement on Vikings Stadium, 57 Constr. Lab. Rep. 2855 (Feb. 16, 2012), at 1603.
New Hampshire Green Developer and Investment Firm Opt for PLA to Coordinate Construction of $275 Million Berlin Station Biomass Plant
? In September 2011, green developer Cate Street Capital and investment firm Starwood Energy Group Global secured financing for the construction of a $275 million wood-powered biomass power plant in Berlin, New Hampshire. According to officials, the plant, which is known as Berlin Station, will be “among the largest and most environmentally advanced biomass energy plants in the Northeast.” (Green Building News). The Berlin Station Plant will be built under a PLA negotiated with the New Hampshire Building and Construction Trades Council. In November 2011, the Trades Council held a job fair to recruit and train local residents for the project. “I think it’s a great opportunity for young people to get into the trades,” Berlin Mayor Paul Grenier said. (Berlin Daily Sun).
Sources: (1) GreenBuildingNews.com, $275 Million Biomass Power Plant Coming to New Hampshire, Sept. 22, 2011, at http://www.greenbuildingnews.com/articles/2011/09/22/275-million-biomass-powerplant-coming-new-hampshire; (2) Barbara Tetreault, Job Fair Aims to Recruit for Biomass Project, The Berlin Daily Sun, Nov. 2, 2011, at http://www.berlindailysun.com/featured/story/job-fair-aims-recruit-biomass-project.
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New Jersey State Legislation Authorizing PLAs on Public Works
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Declares New Jersey has a compelling interest in carrying out public works projects at the lowest reasonable cost, and with the highest degree of quality, in having disputes resolved without strikes, lock-outs or delays, and in ensuring that public works projects are safe. Legislature finds PLAs advance these interests and encourages public agency use. Authorizes PLAs for public works projects on a project-by-project basis where certain requirements are met and when such an agreement would advance the interests of the public entity.
Source: N.J. Stat. § 52:38-3 (2006), available at http://law.onecle.com/newjersey/52-state-government-departments-and-officers/38-1.html.
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Executive Order No. 1 Directing Use of PLAs on Public Works Projects Where State’s Interests Would Be Advanced
? Executive Order issued in 2002 requires, on a project-by-project basis, use of PLAs on public works projects where it is determined that a PLA advances the state’s interests of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, and the state’s policy to advance minority- and women-owned businesses. Among the reasons cited for the order are the state’s compelling interest in ensuring the highest standards of quality at the lowest cost and the costsavings that a highly-skilled workforce produces over time by limiting repairs and maintenance. The order also states that PLAs allow public agencies to more accurately predict a project’s actual cost and are particularly well-suited for larger, more complex projects.
Source: Governor James McGreevey, Executive Order No. 1 (Jan. 7, 2002), available at http://www.state.nj.us/ infobank/circular/eom1.htm.
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New Mexico Gov. Richardson Applauds Use of PLA for $225 Million Hospital Project ?
In Apr. 2004, Governor Bill Richardson published a column applauding the recent decision of the University of New Mexico’s Board of Regents to use a PLA to coordinate the $225 million expansion of University Hospital. Richardson said the PLA would achieve three objectives. First, Richardson said the PLA would make costs “predictable and stable, saving taxpayer money.” Second, the PLA would create quality local jobs. “Without the agreement,” he said, “a contractor is free to use out-of-state workers . . . .” Finally, he said the PLA would ensure the project is completed on time, which is important given that “[a]ny delay . . . [would] cost UNM— and taxpayers— $14,000 per day in interest.” Richardson noted that PLAs are not new, having been used successfully on important private and federal projects in New Mexico, and that no one – union or non-union -- is prevented from bidding. “The bottom line,” Richardson wrote, “is [that] a project labor agreement for the hospital expansion makes good economic sense.”
Source: Gov. Bill Richardson, Project Labor Agreement is Most Prudent Course, Albuquerque Journal (Apr. 11, 2004), available at http://www.abqjournal.com/opinion/guest_columns/160518opinion04-11-04.htm.
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New York Mayor Bloomberg Announces Public Project PLAs Covering $5.3 Billion of Construction and Yielding Savings of Nearly $300 Million
? On November 24, 2009, Mayor Michael Bloomberg announced the creation of four separate PLAs for major public projects in New York City. Collectively, the PLAs cover $5.3 billion in construction and 32,000 jobs, and will save the City nearly $300 million over the next four years. The PLAs provide standardized work rules, ease the City’s bidding requirements, and include provisions that ensure the participation of minorities, women, returning veterans, and recent high school graduates of New York City public schools.
Source: Office of Mayor Michael Bloomberg, Press Release, Mayor Bloomberg Announces Labor Agreements on Public Projects to Reduce Costs, Spur Projects, and Create Jobs (Nov. 24, 2009), at http://www.nyc.gov/html/om/html/ 2009b/pr509-09.html.
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PLA Provides for Timely and Tailored Construction of the Most Advanced Microprocessor Plant in the World
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On July 24, 2009, state officials, GlobalFoundries Inc., and others broke ground on a 1.3 million square foot semiconductor wafer fabrication facility in Saratoga County. The New York Times calls it “the most advanced facility of its kind in the world.” (Press Release; Times). The project’s total capital budget is estimated at $4.2 billion, including local construction expenditures of approximately $800 million, and it will provide a boost to the regional economy. (Press Release). Paterson facilitated the use of a PLA earlier this year to “smooth the way for timely construction” of this historic undertaking. The PLA takes into account the unique requirements of a world-class facility. (Press Release).
Sources: (1) Nicholas Confessore, New Factory Seen as Boon for Upstate, N.Y. Times, July 25, 2009, at A24, at http://www.nytimes.com/2009/ 07/25/nyregion/25chip.html; (2) Governor David Paterson, Press Release, Governor Paterson Breaks Ground on Global Foundries Fab 2 Project in Sarasota County (July 24, 2009), at http://www.ny.gov/governor/ press/press_0724091_print.html.
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Gov. Pataki Issues Executive Order Requiring State Agencies to Consider PLAs for Public Construction Contracts
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On February 12, 1997, Governor Pataki issued an Executive Order requiring state agencies to consider use of PLAs for public construction contracts, stressing that PLAs are “one of many tools which may be used by management and labor to promote the timely completion of public construction projects while limiting their costs,” Pataki said.
Source: Office of Governor George E. Pataki, Press Release, Governor Pataki Announces Project Labor Agreements (Feb. 12, 1997), available at http://worldcat.org/arcviewer/1/AO%23/2007/01/12/0000057321/viewer/file7165.html.
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PLA Adopted by New York Dept. of Transportation Major Road Project
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On October 30, 1999, Governor Pataki announced that the State Department of Transportation would incorporate a PLA into contracts to be awarded for the reconstruction of the Cross Westchester Expressway. “Project labor agreements are an effective means to complete projects quicker and at considerably less cost,” he said. “This agreement in particular will save taxpayers more than $8 million and hasten critical improvements to ease congestion and increase safety within the I-287 corridor.”
Source: Press Release, Office of Governor George E. Pataki, Governor: DOT to Use Project Labor Agreement I-287 Project (Oct. 30, 1999), available at http://worldcat.org/arcviewer/1/AO%23/2007/01/12/0000057321/viewer/file2583.html.
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Ohio Summit County Ordinance Authorizing PLAs for Projects Over $500,000
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Ordinance authorizes the Summit County Executive to execute a PLA for the construction of any capital improvement project in the County where the total construction cost exceeds $500,000. Observes that private and public construction owners have regularly required PLAs and that PLAs have been shown to provide an effective mechanism for project staffing and planning. Determines that PLAs for projects with total construction costs in excess of $500,000 will advance the County’s interests in promoting timely, costefficient and high-quality construction with minimal delays and disruptions.
Source: Summit County, Ohio, Ordinance 2006-071 (Mar. 6, 2006), available at http://www.co.summit.oh.us/council/pdfs/legislation/2006/2006-071.pdf.
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Pennsylvania PLA Used to Coordinate $400 Million Prison Expansion Project
? Pennsylvania’s Department of General Services (DGS) is using a PLA to coordinate the construction of a $400 million prison expansion project at the Pennsylvania State Correctional Institution at Graterford (commonly referred to as “SCI Graterford”), located in Montgomery County. This massive expansion project is intended to address the growing problem of overcrowding in Pennsylvania’s prison system.
Source: Pennsylvania Dep’t of General Services, Prison Expansion Projects, at http://www.portal.state.pa.us/portal/server.pt/community/construction_and_public_ works/1235/prison_expansion_projects/526276.
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Philadelphia Executive Order 5-95 Encouraging Use of PLAs for Public Works Where Appropriate and Feasible
? Order issued by Mayor Ed Rendell in 1995 creates a pilot program to test the appropriateness and feasibility of PLA use on major public works projects. Under the order, agencies are authorized to use PLAs, subject to certain requirements and procedures, where appropriate and feasible with respect to the particular project. Order cites as a basis for the pilot the City’s compelling interest in awarding public works contracts so as to yield the lowest reasonable costs and highest quality and efficiency. Order also cites the capacity of PLAs to ensure such projects are completed at the lowest reasonable costs, by the highest quality and most professional workforce, and in a timely manner without disruptions or delay.
Source: Mayor Ed Rendell, Executive Order No. 5-95 (Nov. 8, 1995), available at http://www.phila.gov/phils/docs/inventor/textonly/execorders/95-05.htm.
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Rhode Island Independent Committee Reviews Evidence, Recommends PLA for $50 Million Courthouse Construction Project
? Cockshaw discusses a legislative battle over whether to use a PLA for $50 million courthouse construction project. PLA proponents prevailed because they, unlike PLA opponents, produced actual data and statistics on benefits of PLAs and their successful use in Rhode Island. The independent committee tasked with making recommendations on whether to use a PLA were “unable to determine a single instance in which [Rhode Island] PLA projects were not completed in a timely manner or within budget. Several were completed early and/or under budget.”
Sources: (1) Peter Cockshaw, Independent Study Group Recommends PLA, Cockshaw’s Construction Labor News & Opinion 33(12), Dec. 2003, at 7-8 (on file with authors); (2) Gregory A. Mancini, Testimony Regarding The Benefits of Implementing a PLA for Construction of the New Kent County Courthouse, Aug. 20, 2003, available at http://www.buildri.org/ contentmgr/showdetails.php/id/2000.
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Virginia Airport Authority Overwhelmingly Approves $2.5-$3.5 Billion PLA for Phase 2 of Dulles Metrorail Project, Citing Success in Phase 1
? On April 6, 2011, the Metro Washington, DC Airport Authority (MWAA) approved a resolution requiring a PLA for Phase 2 of the Dulles Corridor Metrorail Project by an overwhelming 11-2 margin. The Project involves a 23-mile extension of the existing D.C. Area Metrorail system deeper into Northern Virginia with the aim of providing improved access to the Washington Dulles International Airport. The PLA would cover construction work valued between $2.5 billion to $3.5 billion.
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The MWAA resolution touts the benefits that a PLA brought to Phase 1 in support of the PLA for Phase 2. Among other things, it notes that the design-build contractor for the Project “Dulles Transit Partners has reported . . . that the Phase 1 project labor agreement has provided a reliable, stable supply of trained and skilled union construction craft workers, and promoted safety, quality and productivity, allowing the delivery of a cost-effective project on time and within budget.” In addition, the resolution cites the conclusion of the Dulles Transit Partners that “the [PLA] provided for significant labor efficiencies, reduced the labor risks, and enabled it to provide the lowest cost to perform Phase 1 of the Project.” For these and other reasons, the resolution concludes that “the benefits of the project labor agreement on the Metrorail project have been amply demonstrated” and that a PLA would help to “assure timely, efficient and cost-effective construction” in Phase 2 of the Project.
Source: Building & Construction Trades Department, AFL-CIO, Press Release, Phase 2 of Multi-Billion Dollar Dulles Airport (VA) Corridor Rail Project to be Done Under a PLA (Aug. 2011), available at http://www.bctd.org/Newsroom/LatestNews/Phase-2-of-Multi-Billion-Dollar-Dulles-Airport-(VA.aspx.
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Washington, DC PLA Success Story: Nationals Baseball Stadium Project
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Nationals Park, home to Major League Baseball’s Washington Nationals, was built under a PLA on budget and in record time. As reported by the Washington Post, the stadium needed to be completed in time for an exhibition game scheduled for March 29, 2008, “just 22 months after breaking ground in May 2006, making it one of the fastest-built ballparks ever.” (Washington Post). The Park also has the distinction of being “the nation's first major professional stadium to become LEED Silver Certified by the U.S. Green Building Council.” (Washington Nationals). In addition to the above benchmarks, the PLA achieved substantial goals in the development of a skilled DC workforce. According to a report by the Laborers' International Union of North America Local 657 at the end of January 2008, D.C. residents accounted for 87 percent of new apprentices working on the project and half of all new stadium hires. (ABC News 7).
Source: (1) Daniel DeLuc, Ballpark Concept Becomes Concrete, The Washington Post, Jan. 23, 2008, at B01, available at. http://www.washingtonpost.com/wpdyn/content/story/2008/01/22/ST2008012203486.html; (2) Nationals Website: “Green Ballpark,” available at http://mlb.mlb.com/was/ballpark/green_ballpark.jsp; (3) ABC News 7, Report: Nationals Stadium On-Time and On-Budget, Jan. 30, 2008, available at http://www.wjla.com/news/stories/0108/492170.html.
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Washington State Gov. Lowry Executive Order Encouraging Use of PLAs on Public Works Projects
? Order issued by Governor Mike Lowry in December 2006 requires state agencies to consider PLAs, on a project-by-project basis, for public works projects where a PLA will promote labor stability and advance the state’s interest in cost, efficiency, safety, timeliness, promoting women-owned and minority-owned businesses, and other project-specific factors. Among the reasons cited for the order are the state’s compelling interest in securing the highest quality and efficiency at the lowest reasonable costs and the capacity of PLAs to advance these interests.
Source: Wash. Exec. Order No. 96-08 (Dec. 6, 1996), http://www.governor.wa.gov/execorders/eoarchive/eo96-08.htm. available at
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City of Seattle 2002 Housing Program: PLAs Authorized for Housing Development Where Beneficial to Project Execution
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City of Seattle provides that an applicant for housing development funding may require a PLA for his or her project upon demonstrating to the Office of Housing that a PLA would be beneficial.
Source: Seattle Office of Housing, 2002 Housing Levy: Administrative and Financial Plan: Program Years: 2005-2006 (May 2005), available at http://www.seattle.gov/housing/development/2005-2006A&FPlan.pdf.
$1.48 Billion Brightwater PLA Benefits Workers and Community
? King County Councilmember Carolyn Edmonds announces County Council’s approval of a PLA for construction of Brightwater wastewater treatment facility, a project valued at $1.48 billion. “We can’t afford cost overruns or delays on the very tight schedule this project is under,” Edmond stated. “The PLA can help prevent both.” She also noted that a PLA ensures workers a livable wage, health and retirement benefits and safe working conditions. “We see the success of PLA’s throughout our region,” Edmonds declared, “I expect no less from this one.”
Sources: (1) Councilmember Carolyn Edmonds, Press Release, Brightwater Project Labor Agreement Benefits Workers, Community (Jun. 20, 2005), at http://your.kingcounty.gov/council/news/2005/0605/ CE_Brightwater_PLA.htm; (2) King County Dep’t of Natural Resources and Parks, Wastewater Treatment Division, Project Labor Agreement for Brightwater Conveyance System (Jun. 20, 2005), at http://www.seattlebuildingtrades.org/agreements/Brightwater%20Conveyance%20PL A.PDF.
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King County Council PLA Approval for Hundreds of Millions of Dollars in Public Works Projects
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Members of the Metropolitan King County Council explain that their policy of expanding PLA use in the county is directly linked to their pledge to pursue responsible government upon taking office. The Council recommended a PLA for a $257 million Harborview Medical Center upgrade, citing the benefits and long history of PLA construction, as well as their responsibility to protect taxpayers from financial adversity. Emphasizes that benefits of PLA use include set terms and conditions on wages, benefits and hours, coordination among workforce factions, and fair and rapid dispute resolution. In addition, the Council points out that the PLA also acts as an insurance policy against disruptions of the critical life saving functions of the Medical Center. Council notes that companies that have used PLA-construction as a project delivery tool include GM, Ford Motor Company, British Petroleum, Walt Disney, Toyota, Humana, Budd Company and UPS.
Source: Cynthia Sullivan and Larry Phillips, Project-Labor Agreements: Effective Safeguards, The Seattle Times, May 1, 2002, available at http://community.seattletimes.nwsource.com/archive/?date=20020501&slug=pla01.
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Part VI: PLAs for School Construction _____________________________________________________________
California LA County Schools $20 Billion PLA Construction Program
? The LA County Public School System developed a PLA/Project Stabilization Agreement for a massive $20 billion school construction program; this initiative is part of one of the most significant laborcommunity partnerships ever formed. A similar PLA model had recently been used to facilitate another major building program for the County Re-Development Authority, covering over $15 billion worth of public and quasi-public construction work in LA County. Both models incorporate the “We Build Program” as a core component of the PLA strategy. We Build is a community outreach/local workforce development program that connects local unemployed and underemployed workers with training and employment opportunities through PLA projects. These two building initiatives represent some of the largest construction undertakings for which PLAs are being used in California and the U.S.
Source: Los Angeles Unified School District, Facilities Services Division, available at http://www.laschools.org/contractor/webuild/ (last visited Aug. 5, 2009).
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San Diego Unified School District Board of Education PLA for Projects Under $2.1 Billion School Construction Bond Program
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On July 28, 2009, the San Diego Unified School District Board of Education adopted a PLA for school construction projects under a $2.1 billion bond measure (Proposition S) approved by voters in Nov. 2008.
Source: School Board Passes Bond Labor Deal, Revenue Down, San Diego News Channel 6, July 28, 2009, available at http://www.sandiego6.com/ news/local/story/School-Board-Passes-Bond-Labor-Deal-RevenueDown/7Ra4cHeR3EamCbfNfE1L5g.cspx.
San Francisco Unified School District Authorized to Negotiate a PLA for School Construction Program
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Based on the results of a previously ordered review of information from Bay Area school districts, the Board of Education of the San Francisco Unified School District authorized the Superintendent, in collaboration with the City Attorney’s Office, to pursue a school construction PLA with the San Francisco Building and Construction Trades Council.
Source: San Francisco Unified School District, Res. 41-13Sp4 (Approved Apr. 27, 2004), available at http://portal.sfusd.edu/data/board/pdf/memberreso/ supt%20%20PLA%20negotiator%20substitute%204%2004.pdf.
Michigan Detroit Public Schools and Local Unions Enter Into PLA
? In April 2010, Detroit Public Schools (DPS) entered into a PLA with 18 local unions covering work under a $500.5 million bond program dedicated to school building construction and renovation. (Construction Lab. Rep.; DPS News Article). The agreement will help the school district save $3 million in labor costs over the life of the project and establish a construction institute in Detroit schools, staffed by the unions, to help train students for careers in the building trades. (DPS News Article).
Sources: (1) Nora Macaluso, Detroit Public Schools Official Drafting PLA with Greater Detroit Building Trades, 56 Construction Lab. Rep. (BNA) No. 2759 at 28 (Mar. 4, 2010); (2) DPS News Article, DPS agreement, executive order encourage contractors, unions to give Detroit residents priority in hiring for bond program, Apr. 19, 2010, at: http://www.detroit.k12.mi.us/ news/article/1905/.
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Minnesota State Legislation Authorizing School Districts to Use PLAs After Adopting Required Resolution
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Authorizes school boards to use a PLA for school construction provided the school board adopts a written resolution authorizing PLA use at a public meeting and notice of the meeting is published 30 days in advance.
Source: Minn. Stat. § 123B.52 (2005), at http://law.justia.com/minnesota/codes/ 120/123b-s52.html.
Missouri Affton Board of Education Solicits PLA to Coordinate $2.6 Million Conversion of Sheet Metal Shop into Early Childhood Ed. Center ?
On October 18, 2011, the Affton, Missouri Board of Education voted to utilize a PLA for the $2.6 million conversion of an area sheet metal shop into an early childhood education center. Once completed, the 20,000 square foot Center will feature seven classrooms, a project room, a nurse’s office, a library, a stage and a small outdoor garden. The decision to use the PLA was based on the District’s desire to secure top-quality craft labor and ensure the project’s completion by the start of school in the Fall. “We want to have quality craftsmanship and we don’t want any delays,” Affton Superintendent Steve Brotherton explained.
Source: Affton-Shrewsbury Patch, Affton School Board Approves Union-Oriented Project Labor Agreement, Oct. 19, 2011, at http://affton.patch.com/articles/afftonschools-approve-union-oriented-project-labor-agreement.
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New Jersey N.J. Schools Development Authority’s $8.6 Billion PLA Program
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The New Jersey Schools Development Authority (NJSDA) is charged with overseeing a public school construction and renovation program worth $8.6 billion over 10 years. The program was launched in July 2000 and is the largest public construction program in the state’s history. PLAs are authorized in all cases where project costs exceed $5 million and a PLA would advance the state’s interests. NJSDA reports that PLAs have been used uninterrupted since authorized in 2002.
