Beltway politics and policymaking can dramatically impact the bottom line of contractors and affect employment opportunities for the hardworking men and women in the construction industry.
For example, the Federal Acquisition Regulatory (FAR) Council’s final rule promoting special interest schemes that funnel lucrative federal construction contracts to unionized contractors took effect May 13.
It’s bad news for open shop contractors and their skilled employees, especially at a time when the construction industry is fighting an unemployment rate nearing 22 percent.
The final rule implements President Obama’s Feb. 6, 2009, pro-project labor agreement (PLA) Executive Order 13502 into federal procurement regulations.
Executive Order 13502 repeals George W. Bush’s Executive Orders 13202 and 13208, which maintained government neutrality in federal construction contracting and prohibited the government from requiring contractors to agree to a PLA as a condition of winning federal construction contracts. Between 2001 and 2009, these orders ensured fair and open competition on at least $147 billion worth of federal construction contracts and hundreds of billions of dollars worth of state and local construction projects receiving federal dollars and assistance.
In addition, the Obama rule encourages federal agencies procuring construction services on behalf of the federal government to require PLAs on a case-by-case basis on federal construction projects costing more than $25 million.
While it is not a mandate, the rule will open the door to waste and discrimination in federal contracting, as well as increase pressure on federal agencies from Big Labor’s special interests and their allies in Congress.
An April 14
Wall Street Journal editorial, “Crony Contracts,” blasted paybacks to Big Labor, which invested hundreds of millions of dollars in the last election cycle to help elect President Obama and a labor-friendly majority in Congress. “Only 15 percent of the nation’s construction workers are unionized, so from now on the other 85 percent will have to forgo federal work for having exercised their right to not join a union,” the editorial states. “This is a raw display of political favoritism, and at the expense of an industry experiencing 27 percent unemployment ... It’s also a rotten deal for taxpayers.”
With studies demonstrating that PLAs increase the cost of construction projects between 10 percent and 20 percent, it is too early to tell how many tax dollars will be wasted and how many projects will be victimized by discriminatory and costly PLA mandates.
Proponents of fair and open competition on federal construction contracts are fighting back through a variety of legislative, legal and public relations strategies. The construction industry strongly supports passage of the Government Neutrality in Contracting Act (S. 90/H.R. 983), which would protect federal and federally funded construction contracts from government-mandated PLA requirements.
Associated Builders and Contractors (ABC) and a coalition of construction and employer groups also have committed to file a legal challenge against Executive Order 13502 once the first government-mandated PLA is attached to a federal construction project. Attorneys representing open shop contractors and taxpayers believe Executive Order 13502 violates a number of federal regulations and federal competitive bidding laws.
Additionally, ABC has engaged in an aggressive communications and grassroots campaign to educate federal agency procurement officials, lawmakers, industry stakeholders, the media and taxpayers about the harmful effects of government-mandated PLAs. It’s important for these audiences to understand the consequences of anti-competitive PLA schemes in their communities, which could mean one less school, bridge or hospital for every four that are built.
Still, the Obama administration continues to threaten even more PLA expansion. Although it was not implemented into federal regulations in the recent final rule, Section 7 of Executive Order 13502 directs the Office of Management and Budget and U.S. Department of Labor Secretary Hilda Solis to provide President Obama with recommendations to expand federal PLA mandates onto local, state and private projects receiving federal dollars, grants, tax breaks and other forms of financial assistance.
Such an expansion of PLA policy would increase construction costs, harm local and state budgets already suffering from record deficits, curtail private development, and stop the progress of government investments in infrastructure improvement and construction industry job creation.
Ultimately, restoring opportunity and fairness in federal contracting can only be achieved by minding the ABC adage, “Get Into Politics or Get Out of Business.” It is time for the construction industry to rise to the challenge of restoring good government in Washington, D.C.
To access new studies, talking points and media coverage about local, state and federal PLAs, visit
www.TheTruthAboutPLAs.com and its corresponding Facebook page at
www.facebook.com/TheTruthAboutPLAs.