- The Washington Times - Wednesday, November 16, 2011

The Metropolitan Washington Airports Authority and Virginia have reached a tentative agreement on a labor pact that had threatened to quash a deal in which the state would contribute additional money to the Dulles Metrorail project.

Any project labor agreement on the second phase of the project cannot force job applicants to join a union as a condition of employment, and nonunion contractors and subcontractors cannot be discriminated against when seeking work, under language approved Wednesday by the agency’s board of directors.

Proponents of such labor agreements, which are prehiring arrangements in which contractors and labor groups set the terms of employment for a particular project, say they prevent cost overruns by supplying a steady supply of union labor. However, critics argue that the agreements can drive up costs by discouraging bids from nonunion contractors.

In addition to approving the agreement, the agency Wednesday also signed off on a memorandum of agreement for Phase 2 — 11.6-miles of rail from Wiehle Avenue in Reston through Washington Dulles International Airport — that is expected to save about $1 billion on the project, now estimated at $2.8 billion.

Still, union-friendly labor agreements area thorny issue in states such as Virginia that have right-to-work laws, under which workers cannot be required to join a union as a condition of employment.

“This agreement ensures that Virginia’s right-to-work laws will apply to every aspect of Phase 2,” said Secretary of Transportation Sean Connaughton. “It also will ensure that no one — contractors or subcontractors — will be forced to take on unions. It will also subject [Phase 2] to Virginia law. So we think it’s a major step forward from Phase 1.”

Phase 1 of the Silver Line — an 11.5-mile stretch from East Falls Church to Wiehle Avenue in Reston that is expected to be finished in late 2013 — had a labor agreement.

But Dulles Transit Partners, the prime contractor on the project, voluntarily adopted one after winning the contract. In addition, the agreement exempted nonunion subcontractors from its requirements.

A resolution by the agency’s board earlier this year calling for the use of a labor agreement on Phase 2 cited a 2009 executive order from President Obama, a Democrat, encouraging their use on projects built with federal support of more than $25 million.

It also stated that Dulles Transit Partners has recommended a labor agreement “much like the one employed in Phase 1” be used in Phase 2.

The Phase 1 agreement did not require union membership as a condition of working on the project, but in general it does require the lead contractor to seek workers from union halls first before looking elsewhere, said George Morschauser, the project executive director for Dulles Transit Partners. Mr. Morschauser said DTP is performing about 65 percent of the work on Phase 1.

“In order to amass that type of labor force, we thought the local unions had the best opportunity to provide the best-trained workers,” he said, adding that the agreement has worked quite well for the first leg.

Still, about 60 percent of the value of contracts awarded by Dulles Transit Partners on Phase 1 went to non-union subcontractors.

As with Mr. Obama’s directive, the issue has fallen largely along party lines with recent presidents.

In 2001, President George W. Bush, a Republican, issued an executive order barring any construction project that received federal funds from imposing the agreements.

President George H.W. Bush, a Republican, had previously issued an executive order barring the agreements on federal construction projects. President Bill Clinton, a Democrat, later rescinded the order.

Political debate

Gov. Bob McDonnell, a Republican, had long hinted that the $150 million Virginia is scheduled to deliver for the project could be held up if the labor agreement was unfavorable.

“Obviously I can’t have a PLA agreement that violates Virginia’s right-to-work laws,” he said while the negotiations were under way.

Other local politicians went further, expressing concern that aside from the right-to-work laws — which MWAA officials insisted would be fully complied with — any type of mandatory labor agreement would drive up costs.

“Companies in Virginia won’t bid on it, and then it drives the price up,” said Delegate Timothy D. Hugo, Fairfax Republican. “We’re going to be taking Virginia taxpayer money and exporting it to New York and Pennsylvania firms, and that’s just wrong.”

Delegate Robert H. Brink, Arlington Democrat, said the fuss about the agreement had unnecessarily injected ideology into the project.

“We need to go forward with rail to Dulles,” he said. “All of the stakeholders are engaged in very, very delicate negotiations and discussions to try to assemble a funding package that works, and to try to inject this ideological issue into the middle of it is wrong.”

After learning of Wednesday’s vote, Mr. Brink reiterated his stance.

“This is a business decision that MWAA is making based on how it can best manage the specifics of the project,” he said. “I think this was largely based on anti-union animus, and I’m not sure that goes along with serving this project well.”

Business reluctance

Some businesses had said the language originally approved by the agency board regarding the agreement was scaring them away.

“We’re very interested in Phase 2, but if you put it with a PLA, and you’re not with a union contractor, then how can you bid it?” said Bill Dean, president of M.C. Dean, a design-building company that has done work on Phase 1 of the project. He said the agreement might have made the costs associated with the job too high for his company to consider bidding.

Trade groups also were wary.

“The fact that this could actually occur in the commonwealth of Virginia, one of the birthplaces of right-to-work, is insane,” said Brett McMahon, head of Miller Long Concrete.

The sentiment was backed by Ben Brubeck, director of government relations for Associated Builders and Contractors, a national trade association representing merit shop contractors, subcontractors, and material suppliers.

Mr. Brubeck said firms were reluctant to come out publicly until they see the actual language in the procurement documents.

“I am personally aware of at least three firms that are not interested in working on the project if there is … a mandatory Phase 2 mandate,” he said.

Nevertheless, mechanisms to fund the second leg are gradually moving forward.

In addition to the agency’s unanimous vote Wednesday on the funding plan, Loudoun County has also signed off on the agreement, under which it would pay for the design and construction of three parking garages in the county. And to the extent the law allows, it would allow the county to receive land from the agency for the Route 606 station.

Fairfax County would assume responsibility for building the Route 28 station and two parking facilities. But the process is by no means over.

Under the broader funding agreement, Virginia’s General Assembly must appropriate its additional $150 million. And the state has not yet signed off on the labor agreement or the broader memorandum among the stakeholders, which also include the Transportation Department and the Washington Metropolitan Area Transit Authority.

“We’ve got to fund the thing,” said MWAA Board Vice Chairman Thomas Davis III. “This is an important step. But we’ve got a long way to go.”