Sources: (1) New Jersey Embarks on $8.6 Billion Public School Construction Project, Electrical Construction & Maintenance Magazine, Aug. 1, 2004, available at http://ecmweb.com/mag/electric_new_jersey_embarks/; (2) New Jersey Schools Development Authority, Project Labor Agreement, at http://www.njsda.gov/ Business/PLA/index.html.
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New York NYC School Construction Authority: PLA for $13.1 Billion Capital Improvement & Restructuring Program Projected to Save $500 Million
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On January 6, 2005, Mayor Michael Bloomberg announced a PLA entered into by the Department of Education and the Building and Construction Trades Council that is expected to produce $500 million in savings for school construction projects over 5 years. The PLA governs the relationship between New York City’s School Construction Authority, its contractors, and labor with respect to school buildings that are scheduled for rehabilitation and renovation projects under the Department of Education’s $13.1 Billion Five Year Capital Plan.
Source: Press Release, Office of Mayor Michael R. Bloomberg, Mayor Michael R. Bloomberg, Schools Chancellor Joel I. Klein, and BCTC President Edward Malloy Announce Landmark Agreements Between Department of Education and Building and Construction Trades Council (Jan. 6, 2005), available at http://prtl-prdweb.nyc.gov/html/om/html/2005a/pr012-05.html.
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Buffalo Schools Construction Board Approves PLA Worth $1 Billion
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On March 17, 2003, the Buffalo Joint Schools Construction Board unanimously approved a PLA covering $1 billion in school construction and renovation work to be completed over 10 years. (Buffalo News). The PLA includes a bold effort to foster diversity in workforce through a requirement that contractors maintain apprentice programs with at least 35 percent minority and women participants. (Buffalo News). In a letter to Superintendent of Chautauqua Lake Central School District, James Harris, Superintendent of the City of Buffalo School District, reports that, while ABC claims initially raised doubts about PLAs, an examination of the facts and actual track record persuaded him and school board members to use a PLA. (Letter). “I can state unequivocally that the PLA has worked in the District’s interests,” Harris said in the letter. Harris goes on to explain that he owes no duty to unions or non-union contractors, that his concern is “building a school quickly, skillfully and within budget,” and that based on his experience, he is a “converted supporter.” (Letter).
Source: (1) Phil Fairbanks, Panel OKs Agreement for School Project, Buffalo News, Mar. 18, 2003, at B1, available at http://www.highbeam.com/doc/1P222563452.html; (2) Letter from James Harris, Superintendent, City of Buffalo School District (Sept. 27, 1999) (document available upon request).
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Ohio Akron Board Seeks to Replicate Success Through Additional PLAs for New School Construction Projects
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On July 20, 2009 the School Board of Akron, Ohio approved PLAs for 3 of the 5 Akron schools that are next in the pipeline for construction. The school district’s construction project is worth $800 million, though it is unclear from the article what portion of that sum belongs to PLA projects. Previously, only one PLA had been approved – for Leggett Elementary. However, the Board met to consider more PLAs after learning that the Leggett project employs significantly more local residents than three other elementary schools not covered by PLAs. School board President James Hardy, also a member of the board overseeing construction, said, “We want to see if the successes from Leggett can translate into other buildings.”
Source: Katie Byard, Akron Board OKs School Construction Labor Agreements, Akron Beacon Journal, July 21, 2009, at http://www.ohio.com/news/education/ 51356932.html.
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Part VII: PLA News & Journal Reports _____________________________________________________________
Boston Globe Op-Ed by Mark Erlich of New England Carpenters The Truth About PLAs
? In a July 3, 2010 editorial in The Boston Globe, Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters, responds to criticism regarding the UMass Building Authority’s decision to perform a $750 million overhaul of UMass Boston’s campus under a PLA. According to Erlich, critics’ claim that 80 percent of the construction workforce is non-union is inaccurate because it is based on self-described occupational identities and includes laborers and summer house painters. “It does not reflect the real numbers of career trade workers in commercial, institutional, and highway construction – the only parts of the industry where PLAs are ever applied.” Erlich states the presence of union firms in non-residential construction, as documented in the highly-regarded Dodge Reports, is far a more accurate measure. It shows that union contractors account for “65 percent of the dollar value of Massachusetts projects.” Erlich also points out that PLAs are only used on larger, more complex projects, which require larger companies. “That universe is overwhelming union,” Erlich writes, as evidenced by the fact that 23 of the largest 25 general contractors in Boston have collective bargaining agreements.
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In addition, Erlich states that any contractor can bid and use its labor force, provided it complies with the PLA; however, non-union firms choose not to do so because they would have to pay their low-wage workers more. Erlich further writes that the claim that PLAs add costs is based on a 2003 Beacon Hill Institute school construction study that economists from Michigan State University and the University of Rhode Island have proven to be unreliable. Among other flaws, Beacon Hill “based their calculations on bid prices rather than final costs, failed to compensate for urban vs. suburban sites, ignored some schools that were built with PLAs and included others that never had PLAs.” Erlich points out that Beacon Hill was forced to revise its report, reducing its so-called PLA “premium” by 40 percent, in response to a wave of criticism. Even after that, critics of the report used Beacon Hill’s own data to show that there was “no appreciable difference” in the costs of PLA v. non-PLA construction -- the same conclusion arrived at by independent industry expert, Peter Cockshaw.
Source: Mark Erlich, The Truth About PLAs, The Boston Globe, Jul 3. 2010, available at http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/ 2010/07/03/the_truth_about_plas/
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Toyota’s Record of Success With PLAs
? Jeff Caldwell, former head of construction for Toyota North America, explains that he’s had numerous real world experiences with PLAs and can say “without any equivocation that they are a valuable tool for any entity seeking an economical and efficient construction process.” Noting that Toyota has constructed numerous production facilities in the U.S. with PLAs, Mr. Caldwell notes that they ensured labor harmony and a steady supply of highly skilled and productive workers. “In every instance the process worked beautifully,” he said, “[a]nd the proof is in the results.” Caldwell added that Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who do not use PLAs and concluded by noting that PLAs are consistent with the vision at the core of Toyota’s global market success.
Source: Jeff Caldwell, Project Labor Agreements - Toyota’s Way (on file with authors).
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PLAs Can Help Diversify Construction Work
? Tony Pugh of McClatchy Newspapers reports that, while PLAs provide stability on complex projects and keep them moving forward, they can also improve job opportunities for minorities, females, and low-income people who seek entry into construction trades. Pugh cites the Washington National’s Ballpark PLA (see page 14, infra) as a good example.
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Also notes efforts by groups such as the Transportation Equity Network and public agencies such as Missouri Department of Transportation to establish pre-apprenticeship programs in PLAs in order to enhance minority, female, and low-income participation in construction projects.
Source: Tony Pugh, Project Labor Agreements Can Help Diversify Construction Work, McClatchy Newspapers, March 26, 2009, available at http://www.mcclatchydc.com/homepage/story/64885.html.
PLAs Save Time and Money When Properly Crafted
? Former Deputy Labor Commissioner Robert Gollnick discusses the benefits of PLAs and the likelihood they will be used more frequently following a pro-PLA executive order by former Governor George Pataki. PLAs can keep projects on schedule, on budget, and on the path to highquality work, Gollnick explains, which is why PLAs are becoming more popular, why the public sector has been using them for years, and why some of the most successful and best-run companies use them.
Source: Robert Gollnick, The Business Review (Albany), Project Labor Agreements Can Save Time and Money When Put Together Properly, April 11, 1997, available at http://albany.bizjournals.com/albany/stories/1997/04/14/ focus8.html.
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Cockshaw: Evaluating PLA Project Performance
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November 2001 article discusses two recent studies, the first by Daniel Rounds of UCLA and the second by Kimberly Johnston-Dodds of the California Research Bureau, which demonstrate the benefits of PLAs and disprove claims that PLAs discriminate or increase project costs.
Source: Peter Cockshaw, Evaluating PLA Performance, Cockshaw’s Construction Labor News & Opinion 31(11), Nov. 2001, at 1-3, available at http://www.buildri.org/stuff/contentmgr/files/e82237e741344387505f41b08dfbcfa1/ pdf/full_text_cockshaw__s_nov_2001.pdf.
PLAs: A Construction Management Tool
? Article by Mechanical Contractors Association makes the case for PLAs on private and public construction. It notes that PLAs have been used to create harmony and productivity on job-sites since the 1930s on wellrecognized projects, including the Hoover Dam, the Grand Coulee Dam, the Shasta Dam, the St. Lawrence Seaway, Disney World, Cape Canaveral, the Trans-Alaska Pipeline, and the Seattle Seahawks Stadium. The article discusses the various ways in which PLAs deliver cost-savings and how they are well-suited to deliver well-trained, highly-skilled workers at a time when the U.S. is experiencing a skilled labor shortage.
Source: Mechanical Contractors Association, White Paper: Project Labor Agreements: A Construction Management Tool, available at http://www.mcaproof.com/ papers/pla_whitepaper.pdf.
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______________________________________________________________________
Part VIII: Impact of PLAs on Apprenticeship Training _____________________________________________________________
Impact of PLAs on Apprenticeship Training
? ? Reviews how use of PLAs promotes critical investments in and commitments to apprenticeship training in the short-term and long-term. Provides an overview of studies conducted in seven states that demonstrate that union programs attract and graduate a far higher percentage of apprentices, including minority and female apprentices, than programs that lack union participation. In addition, these studies show that union programs are comprehensive and train all essential trades.
Source: Gerard M. Waites and Scott M. Seedorf, Impact of PLAs on Apprenticeship Training (2009) (on file with authors).
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Part IX: Use of PLAs to Address Industry Skill Shortages _____________________________________________________________
Use of PLAs to Address Industry Skill Shortages
? Discusses how PLAs can help address industry skill shortages in the short-term and long-term. In the short-term, PLAs guard against delays by assuring project owners of access to skilled craft labor through a nationwide system of hiring halls or referral systems. In the long-term, PLAs permanently expand the available pool of skilled craft labor by rechanneling new and expanded training investments into established, successful apprenticeship training programs funded by new PLA-construction.
Source: Gerard M. Waites and Scott M. Seedorf, Use of PLAs to Address Industry Skill Shortages (2009) (on file with authors).
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doc_631261640.pdf
A Project Labor Agreement (PLA), also known as a Community Workforce Agreement, is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.
PROJECT LABOR AGREEMENTS
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PLA Briefing Materials
Talking Points Primer White Paper
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Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
Project Labor Agreements (PLAs)
PLA Construction: Highlights
? Craft Labor Agreements: PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern terms and conditions of employment for all craft labor on a designated construction project. ? Highest Quality Craft Labor: PLAs promote safe, quality, cost-effective delivery by providing project owners with reliable access to the safest, most productive and besttrained skilled craft labor available in any given market. ? Extensive Use in Major Markets: With a long history of success, PLAs have been used by both public and private project owners in virtually all market sectors to deliver several hundred billion dollars worth of capital projects just in the last several years.1 ? A Compelling Case of Success: The economic benefits of PLAs have been confirmed by at least 17 reports and studies from government agencies and respected universities.2 (By contrast, PLA opponents offer only a small handful of purported studies prepared by themselves or their agents that have generally been discredited).3 ? Key Project Tool of Top Companies: Private corporations that routinely use PLAs include Fortune 500 companies such as Toyota, General Motors, Wal-Mart, Bank of America, CVS, Target, Sunoco and Disney -- to name a few.4 ? Major Tool for Public Contracting: In the public sector, PLAs have been used for decades to ensure successful delivery of federal, state and municipal projects. ? Federal agencies, including the Department of Energy and General Services Administration, utilize PLAs regularly to build major capital facility projects. ? As recently documented in the Federal Register -- “Project labor agreements have been used in all 50 States and the District of Columbia . . . [on] an array of construction projects covering an expanding range and size of projects . . . .”5
Driving Forces of PLA Construction
? Quality Control of Craft Labor: By accessing well-funded training centers and craft
labor referral systems of local unions, PLAs guarantee facility owners the best available construction labor for any given project. ? Through a single-sentence bid-specification, owners secure full quality control over the entire craft labor force used on their project and eliminate risks of contactors who use untrained, unskilled workers. ? PLAs also establish uniform terms and conditions for all trades and site contractors, including dispute resolution procedures, which ensure stability, consistency and labor peace throughout the project. ? Timely Project Delivery: The ability of PLAs to help meet time-sensitive schedules and ensure timely delivery is among the key reasons they are used in both the public and private sectors. Key factors that ensure on-time completion include:
? Assurance of reliable and adequate supply of properly qualified craft personnel; ? Uniform rules and work-schedules to promote productivity and maximize efficiency; and ? PLA coordination committees to address scheduling milestones and unique project challenges through coordinated, pro-active planning. ? Cost-Effective Project Delivery: By supplying the highest skilled and, therefore, most productive trades, PLAs provide substantial cost benefits by promoting timely, high quality construction. Additional cost benefits are realized by reducing or eliminating re-work, preventing disruption and delays, and improving labor cost forecasting. Such advantages are confirmed by numerous sources. For example: ? In April 2011, the Los Angeles Bureau of Contract Administration reported that 7 of its last 7 PLA projects came in below the engineer’s bid estimate. Cost savings ranged from 2.75 percent to 21.61 percent of estimated project costs.6 ? Toyota has used PLAs successfully to construct multiple production facilities in the U.S. According to Jeff Caldwell, former Assistant General Manager for Plant Engineering: “[T]he proof is in the results. Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who eschew the use of project labor agreements.”7 ? A 2011 Cornell University study documented numerous public-sector PLAs in New York since 2009 which produced, or were projected to produce, costs savings ranging from 4.88 percent to 19.52 percent of project costs.8 ? PLA Bonus: Local Community Benefits: In addition to offering critical economic benefits to project owners, PLAs offer substantial benefits to local communities, including the following: ? Local Hiring Opportunities: While PLAs generally promote local hiring by utilizing local hiring halls and referral systems, they often include additional specific local hiring requirements or goals to increase benefits for local communities and expand employment for minorities, women and economically disadvantaged youth. ? Skill Training Opportunities: Due to the structure of apprenticeship programs, which rely on a “learn while you earn” approach to training, PLAs also offer valuable education and career opportunities to local residents on every project. ? Future Workforce Development: Since the construction industry has an acute need to train the next generation of skilled craft labor, workforce development is important for every community. When PLAs are used, project owners facilitate investment in and expansion of the best craft training programs in any given community and everyone wins.
See Gerard M. Waites & Scott M. Seedorf, White Paper on Project Labor Agreements (Mar. 2012) (document on file); Building & Construction Trades Dept., AFL-CIO, 50 Billion Reasons Why Project Labor Agreements Work, Dec. 10, 2010 ($50 billion in 2010 alone), at http://www.buildingtrades.org/Newsroom/Blogs/PresidentsMessage/December-2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx. See Hugo S. Rossitter & John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (2011); Richard A. Parker & Louis M. Rea, San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011); Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (2011); Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011); Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (2011); Dale Belman & Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010); UCLA Labor Center, Construction Careers for Our Communities (2010); Los Angeles Department of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010); Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009); Dale Belman, Matthew M. Bodah, & Peter Philips, Project Labor Agreements, ELECTRI International (2007); Dale Belman, Russell Ormiston, William Schriver & Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005); Ralph Scharnau & Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004); Bart Gilbert, Director of General Services, Project Labor Agreement Report, Contra Costa County (2004); John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002); Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001); James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), Construction Law Update (2001); Daniel Rounds, Project Labor Agreements: An Exploratory Study, UCLA Institute for Labor and Employment (2001).
3 2
1
See e.g., Kotler (2009), supra note 2, at 22 (“Beacon Hill’s conclusions should be dismissed as not credible”); Kevin Duncan, Project Labor Agreements – Denver Update (2009), at 13, (finding “little objective empirical content within [one anti-PLA] study.”); Belman, Bodah, & Philips, supra note 2, at 14 (criticizing Beacon Hill’s studies); Belman, Ormiston, Schriver, & Kelso, supra note 2, at 18-19 (criticizing Beacon Hill’s studies).
See Peter Cockshaw, Private PLAs Become Widespread, Cockshaw’s Construction Labor News & Opinion 35(8), Sept. 2005, at 1-4 (document on file). Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168, 19170 (Apr. 13, 2010), available at http://edocket.access.gpo.gov/2010/pdf/2010-8118.pdf.
6 5
4
Hugo S. Rossitter and John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (April 2011) (document on file).
Jeff Caldwell, Op-Ed: Project Labor Agreements – Toyota’s Way (emphasis added), available at http://www.plaswork.org/Projects/Project-Focus/Toyota-and-PLAs-(1).aspx Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011), available at http://digitalcommons.ilr.cornell.edu/reports/36/.
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7
Project Labor Agreements Primer
Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
I.
Introduction
Construction is a highly-specialized, highly-skilled and labor-intensive industry that often requires numerous contractors, subcontractors and crafts to closely coordinate their respective tasks to achieve project goals. For roughly a century in the private sector, and three-quarters of a century in the public sector, projects owners have used Project Labor Agreements (PLAs) to meet this challenge, protect capital investments and ensure timely, cost-effective delivery of high quality construction projects. This primer reviews the key reasons behind the widespread use of PLAs by project owners. As discussed, these include the unique access PLAs provide to the most productive, highest quality craft labor available, the coordinated, pro-active planning that PLAs bring to complex projects, and the important benefits local communities receive from these agreements in terms of skill training, employment opportunities and future workforce development.
II.
Overview
? PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern the terms and conditions of employment for all craft labor on a designated capital construction project. ? PLAs promote safe, quality, cost-effective delivery of construction projects by providing project owners, among other things, with reliable access to the best-trained and most highly-skilled craft labor available across the industry and in any given market. ? PLAs have been used in both the public and private sectors to deliver several hundred billion dollars worth of projects over the last decade, including $50 billion in 2010 alone.1 ? The economic benefits of PLAs, including cost savings, have been confirmed in at least 17 major studies by highly-credible academic and government sources.2 By contrast, PLA opponents have generally relied on a small handful of studies by allies and hired-guns.3 Virtually all of these studies have been discredited by subsequent academic works.4
Project owners use PLAs for several key reasons, the first of which is their ability to provide a reliable supply of the best-trained and most highly-skilled craft labor available. PLAs also include a number of important elements which maximize efficiency and productivity, minimize delay and reduce project costs. These include uniform terms and conditions for all trades and site contractors as well as dispute resolution procedures, no-strike clauses and other anti-disruption provisions which prevent worksite issues from impacting project delivery. While PLAs have long been recognized as one of the most effective planning tools for capital facility construction, reliance on these agreements has also increased markedly in recent years. As noted, PLAs have been used to deliver several hundred billion dollars worth of capital construction over the past decade, including $50 billion in projects during 2010 alone.5 This has been due to major successes achieved by countless project owners, ranging from Toyota to the City of Los Angeles, as well as a large body of recent academic, industry and government research – all of which attest to the value and utility of PLAs in construction project delivery. In Toyota’s case, PLAs have been used to build numerous high quality manufacturing facilities in the U.S. According to the company, this approach reduces total project costs for Toyota by one-third.6 Very few other project delivery tools offer such cost advantages. For the City of Los Angeles, PLAs have produced cost savings upwards of 21.61 percent on 7 of its last 7 PLA projects while also exceeding local hiring and training goals included in these PLAs.7
In addition to Toyota, private sector users of PLAs include leading Fortune 500 companies such as General Motors, Wal-Mart, Bank of America, CVS, Target, Sunoco and Disney – to name a few. Public sector users have ranged from large federal agencies, such as the U.S. Department of Energy and U.S. General Services Administration, to various state and municipal government entities across the country. Indeed, according to the Federal Register, PLAs have been used in all 50 states and the District of Columbia.8 Against this backdrop, President Obama established a strong PLA policy for the federal government by issuing Executive Order 13502 in early 2009, which recognizes the economic efficiency of such agreements and promotes their use by all federal departments and agencies on large-scale public works projects.9
III. PLA-Construction: Key Advantages for Project Owners
PLAs are single-site collective bargaining agreements between building trade unions and site contractors that govern the terms and conditions of employment for all craft labor on a designated project. While PLAs are adapted to the needs of a given project, almost every PLA will contain three core elements to ensure quality, timely and cost-effective project delivery. First, PLAs provide project owners with reliable access to the best-trained and most highly-skilled craft labor available across the industry and in any given market. This is accomplished by utilizing hiring halls or referral systems operated by local building trades unions, which provide a caliber of training to their workers that is without equal anywhere in the world. In areas where skilled labor is scarce, these halls and systems are able to bring in skilled labor from neighboring jurisdictions, or opposite corners of the country if necessary. As a result, owners who utilize PLAs have effective quality control over the entire labor force, substantially improving quality and productivity while reducing the risks of shoddy work and delay. Second, PLAs establish uniform terms and conditions for all trades and site contractors to promote project stability and maximize efficiency over the life of the construction process. While large projects almost always have numerous contractors and trades working together on a project, seldom will these contractors and trades have consistent rules and procedures on wages and benefits, work schedules, overtime, holidays, dispute resolution and other issues. This is problematic, not only from an administrative and efficiency standpoint, but also because effective coordination is absolutely essential to successful project delivery. PLAs solve this problem by establishing a single set of rules and procedures for every contractor and craft, thereby providing needed efficiency and stability and reducing administrative costs. Third, PLAs include provisions that are specially-designed to ensure that the project is completed on-time and without costly disruptions or delays. These include dispute resolution procedures that allow on-site issues to be resolved while work continues, a no-strike guarantee to ensure that labor unrest on the project in question or another project in the area does not result in a work stoppage, and other measures, such as joint labor-management PLA committees, to make certain that even the most challenging time schedules are met. As at least seventeen major studies on PLAs confirm, PLAs are able leverage these elements to deliver tremendous economic benefits – benefits which register on every metric of importance to project owners, including quality, timeliness and, as discussed below, cost.10
III.
