President Obama’s plan to force contractors to hire union workers for large government construction projects is proving easier said than done, confusing and costlier than expected.
It’s been more than a decade since a federal project required bids that include union representation of workers, known as a “project labor agreement” or PLA, and a $100 million project to modernize the 12-story Lafayette Building that houses federal agencies is highlighting the kinks that need to be worked out.
The General Services Administration (GSA), for example, first called for PLAs to win bids to rehabilitate the Washington office complex, but earlier this month backtracked, saying the solicitation was in error and it would instead ask contractors to submit two bids, one with a PLA and one without - a highly unusual and costly requirement.
“It’s crazy to try to do that. … It is just pure confusion on their part,” said Brett McMahon, vice president of business development for Miller & Long Co. Inc., the country’s largest concrete subcontractor and the largest employer of construction workers in the Mid-Atlantic region.
He estimated that a general contractor would spend more than $100,000 putting together a single bid for a job of that size and submitting dual bids would increase the cost by about $75,000.
GSA officials said the dual bids were part of its effort to comply with Mr. Obama’s order to use PLAs and a way for the agency to gauge the cost of using PLAs. The Lafayette Building modernization is one of 10 pilot projects with solicitations for bids under way that require the dual pricing, officials said.
“As part of our ongoing outreach, GSA has received feedback from bidders that this process has not caused a significant increase in workload or cost in preparing a proposal,” the GSA said in a written statement issued in response to questions by The Washington Times.
The scope of the contract to rehabilitate the Lafayette Building, which houses agencies including the Department of Veterans Affairs and the Export-Import Bank, includes a total refurbishment of the facade and windows, replacement of interior finishes, preservation of historic features and upgrade of all building systems, including physical building security. The project also will include building amenity spaces such as a health care unit, wellness center and concession area.
A PLA incorporates collective-bargaining agreements into the contract, requiring construction companies to agree to recognize union representation of the workers, hire some workers from union halls, follow union work rules and contribute to union pensions.
Critics say it drives up costs, delays projects and forces most construction workers - the vast majority of whom are not union members - to pay union dues and pension contributions for which they likely will never receive benefits.
Union officials defend PLAs as necessary instruments for ensuring construction companies hire highly skilled workers and pay them fair wages.
Mr. Obama adopted a series of policy changes to strengthen unions, including encouraging PLAs on major government construction jobs. But the president has failed to deliver a PLA or the unions’ top legislative priority the so-called “card-check” bill that would make it easier to organize workplaces in the private sector.
The Lafayette Building project is the second time the administration attempted to attach a PLA to a federal contract.
Earlier this year, the Department of Labor required a PLA on bids for a $35 million contract to build a 160,000-square-foot Job Corps Center in Manchester, N.H. The department last month canceled the bidding process, citing a “need to evaluate the issues” surrounding PLAs.
New Hampshire contractors had formally challenged the union mandate as an unfair restriction on competition. Just 8.7 percent of construction workers are unionized in New Hampshire.
About 14 percent of construction workers in the Washington area are union members.
Nationwide, about 16 percent of construction workers were union members or covered by union contracts in 2008, despite union workers generally receiving higher pay and better benefits than their nonunion counterparts, according to the Bureau of Labor Statistics.
An executive order by Mr. Obama in the first weeks of his presidency would make PLAs the norm for all federal contracts on large-scale construction jobs. The order is under review and a final rule is expected soon.
The order replaced one by the Bush administration that discouraged the use of such agreements.
Despite the setback for PLAs, Mr. Obama’s policies have largely succeeded in tipping the advantage to the labor movement.
He signed three other pro-union executive orders, including one requiring contractors on large federal projects to post signs informing workers of the right to join a union. The president also has appointed a succession of union loyalists to top spots in the Labor Department and on the National Labor Relations Board, which administers federal law governing the relations between unions and employers.