Project labor agreements are good for the state and job growth

Posted by National Alliance for Fair Contracting on

Elizabeth Warren
Chrissy Lynch
August 6, 2024

In the past three years, the Biden-Harris administration has delivered more than $20 billion in federal investment to Massachusetts. Thanks to four historic pieces of legislation — the American Rescue Plan Act, Infrastructure Investment and Jobs Act, CHIPS and Science Act, and Inflation Reduction Act — the United States is building roads and bridges, expanding broadband access, upgrading public transit and energy infrastructure, switching to electric school buses, funding research and innovation, supporting firefighters, and enabling community projects.

When these federal dollars flow into Massachusetts, project labor agreements help ensure that they support job growth. With a long history in both the public and private sectors, PLAs are collective bargaining agreements between workers and contractors that ensure good wages and benefits, safe working conditions, and sustained investment in the local economy and workforce. Under a PLA, Vineyard Wind will power 400,000 Massachusetts homes and businesses and generate nearly 1,000 union jobs — while it reduces emissions by 1.6 million tons and energy costs by $1.4 billion.

PLAs also ensure that federally supported jobs create meaningful opportunities across the board. Currently, Massachusetts Building Trades Unions train 80 percent of all apprentices of color and 88 percent of all women apprentices in our state, and they have been critical to achieving the Commonwealth’s diversity goals for construction. Under a PLA, Encore Boston Harbor casino employed more women than any project in history.

Those opportunities make a real difference. Nationwide, collective bargaining agreements raise wages for workers by 10.2 percent on average. They also help close racial wage gaps, boosting pay for Black workers by 13.1 percent and for Hispanic workers by 18.8 percent, and narrow the gender wage gap from 78 cents on the dollar to 83 cents.

Even so, some take issue with PLAs. To skeptics, we say, first, that if Massachusetts ditched PLAs, we’d lose out on federal funding that is tied to them. But it’s more than that. Multiple studies have found that PLAs do not increase project costs. In fact, to the extent that PLAs support union standards, costs are actually lowered. A 2022 study of 1,550 US construction projects found that use of union labor reduces overall costs by 4 percent.

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Study Shows that Project Labor Agreements Promote Bid Competition, Control Costs, and Expand Pathways to Skilled Construction Careers

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ILEPI – May 7, 2024

Analysis of Port of Seattle Projects Offers Key Insights Into Potential Impact of New Federal Contracting Rules

La Grange, IL: A first-of-its-kind analysis of construction projects from the Port of Seattle between 2016 and 2023—including airports and seaports—shows that project labor agreements (PLAs) promote competition amongst contractors, control construction costs, and deliver superior workforce development outcomes over projects completed without PLAs. The report was conducted by researchers at the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.

Read the Report, The Impact of Project Labor Agreements on Competition, Costs, Apprenticeships, and Diversity:  Evidence from Port of Seattle Projects here.

Project labor agreements are pre-hire agreements between construction project owners and labor organizations that establish the terms and conditions of employment for skilled craft workers on large infrastructure projects. They have a long history as a de-risking mechanism and construction management tool for both the public and private sectors, ranging from the Tennessee Valley Authority in 1930s to the construction of most modern NFL stadiums today. In 2022, President Biden signed an Executive Order to require PLAs on federal projects valued at more than $35 million. Most PLAs include provisions for preventing strikes and lockouts, creating uniform work rules and safety standards, harmonizing schedules between different types of crafts, and addressing skilled labor supply needs.

“As is the case with many policies involving labor standards, there is a great deal of mythology around PLAs and their impact on businesses seeking to compete for bids, on costs borne by project owners and taxpayers, and on the broader workforce supply needs of the construction industry,” said study coauthor and ILEPI Economist Frank Manzo. “With trillions in new infrastructure funding and an Executive Order from President Biden expanding the utilization of PLAs, data from Port of Seattle projects offers a useful comparative analysis that will help communities and policymakers separate myth from fact and maximize the impact of these investments.”

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FAR Council Proposes New Rule on Project Labor Agreements for Major Construction Projects

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By Alexandra Barbee-Garrett, Peter J. Eyre & Thomas P. Gies on August 23, 2022

On August 18, 2022, the FAR Council issued a proposed amendment to the FAR implementing Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which requires the use of project labor agreements (PLAs) on any large-scale federal construction projects valued at or above $35 million unless an exception applies. The Order, and the proposed rule, also give agencies discretion to use PLAs on projects under that $35 million threshold.