Evaluating the “Cost” Factor of PLAs
As noted, PLAs deliver substantial costs benefits to project owners by providing reliable access to the best-trained, most productive craft labor available, establishing uniform rules to promote coordination and stability, and including no-strike clauses and other provisions to reduce disruption and delay. As a result of these and other factors, PLAs have an overall net 2
positive impact on project cost. The list of Fortune 500 companies that use PLAs is compelling evidence, in and of itself, of the beneficial impact PLAs have on project delivery costs. Because corporate leaders have a legal duty to maximize shareholder value, decisions regarding facility planning, like most other issues, are effectively based on the bottom-line. If PLAs increased their costs, companies would not, and arguably could not, use them. Of course, we also know PLAs reduce costs from project owners who have actually used them. The testimony of Jeff Caldwell, former Assistant General Manager for Plant Engineering at Toyota, is illustrative: Toyota has constructed numerous automobile, truck, and engine production facilities in the United States, with another vehicle plant currently under construction in Mississippi. Each of these construction projects was completed, or is being completed, under a project labor agreement that ensured that our facilities were built with a steady supply of highly skilled and productive craft workers and with labor harmony. In every instance, this process worked beautifully. And the proof is in the results. Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who eschew the use of project labor agreements.11 In the public sector, project owners like the City of Los Angeles have reported similar cost savings. In an April 2011 report on its experience using PLAs, Los Angeles’s Deputy City Attorney Hugo Rossitter and Inspector of Public Works John Reamer reported data on a series of highway projects that awarded by the City in the prior three fiscal years.12 While 4 of the last 4 projects awarded without a PLA came in over the engineer’s bid estimate, 7 of the last 7 projects awarded with a PLA came in below the engineer’s bid estimate. Cost savings on the PLA projects ranged from 2.75 percent to 21.61 percent of project costs.13 What’s more, the City achieved these cost savings despite including in the PLA – and meeting – local resident hiring and apprentice participation targets of 30 percent and 20 percent.14 These cost savings are by no means limited to the City of Los Angeles. A May 2011 study by Cornell University Professor Fred Kotler reported similar cost savings in New York. This study, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, revealed cost savings of as much as 19.52 percent on numerous PLAs entered into by project owners in New York State since 2009.15 In each case, Kotler’s research shows that the cost savings achieved were attributable to features that are present in almost all PLAs. Such features included, but were not limited to, reliable access to productive skilled labor, safeguards against work stoppages, and uniform schedules, pay and overtime rules, and holidays.16 These are just a few of many examples of cost savings that project owners have achieved using PLAs. Such findings have also been documented by several other major academic and government studies that have evaluated the cost impact of PLA-construction.17 When one considers what PLAs are designed to do – maximize quality and productivity and minimize project risk – the cost savings reported in these cases should not be surprising. For projects subject to prevailing wage laws, these cost savings will be magnified further. This is because the prevailing wage rate for a given trade is frequently the union-rate. In such cases, project owners who decline to use a PLA are essentially committing themselves to significant additional risk without any corresponding reduction in labor costs.
IV.
Workforce Development: Using PLAs to Build Tomorrow’s Skilled Workforce
In addition to the cost savings and other economic benefits that PLAs bring, project owners are increasingly using PLAs because of the contributions they make to workforce development. The lack of skill training in the construction industry is at the same time the 3
greatest concern expressed by project owners and the industry’s greatest long-term challenge.18 While there are multiple causes for this lack of training, one major cause is the convergence of increasing baby boomer retirements with inadequate training of apprentices to replace them. Industry stakeholders agree that, unless project owners lead by demanding investments in skill training, every aspect of project delivery will suffer, including quality, cost, productivity and safety. What’s more, projects owners will, quite unfairly, be footing this bill project-by-project. The urgent need for action on training is reinforced by a 2009 study by the U.S. Department of Commerce National Institute of Standards and Technology (NIST), which confirms that deterioration in construction project delivery is already occurring.19 The NIST study reports that labor productivity in construction has trended downward at an average annual rate of -0.6 percent (worst among all non-farm industries) over the past 40 years.20 Today, NIST identifies the availability of skilled labor as one of greatest challenges facing the industry and warns that “this challenge is compounded by the decline in training programs.”21 Due in part to this decline, NIST suggests the industry is already suffering significant losses, not only in increased productivity, but also in turnover, absenteeism, safety and other metrics.22 PLAs are a practical and effective tool that project owners can use to simultaneously protect itself from the training problem in the short-term and combat the problem in the longterm. In the short-term, PLAs offer project owners protection from shortages of well-trained labor by guaranteeing them adequate highly-skilled craft workers through union hiring halls or referral systems. As noted, in cases where too few local skilled workers are available, these systems can call upon workers from surrounding regions and at opposite corners of the county if needed to meet local demands. In the long-term, PLAs increase the long-term supply of craft workers needed for the future by forcing local union referral systems to expand their capacity and recruit and train more workers to meet manpower demand. This, in turn, facilitates the long-term workforce planning and development that is critically needed by the industry. The fact of the matter is that investing in the expansion of union apprenticeship programs, through a PLA or other means, is presently the only viable solution to the lack of training that is taking place in the construction industry. Union programs, which have long shouldered the construction industry’s training burden, invest almost $1 billion annually in training that is state-of-the-art and covers all essential crafts.23 By contrast, studies have shown that the open shop sector provides training in some trades but maintains little or no presence in others.24 As told by the NIST study: “Typically, training programs are funded by both owners and contractors through union and collective bargaining agreements. While open shop training programs exist, they tend to be rare.”25 Given these realities, PLAs are practical and costeffective tools that project owners can use to support workforce development in the industry.
V.
Community Benefits: Local Jobs, Good Wages & Excellent Training
In addition to providing high value to project owners and the industry, PLAs offer many important benefits to local communities affected by capital projects, including local employment opportunities, good wages and benefits and the very best skill training the industry has to offer. A. Local Hiring: PLAs are structured to promote the hiring of local residents because they require all project contractors to obtain their craft labor through local union hiring halls or referral systems. Local hiring is of particular value to public project owners because of the multiplier effect it has on taxpayer investments. They understand that local workers purchase goods and services at local businesses, which, in turn, provide jobs, healthcare and other benefits to other local workers.
4
B. Good Wages: By establishing good, livable wages, PLAs ensure that the local workers hired on a project will receive a decent income, which, in turn, supports the local economy and reduces these workers’ need for public assistance. The provision of good wages also helps to attract the best-qualified workers to the project and protect local residents from the unscrupulous practices of companies which hire transient workers at substandard wages and attempt to build projects “on the cheap.” C. Cutting-Edge Skills Training: The apprenticeship training programs operated by local building and construction unions are the very best the industry has to offer.26 Numerous recent studies conducted across the country demonstrate that these union programs attract and graduate far more apprentices than their non-union counterparts, including more minority and female apprentices, and can be counted on to train for all essential construction trades.27 In addition, union programs include advanced training and continuing education for more experienced workers to keep them on the cutting-edge and support meaningful, lifelong careers. D. Health Care & Pension Benefits: Since PLAs will incorporate local union collective bargaining agreements or else independently provide for the payment of fringe benefits, they also ensure that the local workers who are employed on the project receive adequate health care and pension coverage. These benefits promote a better quality of life for local workers and protect local jurisdictions from having to subsidize such benefits for workers who do not receive them from their employers.
V.
Keeping the “PLA Debate” Honest – Sorting Fact From Fiction
Notwithstanding the compelling case for PLAs, certain non-union contractor organizations continue to vigorously oppose these agreements. Their reasons for doing so are relatively simple. The PLA model leverages the best resources and standards available in the industry -- including the best-trained and most highly-skilled labor -- to deliver cost-savings and other economic benefits, i.e., the best value, to project owners. The select groups of non-union contractors which oppose PLAs, on the other hand, subscribe to a model that relies on low-skill, low-cost labor and seeks to undercut the competition in the contracting process by cutting corners on items like training and safety. To these contractors, tools such as PLAs -- which require contractors to do things that all contractors should be doing already -- are “unfair.” Unfortunately, these organizations also have little interest in an honest debate about PLAs. Unable to cite credible facts and evidence in support of their claims, these organizations resort instead to myths and scare-tactics to support their position. One common myth, that PLAs increase costs, is at odds with the experience of project owners such as Toyota and the City of Los Angeles, and with the many credible studies which have examined the issue.28 Likewise, these organizations have falsely maintained that the use of PLAs on federal and other public sector projects will serve to exclude merit shop contractors and non-union workers. However, as countless court decisions have confirmed, this claim is not in accord with reality.29 PLA projects are fully open to bidding by all contractors, union and non-union alike. And, non-union contractors regularly do bid and win work on PLA projects. As told by the California Court of Appeals in one illustrative case brought by the ABC, “an unwillingness, if any, to bid by any ABC member is a case of self-imposed exclusion.”30 Indeed, in that case, seventy-five percent of the contracts awarded under the PLA went to non-union contractors31. Because of these facts, and the clear advantages PLAs offer, federal and state courts have overwhelmingly upheld their use on public works projects.32 What’s more, the seminal 5
rulings in this area, including the leading U.S. Supreme Court case of Boston Harbor -- a 9 to 0 decision -- have stressed that the key focus regarding PLAs in the public sphere must be what is best for the contracting agency and taxpayers -- not the union sector, the open shop or even workers.33 Upon review of the evidence showing that PLAs maximize value for the taxpayer dollar, courts have had little difficulty dispensing with the myths and upholding their use.
VI.
Conclusion
Construction is a high-skill, labor-intensive industry where effective planning and coordination among various contractors and crafts on projects is an absolute must. As a premier planning tool that is specially-designed to meet these needs, PLAs have long been relied on by project owners in the private and public to ensure quality, cost-effective and timely project delivery. In recent years, PLA use has increased markedly as the success stories of companies such as Toyota, and public entities such as the City of Los Angeles, have overpowered the self-serving myths disseminated by certain non-union organizations. The practical consequence of this pro-PLA trend has been several hundred billion dollars of PLA-construction spanning almost every industry and market sector in the United States. As demonstrated herein, the benefits that PLAs provide to projects owners, the industry and local communities are both real and substantial. As word of these benefits continues to spread, reliance on this tool will continue to increase. Good tools prove themselves.
1
See Gerard M. Waites & Scott M. Seedorf, White Paper on Project Labor Agreements (Mar. 2012) (on file with authors); Mark Ayers, 50 Billion Reasons Why Project Labor Agreements Work, Building & Construction Trades Department President’s Message Blog (Dec. 10, 2010), at http://www.bctd.org/Newsroom/Blogs/PresidentsMessage/December-2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx.
2
See Hugo S. Rossitter & John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (2011); Richard A. Parker & Louis M. Rea, San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011); Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (2011); Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011); Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (2011); Dale Belman & Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010); UCLA Labor Center, Construction Careers for Our Communities (2010); Los Angeles Department of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010); Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009); Dale Belman, Matthew M. Bodah, & Peter Philips, Project Labor Agreements, ELECTRI International (2007); Dale Belman, Russell Ormiston, William Schriver & Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005); Ralph Scharnau & Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004); Bart Gilbert, Director of General Services, Project Labor Agreement Report, Contra Costa County (2004); John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002); Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001); James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), Construction Law Update (2001); Daniel Rounds, Project Labor Agreements: An Exploratory Study, UCLA Institute for Labor and Employment (2001). For web links to the above studies, please see our White Paper on Project Labor Agreements.
See David Tuerck, Sarah Glassman, Paul Bachman, Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem, Beacon Hill Institute (2009); Rider Levett Bucknall, Project Labor Agreements Impact Study (2009); Tuerck & Bachman, Project Labor Agreements and Public Construction Costs in New York State, Beacon Hill Institute (2006); Tuerck, Bachman & Jonathan Haughton, Project Labor Agreements and the Cost of Public School Construction in Connecticut, Beacon Hill Institute (2004).
3
6
See e.g., Kotler (2009), supra note 2, at 22 (“Beacon Hill’s conclusions should be dismissed as not credible”); Kevin Duncan, Project Labor Agreements – Denver Update (2009), at 13, (finding “little objective empirical content within [one anti-PLA] study.”); Belman, Bodah, & Philips, supra note 2, at 14 (criticizing Beacon Hill’s studies); Belman, Ormiston, Schriver, & Kelso, supra note 2, at 18-19 (criticizing Beacon Hill’s studies).
5 6
4
Waites & Seedorf, supra note 1.
Jeff Caldwell, Op-Ed: Project Labor Agreements – Toyota’s Way, available at http://www.plaswork.org/Projects/ Project-Focus/Toyota-and-PLAs-(1).aspx.
7 8
See Rossitter & Reamer, supra note 2.
Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168 (Apr. 13, 2010), available at http://edocket.access.gpo.gov/2010/pdf/2010-8118.pdf.
Similar steps have been taken at the state level as well. See e.g., Governor Pat Quinn, Governor Pat Quinn Signs Legislation to Protect Diversity in State Public Works Projects (Jul. 27, 2011), at http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=11&RecNum=9579; Governor Chet Culver, Exec. Order 22 (Feb. 3, 2010), at http://publications.iowa.gov/9655/1/Executive_Order_No22.pdf.
10 11 12 13 14 15 16 17 18
9
Supra note 2. Caldwell, supra note 6. Rossitter & Reamer, supra note 2. Id. Id. Kotler, supra note 2, at 55. See id. Supra note 2.
See e.g., The Construction Executive, The Perfect Storm: Factors Come Together Creating a Storm in the Construction Workforce (June 2004), 21-25, at http://www.constructionexec.com/Files/Storm.pdf; Construction Users Roundtable (CURT), Confronting the Skilled Workforce Shortage (June 2004) (document on file with authors).
19
Allison Huang, Robert E. Chapman and Davis T. Butry, U.S. Department of Commerce National Institute of Standards and Technology, Metrics and Tools for Measuring Construction Productivity: Technical and Empirical Considerations (Sept. 2009), available at http://www.nist.gov/customcf/get_pdf.cfm?pub_id=903603. Id. at 39. Id. at 22-23. Id. at 25-26.
20 21 22
23 Industrial Information Resources, Press Release, America’s Building Trades Unions Set the Standard for Skilled Craft Training, a Feature of “Industry Today” (Sept. 8, 2011), available at http://www.marketwire.com/pressrelease/americas-building-trades-unions-set-standard-skilled-craft-training-feature-industry-1558382.htm. 24 Cihan Bilginsoy, University of Utah, Apprenticeship Training in the U.S. Construction Industry (1998), 9, available at http://www.faircontracting.org/PDFs/prevailing_wage/ApprenticeshipTrainingInTheConstructionIndustry.pdf. 25 26
NIST study, supra note 15, at 23.
See e.g., Sarah S. Etherton, Stephen L. Cook, and Robert V. Massey, Jr., West Virginia University Institute for Labor Studies and Research, Building Trades Apprentice Training in West Virginia: A Comparison of Union and NonUnion Building Trades Programs in the 1990s (2002). See Anneta Argyres & Susan Moir, Labor Resource Center, University of Massachusetts Boston, Building Trades Apprentice Training in Massachusetts: An Analysis of Union and Non-Union Programs, 1997-2007 (2008); Erin Johansson & Fred Feinstein, Apprenticeship Training Programs in Maryland: A Case Study of the Construction Industry, 1990-2003 (2005); Jeff Vincent, Indiana University Institute for the Study of Labor in Society, Analysis of Construction
27
7
Industry Apprenticeship Programs in Indiana (2004); Randy Loomans & Mitch Seaman, Washington State Construction and Building Trades Council, AFL-CIO, Apprenticeship Utilization in Washington State Programs in the Building and Construction Trades (2003); Donald H. Bradley & Stephen A. Herzenberg, Keystone Research Center, Construction and Apprenticeship Training In Pennsylvania (2002); Sarah S. Etherton et. al., West Virginia University Extension Service, Institute for Labor Studies and Research, Building Trades Apprentice Training in West Virginia: A Comparison of Union and Non-Union Building Trades Programs in the 1990s (2002); Cihan Bilginsoy, University of Utah, Apprenticeship Training in the U.S. Construction Industry (1998); William J. Londrigan and Joseph B. Wise, Kentucky AFL-CIO, Apprenticeship Training In Kentucky: A Comparison of Union and Non-Union Programs in the Building Trades (1997).
28 Supra note 2. As noted, while seventeen-plus studies confirm the benefits of PLAs, opponents of PLAs rely on just a handful of studies to support claims that PLAs increase costs and reduce competition. Most of these studies have been authored by the Beacon Hill Institute, a self-described “free-market think-tank.” See Bacon Hill studies, supra note 3. These studies have been criticized and discredited in numerous academic works. Supra note 4. 29
See e.g., Enertech Elec. Inc. v. Mahoning Cty. Comm’rs, 85 F.3d 257, 260 (6th Cir. 1996); Master Builders of Iowa, Inc. v. Polk County, 653 N.W.2d 382, 395 n. 6 (Iowa 2002); Associated Builders and Contractors v. San Francisco Airports Comm’n, 981 P.2d 499, 507 (Cal. 1999); John T. Callahan & Sons, Inc. v. City of Malden, 713 N.E.2d 955, 964 (Mass. 1999); Queen City Construction, Inc. v. City of Rochester, 604 N.W.2d 368, 376 (Minn. Ct. App. 1999). Associated Builders & Contractors, Inc. v. Metro. Water Dist., 69 Cal. Rptr. 2d 885, 888 (Cal. Ct. App. 1997), superseded by grant of review, 951 P.2d 1182 (Cal. 1998), review dismissed, 991 P.2d 750 (Cal. 1999).
31 30
Id. Moreover, Section 8(b)(2) of the National Labor Relations Act requires that hiring halls and referral systems be operated in a non-discriminatory matter, such that non-union workers are free to apply and work under PLAs.
