Guest Column: Pro-Union White House Order Guarantees Government Waste
April 30, 2009
by: Ben Brubeck

Government WasteWatch, Spring 2009

Government spending watchdogs should be outraged by a recent White House executive order that will likely make federal and federally-funded construction projects more expensive.

Executive Order 13502, signed by President Obama Feb. 6, encourages federal agencies to require the use of project labor agreements (PLAs) on a project-by-project basis for federal construction projects in excess of $25 million.

PLAs are pre-hire collective bargaining agreements negotiated between a government entity and local building trade unions that typically set restrictive and costly union work rules and job classifications.

While the terms and conditions of PLAs vary, their effect on government construction contracts is consistent: PLAs increase construction costs, and they discourage qualified, non-unionized contractors from bidding.

Stifling competition makes little economic sense considering 84.4 percent of U.S. construction workers do not belong to a union. Eliminating such a large segment of the construction industry from the pool of potential bidders inflates construction costs.  A 2006 study by the Beacon Hill Institute at Suffolk University in Boston found that the use of PLAs on school construction projects in New York increased the cost of the projects by 20 percent when compared to non-PLA projects.

In short, PLAs are a windfall for organized labor at the expense of taxpayers.  During these difficult economic times, with almost $50 billion in infrastructure bonds and $146 billion in construction spending allocated for “shovel-ready” construction projects in the $787 billion federal stimulus bill (H.R. 1) signed into law Feb. 17, the government should be doing all it can to stretch scarce tax dollars to rebuild our nation’s crumbling schools and bridges. 

Instead, Executive Order 13502 encourages favoritism, discrimination and government waste by supporting pro-PLA procurement policies that may result in increased construction costs with no tangible benefits to the American taxpayer.

PLA proponents are quick to applaud Executive Order 13502 and maintain that PLAs actually save taxpayer dollars in the long run.
 
America’s most notorious PLA project, Boston’s “Big Dig,” easily refutes such claims.  The Big Dig missed deadlines, sapped taxpayers for a staggering $22 billion -- almost eight and a half times the original cost estimate of $2.6 billion -- suffered major tunnel leaks in 2004, and is responsible for the tragic death of a motorist killed by shoddy construction in 2006.

It is critical for government waste watchdogs to actively oppose PLAs so the federal government does not get in the habit of attaching PLAs to other large-scale construction projects. 

Under Section 7 of Executive Order 13502, government officials have an August deadline to provide President Obama recommendations about whether broader use of PLAs on federally-funded projects would help “promote the economical, efficient and timely completion of such projects.” 

Citizens Against Government Waste members must oppose the expanded use of PLAs to ensure projects are bid in a fair and competitive manner. They can help reduce government waste in construction by calling their members of Congress and asking them to support the Government Neutrality in Contracting Act (S. 90/H.R. 983), introduced Jan. 6 by Sen. David Vitter (R-La.) and Feb. 11 by Rep. John Sullivan (R-Okla.). This legislation protects federal and federally-funded construction contracts from government-mandated PLA requirements.

For talking points, studies and more information on union-only PLAs and analysis on Obama’s Executive Order 13502, visit www.abc.org/pla.

Ben Brubeck is director of labor and state affairs for Associated Builders and Contractors.