In addition to expanding definitions of “construction,” “labor organization,” and “large-scale construction project” to align with E.O. 14063, the proposed rule would revise FAR 22.503 to reflect the change in policy that mandates agencies to require the use of PLAs when awarding large-scale federal construction contracts—including individual orders under Indefinite Delivery, Indefinite Quantity contracts—unless an exception applies. The proposed rule would make the PLA requirement a mandatory flow-down. The proposed rule would also allow agencies to include any additional agency-specific requirements in a PLA through FAR 22.504(b)(6), and would strike the current FAR 22.504(c), which grants agencies discretion to specify PLA terms and conditions.

Both the E.O. and the proposed rule implementing it provide an exception from the PLA requirements. The proposed rule would allow the senior procurement executive of an agency to grant a written exception to the PLA requirement in each of the following circumstances, as provided in the E.O.:

1. Requiring a PLA would not achieve economy and efficiency in Federal procurement, as described in 22.504(d);

2. Requiring a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition, i.e., where adequate competition at a fair and reasonable price could not be achieved; or

3. Requiring a PLA would be inconsistent with statutes, regulations, other E.O.s., or Presidential Memoranda.

This change in policy will become effective with the publication of the Final Rule, following a 60-day public comment period.

We will continue to monitor developments concerning this initiative.

(See Article)

Maine labor coalition scores major legislative win creating renewable energy jobs

Posted by National Alliance for Fair Contracting on

April 29, 2022
Dan Neumann

The Maine Labor Climate Council, a new coalition made up of a dozen unions from across the state representing a variety of different industries, won its first major victory in the Maine Legislature this week.

The top priority bill for the council this session, LD 1969, introduced by Rep. Scott Cuddy (D-Winterport), went into law without Gov. Janet Mills’ signature on April 25. The law will require prevailing wages and equity standards on all large, utility-scale renewable energy projects including solar, wind, tidal, geothermal and hydropower. …

The new law mandates that contractors pay the prevailing wages customary for each occupation in an industry. The new law will also build a career path for Mainers wanting to get into the clean energy sector by developing pre-apprenticeship programs that will help them access union-registered apprenticeship programs.

LD 1969 also incentivizes employee ownership of renewable energy construction projects as well as the use of Projects Labor Agreements — pre-hire negotiated agreements that require strong labor standards regarding wages, hours, working conditions and dispute resolution methods. The law directs the Maine Public Utilities Commission to consider these factors when acquiring energy under Maine’s renewable portfolio standard, a law that establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

Maine’s renewable portfolio standard (RPS) establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

With the passage of the new law, Maine joins other states like Connecticut, Illinois, New York and New Jersey that have recently passed strong labor and equity standards in the renewable energy sector.

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Project labor agreements on federal construction projects will benefit nearly 200,000 workers

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Posted February 9, 2022 at 11:07 am by Ihna Mangundayao, Celine McNicholas, and Margaret Poydock

President Biden recently signed an executive order (EO) requiring project labor agreements on federal construction projects over $35 million, a move that is expected to affect $262 billion in federal construction contracting and improve job quality for nearly 200,000 workers.

Project labor agreements (PLAs) are used primarily in the construction industry to establish the terms of employment for all workers on a project. Generally, PLAs specify workers’ wages and fringe benefits and may include provisions requiring contractors to hire workers through union hiring halls, otherwise establish a unionized workforce, or develop procedures for resolving employment disputes. PLAs often include language that prevents workers from striking during the project while also preventing employers from locking workers out.

PLAs are effective mechanisms for controlling construction costs, ensuring efficient completion of projects, and establishing fair wages and benefits for all workers. PLAs also help ensure worker health and safety protections while providing a unique opportunity for workforce development. These agreements can be written to engage local populations, provide jobs for underrepresented groups, and develop experience for apprentices.

Project labor agreements don’t raise construction costs

Evidence shows that PLAs do not increase construction costs. For example, New York City embarked on a $5.3 billion project in 2009, and the use of four PLAs was estimated to lead to 1,800 new jobs while saving the city approximately $300 million. A study from the Berkeley Labor Center also found that projects with PLAs attracted a “similar number of bidders” and “came in at a slightly lower price” when compared to projects without PLAs in place. Another 2015 paper from University of Utah economists compared nine PLA affordable housing projects with 121 affordable housing projects built without PLAs and found that the PLA projects were not more expensive to build.

(Read More)

(White House Briefing)

Biden joins ironworkers in Upper Marlboro to sign federal labor protections into law

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Joshua Barlow
February 5, 2022, 10:32 PM

President Joe Biden joined union members at Ironworkers Local 5 in Upper Marlboro, Maryland, where he signed an executive order that gives construction workers new protections for federally contracted projects.