32 See Building and Construction Trades Council v. Associated Builders & Contractors (“Boston Harbor”), 507 U.S. 218 (1993); Johnson v. Rancho Santiago Community College Dist., 623 F.3d 1011 (9th Cir. 2010); Associated Builders & Contractors, Inc. v. Lavin, 431 F.3d 1004 (7th Cir. 2005); Associated Gen. Contractors of Am. v. Metro. Water Auth., 159 F.3d 1178 (9th Cir. 1998); Phoenix Eng’g v. MK-Ferguson of Oak Ridge Co., 966 F.2d 1513 (6th Cir. 1992); Building Industry Elec. Contractors Ass'n v. City of New York, 2011 WL 3427138 (S.D.N.Y. Aug. 5, 2011) (unreported); Sheet Metal Workers Local 27 v. E.P. Donnelly, Inc., 673 F.Supp.2d 313 (D.N.J. 2009); Building Industry Electrical Contractors Ass’n v. City of New York, No. 10 Civ. 8002 (RPP) (S.D.N.Y. Aug. 4, 2011) (unreported); Albany Specialties, Inc. v. Bd. of Educ. of So. Glens Falls Sch. Dist., No. 99-CV-1462 (N.D.N.Y. Oct. 1, 1999) (unreported); Util. & Transp. Contractors Ass’n v. Essex Co. Improvement Auth., No. 98-4408 (D.N.J. Oct. 15, 1998) (unreported); JNS Heating v. Suffolk Co., No. CV-95-5227 (E.D.N.Y. Oct. 4, 1996) (unreported); McGraw's Custom Constr., Inc. v. City of Juneau, No. J96-0003 (D. Alaska Mar. 28, 1996) (unreported); Lott Constructors, Inc. v. Camden Co. Bd. of Chosen Freeholders, 1994 WL 263851 (D.N.J. 1994) (unreported); Enertech Elec., Inc. v. Mahoning Co. Comm’rs, 1994 WL 902493 (N.D. Ohio 1994), aff’d, 85 F.3d 257 (6th Cir. 1996); Associated Gen. Contractors of Am. v. County of St. Louis, 825 F.Supp. 238 (D. Minn. 1993); Laborers Local No. 942 v. Lampkin, 956 P.2d 422 (Alaska 1998); Elec. Contractors, Inc. v. Dept. of Education, 2009 WL 5945554 (Conn. Super. Ct. Aug. 7, 2009) (unreported); Associated Builders & Contractors, Inc. v. S.F. Airports Comm’n, 981 P.2d 499 (Cal. 1999); Associated Gen. Contractors of Am. v. San Diego Unified Sch. Dist., 195 Cal. Rptr. 3d 698 (Cal. Ct. App. 2011); Conn. Associated Builders & Contractors, Inc. v. Anson, No. CV-98-0579841-S (Conn. Super. Ct. Oct. 26, 1998), aff’d, 740 A.2d 804 (1999); Master Builders of Iowa, Inc. v. Polk Co., 653 N.W.2d 382 (Iowa 2002); John T. Callahan & Sons, Inc. v. City of Malden, 713 N.E.2d 955 (Mass. 1999); Util. Contractors Ass’n of New England, Inc. v. Mass. Dept. of Pub. Works, 5 Mass. L. Rptr. 17, 1996 WL 106983 (Mass. Super. Ct., 1996); City of Lansing v. Carl Schlegel, Inc., 669 N.W.2d 315 (Mich. Ct. App. 2003); Associated Builders & Contractors, Inc. v. Minnetonka Indep. Sch. Dist. No. 276, 1999 WL 1261743 (Minn. Ct. App. Dec. 28, 1999) (unreported); Queen City Constr. Inc. v. Rochester, 604 N.W.2d 368 (Minn. Ct. App. Dec. 28, 1999); Associated Builders & Contractors, Inc. v. So. Nev. Water Auth., 979 P.2d 224 (Nev. 1999) (unreported); N.Y. State Chapter, Inc. v. N.Y. State Thruway Auth., 666 N.E.2d 185 (N.Y. 1996); E.W. Tompkins Co., Inc. v. Bd. of Trs. of Clifton Park-Halfmoon Pub. Library, 813 N.Y.S.2d 789 (N.Y. App. Div. 2006); Associated Builders & Contractors, Inc. v. Bd. Educ. of Buffalo, 703 N.Y.S.2d 418 (N.Y. App. Div. 2000); Albany Specialties, Inc. v. County of Orange, 662 N.Y.S.2d 773 (N.Y. App. Div. 1997); Associated Builders & Contractors, Inc. v. Onondaga County, 1999 WL 297696 (N.Y. Sup. Ct., Onondaga Co. Mar. 16, 1999); Flex Elec. Contractors, Inc. v. County of Orange, No. 4256-97 (N.Y. Sup. Ct., Orange Co. Sept. 30, 1997) (unreported); Rondout Elec. v. County of Orange, 1995 WL 791913 (N.Y. Sup. Ct., Orange Co. Dec. 22, 1995) (unreported); Ohio Bldg. & Constr. Trades v. Cuyahoga Co. Bd., 781 N.E.2d 951 (Ohio 2002); Associated Builders & Contractors, Inc. v. Jefferson Co. Bd. of Comm’rs, 665 N.E.2d 723 (Ohio Ct. App. 1995); Hawbaker v. Dept. of Gen. Servs., 405 MD 2009 (Pa. Commw. Ct. Dec. 1, 2009), aff’d, 111 MAP 2009 (Pa. 2011) (unreported); Sossong v. Shaler Area Sch. Dist., 945 A.2d 788, 794 (Pa. Commw. Ct. 2008), appeal denied, 967 A.2d 962 (Pa. 2009); A. Pickett Construction Inc. v. Luzerene Co. Associated Builders & Contractors Inc., 738 A.2d 20 (Pa. Commw. Ct. 1999); North State Mechanical, Inc. v. Dept. of Gen. Servs., No. 122 M.D. 2001 (Pa. Commw. Ct. Jun. 21, 2001) (unreported). 33
See e.g., Boston Harbor, 507 U.S. 218, 231-232 (1993).
8
Project Labor Agreements White Paper
Prepared by: Gerard M. Waites, Esq. Scott M. Seedorf, Esq. O’Donoghue & O’Donoghue, LLP 4748 Wisconsin Avenue, N.W. Washington, DC 20016
March 2012
Project Labor Agreements White Paper ******************************
Introduction
For over three quarters of a century, project owners in the public and private sectors have used Project Labor Agreements, or “PLAs,” to maximize efficiency, minimize risks, reduce costs, and meet critical deadlines on capital facility projects. Although each PLA will be tailored to the needs of a given project, almost every PLA will include three essential elements to ensure quality, cost-effective and timely project delivery: 1) A guarantee of adequate well-trained, highly-qualified craft labor to maximize productivity and quality and minimize the need for rework; 2) Uniform terms and conditions governing all contractors and trades to promote consistency and stability and reduce administrative costs; and 3) Dispute resolution, no-strike and other anti-disruption provisions to ensure that the project is completed on-time and without costly delays. As this paper shows, PLAs have been used in recent years to deliver several hundred billions of dollars worth of construction projects. This widespread use has occurred over time on projects of all types and sizes in all 50 States and the District of Columbia. Notable consumers of PLA-construction include Fortune 500 companies such as Toyota, General Motors and Wal-Mart; federal departments and agencies such as the U.S. General Services Administration, the U.S. Department of Energy and the U.S. Army Corps of Engineers; and state and local governments across the United States. Many of these owners, including Toyota, the Illinois Department of Transportation and the City of Los Angeles, have published articles or reports touting the benefits of PLAs. The industry studies discussed in this paper help to explain why these owners have turned to PLAs to deliver their capital projects. Namely, these studies demonstrate that PLAs consistently produce cost savings for owners, maximize work quality, eliminate disruption and delay, and deliver important community benefits. Such findings have also served to dispel many of the myths disseminated by select non-union groups which subscribe to low-wage, low-skill business models and appear to oppose, on that basis, any measures which have the effect of raising or enforcing industry standards. In short, this paper demonstrates what leading project owners in both the private and public sectors have known for many decades: PLAs work.
Table of Contents ******************************
Part I: PLA Reports & Studies
Part II:
Extensive Use of PLA-Construction
Part III:
Federal Policy on Project Agreements
Part IV:
PLAs for Nuclear Construction
Part V:
PLAs by State & Local Government
Part VI:
PLAs for School Construction
Part VII:
PLA News & Journal Reports
Part VIII:
PLAs Impact on Apprenticeship Training
Part IX:
Use of PLAs to Address Construction Industry Skill Shortages
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Part I: PLA Reports and Studies _____________________________________________________________
A. FAVORABLE STUDIES ON PLAS REVIEWED
Organization, Title and Date 1. 2. 3. 4. 5. 6. 7. 8. 9. Los Angeles Bureau of Contract Administration, Using Project Labor Agreements: The City of Los Angeles Perspective (2001) Rea & Parker Research for San Diego Unified School District, Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (2011) University of California Los Angeles Labor Center, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles (2011) Cornell University School of Industrial and Labor Relations, Project Labor Agreements in New York State: In the Public Interest and of Proven Value (2011) Cornell University School of Industrial and Labor Relations, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers (2011) Economic Policy Institute, Building Better: A Look at Best Practices for the Design of Project Labor Agreements (2010) University of California Los Angeles Labor Center, Construction Careers for Our Communities (2010) Los Angeles Department of Public Works, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (2010) Cornell University School of Industrial and Labor Relations, Project Labor Agreements in New York State: In the Public Interest (2009)
10. Michigan State University and Universities of Rhode Island and Utah, Project Labor Agreements (2007) 11. Michigan State University School of Labor & Industrial Relations, The Effect of PLAs on the Cost of School Construction in New England (2005) 12. Iowa Policy Project, Project Labor Agreements in Iowa (2004) 13. Contra Costa County, California General Services Department, Project Labor Agreement Report (2004) 14. Harvard University Joint Center for Housing Studies, Project Labor Agreements (2002) 15. California Research Bureau, Constructing California: A Review of Project Labor Agreements (2001) 16. Construction Law Update, The Case for Public Owner Project Labor Agreements (2001) 17. University of California Institute for Labor and Employment, Project Labor Agreements: An Exploratory Study (2001)
B.
MAJOR HIGHLIGHTS OF STUDIES REVIEWED
Document No.
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Los Angeles Bureau of Contract Administration (2011) Using Project Labor Agreements: The City of Los Angeles Perspective
? In April 2011, Los Angeles Deputy City Attorney Hugo Rossitter and Inspector of Public Works John Reamer presented data from the Los Angeles Bureau of Contract Administration (BCA) showing that City PLA projects have consistently come in below engineer’s bid estimates and been used effectively to advance local hiring and training goals. They stated that PLAs complement the BCA’s mission in numerous ways, including by promoting cooperation, minimizing disruptions and delay, providing greater access to skilled craft labor, ensuring that contractors pay proper wages and by combating poverty and unemployment through construction employment and training. In answer to the question “Do PLAs Cost More?,” Rossitter and Reamer pointed to data on 14 highway projects awarded in the previous 3 fiscal years: 4 without PLAs and 10 with PLAs. While all 4 projects awarded without a PLA came in over the engineer’s bid estimate (from 12.58 percent to 30 percent over), 7 of 10 PLA projects -- and 7 of the last 7 PLA projects -- came in below the engineer’s bid estimate. Cost savings on the 7 PLA projects coming in below the engineer’s bid estimate ranged from 2.75 percent to 21.61 percent of estimated project cost. The data also showed that non-union contractors are routinely awarded contracts on PLA projects and are represented on PLA projects to generally the same extent as they are represented on non-PLA projects. Rossitter and Reamer also cited notable successes in using PLAs to promote local hiring and training goals for Los Angeles residents. They reported that 32.84 percent of the work on PLA projects to date had been performed by local residents, while 26.15 percent of the work on such projects had been performed by apprentices. Both numbers exceed the goals set by the BCA of achieving 30 percent local participation and 20 percent apprentice participation on PLA projects.
Source: Hugo S. Rossitter and John L. Reamer, Paving the Way: Using Project Labor Agreements (PLAs): The City of Los Angeles Perspective (April 2011), Presented at AFL-CIO Lawyers Coordinating Committee Conference in San Diego, California, April 26-28, 2011 (on file with authors).
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Rea & Parker Research for San Diego Unified School District (2011) Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations
? This study was prepared at the request of the San Diego Unified School District (“SDUSD”) to review construction and labor-related performance on Proposition S projects subject to a Project Stabilization Agreement, or PSA (another name for a PLA). Proposition S, which was approved by voters on Nov. 4, 2008, provided a $2.1 billion general obligation bond to finance the repair, renovation and revitalization of SDUSD schools. The PLA being used to build these projects was executed in July 2009. (p. 2).
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The study found that project costs for PLA-covered SDUSD projects were the same as comparable non-PLA projects that were built prior the execution of the SDUSD PLA in July 2009. (pp. iii & 172). However, while project costs were the same, the study reported that PLA-covered projects outperformed the non-PLA projects in other significant ways. PLA-covered projects demonstrated a “clear advantage” over non-PLA projects in terms of completion time. The study reported that PLA projects were completed on average 28 days faster than non-PLA projects relative to the projects’ estimated completion date. (p. 177). PLA-covered projects also outperformed non-PLA projects in identifying labor and wage law compliance issues, which, the study notes, translates into better protection for workers on SDUSD projects. (pp. 181-183). A final significant way in which PLA-covered projects outperformed nonPLA projects is in promoting local hiring. The SDUSD PLA set “very ambitious” goals for local hiring – specifically, that covered projects employ 35 percent of its workers from economically disadvantaged zip codes, 70 percent from the SDUSD and 100 percent from San Diego County. As of October 2011 the study reported that PLA projects were close to achieving the 35 percent target and making good progress on the other goals. The study notes that its near-achievement of the 35 percent target is “almost entirely due to union referrals.” (pp. 185-190).
Source: Richard A. Parker, Ph.D. & Louis M. Rea Ph.D., San Diego Unified School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations (Nov. 2011), available at http://www.sandi.net/ cms/lib/CA01001235/Centricity/Domain/138/psastudy12-7-11.pdf.
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University of California Los Angeles Labor Center (2011) Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles
? Uyen Le builds upon previous work done by the UCLA Labor Center previous and evaluates the impact of provisions in the Los Angeles Unified School District (LAUSD) PLA which promote the participation of small and disadvantaged businesses. In addition, Le reviews the performance of the LAUSD “We Build” pre-apprenticeship program operated in connection with the PLA as well as the PLA’s performance in promoting local hiring. (p. 5). Le reports success on all of these fronts. In 2003, the LAUSD Board of Education incorporated a goal of 25 percent small business participation into the LAUSD PLA. Le reports that the LAUSD PLA achieved nearly double that number as of Sept. 2011, with 48 percent of LAUSD project dollars going to small and disadvantaged businesses. He also reports that 44 percent of prime contractors have been small and disadvantaged businesses. (p. 15).
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The study also reported that the LAUSD construction bidding process has been “highly competitive, ensuring that the bids that came in were competitively priced and created a high value for the district.” (p. 16). One former official Le interviewed estimated that LAUSD PLA projects averaged 18 bidders for specialized crafts for each RFP, which is about 13 more bidders than are needed for adequate competition. LAUSD saw their costs fluctuate and increase at times since 2003, but this was due to external factors rather than the PLA. (p. 17). LAUSD launched the “We Build” pre-apprenticeship program in conjunction with the PLA to provide local residents with career opportunities in the construction industry. Since 2004, over 1,628 local residents have graduated from the “We Build” program and 81 percent of those graduates are now working in construction. (p. 18). The LAUSD PLA had achieved 41 percent local hiring within LAUSD and 68 percent local hiring within the County as of the date of the study (p. 18). In addition, 41.5 percent of apprentices of all apprentices working under the PLA were first-year apprentices while 67 percent of the PLA workforce consisted of minority workers. (p. 19).
Source: Uyen Le, Project Labor Agreements: Pathways to Business Ownership and Workforce Development in Los Angeles, UCLA Labor Center (Nov. 2011), at http://constructionacademy.org/wordpress/wp-content/uploads/2011/11/LAUSDPSA-Small-Business-Participation-CCA-11-18-11.pdf.
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Cornell University, School of Industrial and Labor Relations (2011) Project Labor Agreements in New York State II: In the Public Interest and of Proven Value
? Professor Kotler follows-up his prior 2009 study (below) with new data confirming the benefits of PLAs and a report on the “significant increase in the authorization and use of PLAs for both public and private sector work” he has documented since the 2009 study was published. (p. 1). Part I discusses the broad social and economic benefits that PLAs offer. Kotler discusses factors in the construction industry, such as its mobile workforce and the intermittent nature of the work, that tend, absent PLAs and other safeguards, to lead to a “race to the bottom” on industry, working, and living standards, disadvantage law-abiding businesses, drive up taxpayer costs and otherwise do harm to communities. (p. 6-25). Part II explains why PLAs have been repeatedly upheld as consistent with state competitive bidding laws. Upon review of the record, Kotler reaffirms that the usual claims by anti-union groups – e.g., that PLAs limit the pool of bidders, and drive up costs – “are not supported by PLA experience or by a clear analysis of statutory and case law.” (p. 26-34). Part III details the cost savings that PLAs are providing client owners, citing numerous recent examples in New York State. These recent examples, all of which are supported by due diligence studies, include: o Four New York City PLAs announced by Mayor Bloomberg, worth over $5 billion and projected to save the City $300 million;
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A PLA covering eight City-owned building projects, worth $1.21 billion and projected to yield cost savings amounting to 4.88 percent of total project costs; A PLA covering three projects under the jurisdiction of the City Sanitation Department, worth $661.3 million and projected to cost savings amounting to 6.1 percent of total project costs; A PLA covering seven projects under the jurisdiction of the City Department of Environmental Protection, worth $686.26 million and projected to yield 5.5 percent cost savings; A PLA covering a $5.94 million project for City Parks and Recreations, projected to yield 10.2 percent cost savings; and An Economic Recovery PLA covering over seventy City projects, worth tens of billions of dollars and projected to yield cost savings of 19.52 percent for these projects.
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(pp. 35-59).
Source: Fred B. Kotler, Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School (2011), available at http://digitalcommons.ilr.cornell.edu/reports/36/.
Cornell University, School of Industrial and Labor Relations (2011) Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers
? This study reviews the extent to which PLAs are used to promote middle class career opportunities for low income communities, women, minorities and disadvantaged or at risk populations. It finds that PLAs or Community Workforce Agreements (“CWAs”) -- as PLAs which include provisions along these lines are often called – have succeeded in creating these opportunities and that growing numbers of PLAs/CWAs are including provisions targeting the aforementioned groups. (pp. 2-3). The authors analyzed 185 PLAs dated between 1995 and 2010 in order to determine how often community workforce oriented provisions appear. They found that of the 185 PLAs analyzed: o o o o o o o o o (p. 7). 139 included provisions promoting the hiring of veterans; 103 promoted the hiring of minorities and women; 100 promoted the hiring of apprentices; 70 promoted the hiring of local residents; 55 utilized a union pre-apprenticeship program; 45 promoted the hiring of economically disadvantaged workers; 36 promoted women/minority-owned and small businesses; 25 set a percentage goal for local resident apprentices; and 12 involved community-based organizations in recruitment and monitoring of the above provisions.
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As noted, the study also found that community workforce provisions have become more popular over time. For instance, while 17 percent of the PLAs dated before 2004 had zero community workforce provisions, no PLA dated 2009 or 2010 were without such a provision. In addition, while 38.9 percent and 22 percent of pre-2004 PLAs had between 1 to 3 or 4 to 6 provisions, respectively, 51.2 percent and 40.2 percent of the 2009-2010 PLAs had between 1 to 3 or 4 to 6 provisions. (p. 19). PLA/CWA provisions which promote the hiring of veterans have experienced the most precipitous increase in popularity among community workforce provisions. The study notes that these provisions “were nowhere to be found amongst the pre-2004 arrangements, but topped the popularity list in both 2005-2008 and 2009-2010.” (p. 20). The study concludes with three representative cases in which PLAs included community workforce provisions: the Cleveland University Hospital-Cleveland BCTC PLA; Washington, D.C.’s Nationals Stadium PLA; and New York City’s PLA Memorandum of Understanding. In all three cases ambitious local hiring, diversity and other goals were set, and in all three cases most or all goals were met or exceeded. (pp. 30-38).
Source: Maria Figueroa, Jeff Grabelsky & Ryan Lamare, Community Workforce Provisions in Project Labor Agreements: A Tool for Building Middle Class Careers, Cornell University ILR School (Oct. 2011), available at http://www.ilr.cornell.edu/news/upload/PLA-REPORT-10-6-2011_FINAL.pdf.
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Economic Policy Institute (2010) Building Better: A Look at Best Practices for the Design of Project Labor Agreements
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This study begins with an overview of PLAs and the value they offer construction owners. The authors explain that PLAs are tailored to the unique challenges and conditions of the U.S. construction industry. These include the occupational or trade-specific structures of the work and of firms, the temporary nature of construction projects, and the presence of numerous trades and employers, each with their own work rules, hours, and wage scales, on larger projects. In addition, the authors identify other more recent challenges which have arisen as union representation in the industry has decreased. These include a declining apprenticeship system and related shortages in skilled labor. (pp. 4-5). Based on research and interviews with industry stakeholders, the authors report that PLAs have been used successfully to bring order to a diverse and decentralized industry while meeting the unique needs of the project at hand. The authors draw upon this experience in offering advice on how PLAs can be designed to: improve efficiency and innovation (pp. 10-14); expand opportunity for local residents and support community development goals (pp. 15-19); improve worker safety and health (pp. 2227); resolve labor disputes and other disruptions that impede the on-time completion of projects (pp. 27-30); and facilitate the participation of nonunion contractors (p. 31-37). The authors conclude with a discussion of best practices for negotiating PLAs. (p. 37-41).
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Source: Dale Belman and Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project Labor Agreements, Economic Policy Institute (2010), available at http://epi.3cdn.net/179fd74170130cd540_ibm6ib3kd.pdf.
University of California Los Angeles Labor Center (2010) Construction Careers for Our Communities
? This study reviews the successes of three Los Angeles-area PLAs in promoting the hiring of local residents on City-funded construction projects. The three area PLAs analyzed in the study are: the Los Angeles Community College District (LACCD) PLA; the Los Angeles Unified School District (LAUSD) PLA; and the City of Los Angeles PLA. The LAACD PLA covered about $2.2 billion worth of projects at the time of the study and established a local hiring goal of 30 percent. The study found that every one of the 10 community colleges covered by this PLA met the 30 percent local hiring target and that average local hiring under the PLA as a whole was 34 percent. (p. 9). The LAUSD PLA covered about $20 billion in construction projects and established a highly ambitious 50 percent local hiring goal. (p. 11-12). The study reports that, while the former goal had not yet been attained, the LAUSD PLA had made impressive progress, with local hires accounting for 38 percent of total work hours on average, 39 percent of journey-level workers and 41 percent of apprentices. (p. 21 & 25). The City of Los Angeles PLA covered about $380 million in projects at the time of the study and established a 30 percent local hiring goal. (p. 30). The study reported that local apprentices and journey-level workers accounted for 41 percent of workers employed by large contractors; 35 percent of workers by large subcontractors; and 18 percent of workers by small subcontractors. (pp. 40-41). Overall, the study reported local hiring provisions in the three PLAs produced local hiring of roughly 35 to 40 percent and also promoted the hiring of apprentices, including local apprentices. (p. 46). In the case of the City of Los Angeles PLA, the use of a PLA added about 20 percentage points to local workers share of total project hours. (p. 44). While the study demonstrates PLAs are valuable tools for promoting local hiring, it also shows that smaller contractors may need more assistance in meeting these requirements and that all contractors tend to improve their local hiring performance over time. (pp. 24-25 & 46).
Source: UCLA Labor Center, Construction Careers for Our Communities (2010), available at http://constructionacademy.org/wordpress/wpcontent/uploads/2009/08/ConstructionCareersForOurCommunitiesFullReport.pdf.
