PLAs – Fact or Fiction???

By Pete Saucedo, Executive Director - AGC Apprenticeship

At nearly every government agency, school board, etc., both small and large, organized labor has a team of individuals who actively pitch project labor agreements (PLAs).

Labor has had success at several levels in peddling PLAs, most recently at the San Diego Airport Authority, as well as various school districts, and some large private projects too.

While in a court of law, for example, both sides through their attorneys argue the merits of a case, and the most persuasive argument typically prevails. With PLAs, labor has stacked the deck so to speak. They do not rely on the merits of a PLA to sell itself, rather the Building Trades actively support politicians, and once elected, they persuade those same supported politicians to introduce and pass a PLA. This strategy has been successful with some entities, although when a vote is put to the people, the electorate has consistently rejected PLAs.

The Fallacy

Labor’s hired guns eloquently tout that PLAs are primarily about four things: - Local hire - Labor harmony/no strike clauses - Veteran outreach and utilization on projects - Apprenticeship utilization and training

All these things sound great on its face, and who wouldn’t support these important concepts?

The Reality

What Labor officials do not tell politicians is the real motive behind their efforts. PLAs are a political tool to gain market share - period. There are two main components of a PLA that support this reality:

1. Labor wants their workers to perform the work. 2. They want union dues and all fringe benefit dollars to go into their trust funds/coffers. This often amounts to tens of millions of dollars on large bond issues.

These are the only two reasons why Labor consistently pushes PLAs locally and statewide.

And how do we know? Because we have offered to negotiate a PLA with all the benefits that Labor claims (local hire, veteran outreach, labor harmony, and apprenticeship utilization) but without those two major provisions (the contractor can use their own workers, and all fringe benefit money can go to any bona fide third-party fund in accordance with state prevailing wage laws). Labor will never agree to such a modified PLA because it doesn’t accomplish the two primary goals previously stated: they want their workers to perform the work, and they want the money (and not necessarily in that order!).

Based on objective data and also testimony of large general contractors who have performed both PLA and non-PLA work, the costs of a PLA project will increase somewhere between 10-20%. The primary reason is reduced bidders. Many open-shop subcontractors will not even bid a PLA project because they can’t utilize their own team, and for the very few core workers a non-union contractor may use, their fringe benefit monies are often gobbled up by the system with the worker receiving absolutely no benefit (i.e., pension contributions where a worker doesn’t work five years to vest are often forfeited in their entirety).

On a bond issue of say $500 million, a PLA can cost an extra $50-$100 million in excess costs due to the union only provisions. $50-$100 million buys a lot of buildings, and PLAs promote economic waste on several levels. So why would any board ever pass a PLA? Politics, plain and simpleA

Apprenticeship

One of the major provisions of a PLA expressly bans the use of non-union apprentices, even though these same apprentices come from programs like the AGC that are state and federally approved. This amounts to discrimination, and again, is a tactic by Labor to gain market share through politics.

In any shape or form, discrimination is always wrong. ALWAYS WRONG!

In several public hearings regarding the merits of a PLA, local Building Trades leader, Tom Lemmon, has openly stated that his union programs are “the Harvard” of apprenticeship programs. While we acknowledge that many union apprenticeship programs are of high quality, the one metric the state of California uses to evaluate programs are graduation rates. In the most recent stats published by the DIR, the AGC graduation rate for Laborers is 62.7%, the union Laborer program’s rate is 4.8%. For Carpenters, the union program graduates 23.3%, while the AGC graduates 65.1%. A resounding difference in our two largest trades.

AGC Philosophy

The formal AGC position both locally and nationally is we strongly oppose government-mandated PLAs.

AGC is committed to free and open competition for all publicly funded work and believes that the lawful labor relations policies and practices of private construction contractors should not be a factor in a government agency’s selection process. AGC believes that neither a public project owner nor its representatives should compel any firm to change its lawful labor practices to compete for or perform public work, as PLAs effectively do. AGC also believes that government mandates for PLAs can restrain competition, drive up costs, cause delays, lead to jobsite disputes, and disrupt local collective bargaining.

In contrast to the discriminatory tactics of Labor, the AGC believes that all workers (both union and non-union) and all contractors (both union and nonunion) should have the right to work on and build publicly funded projects.

The Question

The AGC has acknowledged both locally and nationally that union programs are some of the best. Labor self-proclaims they are the Harvard of apprenticeship, the best of the best. But those bold claims beg perhaps the most important question of all: If union training programs are the best, and therefore their workers are the best trained, why do they need a political solution to guarantee market share?

If you are the best, you go into the courtroom, onto the field or court, or onto a construction project and you beat your competition! You don’t need to stack the deck by electing politicians that will guarantee work. Labor’s primary strategy of imposing PLAs wherever they can is unethical. It’s discriminatory, it’s anti-competitive, and it’s simply un-American.

The New England Patriots have won six Super Bowls and are generally regarded as the best team in the league, if not all time. Can you imagine a scenario where they lobby politicians, so they don’t even have to play the game; they just cut straight to closing ceremony and are awarded the Super Bowl trophy.

It is not opinion or rhetoric – if you look at the actions of labor officials themselves, they are screaming out loud that their constituency cannot compete in the open market. If they could, why would they continuously push for political options that guarantee the work and guarantee they will receive the money?

Either they are the best, and therefore they can compete and win in the open market, or maybe they are not the best in spite of what union leadership alleges, and they truly need the government handout?

The AGC is comprised of both union and non-union contractors. We do not support only one side – we promote the entire industry. And we absolutely do not support the use of discriminatory and wasteful PLAs!