According to the White House, the executive order requires federal construction contracts worth more than $35 million to use project labor agreements.

The order, which goes into effect immediately, will affect an estimated 200,000 union workers in an industry that has taken severe economic hits due to the pandemic.

Project labor agreements (PLA) are legal mechanisms by which the terms and conditions for workers on an individual project are determined. Within the new executive order, any contractor who is awarded a federal contract must co-sign the PLA with any union representing their labor force.

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FACT SHEET: President Biden Signs Executive Order to Boost Quality of Federal Construction Projects

Posted by National Alliance for Fair Contracting on

White House Briefing Room
FEBRUARY 03, 2022 | STATEMENTS AND RELEASES

Biden-Harris Administration will make federal procurement more economical and efficient by improving coordination and minimizing disruptions on large federal construction projects

Tomorrow, the President will sign an Executive Order to improve timeliness, lower costs and increase quality in federal construction projects. Federal construction projects span the country – from the maintenance of nuclear sites to base construction to waterways and flood projects. By requiring the use of project labor agreements (PLAs) on federal construction projects above $35 million, the Order will help alleviate the management and coordination challenges that can stymie progress on major construction projects. This helps projects get completed on time and helps the government get the best value for taxpayers’ dollars.

Based on FY2021 figures, this Order could affect $262 billion in federal government construction contracting and improve job quality for the nearly 200,000 workers on federal construction contracts. Additionally, the President’s Executive Order directs the departments of Defense and Labor, along with the Office of Management Budget, to lead a training strategy for the nearly 40,000-person strong contracting workforce on the implementation of this Order’s policy.

This Executive Order is just one of many steps the Biden-Harris Administration is taking that will improve the efficiency of federal procurement. Since taking office, the President fulfilled his commitments to strengthen Buy American rules, and secured a reliable supply of experienced, quality workers for federal service contracts. As of January 30th, federal contractors in new or extended contracts must pay a $15/hour minimum wage, as the President directed in Executive Order 14026.

This new Executive Order, while only applicable to federal procurement, advances the Administration’s commitment to rebuild the nation’s infrastructure, on-time and at reasonable cost. The Order will only apply to provisions in the Bipartisan Infrastructure Law that are direct federal procurement, which excludes construction projects financed through grant dollars to non-federal entities. The Executive Order will benefit taxpayers, contractors, and workers by:

  • Alleviating the coordination challenges on large, complex projects. Multi-million-dollar projects can present real management challenges to the primary contractor on the project, which has to work with multiple businesses and multiple types of skilled labor to complete a project. PLAs can help coordinate diverse contractors and sub-contractors and their employees working on a project and prevent disputes between subcontractors. Additionally, workers will have more confidence in the management of the project and a greater commitment to completing the project if they have a voice at the table. This helps projects get completed on time by minimizing work disruptions. On-time projects save the government, and taxpayers, money.
  • Raising quality standards for contractors bidding on federal projects. PLAs help raise the standards of all bidders on federal contracts. Contractors who offer lower wages or do not train their workers will need to raise their standards to compete with other high-wage, high-quality companies. Businesses with well-trained workers will be more likely to bid for and win federal contracts. Well-trained, high quality workers are more productive, completing projects well and on time.
  • Reducing uncertainty in the contracting process. PLAs standardize the work rules, compensation costs, and dispute settlement processes on construction projects. This standardization helps create more certainty for the government and, therefore, taxpayers, about the costs and completion rate for projects.
  • Increasing training for the federal contracting workforce. The Executive Order directs the Departments of Defense and Labor, along with the Office of Management and Budget, to lead a training strategy for the contracting workforce on Project Labor Agreements and the implementation of this Order. This training will create a more uniform and accessible experience for contractors interacting with departments and agencies across the federal government.

(See White House Briefing)

(See Official White House Presidential Action on PLAs) released Feb. 4, 2022

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$15B California school construction bond to go before voters (CA)

Posted by National Alliance for Fair Contracting on

AUTHOR – Kim Slowey
PUBLISHED – Sept. 16, 2019

Dive Brief:

  • California lawmakers have agreed on the terms of a $15 billion construction bond program that will now go before state voters in March. The money would go toward public preschool, K-12 and higher education construction and modernization projects.
  • If approved by voters, the lion’s share of the funding – $9 billion – will be used for preschool and K-12 projects: $2.8 billion for new construction; $5.2 billion for modernization; $500 million for charter schools; and $500 million for career technical schools. The University of California and the system’s Hastings College of the Law in San Francisco will be able to tap into $2 billion, as will California State University facilities and the California Community Colleges system.
  • The state’s General Services Department will prioritize projects for facilities that have posed health or life safety hazards, followed by those proposed by school districts with financial hardships; school facilities that have concerns with lead in water; projects that have been waiting for approval for two quarters; and new construction or modernization projects that will ease overcrowding.