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Los Angeles Department of Public Works (2010) Project Labor Agreements (PLAs): Are They Fair and Beneficial?
? In February 2010, the Los Angeles Department of Public Works Bureau of Contract Division made a presentation which addressed the question of whether PLAs are “fair and beneficial” to the City and its contractors. Based on its data and experience from nearly $950 million in PLA construction since 2001, the Department answered in the affirmative. Upon review of PLA projects awarded between March 2007 and July 2009, the Department found that the projects “were for the most part awarded lower than the engineers’ estimate.” It further found that, “on average, all bids submitted after the PLA were either closer or lower than the engineer’s estimate compared to those prior to the PLA.” The Department also observed that PLAs help level the playing field for union and non-union contractors. While both union and non-union contractors are already required to pay prevailing wages on public works contracts, the PLA further levels the playing field by requiring these contractors to abide by the same rules and requirements on the project. While the Department conceded that PLAs may cost more for non-union contractors who do not otherwise pay fringe benefits for their workers, it noted that these added costs come with added benefits. The non-union contractors’ workers are afforded the same benefits and protections as union workers during their time on the project, while non-union contractors are granted access to a skilled union workforce. Among other cited benefits, the Department noted that its PLAs include provisions which promote local hiring and provide residents with access to apprenticeship programs that lead to well-paying construction careers.
Source: Los Angeles Dept. of Public Works Bureau of Contract Administration, Project Labor Agreements (PLAs): Are They Fair and Beneficial? (Feb. 2010), at http://www.portoflosangeles.org/Board/2010/June/ 061710_Item6_trans2.pdf.
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Cornell University, School of Industrial and Labor Relations (2009) Project Labor Agreements in New York State: In the Public Interest
? Professor Kotler reports that PLAs have proven to be a useful management tool for achieving cost-savings as well as on-time, on-budget, and quality construction. Because they are negotiated pre-bid and tailored specifically to the particular needs of a single project, PLAs also allow project owners, contractors, and trade unions to anticipate and avoid potential problems. This report shows that PLAs serve to maximize project stability, efficiency, and productivity and minimize the risks and inconvenience to the public that often accompany large public works projects, which is why PLAs are increasingly being used by state, county and municipal agencies.
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For projects reviewed in the report, decisions to use PLAs were based on economic feasibility or due diligence studies that evaluated cost savings, risk avoidance, and other related issues.
Source: Fred B. Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University ILR School (2009), available at http://digitalcommons.ilr.cornell.edu/reports/22/.
Report from Professors of Michigan State, Rhode Island, Utah (2007) Project Labor Agreements
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This study provides a detailed overview of PLAs, observing at the outset that PLAs have been used in the private and public sectors without controversy for most of their history. (p. 5). Although President George W. Bush helped to reverse this trend with an anti-PLA Executive Order in 2001, private sector use of PLAs did not slow during his administration. (pp. 12-13). This is significant because the private sector is by far the largest consumer of PLAs, accounting for 75 percent PLA use. The authors find major flaws with some of the previous PLA research done by the non-union contractor association ABC, the conservative free-market Beacon Hill Institute and others. For example, the authors report that the Beacon Hill’s studies in 2003 and 2004 “did an insufficient job at controlling for variables that affect construction costs. Hence, much of what was attributed of the presence of a PLA is actually explained by other variables, such as project location (e.g. the inner city) and building amenities (heating systems, swimming pools, etc.).” (p. 14). The authors interviewed approximately forty individuals with experience working with PLAs, including public and private users and contractors. Among the benefits of PLAs cited were their ability to assure the timely completion of a project (p. 27-28), the savings produced in the final cost of a PLA project (which are not necessary reflected in the bid price) (pp. 28, 29-30), enhanced minority participation and the facilitation of worker training (pp. 28-29), and the emphasis on safety on PLA jobs (p. 29). The authors then examined the effect of PLAs on bidding by looking at bidding behavior in adjacent San Jose, California school districts, and on costs by studying 108 school construction projects in New England. On bidding, the data showed “that the presence of a PLA has no statistically significant effect on the number of bidders per bid opening.” On costs, the authors lodged heavy criticism at various aspects of the Beacon Hill Institute’s research, most notably Beacon Hill’s failure to consider that PLA projects may be more complex and have more amenities (“why projects are build with PLAs in the first place.”) (p. 37). Contrary to Beacon Hill’s research, the authors’ thorough study of the 108 school projects revealed no impact of PLAs on project costs. (p. 37).
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The authors conclude with a number of case studies that show how PLAs can be adapted to meet a number of challenges, including tight schedules and labor markets, lightly unionized regions, sites that have to remain operational during construction (e.g., airports), and community-based needs regarding career training in the trades. (p. 39-59).
Source: Dale Belman, Matthew M. Bodah, and Peter Philips, Project Labor Agreements, ELECTRI International (2007), available at http://builtbest.org/ sites/builtbest.prometheuslabor.com/files/PLA_NECA_Report%5B1%5D.pdf.
Michigan State University, School of Labor & Industrial Relations (2005) The Effect of PLAs on the Cost of School Construction in New England
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This study revealed major flaws in anti-PLA studies conducted by the conservative Beacon Hill Institute, finding that when more complete data models are used, the evidence shows that PLAs do not raise the cost of school construction projects. (pp. 19-21). The authors examined the cost of 92 school construction projects in and around Massachusetts using a number of statistical models in order to examine the models’ conclusions about the cost impact of PLAs. When an overly-simplistic data model similar to the Beacon Hill Institute’s model was used, the study showed PLA projects being more expensive. However, as the authors applied progressively more complete models, accounting for differences in project characteristics such as type of school, location of the project, and other criteria, the so-called PLA cost premium disappeared. The most complete model, which incorporated all of these characteristics, showed that PLAs did not raise project costs. (p. 21). Among the serious flaws in Beacon Hill’s research was its failure to consider that PLA projects tend to be larger and more complex, a fact that is well-known in the construction industry. For example, the data showed that PLA schools tended to be much taller, were more than twice as likely to be amenity-intensive vocational schools, and always required demolition work as compared to just half of the non-PLA schools. (p. 6-8). Beacon Hill’s model also failed to consider other common-sense facts, such as the fact that high schools are more expensive and require more elaborate facilities, and the fact that urban schools cost more to build (substantially so) because of more exacting codes and the need in some cases for services such as 24 hour police protection. (pp. 10-13). The authors also noted that Beacon Hill’s second study corrected a few problems and added a few variables to its data model. These marginal improvements to the data model alone reduced Beacon Hill’s estimate of the cost impact of PLAs by 41 percent (p. 19).
Source: Dale Belman, Russell Ormiston, William Schriver, and Richard Kelso, The Effect of Project Labor Agreements on School Construction in New England, Michigan State University SLIR Working Paper Series (2005), available at http://www.lir.msu.edu/faculty/workingpapers/.
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Iowa Policy Project (2004) Project Labor Agreements in Iowa: An Important Tool
? ? Report by the non-profit, non-partisan Iowa Policy Project discusses how PLAs fit into the fabric of federal labor and state competitive bidding laws. Makes the case that PLA use should be expanded in the public sector because they have proven to be cost-effective, efficient, and reliable mechanisms for large or complex project delivery. Dispels many of the myths used by PLA opponents and shows how PLAs are common-sense management tools that facilitate successful construction project delivery and provide public and private project owners with greater value for capital investments.
Source: Ralph Scharnau and Michael F. Sheehan, Project Labor Agreements in Iowa: An Important Tool for Managing Complex Public Construction Projects, Iowa Policy Project (2004), available at http://www.iowapolicyproject.org/20022004docs/041201-PLAs.pdf.
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Contra Costa County, California, Director of General Services (2004) Project Labor Agreement Report
? In January 2002, Contra Costa County Board of Supervisors adopted a policy requiring every county-funded construction projects with a budget of or over $1 million to include a PLA. Contra Costa County Director of General Services reports that union contractors submitted 44 of 62 bids for 8 projects between May 2002 and November 2003 and that bids for 5 of 8 projects subject to the PLA policy were lower than the architect/engineer’s cost estimate.
Source: Bart Gilbert, Director of General Services, Project Labor Agreement Report, Costa County (Jul. 7, 2004), available at http://www.lecet.org/Clearinghouse_Public/LECET/PLA/ contra_costa.pdf.
Contra
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Harvard University: Joint Center for Housing Studies (2002) Project Labor Agreements
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Professor John Dunlop provides a historical overview of PLAs, which have their roots in construction developments during World War II and in the post-war era at atomic energy, space, and missile sites. Discusses the benefits of PLAs, including attainment of efficiency through standardized terms and conditions, clear channels of communication and direction, and a steady and reliable supply of skilled labor. States that it is curious that no legal or public relations assault has been made on PLAs in the private and non-profit sectors, and suspects this is because PLAs have passed the private market test.
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Notes that PLAs have been used by various private organizations, including Toyota, Boeing, Inland Steel, Arco, among others—and that many of the private owners are repeat users. Such private experience, the author submits, should validate the public PLAs and override criticism.
Source: John T. Dunlop, Project Labor Agreements, Harvard University Joint Center for Housing Studies (2002), available at http://www.jchs.harvard.edu/ publications/industrystudies/W02-7_dunlop.pdf.
California Research Bureau (2001) Constructing California: A Review of Project Labor Agreements
? Johnston-Dodds of the California General Assembly’s Research Bureau provides a historical overview of PLAs in California beginning with the successful Shasta Dam project which ran from 1938 to 1944. (p. 9). Reports private construction projects in California are much more likely to use PLAs than public projects. In fact, 72 percent of the 84 California PLAs reviewed were for private sector projects. In addition, 22 out of 23 private cogeneration electricity plants were built under PLAs. (p. 13). Finds that owner preference is a key driver of PLAs, stating that: “Owners increasingly want PLAs in order to meet their speed-to-market demands and to ensure against delays that can be caused by worker shortages, work stoppages, or collective bargaining negotiations.” (p. 59). Study presents the views of both union and non-union contractors, public agencies, and others on PLAs. Discusses in some detail the experience that Bechtel, one of the world’s largest contractors, has had with PLAs: o Bechtel has used PLAs on more than 100 large construction projects over the last 25 years; 85 percent of PLAs used on Bechtel projects are in the private sector. (p. 38). Bechtel states that centralized union referral systems, training and apprenticeship programs are “positive . . . well-proven systems,” especially on larger, complex projects. (p. 58). o In addition, Bechtel indicates that PLAs facilitate increased cooperation and communication between management and construction workers and permit use and testing of innovative safety programs. (p.38). o For example, one Bechtel PLA included a self-inspection safety program for the Shell Project during the mid-1990s. Development of this program was made possible by the PLA; after 2 million man-hours, no worker suffered an injury serious enough to warrant missing a day’s work. Bechtel now uses this program all over the world. (p. 38). ? Johnston-Dodds also highlights an innovative Port of Oakland PLA, which includes various economic development, community capacity building, and social justice provisions aimed at creating opportunities for historically disadvantaged local residents and businesses. (pp. 41-51).
Source: Kimberly Johnston-Dodds, Constructing California: A Review of Project Labor Agreements, California Research Bureau (2001), available at http://www.library.ca.gov/crb/01/10/01-010.pdf.
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2001 Construction Law Update The Case for Public Owner Project Labor Agreements (PLAs)
? Authors make the case for PLAs on public works projects based on support gleaned from court decisions as well as the authors’ extensive hands-on experience with PLAs, including their “cradle-to-grave” experience exploring, drafting, and administering the well-known Tappan Zee Bridge PLA. Chapter begins with an explanation of what a PLA is and is not. For example, a PLA is typically limited in time and scope to the project for which it was negotiated, (p. 114), and is not a “union only” agreement that requires contractors to be unionized in order to bid or perform work. (p. 116). Chapter proceeds to a succinct analysis of the litany of court decisions upholding PLAs on public works projects and, thereafter, to a discussion of the authors’ own hands-on experience on the Tappan Zee Bridge project as well as ten other major public projects. On the Tappan Zee Bridge project and six of the other projects, the authors recommended a PLA; on three others they did not recommend PLAs. (p. 127). On projects authors were involved with and in which PLAs were used, they report, among other things, “that in highly unionized areas, not only did PLAs save substantial amounts in construction costs, but the amounts could be quantified for each cost-saving PLA provision.” (p. 127). Overall, the authors submit that “[p]robably the best argument for PLAs in the public sector is that they have been for decades, and still are, used in the private sector by large, sophisticated, experienced developers, owners, construction managers and contractors, all of whom are driven by the profit motive.” (p. 129).
Source: James M. O’Neill and Michael V. Griffin, The Case for Public Owner Project Labor Agreements (PLAs), in 2001 Construction Law Update (Neal J. Sweeney ed., Aspen Publishers, Inc. 2001), 111-162 (on file with authors).
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University of California, Institute for Labor and Employment (2001) Project Labor Agreements: An Exploratory Study
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Daniel Rounds conducted a pilot study to evaluate arguments made by proponents and opponents of PLAs. Specifically, the author investigated project performance at three PLA sites: two private and one public. Study concludes, based on research and interviews conducted at the three sites, that PLAs facilitated workplace cooperation, delivered highly skilled labor, did not increase costs and reduced the likelihood of labor unrest.
Source: Daniel Rounds, Project Labor Agreements: An Exploratory Study (UCLA Institute for Labor and Employment 2001) (on file with authors).
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Part II: Extensive Use of PLA Construction _____________________________________________________________
$50 Billion in Public & Private PLAs in 2010 Alone
? Over 300 public and private sector PLAs, covering construction work in excess of $50 billion, were negotiated in 2010 alone, according to data collected by the Building and Construction Trades Department, AFL-CIO.
Source: Mark Ayers, 50 Billion Reasons Why Project Labor Agreements Work, Building & Construction Trades Department President’s Message Blog (Dec. 10, 2010) at http://www.bctd.org/Newsroom/Blogs/Presidents-Message/December2010/50-Billion-Reasons-Why-Project-Labor-Agreements-Wo.aspx.
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Cockshaw’s Report: Private Sector PLAs Become Widespread
? ? ? A leading industry report shows have become widespread in the private sector, including substantial use by many Fortune 500 companies. Cites the use of PLAs by Bank of America, CVS, Disney, IBM, Loews, Marriott, Sunoco, Target, Toyota, U.S. Airways, Wal-Mart and Xcel. Notes a study by the California Research Bureau which found private sector PLAs outnumbered public PLAs in California, and its conclusion that “private owners specifically request that contractors use PLAs for economic reasons, labor stability and cost and scheduling factors.”
Source: Peter Cockshaw, Private PLAs Become Widespread, Cockshaw’s Construction Labor News & Opinion 35(8), Sept. 2005, at 1-4, available at http://www.buildri.org/stuff/contentmgr/files/c1f488859b6395396289bcdb03ccf84b/ doc/2005.cockshaw__s_sept_2005.pdf.
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Housing Trust Supports Billions in PLA Work Over 45 Year Tenure
? Since its inception, the AFL-CIO Housing Investment Trust (HIT) and its predecessor have leveraged more than $6 billion in capital to support housing construction projects built under PLAs and PLA-type agreements These investments have generated some 69,000 good paying construction jobs, over 100,000 housing units to revitalize communities, and aboveaverage returns for investors.
Source: AFL-CIO Housing Investment Trust, Socially Beneficial Impact, at http://www.aflcio-hit.com/wmspage.cfm?parm1=140 (last visited Aug. 22, 2011).
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Building Trust Relies on PLAs to Protect Over $4 Billion of Investments
? Since 1988, the AFL-CIO Building Investment Trust (BIT) has participated in over $4 billion in real estate investment transactions. (p. 6).
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BIT has relied on PLAs and PLA-type agreements to deliver projects across the country and support some 54 million man-hours of construction work. It’s investments continue to yield above-average returns. (p. 6).
Source: AFL-CIO Building Investment Trust, Annual Report 2008, available at http://www.aflcio-bit.com/AFL-CIO-BIT/files/6a/6aa9366e-c5c2-4280-981d2eded6e13117.pdf.
Multi-Employer Trust Uses PLAs for Billions of Dollars in Projects
? The Multi-Employer Property Trust’s (MEPT) development, renovation, and other investments have generated over $13 billion in economic activity through projects built under PLAs and PLA-type agreements. These investments have generated over 67 million man-hours of construction work while producing above-average returns for investors.
Source: Multi-Employer Property Trust, Job Creation, available http://www.mept.com/union/job_creation.php (last visited Aug. 22, 2011). at
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Part III: Federal PLA Policy _____________________________________________________________
Executive Order 13502: Use of PLAs for Federal Construction Projects
? President Obama’s Executive Order of February 6, 2009 encourages federal agencies to use PLAs for large-scale federal construction projects to promote timely and efficient completion of such projects. This Executive Order also directs federal agencies to develop PLA implementation plans and tasks the Office of Management and Budget with conducting a study on broader future use of PLAs.
Source: Exec. Order No. 13,502, 74 Fed. Reg. 6,985 (Feb. 6, 2009), available at http://edocket.access.gpo.gov/2009/pdf/E9-3113.pdf.
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Final Rule on Federal PLAs Documents PLA Successes in Public and Private Sectors and Facilitates Use for Federal Projects
? On April 13, 2010, the Federal Acquisition Regulation (FAR) Council issued a final rule implementing E.O. 13502, removing legal and administrative roadblocks that precluded consideration of PLAs by many federal agencies. The final rule gives federal agencies broad discretion to require contractors to execute and abide by a PLA as a condition of performing work on a large-scale federal project. (p. 19172). The background section of the rule documents the long and extensive use of PLAs by governmental bodies and private corporations for all types of construction. It notes that PLAs “have been used by the private sector for a variety of construction projects that are similar in nature to those undertaken in the public sector, including for manufacturing plants, power plants, parking structures, and stadiums.” (p. 19170).
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The rule also notes that PLAs have been used by the federal government on dams, defense installations, atomic energy facilities, and other projects for “many decades” -- as well as by State and Local governments “in all 50 States and the District of Columbia . . . [on] an array of construction projects covering an expanding range and size of projects—from schools, hospitals, roads, bridges, and police buildings, to convention centers, courthouses, manufacturing facilities, airports, power plants, transit systems, stadiums, and a prison.” (p. 19170). The U.S. Department of Energy (DOE) uses PLAs at most of its key sites, including the Hanford Site in Washington State, the Savannah River Site in South Carolina, the Oak Ridge Reservation in Tennessee, the Nevada Test Site (NTS) (PLA in place since 1964), and the Idaho National Laboratory. In fact, as of the summer 2009, 21 of 25 DOE construction projects were either covered or slated to be covered by PLAs. (p. 19169-19170). The rule makes it clear that DOE’s experience with PLAs has been positive, stating specifically that: Current and past DoE representatives have stated that project labor agreements have contributed to economy and efficiency of DOE construction projects, including completion of projects on time and within budget, by, among other things— ? ? Providing a mechanism for coordinating wages, hours, work rules, and other terms of employment across the project; Creating structure and stability through the use of broad provisions for grievance and arbitration of any disputes that may arise on site, including procedures for resolving disputes among the construction crafts; Prohibiting work stoppages, slowdowns, or strikes for the duration of a project and obligating senior union management to use their best efforts to prevent any threats of disruptions of work that might arise; and Ensuring expeditious access to a well trained, assured supply of skilled labor, even in remote areas where skilled labor would have otherwise been extremely difficult to find in a timely fashion.
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(p. 19170). ? Also noteworthy is the fact that the Tennessee Valley Authority (TVA) has used PLAs successfully on its construction projects for almost 19 years. “In the nearly 200 million man hours of work on TVA construction projects using project labor agreements, there have been no formal strikes or any organized work stoppages.” (p. 19170). Further, “[t]he rate of injury on TVA projects has also been significantly reduced, especially over the last approximately 5 years.” (p. 19170).
Source: Use of Project Labor Agreements for Federal Construction Projects, 75 Fed. Reg. 19168 (Apr. 13, 2010), at http://edocket.access.gpo.gov/ 2010/pdf/2010-8118.pdf.
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General Services Administration Jumpstarts Federal PLA Construction With 7 Projects Totaling Over $760 Million
? The U.S. General Services Administration (GSA), one of the largest federal purchasers of construction services, now has over $760 million in PLA construction in effect. GSA began using PLAs to coordinate some of its largest and most important projects following the Federal Acquisition Regulation (FAR) Council’s completion of a final rule implementing President Obama’s PLA executive order.
Sources: The projects for which PLAs are being used are as follows: A.J. Celebrezze Federal Building, Cleveland, OH ($115M), at https://www.fbo.gov/spg/GSA/PBS/5PCI/GS_05P_09_GBC_0035/listing.html Peter Rodino Federal Building, Newark, NJ ($142M), at https://www.fbo.gov/spg/GSA/PBS/2PCB/GS-02P-09-DTC-0018(N)/listing.html 50 United Nations Plaza, San Francisco, CA ($101M), at https://www.fbo.gov/spg/GSA/PBS/9PCS/GS-09P-09-KTC-0065/listing.html Prince Kuhio Kalanianaole Federal Building, Honolulu, HI ($80M), at https://www.fbo.gov/spg/GSA/PBS/9PCS/GS-09P-09-KT-C-0103/listing.html Edith Green-Wyndell Wyatt Federal Building, Portland, OR ($125M), at https://www.fbo.gov/spg/GSA/PBS/10PDC/GS-10P-09-LT-C-0052/listing.html Lafayette Building Modernization, Washington, DC ($106M), at https://www.fbo.gov/spg/GSA/PBS/WPC/GS11P10MKC0061/listing.html Consolidation of DHS at St. Elizabeth’s, Washington, DC ($93M), at https://www.fbo.gov/spg/GSA/PBS/WPC/GS11P10MKC0059/listing.html ***Estimated project values based on GSA Public Buildings Service Procurement Instructional Bulletin, 09-02, (Aug. 11, 2009) (on file with authors).
