Associated Builders and Contractors, Eastern PA Chapter, Inc. et al v. County of Northampton

Posted by National Alliance for Fair Contracting on

“Four municipalities recently passed responsible contractor ordinances which specify certain criteria that a contractor must satisfy to be eligible to perform work valued over a certain monetary threshold for those municipalities. … the ordinances’ require… that all bidders on qualifying public works projects participate in a so-called “Class A Apprenticeship Program” … expense of their nonunion competitors and taxpayers. The plaintiffs … arguing that the apprenticeship-program-participation requirement is not rationally related to any legitimate government purpose.

…

…the court agrees with the defendants that ERISA does not preempt the ordinances because they do not “refer to” or have a “connection with” ERISA-covered plans … and even if they did, the market participant exception would preclude preemption here.

(Read More)

Council approves rules to encourage local labor on city construction projects (IL)

Posted by National Alliance for Fair Contracting on

By Crystal Thomas – Staff Writer
Posted Sep 5, 2018 at 12:01 AM

Springfield City Council members unanimously voted Tuesday to strengthen an ordinance that encourages contractors to have city residents work on at least half of the hours needed for city construction projects worth more than $100,000.

With the changes, contractors who don’t make any effort to hire locally can be barred from bidding on city construction projects for up to three years, and those that do use a crew made up of more than 50 percent local workers will be awarded.

The changes were made to a local labor ordinance passed in 2016. It fined contractors who failed to utilize enough Springfield workers on city construction jobs. If a contractor used no local labor, it could be fined up to 2.5 percent of the total bid – a $25,000 penalty on a $1 million construction contract.

Now, contractors can be rewarded using the same formula. If all Springfield labor is used on a construction job, the company would receive an additional 2.5 percent of the total bid.

Ward 3 Ald. Doris Turner called the amended ordinance the “carrot and stick approach” to hiring local.

Turner and Ward 1 Ald. Chuck Redpath met with city officials last week to hammer out the changes council members wanted to see after Langfelder proposed his changes more than a month ago.

Turner said she saw the ordinance as way to promote work and careers for local residents. It establishes that a contractor would need to be affiliated with an apprenticeship program and use more minority workers.

(Read More)

Allied Construction Industries v. City Of Cincinnati, Laborers International Union of North America, Local 265 (United States Court of Appeals for the Sixth Circuit)

Posted by National Alliance for Fair Contracting on

January 4, 2018

http://www.opn.ca6.uscourts.gov/opinions.pdf/18a0004p-06.pdf

“We hold that the City was acting as a market participant in enacting the Ordinance, and therefore these provisions are not preempted by ERISA. … Cincinnati enacted Ordinance No. 282-2012 … to provide guidelines for selecting the “lowest and best bidder” on certain projects of the “Department of Sewers” …

[It] lists fifteen factors to be considered in selecting the lowest and best bidder, two of which are at issue here. Section 320-3(j) requires the bidder to certify whether:

  • it provides, or contributes to, a health care plan for those employees working on the project and shall provide a copy of the health plan upon request…
  • it contributes to an employee pension or retirement program, including, but not limited to, a 401K, a defined benefit plan, or similar plan, for its field employees working on the project and shall provide a copy of the plan upon request…
  • [it] imposes an apprenticeship standard, requiring each bidder to certify that “[f]or the duration of the project, the bidder will maintain or participate in an apprenticeship program for the primary apprenticeable occupation on the project,” and that that apprenticeship program must have graduated at least one apprentice for each of the past five years. …
  • [it] requires the winning contractor to pay $.10 per hour per worker into a preapprenticeship training fund, managed by the City. …

The City and the Union argue that the Ordinance cannot be preempted by ERISA because the City was acting as a market participant, rather than as a regulator, by codifying in the Ordinance its preferences for bidders… [T]he goal of “efficient procurement” does not restrict a state or municipality to selecting the cheapest possible bidder. To the contrary, “just as private entities serve their purposes by taking into account factors other than price in their procurement decision,” so too can a municipality…

In his report submitted in this case, Dr. Dale Belman, a professor at Michigan State University, explained:

“[p]rivate sector owners who undertake construction projects for their own use are concerned with factors beyond the bid price for a project. This reflects a purpose of minimizing the long term costs of a construction project where quality, timeliness, safety and predictability are as important as bid price in determining the capital and operating costs of a construction project. In adopting the ordinance, the [City] acted in a manner similar to other large owners who are building for their own purposes.”

[A] municipality might reasonably conclude that a contractor who provides these benefits is less likely to experience significant employee turnover, improving the stability and overall quality of a project. This is consistent with the City’s stated goal to find contractors who are committed to the City’s “safety, quality, time, and budgetary concerns.” …Moreover, the apprenticeship requirements in §§ 320-5 and 320-7 are connected to the City’s reasonable concern over a possible shortfall of trained workers who would be available for City projects in the future. … The City has a strong proprietary interest in developing a skilled workforce for its many future projects….

The City was acting as a market participant in enacting the Ordinance, and thus, the Ordinance is not subject to ERISA preemption… [W]e REVERSE … and direct the district court to enter judgment in favor of the City of Cincinnati.”

(Read More)