Dive Insight:

If voters approve the legislation next year, that’s good news for the California contractors that specialize in school construction, but it has also raised questions from some about the role that project labor agreements (PLAs) play in the measure.

In Section 17070.56(a)(2) of the bill, within each priority category, those projects that use a PLA will be given first consideration. So, for example, if there are 10 projects that are meant to deal with some health or safety hazard, the projects that use a PLA will be given priority over the others.

(Read More)

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Your Turn: Project labor agreement needed in Worcester Red Sox deal (MA)

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By Frank Callahan
March 14, 2019

The city of Worcester, the Worcester Red Sox and Madison Downtown Holdings, a private developer, are building a $240-million downtown project that includes a new, $90-million, 10,000-seat stadium for the Boston Red Sox Triple-A Minor League affiliate team. Most see this as good news for the community. And it can be if the stakeholders embrace the use of a project labor agreement to ensure safety, equity and fairness for the workers who build the stadium.

Unfortunately, some contractor lobbying groups who advocate to pay workers lower wages are engaged in a cynical campaign aimed at ensuring the prosperity generated by this large proposal isn’t shared with the actual workers doing the work. They also don’t care if the project is done in the safest way possible, or with the best-trained workers possible.

Every fan sitting in that stadium over the decades that will follow its opening deserves to know that Worcester built its stadium in the safest way possible with the best-trained workforce. That’s just one reason why the union building trades are speaking up for a project labor agreement to ensure the safety of workers and the public in Worcester.

Project labor agreements, also called community workforce agreements or project stabilization agreements, emerged in the early 20th century as basic pre-hire agreements between the owner or contractor and the local building trades unions.

By the 1980s, these agreements were common in both the public and private sectors. Modern PLAs are negotiated on a case-by-case basis, and include sophisticated provisions that keep jobs running smoothly, promote efficiencies, and nurture the development of a skilled workforce. Most importantly, they prevent worker exploitation, wage theft and other illegal or unsafe acts that can harm local workers on a non-PLA job site.

For years, wealthy special interests have tried to undermine workers’ rights and advance narratives around the concepts of unions being outdated and unneeded. Despite the anti-worker spin promoted by organizations like the Merit Construction Alliance, public support for unions is growing. Meanwhile, union membership and the need for PLAs are also both on the rise in Massachusetts.

The building trade unions have been creating economic prosperity and a pathway to the middle class for workers throughout Central Massachusetts for generations. Right now, many Worcester area families could benefit from a good, union job in the construction industry.

Sadly, efforts are afoot in Worcester to lower safety, wage and training standards for working people on the new stadium project, putting Worcester workers at risk of losing life or limb, and in the position of earning less for the same work that is done elsewhere in the state. That simply would not be fair.

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PLAs good for construction industry

Posted by National Alliance for Fair Contracting on

KIMBERLY GLASSMAN
MARCH 5, 2018

On Feb. 12, an op-ed in the HBJ (“State must end project labor agreements”) by the Connecticut chapter of the Associated Builders and Contractors presented an over-simplified and inaccurate description of project labor agreements.

A project labor agreement, or PLA, is a pre-hire agreement that sets construction project employment terms. They’re often used on complex projects that require the services of multiple contractors and subcontractors over a sustained period of time. PLAs are a common procurement method for the state of Connecticut, municipalities and private developers.

The Associated Builders and Contractors (ABC) likes to tout their membership numbers. However, they represent only 1 percent of construction companies in the United States. According to the National Labor College, a meager 22,260 apprentices were enrolled in ABC programs, compared to over 420,000 apprentices enrolled in union-funded programs.

Though we appreciate ABC’s attempt to paint the use of PLAs as a partisan issue by invoking Gov. Malloy’s decision to utilize the agreements, they fail to disclose other elected leaders’ use of them. Republican Mayor Mark Boughton recently signed a PLA for Danbury High School. Former Republican Mayor John Harkins signed PLAs for both the Victoria Soto Elementary School and Stratford High School. And former Gov. John Rowland signed a historic PLA on Adriaen’s Landing in Hartford.

(Read More)