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U.S. Navy Adopts Military’s First-Ever PLA in Washington State
? In December 2011, the U.S. Navy announced that it will be using a PLA to build a $715M explosives handling wharf in Washington State. The PLA is reportedly the first to be adopted by the U.S. Department of Defense or any of its constituent departments or agencies. In support of its decision, the Navy cited the ability of the PLA to assure timely completion of the project, promote economy and efficiency, contain costs and promote the hiring of local workers. Construction is expected to get underway in the summer 2012. However, the Navy must first complete an environment impact statement and issue a record of decision for the project.
Sources: Ed Friedrich, Navy to Hire Local Workers for Second Explosives Handing Wharf, Kitsap Sun (Jan. 1, 2012), available at http://www.kitsapsun.com/news/2012/jan/01/navy-to-hire-local-workers-forsecond-explosives/.
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Department of Labor Requires PLA for New Hampshire Jobs Center
? Pursuant to a bid solicitation issued in December 2011, the U.S. Department of Labor is requiring the use of a PLA to construct a new Jobs Corps Center in Manchester, New Hampshire. The project is valued at upwards of $50 million. (Solicitation). The PLA itself, which is included in the solicitation, cites the Department’s desire to “promote economy and efficiency in Federal Procurement pursuant to Executive Order 13502” along with numerous specific benefits that the PLA will bring to the Project. (PLA at 1). Among other cited benefits, the PLA is said to provide: o o o o o o The most cost effective construction, including direct savings; Standardized employment terms and conditions; Appropriate mechanisms to resolve worksite disputes; A reliable source of skilled and experienced labor; Assurances against misclassification and payroll issues; and Maximum safety for both workers and the community.
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(PLA at 1-2).
Sources: U.S. Department of Labor, Solicitation: Construction of New Job Corps Center in Manchester New Hampshire (Last retrieved Feb. 2, 2012), at https://www.fbo.gov/notices/64b6788bb0c78a44c9ae5e13b85f8886; Job Corps Center PLA, at http://www.solicitationattachments.com/newhampshire/1pla.pdf.
Army and Army Corps of Engineers Adopt PLA with “Helmets to Hardhats” Clause to Promote Veterans’ Training and Recruitment
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In August 2011, the Building & Construction Trades Department, AFLCLO, and Walbridge ratified an innovative PLA that utilizes the “Helmets to Hardhats” program to facilitate the entry of veterans and members of the National Guard and Reserves into careers in the building and construction industry. This PLA will cover an Army/Army Corps of Engineers project at Arnold Air Force Base in Tennessee. The Helmets to Hardhats Program was founded by America’s Building Trades Unions to connect veterans and transitioning active-military to industry-best skill training and good job opportunities in the building and construction trades. Since 2007, it has placed over 5,000 veterans in craft apprenticeship programs and employment throughout the United States. Under the Army/Army Corps PLA, veterans and soon-to-be veterans working on the project will receive a range of services, including preliminary orientation, aptitude assessments, referrals to apprenticeship programs, counseling and mentoring, and job opportunities.
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Helmets to Hardhats, along with the United Association’s Veterans in Piping (VIP) Program, another top program promoting veterans training and recruitment, have garnered national attention and praise, both in- and outside of the military, for the invaluable service they render to veterans.
Sources: Building and Construction Trades Department, AFL-CIO, BCTD Now 8/22/11, at http://www.youtube.com/watch?v=6z6uF9pNUV8; see Helmets to Hardhats, at http://www.helmetstohardhats.org; see also United Association Veterans in Piping (VIP) Program, at http://www.uavip.org/.
Extensive Use of PLAs by U.S. Department of Energy
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The U.S. Department of Energy (DOE) has required PLAs, which it refers to as “Site Stabilization Agreements,” for billions of dollars worth of construction projects on DOE sites. These agreements have been used at virtually all DOE’s main nuclear sites, which include: Hanford Site in Washington State, Savannah River Project in South Carolina, Oak Ridge Reservation in Tennessee, the Nevada Test Site and Tonopah Test Range (Area 52), Rocky Flats Plant in Colorado, and the Idaho National Laboratory (INL). A review of project data at three of these sites indicates that over last several decades approximately 8.2 million man-hours have been worked under these agreements (Savannah River/2,830,000 manhours; Oak Ridge/2,300,600 man-hours; and Handford/3,148,000). One example is the Idaho National Laboratory agreement, entitled “INL Site Stabilization Agreement,” which was entered into as early as 1984.
Source: (1) INL Site Stabilization Agreement (Mar. 1, 2007), available at https://idahocleanupproject.com/portals/0/documents/dmcs/brown/Site_Stabiliz ation_Agreement.pdf; (2) Statement of John Koskinen, OMB Deputy Director for Management, Before the Committee on Labor and Human Resources, U.S. Senate (Apr. 30, 1997), available at http://georgewbushwhitehouse.archives.gov/omb/legislative/testimony/19970430-23262.html.
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Energy Bill Would Require Use of PLA on ANWR Projects
? On January 5, 2011, U.S. Rep. Don Young (R-AK) introduced the American Energy Independence and Price Reduction Act, H.R. 49, which would increase domestic oil production by opening additional coastal waters and Alaska’s Arctic National Wildlife Refuge (ANWR) for drilling. Section 6(b) would require lessees of land in ANWR to use PLAs for all on-site production, maintenance and construction. According to the bill, the PLA requirement is based on “the Government’s proprietary interest in labor stability and in the ability of labor and management to meet the particular needs and conditions” of such projects.” Rep. Young’s bill currently has 123 co-sponsors.
Sources: American Energy Production and Price Reduction Act, H.R. 49, 111th Cong. (2009), available at http://www.opencongress.org/bill/111-h49/show; American Energy Production and Price Reduction Act, H.R. 6107, 110th Cong. (2008), available at http://www.opencongress.org/bill/110-h6107/show.
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Office of Management and Budget Touts Benefits of Pro-PLA Policy
? Former OMB Deputy Director for Management John Koskinen testified before the Senate Committee on Labor and Human Resources in support of federal PLAs in 1997, noting they have proven valuable in the public and private sectors because they “help ensure projects are completed ontime and on-budget—without accidents, delays, and unexpected costs.” Mr. Koskinen reported that the federal government has used PLAs to build dams, defense installations and atomic energy facilities and had a particularly successful track record at DOE sites. He stressed that the federal government should be able to reap the same benefits that private firms and state and local governments achieve from PLAs.
Source: Statement of John Koskinen, Before the Committee on Labor and Human Resources, U.S. Senate (Apr. 30, 1997), available at http://georgewbushwhitehouse.archives.gov/omb/legislative/ testimony/19970430-23262.html.
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Part IV: PLAs for Nuclear Construction ____________________________________________________________
PLA to Govern $14.5 Billion Construction of Two New Nuclear Reactors at Southern Company’s Vogtle Electric Generating Plant
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In April 2010, the Building & Construction Trades Department, AFL-CIO,
and Stone Webster Construction agreed to use a PLA for the construction of the two new nuclear units at Southern Company’s Vogtle Electric Generating Plant near Waynesboro, Georgia. In February, the project received the backing of the Obama Administration, which awarded Vogtle $8.33 billion in federal loan guarantees.
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Among other things, the PLA will ensure that the project is staffed by local workers and provide specialized training programs so that the skills honed at Vogtle can be leveraged on other nuclear projects across the country.
Source: Rob Pavey, Unions in Deal to Train Workers, The Augusta Chronicle, Apr. 20, 2010, available at http://chronicle.augusta.com/news/metro/2010-0420/unions-deal-train-workers.
Nuclear Innovation North America LLC Chooses PLA for $13 Billion Construction of Two New Nuclear Units at South Texas Project (STP)
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In April 2010, Nuclear Innovation North America LLC (NINA), a company
jointly owned by NRG Energy, Inc. and Toshiba Corporation, announced an agreement with the Building & Construction Trades Department, AFLCIO, to use a PLA for the $13 billion construction of two new nuclear units at the South Texas Project (STP) in Matagorda County, Texas. The new units, commonly referred to as STP 3&4, are scheduled to come online in 2016 and 2017, respectively. (Press Release; Fact Sheet).
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“Clean reliable nuclear energy is key to meeting the environmental challenges we face as well as reducing our nation’s dependence on foreign energy,” said Steve Winn, CEO of NINA. “To ensure we can achieve these important goals and can build STP 3&4 and the many new nuclear units to follow, it is critical that we have a skilled pool of American workers. This agreement and the skilled labor it represents will help make that possible.” (Press Release).
Sources: (1) Press Release, NRG Energy, Inc., Project Labor Agreement with America’s Building Trades Unions Announced for South Texas Project Nuclear Power Expansion (Apr. 8, 2010), available at http://finance.yahoo.com/news/ Project-Labor-Agreement-with-bw-1526648672.html?x=0&.v=1; (2) NRG Energy, Inc., South Texas Project Fact Sheet, Jan. 2010, available at http://www.nrgenergy.com/pdf/factsheets/ factsheet_stp1-4.pdf.
Bechtel Construction Co. and Building Trades Unions Announce PLA for Construction of New $4 Billion Nuclear Unit at Calvert Cliffs Plant
? In June 2009, Bechtel Construction Company announced that it had entered into a PLA with the Building & Construction Trades Department, AFL-CIO, and the National Construction Alliance II for the construction of a new nuclear unit at the Calvert Cliffs Nuclear Power Plant in Lusby, Maryland. (Press Release). According to Bechtel, the PLA guarantees skilled and qualified workers for the project in exchange for fair wages, benefits and working conditions for those workers. (Press Release). The estimated cost of the new unit is $4 billion. (Pelton). "This is an historic agreement,” said Carl Rau, Bechtel Nuclear president. “It not only benefits labor and Bechtel, it benefits the entire nuclear industry as it grows to meet the country’s increasing demand for clean energy. The success of this agreement will point the way for the construction of future nuclear energy projects.” (Press Release).
Sources: (1) Press Release, Bechtel Construction Company, The Building and Construction Trades Department, AFL-CIO; The National Construction Alliance II; and Bechtel Construction Approve Historic Project Labor Agreement (Jun. 1, 2009), available at http://www.bechtel.com/2009-06-01.html; (2) Tom Pelton, Nuclear Power Has New Shape, Baltimore Sun, Dec. 25, 2007, available at, http://articles.baltimoresun.com/2007-12-25/news/ 712250014_1_reactor-nuclearpower-calvert-cliffs.
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_______________________________________________________________________
Part V: PLA Construction by State & Local Governments _____________________________________________________________
Alaska Gov. Palin Endorses Use of PLA for Gasline Construction
? ? In an April 2007 article of Alaska Economic Trends, Gov. Sarah Palin explains her support for PLAs as part of the Alaska Gasline Inducement Act. Gov. Palin emphasizes that PLAs provide host of assurances for both management and workers, including labor stability which results in less cost overruns, no-strike provisions which assure timeliness, opportunities for Alaskans to learn on the job with pay and benefits and a bidding process that is open to union and non-union firms alike.
Source: Sarah Palin, The Alaska Gasline Inducement Act and Alaska Hire, Alaska Economic Trends, Apr. 2007, at 3, at http://labor.state.ak.us/trends/apr07.pdf.
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Arizona/Nevada PLA Used to Build Landmark Hoover Dam Bypass Bridge
? In October 2010, work was completed on the $240 million Hoover Dam Bypass Bridge, designated by Congress as the Mike O'Callaghan-Pat Tillman Memorial Bridge, in budget and on-schedule. Like the Hoover Dam itself, this landmark project was built under a PLA. (LIUNA!). The Federal Highway Administrator dubbed the project “a modern engineering marvel” while Popular Mechanics Magazine has cited it as “an example of big-ticket civil engineering done right” at a time when “people expect mega-engineering projects to be over budget—and, often, underwhelming.” (Popular Mechanics). As described by U.S. Transportation Secretary Ray LaHood: “This majestic bridge is the longest of its kind in the Western Hemisphere. It rests on the tallest precast concrete columns ever constructed. And it reaffirms a powerful idea: Americans can still build great things not just in spite of enormous economic challenge, but as the means of overcoming it.” (LaHood).
Sources: (1) LIUNA! Website, at http://www.liunabuildsamerica.org/project-laboragreements-work; (2) Erik Sofge, Lessons from the Hoover Dam Bypass, Popular Mechanics, Dec. 15, 2010, at http://www.popularmechanics.com/technology/ engineering/infrastructure/lessons-from-the-hover-dam-bypass; (3) Ray LaHood, Hoover Dam Bypass Bridge, A Symbol of American Ingenuity, DOT Fast Lane Blog, at http://fastlane.dot.gov/2010/10/hoover-dam-bypass-bridge-a-symbol-ofamerican-possibility.html.
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California Governor Brown Signs Bill to Preserve Local Government Access to PLAs ?
On October 2, 2011, Governor Jerry Brown signed into law SB 922, which denies state construction dollars to local jurisdictions that have approved blanket bans on PLAs, empowers local jurisdictions to decide on a projectby-project basis whether a PLA is appropriate, and establishes parameters for using PLAs on publicly-funded projects. In a joint statement on SB-922, its authors, California Senate President Pro Tem Darrell Steinberg and General Assembly Speaker John A. Perez, pointed out that the law does not require any local jurisdiction to use PLAs. It simply prohibits them from barring consideration of, and access to, this tool. “We will not allow a few cities to throw away our scarce taxpayer dollars, unfairly tying the hands of their elected officials from considering a method which can give taxpayers the most bang for the buck,” they said. Steinberg and Perez added PLAs “have been used by both business and government to save money on construction of municipal projects for over 70 years. Governments also use them to achieve additional goals such as local hiring, assuring our returning veterans a job on a project, and creating viable apprenticeships and other training programs for the community.”
Sources: (1) Office of Governor Edmund G. Brown, Governor Brown Issues Legislative Update, Oct. 2, 2011, at http://gov.ca.gov/news.php?id=17251; Office of John A. Perez, Joint Statement: Pro Tem Steinberg and Speaker John A. Perez Set the Record Straight on SB 922, Oct. 12, 2011, at http://asmdc.org/speaker/news-room/press-releases/item/2695-joint-statement-protem-steinberg-and-speaker-john-a-p%C3%A9rez-set-the-record-straight-on-sb-922.
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PLAs Used to Construct 96 Percent of California’s Power Plants
? In June 2011, Industrial Information Resources (“IIR”), a market intelligence firm, published research showing that 53 power plants in California have been built under PLAs in the past 15 years. These 53 power plants constitute 96 percent of all power plants built during this time and represent more than 30 million hours and $15 billion worth of work. According to IIR, this trend owes to the superior training programs and productivity of the California Building Trades and to project owners’ desire to secure higher returns on their investments. IIR adds that: “[w]hile the 53 California power plants built using union labor were completed on time and on budget, other non-PLA power projects have suffered multiple cost and time overruns, resulting in a cascading series of lawsuits and unpaid contractors and subcontractors.”
Source: Industrial Information Resources Press Release, Project Labor Agreements Work for California Power Industry – and More (Jun. 17, 2011), available at http://www.marketwire.com/press-release/project-labor-agreements-work-californiapower-industry-more-feature-industry-today-1528086.htm.
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Los Angeles Transit Board Inks Landmark Transit & Highway PLA
? On Jan. 26, 2012, the Los Angeles County Metropolitan Transportation Authority (“MTA”) announced that their Board of Directors had unanimously approved a Project Labor Agreement which will cover all MTA and transit and highway projects with a cost over $2.5 million. Immediate funding for covered projects will come largely from Measure R, a $30 billion ballot measure approved in Nov. 2008. However, the MTA states the PLA could cover upwards of $70 billion in work over the next three decades if it fully implements its Long Range Plan. The PLA is believed to be the first of its kind for a transit agency and includes provisions which promote training and career opportunities for economically disadvantaged and youth populations in Los Angeles. Specifically, the PLA calls for 40 percent of work hours on covered projects to be done by economically disadvantaged workers and 10 percent of work hours to be done by individuals struggling with poverty, chronic unemployment and other hardships. In addition, registered apprentices are to comprise at least 20 percent of the workforce. Mayor Antonio Villaraigosa praised the MTA Board’s decision to adopt the PLA. “I am proud that the MTA Board voted unanimously to become the first transit agency in the nation to use federal and local dollars to create jobs targeted at economically disadvantaged communities and individuals," he said. "This landmark program is part of a strategy to deliver public transit projects while creating jobs that will lift people out of poverty and into the middle class."
Source: Los Angeles Metropolitan Transportation Authority Press Release, Metro Board Approves Project Labor Agreement for Metro Construction Projects (Jan. 26, 2012), at http://www.metro.net/news/simple_pr/Metro-Board-approvesPLA-for-Metro-Construction-Pr/.
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Citing PLAs as “Best Path to Success” Towards Goals, Los Angeles Community Redevelopment Agency Reports $1.44 Billion in PLA Projects ?
In October 2009, the Community Redevelopment Agency of the City of Los Angeles presented “Project Labor Agreements: The Los Angeles Experience” to the Department of Energy Contractor Attorneys' Association (DOECAA). The Agency cited data showing that the “PLA is the best path to success” in fulfilling its goals on public works construction of strengthening the Los Angeles economy through local investment and expanding opportunity for people with barriers to employment. Under the Agency’s Construction Careers Policy, PLAs are required for public improvements valued at $500,000 or more, projects on Agency land, and projects in which the Agency invests $1 million or more. 30 percent of total work hours, and 30 to 40 percent of apprentice hours, must be performed by community or high-unemployment area residents, while 10 percent of hours are to be performed by disadvantaged workers.
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According to the Agency, the public interests served by PLAs include: safe and quality construction delivered on time and on budget; rebuilding the middle class; expanding opportunity for minorities; improving the tax base and encouraging community reinvestment; decreasing the reliance of residents on public assistance; and building a trained workforce. As noted, the data presented by the Agency attests to their success in using PLAs to advance these interests. At the time of the presentation, there were 23 PLA projects worth $1.44 billion in Los Angeles. Among other benefits highlighted by the Agency: 30.55 percent of work hours on PLA projects were performed by local residents; almost $50 billion in wages and benefits had been reinvested back into the Los Angeles economy; and average contractor bids and contract awards in recent years had consistently come in below the engineer’s bid estimates:
Source: Community Redevelopment Agency of the City of Los Angeles, Project Labor Agreements: The Los Angeles Experience, 2009 DOECAA Conference Presentation (on file with authors).
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San Francisco 49ers to Build New $1 Billion Stadium Under PLA
? On Feb. 28, 2012, the National Football League’s San Francisco 49ers announced that they had entered into a PLA to facilitate the construction of a new $1 billion, 68,500-seat stadium on land leased by the City of Santa Clara. The project will employ thousands of local workers. 49ers CFO Larry McNeill said the PLA was essential to ensuring the highest quality product. “Everything we do within the 49ers is based on quality and performance,” he said. “We have very high expectations for the new stadium, and this PLA gives us confidence that we will have a quality job that will come in on time and on budget.”
Source: State Building & Construction Trades Council of California, Press Release, PLA Finalized for New 49ers Stadium (Feb. 28, 2012), available at www.sbctc.org/doc.asp?id=4085.
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BNSF Railway and Los Angeles/Orange County Building Trades Ink $255 Million PLA for Southern California International Gateway
? On October 25, 2011, BNSF Railway and the Los Angeles/Orange Counties Building & Construction Trades Council announced that they had executed a $255 million PLA to govern construction of the Southern California International Gateway (SCIG), a state-of-the art, near-dock intermodal rail facility. Upon completion, BNSF asserts that SCIG will be “the greenest Intermodal facility in the United States.” (BNSF). The PLA will regulate, among other things, safety, quality and timely construction of SCIG while providing job and apprentice opportunities to qualified local residents. Construction is expected to begin in 2013, after the Port of Los Angeles completes its environmental review. (ENR).
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Sources: (1) BNSF Railway, Press Release, BNSF Railway and LA/Orange Counties Building and Construction Trades Council Sign $255 Million Labor Agreement for Construction of Proposed Intermodal Facility, Oct. 25, 2011, available at http://www.marketwatch.com/story/bnsf-railway-and-laorange-counties-building-andconstruction-trades-council-sign-255-million-labor-agreement-for-construction-ofproposed-intermodal-facility-2011-10-25; (2) ENR California, BSNF Railway, LA/OC Labor Council Sign $255M PLA for Intermodal Port Project, Oct. 26, 2011, at http://california.construction.com/california_construction_news/2011/1026bnsfrailwaylaoclaborcouncilsign255mplaforintermodalportproject.asp.
