The 112th Congress is taking steps to restore fair and open competition in federal construction contracting.
In February 2009, President Obama issued Executive Order 13502, which strongly encourages federal agencies to require project labor agreements (PLAs) on a case-by-case basis on federal construction projects exceeding $25 million in total cost. In April 2010, the Federal Acquisition Regulatory Council issued a final rule implementing Executive Order 13502 into federal procurement regulations, which took effect in May 2010. Although President Obama’s pro-PLA executive order does not mandate PLAs, it exposes federal procurement officials to intense political pressure from special interest groups, politicians and federal agency political appointees.
Typically, a PLA is a contract awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers; obtain apprentices exclusively through union apprenticeship programs; pay fringe benefits into union-managed benefit and pension programs; and obey the unions’ work rules and job classifications.
Merit shop contractors argue that government-mandated PLAs are unfair because they are designed to funnel work to unionized contractors and their unionized workforces, which constitute just 13.1 percent of the U.S. private construction workforce, according to 2011 Bureau of Labor Statistics data. Qualified merit shop contractors, their skilled employees and many communities strongly oppose PLA mandates because they discourage fair and open competition, increase construction costs paid for by taxpayer dollars, reduce the number of construction projects and stifle much needed job creation in the construction industry, which has an unemployment rate of 22 percent. Historic Anti-PLA Amendment
On Feb. 18, 2011, the U.S. House of Representatives considered H.R. 1, the Full-Year Continuing Appropriations Act for Fiscal Year 2011. Rep. Frank Guinta (R-N.H.) offered an amendment to the bill that would block any funding for federal construction projects subject to a government-mandated PLA, essentially prohibiting the federal government from requiring PLAs on projects funded by H.R. 1.
In a letter sent to all House members, Associated Builders and Contractors (ABC
) and a coalition of construction industry employer groups and associations stated: “Representative Guinta’s amendment protects taxpayers and ensures fair and open competition on government construction contracts.” Unfortunately, in a 1:30 a.m. vote on Feb. 19, the amendment failed 210-210. The vote was split along party lines, with the exception of 26 Republican members who opposed the amendment.
Despite the loss, the Guinta amendment was the first time the House voted on government-mandated PLAs. It was an exceptional opportunity for the merit shop construction industry to educate legislators about PLAs and call attention to this critical issue impacting businesses and taxpayers. ABC anticipates additional opportunities for PLA-targeted amendments that will restore fairness in federal construction contracting.
Government Neutrality in Contracting Act
New legislation introduced earlier this year seeks to create more federal contracting opportunities for merit shop contractors and their employees. The Government Neutrality in Contracting Act (H.R. 735/S. 119), introduced in the House of Representatives by Rep. John Sullivan (R-Okla.) and in the Senate by Sen. David Vitter (R-La.), would "preserve open competition and federal government neutrality towards the labor relations of federal government contractors on federal and federally funded construction projects" by prohibiting executive agencies and recipients of federal funds from requiring contractors to agree to a PLA as a condition of winning a federal or federally assisted construction contract. If passed, the legislation would increase competition, reduce costs, create construction jobs and restore a level playing field for all qualified contractors to compete for public construction contracts.
ABC has set a goal of obtaining 150 co-sponsors to help encourage congressional leadership to bring this legislation to the floor for a vote. House Oversight Subcommittee Hearing on PLAs
On March 16, the House Oversight and Government Reform Committee’s Regulatory Affairs, Stimulus Oversight and Government Spending Subcommittee, chaired by Rep. Jim Jordan (R-Ohio), held a hearing on “Regulatory Impediments to Job Creation: The Cost of Doing Business in the Construction Industry.” It examined how government-mandated PLAs and other harmful regulations are increasing costs and reducing job creation in the construction industry.
ABC General Counsel Maurice Baskin testified that recent administration efforts to make PLAs part of the federal procurement process are “threatening to violate the longstanding congressional mandate of full and open competition in federal procurement—at taxpayers’ expense.”
ABC members John Ennis, Jr., CEO of Ennis Electric Company, Inc.
, Manassas, Va., and John F. Biagas, CEO of Bay Electric
, Newport News, Va., also testified at the hearing. Both shared personal stories about how federal PLAs have negatively impacted their employees and businesses.
With the assistance of key members of Congress and continued communication with elected officials by contractors and employees across the country, the merit shop construction industry can eliminate waste and favoritism, as well as ensure equal opportunity and open competition in the procurement of federal construction contracts.
To access new studies, talking points and media coverage about local, state and federal PLAs, visit www.TheTruthAboutPLAs.com