PLA Successfully Employed in Solano County Government’s $113.5 Million ‘Smart-Growth’ Consolidation Effort
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In July 2005, Solano County brought together 16 departments from 15 different locations under one roof, a Government Center, as part of a $113.5 million ‘smart-growth’ consolidation effort, the largest undertaking in the 155 year-old county’s history. Fast-track schedule was achieved in part because of PLA. Government Center project logged 400,000 man-hours over 2.5 years without single lost-time injury. Since 80 percent of workforce came from local hiring halls or referral system, project cost was reinvested into the community.
Source: Tony Illia, Government Center Blends Bridging, CM and PLA, Design Build, May/June 2005, at 10, available at http://designbuild.construction.com/features/archive/2005/0506_cover.asp.
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Port of Long Beach Approves PLA for Initial Phase of $750 Million Modernization
? In a unanimous March 1, 2010 decision, the Port of Long Beach Board of Commissioners voted to adopt a PLA for the initial phase of a six year, $750 million port modernization effort. The initial phase will be approximately 15 months and employ 1,000 to 1,200 workers. The Board is using this initial phase to “test” the PLA concept, and considering a PLA for the entire six-year project if successful.
Source: Tom Gilroy, Long Beach Port Approves PLA to Cover First Phase of Port Modernization Project, 56 Constr. Lab. Rep. (BNA) No. 2760 at 60 (Mar. 11, 2010).
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Riverside Community College Adopts Standard PLA for Measure C Projects Over $1 Million
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On March 16, 2010, the Board of Trustees of California’s Riverside Community College District approved a standard PLA for use on all projects which cost over $1 million and draw funding from Measure C, a $350 million bond measure that was approved by voters in 2004. Thirteen projects are immediately subject to the PLA.
Source: Imran Ghori, Riverside Community College District Seeking Consultant for Key Labor Accord, Press Enterprise, Apr. 7, 2010, at http://www.pe.com/ localnews/riverside/stories/PE_News_Local_W_pla07.47edfa7.html.
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PLA Reports From Various Public Owners in California
? Booklet presents succinct testimony from various public project owners in the State of California regarding their successful experiences using PLAs to build public works construction projects in various parts of the state.
Source: Bill Rickman, Project Labor Agreements (State Building and Construction Trades Council of California 2002), available at http://builtbest.org/sites/builtbest.prometheuslabor.com/files/669.PLAbookletCA.pdf.
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Connecticut State Legislation Requires PLAs and Local Hiring for Development Properties or Compliance with Prevailing Wage Law
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Mandates the use of a PLA or compliance with prevailing wage law in connection with construction of the Adrian’s Landing and Rentschler Field (UCONN) projects.
Source: Conn. Gen. Stat. § 32-656 (2006), available at http://law.justia.com/connecticut/codes/title32/sec32-656.html.
Illinois Illinois Enacts Project Labor Agreements Act to Secure Highest Quality at Lowest Cost and Full Participation on Public Works
? On July 27, 2011, Illinois Governor Pat Quinn signed the Project Labor Agreements Act, which requires State agencies to use a PLA where it is “determined that the agreement advances the State's interests of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, or the State's policy to advance minority-owned and women-owned businesses and minority and female employment.” (Public Act). At the bill signing ceremony, Quinn stressed the ability of PLAs to ensure that projects are completed “on time, under budget, and in a proper way that encourages the participation of all of our workers . . . .” (Press Release). The text of the Act, which was passed by the Legislature as House Bill 2987, cites the State’s interests in securing “the highest standards of quality and efficiency at the lowest responsible cost” and in making certain “that a highly skilled workforce [is] employed on public works projects to ensure lower costs over the lifetime of the completed project for building, repairs, and maintenance to ensure lower costs over the lifetime of the completed project for building, repairs, and maintenance.” Further, the Act notes that PLAs can be used to more accurately predict project costs and are particularly beneficial on complex projects. (Public Act). The Act also promotes minority and female participation on public works projects by requiring State agencies adopting a PLA to include goals regarding the number of apprenticeship hours that will be completed by minorities and females on the project in question and to file progress reports concerning the actual participation of these groups. (Public Act).
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Sources: (1) Illinois Public Act 097-0199 (HB 2987 Enrolled), available at http://www.ilga.gov/legislation/publicacts/97/PDF/097-0199.pdf; (2) Office of Governor Pat Quinn, Press Release, Governor Pat Quinn Signs Legislation to Protect Diversity in State Public Works Projects, Jul. 27, 2011, at http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=11&Re cNum=9579.
Illinois DOT States That PLAs Have “Worked Exceptionally Well” In Report Documenting Over $878 Million of PLA Construction
? On January 27, 2011, the Illinois Department of Transportation (IDOT) issued a revised report showing that it has used PLAs to build over $878 million in construction projects since 2004. Notably, the report data shows that IDOT has dramatically increased its use of PLAs in recent years, with over $605 million of PLA construction in 2010 alone. The report indicates that this dramatic increase in PLA use is based on IDOT’s positive experience with these agreements since the issuance of Executive Order 2003-13, which authorized the use of PLAs on public works projects when they advance the state’s interests. IDOT’s experience using PLAs, in its own words, has been as follows: “Project Labor Agreements are essential in promoting efficiency of construction operations and providing for peaceful settlement of all labor disputes without strikes or lockouts. This helps to ensure that state and federal construction projects are completed in a timely and economical manner. In order to accomplish this objective, all contractors are bound by the terms of the Collective Bargaining Agreements and amendments to the local trade council. This prevents con?icts from occurring between union and non-union ?rms.” .... We have found the agreements to be beneficial to all parties involved in the construction process. Contractors are assured high-quality craft persons without strikes or work stoppages. Unions are guaranteed the contractor will employ their members and all jurisdictional disputes will be settled at monthly meetings.” ? All told, IDOT reports that PLAs have “worked exceptionally well throughout the state, by allowing the labor and contractors to interact together to assure a timely completion of our projects.”
Source: Illinois Department of Transportation, Project Labor Agreements, Revised Jan. 27, 2011, p. 8, at http://www.dot.state.il.us/desenv/PLA-Master-012711.pdf.
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Illinois Capital Development Board Touts PLA Program
? Reports from IL Capital Development Board show as of Jan. 20, 2009: o o o 86 active projects with PLAs worth over $259.4 million in total. 141 completed projects with PLAs worth over $1.2 billion in total. 227 total projects with PLAs worth $1.4 billion in total.
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Capital Development Board states that it has found PLAs “to be beneficial to all parties involved in the construction process” and have “worked exceptionally well throughout the State by allowing labor and contractors to interact together to assure a timely completion of our projects.” Illinois Department of Transportation has a PLA program similar to the Capital Development Board for state road and highway projects.
Source: Illinois Capital Development Board, Project Labor Agreements (Jan. 2009), available at http://www.cdb.state.il.us/forms/download/PLAbooklet.pdf.
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State Legislation Requiring Grant Recipients in Renewable Fuels Development Program to Enter PLA
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Requires grant recipients under Illinois’s Renewable Fuels Development Program to enter into a PLA as a condition of receiving grant funding.
Source: 20 Ill. Comp. Stat. 689/15 (2005), available at http://law.justia.com/ illinois/codes/chapter5/2439.html.
Executive Order 2003-13 Requiring Evaluation of PLAs for Works and Adoption Where PLA Advances State Interest
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Requires executive agencies, on project-by-project basis, to include a PLA on public works projects where agency determines that a PLA advances the state’s interests in terms of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability or the state’s policy to advance minorityand women-owned businesses and minority and female employment. Cites as basis for E.O. the state’s compelling interest in securing highest standards of quality and efficiency at the lowest responsible cost on public works projects and the capacity of PLAs to deliver on these objectives.
Source: Ill. Exec. Order No. 2003-13 (May 7, 2003), available at http://www.faircontracting.org/NAFCnewsite/pla_pdf/Illinois-Executive-Order-onPLAs-2003.pdf.
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Indiana $700 Million Lucas Oil Stadium Successfully Delivered Under PLA
? In Feb. 2012, Industrial Information Resources (IIR) unveiled an article and video report highlighting the successful delivery of the Indianapolis Colts’ new Lucas Oil Stadium, the site of Super Bowl XLVI, under a PLA. IIR reported that the $700 million stadium was completed on-time, onbudget and safely because of the PLA. According to IIR, the PLA was beneficial because it enabled the Colts and Indiana taxpayers to secure 1,500 highly-skilled workers representing all essential crafts and bring these workers under a single set of rules for the duration of the project.
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Barney Levengood, Executive Director of the Indiana Convention Center and Lucas Oil Stadium, touted the quality of labor under the PLA. “They're trained.” He said, “They go through an apprenticeship program. They have skills and are very incredibly safety-oriented."
Source: Industrial Information Resources, Super Bowl XLVI Stadium Crafted By Building Trades Union Project Labor Agreement (Feb. 2011), available at http://www.industrialinfo.com/radio/industrytoday.jsp?guest=bctd05.
State Legislation Requiring PLA Construction of Projects by Indiana’s Stadium and Convention Building Authority
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Directs the Indiana Stadium and Convention Building Authority, as a prerequisite to the issuance of bonds for the construction, improvement, or renovation of facilities, to ensure that each associated contract or subcontract requires a PLA.
Source: Ind. Code Ann. § 5-1-17-18 http://law.justia.com/indiana/codes/title5/ar1/ch17.html. (2006), available at
Iowa New Iowa Corrections Projects Will Be First State PLAs
? Iowa Gov. Chet Culver signed a March 16, 2010 letter committing to requiring PLAs for the construction of the new Iowa State Penitentiary and for improvements to a women’s facility. They will be the first state projects to use PLAs; the combined cost of the projects is nearly $200 million.
Source: Mark Wolski, Governor Culver Signs Letter Requiring PLAs for Two Corrections Department Projects, 56 Constr. Lab. Rep. (BNA) No. 2762 at 120 (Mar. 25, 2010).
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Gov. Culver Signs Executive Order Encouraging Use of PLAs
? On Feb. 3, 2010, Iowa Gov. Chet Culver signed pro-PLA Executive Order 22. The order, similar to Obama’s E.O. 13502, encourages state agencies to consider using PLAs on state projects costing $25 million or more. Gov. Culver’s order came in the midst of planning for several important state projects, including projects at two correctional facilities, a veterans’ home, and the University of Iowa.
Source: Mark Wolksi, Culver Signs Executive Order Requiring State Agencies to Consider Using PLAs, 55 Constr. Lab. Rep. (BNA) No. 2756 at 1589 (Feb. 11, 2010).
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Minnesota Minnesota Vikings Choose PLA to Build $1 Billion New Stadium
? On Feb. 6, 2012, the Minnesota Vikings and the Minneapolis Building and Construction Trades Council announced a landmark PLA that will govern the construction of the Vikings’ new stadium, if the stadium is constructed in Minneapolis as advocated by Governor Mark Dayton. The stadium would be the largest construction project in state history.
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Assuming Minneapolis is selected for the stadium site, state and local government officials will still need to finalize additional details, including financing for the project and the share of the project costs that will borne by Minnesota taxpayers and the Vikings organization.
Source: Mark Wolski, Minnesota Unions Tout Deal For Labor Agreement on Vikings Stadium, 57 Constr. Lab. Rep. 2855 (Feb. 16, 2012), at 1603.
New Hampshire Green Developer and Investment Firm Opt for PLA to Coordinate Construction of $275 Million Berlin Station Biomass Plant
? In September 2011, green developer Cate Street Capital and investment firm Starwood Energy Group Global secured financing for the construction of a $275 million wood-powered biomass power plant in Berlin, New Hampshire. According to officials, the plant, which is known as Berlin Station, will be “among the largest and most environmentally advanced biomass energy plants in the Northeast.” (Green Building News). The Berlin Station Plant will be built under a PLA negotiated with the New Hampshire Building and Construction Trades Council. In November 2011, the Trades Council held a job fair to recruit and train local residents for the project. “I think it’s a great opportunity for young people to get into the trades,” Berlin Mayor Paul Grenier said. (Berlin Daily Sun).
Sources: (1) GreenBuildingNews.com, $275 Million Biomass Power Plant Coming to New Hampshire, Sept. 22, 2011, at http://www.greenbuildingnews.com/articles/2011/09/22/275-million-biomass-powerplant-coming-new-hampshire; (2) Barbara Tetreault, Job Fair Aims to Recruit for Biomass Project, The Berlin Daily Sun, Nov. 2, 2011, at http://www.berlindailysun.com/featured/story/job-fair-aims-recruit-biomass-project.
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New Jersey State Legislation Authorizing PLAs on Public Works
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Declares New Jersey has a compelling interest in carrying out public works projects at the lowest reasonable cost, and with the highest degree of quality, in having disputes resolved without strikes, lock-outs or delays, and in ensuring that public works projects are safe. Legislature finds PLAs advance these interests and encourages public agency use. Authorizes PLAs for public works projects on a project-by-project basis where certain requirements are met and when such an agreement would advance the interests of the public entity.
Source: N.J. Stat. § 52:38-3 (2006), available at http://law.onecle.com/newjersey/52-state-government-departments-and-officers/38-1.html.
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Executive Order No. 1 Directing Use of PLAs on Public Works Projects Where State’s Interests Would Be Advanced
? Executive Order issued in 2002 requires, on a project-by-project basis, use of PLAs on public works projects where it is determined that a PLA advances the state’s interests of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, and the state’s policy to advance minority- and women-owned businesses. Among the reasons cited for the order are the state’s compelling interest in ensuring the highest standards of quality at the lowest cost and the costsavings that a highly-skilled workforce produces over time by limiting repairs and maintenance. The order also states that PLAs allow public agencies to more accurately predict a project’s actual cost and are particularly well-suited for larger, more complex projects.
Source: Governor James McGreevey, Executive Order No. 1 (Jan. 7, 2002), available at http://www.state.nj.us/ infobank/circular/eom1.htm.
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New Mexico Gov. Richardson Applauds Use of PLA for $225 Million Hospital Project ?
In Apr. 2004, Governor Bill Richardson published a column applauding the recent decision of the University of New Mexico’s Board of Regents to use a PLA to coordinate the $225 million expansion of University Hospital. Richardson said the PLA would achieve three objectives. First, Richardson said the PLA would make costs “predictable and stable, saving taxpayer money.” Second, the PLA would create quality local jobs. “Without the agreement,” he said, “a contractor is free to use out-of-state workers . . . .” Finally, he said the PLA would ensure the project is completed on time, which is important given that “[a]ny delay . . . [would] cost UNM— and taxpayers— $14,000 per day in interest.” Richardson noted that PLAs are not new, having been used successfully on important private and federal projects in New Mexico, and that no one – union or non-union -- is prevented from bidding. “The bottom line,” Richardson wrote, “is [that] a project labor agreement for the hospital expansion makes good economic sense.”
Source: Gov. Bill Richardson, Project Labor Agreement is Most Prudent Course, Albuquerque Journal (Apr. 11, 2004), available at http://www.abqjournal.com/opinion/guest_columns/160518opinion04-11-04.htm.
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New York Mayor Bloomberg Announces Public Project PLAs Covering $5.3 Billion of Construction and Yielding Savings of Nearly $300 Million
? On November 24, 2009, Mayor Michael Bloomberg announced the creation of four separate PLAs for major public projects in New York City. Collectively, the PLAs cover $5.3 billion in construction and 32,000 jobs, and will save the City nearly $300 million over the next four years. The PLAs provide standardized work rules, ease the City’s bidding requirements, and include provisions that ensure the participation of minorities, women, returning veterans, and recent high school graduates of New York City public schools.
Source: Office of Mayor Michael Bloomberg, Press Release, Mayor Bloomberg Announces Labor Agreements on Public Projects to Reduce Costs, Spur Projects, and Create Jobs (Nov. 24, 2009), at http://www.nyc.gov/html/om/html/ 2009b/pr509-09.html.
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PLA Provides for Timely and Tailored Construction of the Most Advanced Microprocessor Plant in the World
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On July 24, 2009, state officials, GlobalFoundries Inc., and others broke ground on a 1.3 million square foot semiconductor wafer fabrication facility in Saratoga County. The New York Times calls it “the most advanced facility of its kind in the world.” (Press Release; Times). The project’s total capital budget is estimated at $4.2 billion, including local construction expenditures of approximately $800 million, and it will provide a boost to the regional economy. (Press Release). Paterson facilitated the use of a PLA earlier this year to “smooth the way for timely construction” of this historic undertaking. The PLA takes into account the unique requirements of a world-class facility. (Press Release).
Sources: (1) Nicholas Confessore, New Factory Seen as Boon for Upstate, N.Y. Times, July 25, 2009, at A24, at http://www.nytimes.com/2009/ 07/25/nyregion/25chip.html; (2) Governor David Paterson, Press Release, Governor Paterson Breaks Ground on Global Foundries Fab 2 Project in Sarasota County (July 24, 2009), at http://www.ny.gov/governor/ press/press_0724091_print.html.
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Gov. Pataki Issues Executive Order Requiring State Agencies to Consider PLAs for Public Construction Contracts
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On February 12, 1997, Governor Pataki issued an Executive Order requiring state agencies to consider use of PLAs for public construction contracts, stressing that PLAs are “one of many tools which may be used by management and labor to promote the timely completion of public construction projects while limiting their costs,” Pataki said.
Source: Office of Governor George E. Pataki, Press Release, Governor Pataki Announces Project Labor Agreements (Feb. 12, 1997), available at http://worldcat.org/arcviewer/1/AO%23/2007/01/12/0000057321/viewer/file7165.html.
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PLA Adopted by New York Dept. of Transportation Major Road Project
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On October 30, 1999, Governor Pataki announced that the State Department of Transportation would incorporate a PLA into contracts to be awarded for the reconstruction of the Cross Westchester Expressway. “Project labor agreements are an effective means to complete projects quicker and at considerably less cost,” he said. “This agreement in particular will save taxpayers more than $8 million and hasten critical improvements to ease congestion and increase safety within the I-287 corridor.”
Source: Press Release, Office of Governor George E. Pataki, Governor: DOT to Use Project Labor Agreement I-287 Project (Oct. 30, 1999), available at http://worldcat.org/arcviewer/1/AO%23/2007/01/12/0000057321/viewer/file2583.html.
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Ohio Summit County Ordinance Authorizing PLAs for Projects Over $500,000
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Ordinance authorizes the Summit County Executive to execute a PLA for the construction of any capital improvement project in the County where the total construction cost exceeds $500,000. Observes that private and public construction owners have regularly required PLAs and that PLAs have been shown to provide an effective mechanism for project staffing and planning. Determines that PLAs for projects with total construction costs in excess of $500,000 will advance the County’s interests in promoting timely, costefficient and high-quality construction with minimal delays and disruptions.
Source: Summit County, Ohio, Ordinance 2006-071 (Mar. 6, 2006), available at http://www.co.summit.oh.us/council/pdfs/legislation/2006/2006-071.pdf.
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Pennsylvania PLA Used to Coordinate $400 Million Prison Expansion Project
? Pennsylvania’s Department of General Services (DGS) is using a PLA to coordinate the construction of a $400 million prison expansion project at the Pennsylvania State Correctional Institution at Graterford (commonly referred to as “SCI Graterford”), located in Montgomery County. This massive expansion project is intended to address the growing problem of overcrowding in Pennsylvania’s prison system.
Source: Pennsylvania Dep’t of General Services, Prison Expansion Projects, at http://www.portal.state.pa.us/portal/server.pt/community/construction_and_public_ works/1235/prison_expansion_projects/526276.
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Philadelphia Executive Order 5-95 Encouraging Use of PLAs for Public Works Where Appropriate and Feasible
? Order issued by Mayor Ed Rendell in 1995 creates a pilot program to test the appropriateness and feasibility of PLA use on major public works projects. Under the order, agencies are authorized to use PLAs, subject to certain requirements and procedures, where appropriate and feasible with respect to the particular project. Order cites as a basis for the pilot the City’s compelling interest in awarding public works contracts so as to yield the lowest reasonable costs and highest quality and efficiency. Order also cites the capacity of PLAs to ensure such projects are completed at the lowest reasonable costs, by the highest quality and most professional workforce, and in a timely manner without disruptions or delay.
Source: Mayor Ed Rendell, Executive Order No. 5-95 (Nov. 8, 1995), available at http://www.phila.gov/phils/docs/inventor/textonly/execorders/95-05.htm.
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Rhode Island Independent Committee Reviews Evidence, Recommends PLA for $50 Million Courthouse Construction Project
? Cockshaw discusses a legislative battle over whether to use a PLA for $50 million courthouse construction project. PLA proponents prevailed because they, unlike PLA opponents, produced actual data and statistics on benefits of PLAs and their successful use in Rhode Island. The independent committee tasked with making recommendations on whether to use a PLA were “unable to determine a single instance in which [Rhode Island] PLA projects were not completed in a timely manner or within budget. Several were completed early and/or under budget.”
Sources: (1) Peter Cockshaw, Independent Study Group Recommends PLA, Cockshaw’s Construction Labor News & Opinion 33(12), Dec. 2003, at 7-8 (on file with authors); (2) Gregory A. Mancini, Testimony Regarding The Benefits of Implementing a PLA for Construction of the New Kent County Courthouse, Aug. 20, 2003, available at http://www.buildri.org/ contentmgr/showdetails.php/id/2000.
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Virginia Airport Authority Overwhelmingly Approves $2.5-$3.5 Billion PLA for Phase 2 of Dulles Metrorail Project, Citing Success in Phase 1
? On April 6, 2011, the Metro Washington, DC Airport Authority (MWAA) approved a resolution requiring a PLA for Phase 2 of the Dulles Corridor Metrorail Project by an overwhelming 11-2 margin. The Project involves a 23-mile extension of the existing D.C. Area Metrorail system deeper into Northern Virginia with the aim of providing improved access to the Washington Dulles International Airport. The PLA would cover construction work valued between $2.5 billion to $3.5 billion.
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The MWAA resolution touts the benefits that a PLA brought to Phase 1 in support of the PLA for Phase 2. Among other things, it notes that the design-build contractor for the Project “Dulles Transit Partners has reported . . . that the Phase 1 project labor agreement has provided a reliable, stable supply of trained and skilled union construction craft workers, and promoted safety, quality and productivity, allowing the delivery of a cost-effective project on time and within budget.” In addition, the resolution cites the conclusion of the Dulles Transit Partners that “the [PLA] provided for significant labor efficiencies, reduced the labor risks, and enabled it to provide the lowest cost to perform Phase 1 of the Project.” For these and other reasons, the resolution concludes that “the benefits of the project labor agreement on the Metrorail project have been amply demonstrated” and that a PLA would help to “assure timely, efficient and cost-effective construction” in Phase 2 of the Project.
Source: Building & Construction Trades Department, AFL-CIO, Press Release, Phase 2 of Multi-Billion Dollar Dulles Airport (VA) Corridor Rail Project to be Done Under a PLA (Aug. 2011), available at http://www.bctd.org/Newsroom/LatestNews/Phase-2-of-Multi-Billion-Dollar-Dulles-Airport-(VA.aspx.
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Washington, DC PLA Success Story: Nationals Baseball Stadium Project
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Nationals Park, home to Major League Baseball’s Washington Nationals, was built under a PLA on budget and in record time. As reported by the Washington Post, the stadium needed to be completed in time for an exhibition game scheduled for March 29, 2008, “just 22 months after breaking ground in May 2006, making it one of the fastest-built ballparks ever.” (Washington Post). The Park also has the distinction of being “the nation's first major professional stadium to become LEED Silver Certified by the U.S. Green Building Council.” (Washington Nationals). In addition to the above benchmarks, the PLA achieved substantial goals in the development of a skilled DC workforce. According to a report by the Laborers' International Union of North America Local 657 at the end of January 2008, D.C. residents accounted for 87 percent of new apprentices working on the project and half of all new stadium hires. (ABC News 7).
Source: (1) Daniel DeLuc, Ballpark Concept Becomes Concrete, The Washington Post, Jan. 23, 2008, at B01, available at. http://www.washingtonpost.com/wpdyn/content/story/2008/01/22/ST2008012203486.html; (2) Nationals Website: “Green Ballpark,” available at http://mlb.mlb.com/was/ballpark/green_ballpark.jsp; (3) ABC News 7, Report: Nationals Stadium On-Time and On-Budget, Jan. 30, 2008, available at http://www.wjla.com/news/stories/0108/492170.html.
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Washington State Gov. Lowry Executive Order Encouraging Use of PLAs on Public Works Projects
? Order issued by Governor Mike Lowry in December 2006 requires state agencies to consider PLAs, on a project-by-project basis, for public works projects where a PLA will promote labor stability and advance the state’s interest in cost, efficiency, safety, timeliness, promoting women-owned and minority-owned businesses, and other project-specific factors. Among the reasons cited for the order are the state’s compelling interest in securing the highest quality and efficiency at the lowest reasonable costs and the capacity of PLAs to advance these interests.
Source: Wash. Exec. Order No. 96-08 (Dec. 6, 1996), http://www.governor.wa.gov/execorders/eoarchive/eo96-08.htm. available at
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City of Seattle 2002 Housing Program: PLAs Authorized for Housing Development Where Beneficial to Project Execution
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City of Seattle provides that an applicant for housing development funding may require a PLA for his or her project upon demonstrating to the Office of Housing that a PLA would be beneficial.
Source: Seattle Office of Housing, 2002 Housing Levy: Administrative and Financial Plan: Program Years: 2005-2006 (May 2005), available at http://www.seattle.gov/housing/development/2005-2006A&FPlan.pdf.
$1.48 Billion Brightwater PLA Benefits Workers and Community
? King County Councilmember Carolyn Edmonds announces County Council’s approval of a PLA for construction of Brightwater wastewater treatment facility, a project valued at $1.48 billion. “We can’t afford cost overruns or delays on the very tight schedule this project is under,” Edmond stated. “The PLA can help prevent both.” She also noted that a PLA ensures workers a livable wage, health and retirement benefits and safe working conditions. “We see the success of PLA’s throughout our region,” Edmonds declared, “I expect no less from this one.”
Sources: (1) Councilmember Carolyn Edmonds, Press Release, Brightwater Project Labor Agreement Benefits Workers, Community (Jun. 20, 2005), at http://your.kingcounty.gov/council/news/2005/0605/ CE_Brightwater_PLA.htm; (2) King County Dep’t of Natural Resources and Parks, Wastewater Treatment Division, Project Labor Agreement for Brightwater Conveyance System (Jun. 20, 2005), at http://www.seattlebuildingtrades.org/agreements/Brightwater%20Conveyance%20PL A.PDF.
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King County Council PLA Approval for Hundreds of Millions of Dollars in Public Works Projects
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Members of the Metropolitan King County Council explain that their policy of expanding PLA use in the county is directly linked to their pledge to pursue responsible government upon taking office. The Council recommended a PLA for a $257 million Harborview Medical Center upgrade, citing the benefits and long history of PLA construction, as well as their responsibility to protect taxpayers from financial adversity. Emphasizes that benefits of PLA use include set terms and conditions on wages, benefits and hours, coordination among workforce factions, and fair and rapid dispute resolution. In addition, the Council points out that the PLA also acts as an insurance policy against disruptions of the critical life saving functions of the Medical Center. Council notes that companies that have used PLA-construction as a project delivery tool include GM, Ford Motor Company, British Petroleum, Walt Disney, Toyota, Humana, Budd Company and UPS.
Source: Cynthia Sullivan and Larry Phillips, Project-Labor Agreements: Effective Safeguards, The Seattle Times, May 1, 2002, available at http://community.seattletimes.nwsource.com/archive/?date=20020501&slug=pla01.
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Part VI: PLAs for School Construction _____________________________________________________________
California LA County Schools $20 Billion PLA Construction Program
? The LA County Public School System developed a PLA/Project Stabilization Agreement for a massive $20 billion school construction program; this initiative is part of one of the most significant laborcommunity partnerships ever formed. A similar PLA model had recently been used to facilitate another major building program for the County Re-Development Authority, covering over $15 billion worth of public and quasi-public construction work in LA County. Both models incorporate the “We Build Program” as a core component of the PLA strategy. We Build is a community outreach/local workforce development program that connects local unemployed and underemployed workers with training and employment opportunities through PLA projects. These two building initiatives represent some of the largest construction undertakings for which PLAs are being used in California and the U.S.
Source: Los Angeles Unified School District, Facilities Services Division, available at http://www.laschools.org/contractor/webuild/ (last visited Aug. 5, 2009).
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San Diego Unified School District Board of Education PLA for Projects Under $2.1 Billion School Construction Bond Program
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On July 28, 2009, the San Diego Unified School District Board of Education adopted a PLA for school construction projects under a $2.1 billion bond measure (Proposition S) approved by voters in Nov. 2008.
Source: School Board Passes Bond Labor Deal, Revenue Down, San Diego News Channel 6, July 28, 2009, available at http://www.sandiego6.com/ news/local/story/School-Board-Passes-Bond-Labor-Deal-RevenueDown/7Ra4cHeR3EamCbfNfE1L5g.cspx.
San Francisco Unified School District Authorized to Negotiate a PLA for School Construction Program
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Based on the results of a previously ordered review of information from Bay Area school districts, the Board of Education of the San Francisco Unified School District authorized the Superintendent, in collaboration with the City Attorney’s Office, to pursue a school construction PLA with the San Francisco Building and Construction Trades Council.
Source: San Francisco Unified School District, Res. 41-13Sp4 (Approved Apr. 27, 2004), available at http://portal.sfusd.edu/data/board/pdf/memberreso/ supt%20%20PLA%20negotiator%20substitute%204%2004.pdf.
Michigan Detroit Public Schools and Local Unions Enter Into PLA
? In April 2010, Detroit Public Schools (DPS) entered into a PLA with 18 local unions covering work under a $500.5 million bond program dedicated to school building construction and renovation. (Construction Lab. Rep.; DPS News Article). The agreement will help the school district save $3 million in labor costs over the life of the project and establish a construction institute in Detroit schools, staffed by the unions, to help train students for careers in the building trades. (DPS News Article).
Sources: (1) Nora Macaluso, Detroit Public Schools Official Drafting PLA with Greater Detroit Building Trades, 56 Construction Lab. Rep. (BNA) No. 2759 at 28 (Mar. 4, 2010); (2) DPS News Article, DPS agreement, executive order encourage contractors, unions to give Detroit residents priority in hiring for bond program, Apr. 19, 2010, at: http://www.detroit.k12.mi.us/ news/article/1905/.
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Minnesota State Legislation Authorizing School Districts to Use PLAs After Adopting Required Resolution
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Authorizes school boards to use a PLA for school construction provided the school board adopts a written resolution authorizing PLA use at a public meeting and notice of the meeting is published 30 days in advance.
Source: Minn. Stat. § 123B.52 (2005), at http://law.justia.com/minnesota/codes/ 120/123b-s52.html.
Missouri Affton Board of Education Solicits PLA to Coordinate $2.6 Million Conversion of Sheet Metal Shop into Early Childhood Ed. Center ?
On October 18, 2011, the Affton, Missouri Board of Education voted to utilize a PLA for the $2.6 million conversion of an area sheet metal shop into an early childhood education center. Once completed, the 20,000 square foot Center will feature seven classrooms, a project room, a nurse’s office, a library, a stage and a small outdoor garden. The decision to use the PLA was based on the District’s desire to secure top-quality craft labor and ensure the project’s completion by the start of school in the Fall. “We want to have quality craftsmanship and we don’t want any delays,” Affton Superintendent Steve Brotherton explained.
Source: Affton-Shrewsbury Patch, Affton School Board Approves Union-Oriented Project Labor Agreement, Oct. 19, 2011, at http://affton.patch.com/articles/afftonschools-approve-union-oriented-project-labor-agreement.
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New Jersey N.J. Schools Development Authority’s $8.6 Billion PLA Program
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The New Jersey Schools Development Authority (NJSDA) is charged with overseeing a public school construction and renovation program worth $8.6 billion over 10 years. The program was launched in July 2000 and is the largest public construction program in the state’s history. PLAs are authorized in all cases where project costs exceed $5 million and a PLA would advance the state’s interests. NJSDA reports that PLAs have been used uninterrupted since authorized in 2002.
Sources: (1) New Jersey Embarks on $8.6 Billion Public School Construction Project, Electrical Construction & Maintenance Magazine, Aug. 1, 2004, available at http://ecmweb.com/mag/electric_new_jersey_embarks/; (2) New Jersey Schools Development Authority, Project Labor Agreement, at http://www.njsda.gov/ Business/PLA/index.html.
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New York NYC School Construction Authority: PLA for $13.1 Billion Capital Improvement & Restructuring Program Projected to Save $500 Million
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On January 6, 2005, Mayor Michael Bloomberg announced a PLA entered into by the Department of Education and the Building and Construction Trades Council that is expected to produce $500 million in savings for school construction projects over 5 years. The PLA governs the relationship between New York City’s School Construction Authority, its contractors, and labor with respect to school buildings that are scheduled for rehabilitation and renovation projects under the Department of Education’s $13.1 Billion Five Year Capital Plan.
Source: Press Release, Office of Mayor Michael R. Bloomberg, Mayor Michael R. Bloomberg, Schools Chancellor Joel I. Klein, and BCTC President Edward Malloy Announce Landmark Agreements Between Department of Education and Building and Construction Trades Council (Jan. 6, 2005), available at http://prtl-prdweb.nyc.gov/html/om/html/2005a/pr012-05.html.
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Buffalo Schools Construction Board Approves PLA Worth $1 Billion
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On March 17, 2003, the Buffalo Joint Schools Construction Board unanimously approved a PLA covering $1 billion in school construction and renovation work to be completed over 10 years. (Buffalo News). The PLA includes a bold effort to foster diversity in workforce through a requirement that contractors maintain apprentice programs with at least 35 percent minority and women participants. (Buffalo News). In a letter to Superintendent of Chautauqua Lake Central School District, James Harris, Superintendent of the City of Buffalo School District, reports that, while ABC claims initially raised doubts about PLAs, an examination of the facts and actual track record persuaded him and school board members to use a PLA. (Letter). “I can state unequivocally that the PLA has worked in the District’s interests,” Harris said in the letter. Harris goes on to explain that he owes no duty to unions or non-union contractors, that his concern is “building a school quickly, skillfully and within budget,” and that based on his experience, he is a “converted supporter.” (Letter).
Source: (1) Phil Fairbanks, Panel OKs Agreement for School Project, Buffalo News, Mar. 18, 2003, at B1, available at http://www.highbeam.com/doc/1P222563452.html; (2) Letter from James Harris, Superintendent, City of Buffalo School District (Sept. 27, 1999) (document available upon request).
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Ohio Akron Board Seeks to Replicate Success Through Additional PLAs for New School Construction Projects
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On July 20, 2009 the School Board of Akron, Ohio approved PLAs for 3 of the 5 Akron schools that are next in the pipeline for construction. The school district’s construction project is worth $800 million, though it is unclear from the article what portion of that sum belongs to PLA projects. Previously, only one PLA had been approved – for Leggett Elementary. However, the Board met to consider more PLAs after learning that the Leggett project employs significantly more local residents than three other elementary schools not covered by PLAs. School board President James Hardy, also a member of the board overseeing construction, said, “We want to see if the successes from Leggett can translate into other buildings.”
Source: Katie Byard, Akron Board OKs School Construction Labor Agreements, Akron Beacon Journal, July 21, 2009, at http://www.ohio.com/news/education/ 51356932.html.
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Part VII: PLA News & Journal Reports _____________________________________________________________
Boston Globe Op-Ed by Mark Erlich of New England Carpenters The Truth About PLAs
? In a July 3, 2010 editorial in The Boston Globe, Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters, responds to criticism regarding the UMass Building Authority’s decision to perform a $750 million overhaul of UMass Boston’s campus under a PLA. According to Erlich, critics’ claim that 80 percent of the construction workforce is non-union is inaccurate because it is based on self-described occupational identities and includes laborers and summer house painters. “It does not reflect the real numbers of career trade workers in commercial, institutional, and highway construction – the only parts of the industry where PLAs are ever applied.” Erlich states the presence of union firms in non-residential construction, as documented in the highly-regarded Dodge Reports, is far a more accurate measure. It shows that union contractors account for “65 percent of the dollar value of Massachusetts projects.” Erlich also points out that PLAs are only used on larger, more complex projects, which require larger companies. “That universe is overwhelming union,” Erlich writes, as evidenced by the fact that 23 of the largest 25 general contractors in Boston have collective bargaining agreements.
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In addition, Erlich states that any contractor can bid and use its labor force, provided it complies with the PLA; however, non-union firms choose not to do so because they would have to pay their low-wage workers more. Erlich further writes that the claim that PLAs add costs is based on a 2003 Beacon Hill Institute school construction study that economists from Michigan State University and the University of Rhode Island have proven to be unreliable. Among other flaws, Beacon Hill “based their calculations on bid prices rather than final costs, failed to compensate for urban vs. suburban sites, ignored some schools that were built with PLAs and included others that never had PLAs.” Erlich points out that Beacon Hill was forced to revise its report, reducing its so-called PLA “premium” by 40 percent, in response to a wave of criticism. Even after that, critics of the report used Beacon Hill’s own data to show that there was “no appreciable difference” in the costs of PLA v. non-PLA construction -- the same conclusion arrived at by independent industry expert, Peter Cockshaw.
Source: Mark Erlich, The Truth About PLAs, The Boston Globe, Jul 3. 2010, available at http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/ 2010/07/03/the_truth_about_plas/
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Toyota’s Record of Success With PLAs
? Jeff Caldwell, former head of construction for Toyota North America, explains that he’s had numerous real world experiences with PLAs and can say “without any equivocation that they are a valuable tool for any entity seeking an economical and efficient construction process.” Noting that Toyota has constructed numerous production facilities in the U.S. with PLAs, Mr. Caldwell notes that they ensured labor harmony and a steady supply of highly skilled and productive workers. “In every instance the process worked beautifully,” he said, “[a]nd the proof is in the results.” Caldwell added that Toyota’s North American construction costs are roughly one-third less than other major automobile manufacturers who do not use PLAs and concluded by noting that PLAs are consistent with the vision at the core of Toyota’s global market success.
Source: Jeff Caldwell, Project Labor Agreements - Toyota’s Way (on file with authors).
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PLAs Can Help Diversify Construction Work
? Tony Pugh of McClatchy Newspapers reports that, while PLAs provide stability on complex projects and keep them moving forward, they can also improve job opportunities for minorities, females, and low-income people who seek entry into construction trades. Pugh cites the Washington National’s Ballpark PLA (see page 14, infra) as a good example.
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Also notes efforts by groups such as the Transportation Equity Network and public agencies such as Missouri Department of Transportation to establish pre-apprenticeship programs in PLAs in order to enhance minority, female, and low-income participation in construction projects.
Source: Tony Pugh, Project Labor Agreements Can Help Diversify Construction Work, McClatchy Newspapers, March 26, 2009, available at http://www.mcclatchydc.com/homepage/story/64885.html.
PLAs Save Time and Money When Properly Crafted
? Former Deputy Labor Commissioner Robert Gollnick discusses the benefits of PLAs and the likelihood they will be used more frequently following a pro-PLA executive order by former Governor George Pataki. PLAs can keep projects on schedule, on budget, and on the path to highquality work, Gollnick explains, which is why PLAs are becoming more popular, why the public sector has been using them for years, and why some of the most successful and best-run companies use them.
Source: Robert Gollnick, The Business Review (Albany), Project Labor Agreements Can Save Time and Money When Put Together Properly, April 11, 1997, available at http://albany.bizjournals.com/albany/stories/1997/04/14/ focus8.html.
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Cockshaw: Evaluating PLA Project Performance
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November 2001 article discusses two recent studies, the first by Daniel Rounds of UCLA and the second by Kimberly Johnston-Dodds of the California Research Bureau, which demonstrate the benefits of PLAs and disprove claims that PLAs discriminate or increase project costs.
Source: Peter Cockshaw, Evaluating PLA Performance, Cockshaw’s Construction Labor News & Opinion 31(11), Nov. 2001, at 1-3, available at http://www.buildri.org/stuff/contentmgr/files/e82237e741344387505f41b08dfbcfa1/ pdf/full_text_cockshaw__s_nov_2001.pdf.
PLAs: A Construction Management Tool
? Article by Mechanical Contractors Association makes the case for PLAs on private and public construction. It notes that PLAs have been used to create harmony and productivity on job-sites since the 1930s on wellrecognized projects, including the Hoover Dam, the Grand Coulee Dam, the Shasta Dam, the St. Lawrence Seaway, Disney World, Cape Canaveral, the Trans-Alaska Pipeline, and the Seattle Seahawks Stadium. The article discusses the various ways in which PLAs deliver cost-savings and how they are well-suited to deliver well-trained, highly-skilled workers at a time when the U.S. is experiencing a skilled labor shortage.
Source: Mechanical Contractors Association, White Paper: Project Labor Agreements: A Construction Management Tool, available at http://www.mcaproof.com/ papers/pla_whitepaper.pdf.
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Part VIII: Impact of PLAs on Apprenticeship Training _____________________________________________________________
Impact of PLAs on Apprenticeship Training
? ? Reviews how use of PLAs promotes critical investments in and commitments to apprenticeship training in the short-term and long-term. Provides an overview of studies conducted in seven states that demonstrate that union programs attract and graduate a far higher percentage of apprentices, including minority and female apprentices, than programs that lack union participation. In addition, these studies show that union programs are comprehensive and train all essential trades.
Source: Gerard M. Waites and Scott M. Seedorf, Impact of PLAs on Apprenticeship Training (2009) (on file with authors).
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Part IX: Use of PLAs to Address Industry Skill Shortages _____________________________________________________________
Use of PLAs to Address Industry Skill Shortages
? Discusses how PLAs can help address industry skill shortages in the short-term and long-term. In the short-term, PLAs guard against delays by assuring project owners of access to skilled craft labor through a nationwide system of hiring halls or referral systems. In the long-term, PLAs permanently expand the available pool of skilled craft labor by rechanneling new and expanded training investments into established, successful apprenticeship training programs funded by new PLA-construction.
Source: Gerard M. Waites and Scott M. Seedorf, Use of PLAs to Address Industry Skill Shortages (2009) (on file with authors).
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doc_631261640.pdf