CONSTRUCTION

New Federal Project Labor Agreement Rule Will Prevent Most Firms From Bidding on Federal Construction Projects and Hurt Minority Firms

By Subcontractors USA News Provider

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, released the following statement in response to the release of new federal rules that will soon require procurement officials to impose project labor agreements for federal construction projects valued at $35 million or more:

“Today’s proposed rules requiring procurement officials to impose project labor agreements for federal construction projects will prevent most contractors from bidding and will harm the disadvantaged firms that contracting rules are meant to help.

“As a follow-up to the executive order President Biden issued in February that seeks to impose project labor agreements on all federal construction projects worth at least $35 million, the Federal Acquisition Regulation (FAR) Council released a proposed rule (FAR Case 2022-003) today. Unfortunately, the proposed rule would cause most federal construction contractors to stop bidding on federal projects, according to a survey the Associated General Contractors of America (AGC) conducted in response to the president’s executive order.

“The survey found that nearly three-quarters of federal contractors report they will stop bidding on federal projects if the Biden administration follows through on its plans to impose government-mandated project labor agreements. While 73 percent of surveyed firms report they are currently bidding on federal construction projects valued at $35 million or more, the same percentage, 73 percent, report they would not bid on those projects if a project labor agreement were required.

“Moreover, the federal mandate will make it harder for contractors to partner with small, veteran, minority, or disabled-owned firms. Government-mandated project labor agreements require every general contractor or subcontractor performing work to negotiate with or become a party to an agreement with one or more unions. 82 percent of firms report this mandate will make it harder for general contractors to subcontract with small, disadvantaged businesses—such as womenowned, HUBZone, and service-disabled veteran-owned small businesses—because those firms typically are not accustomed or prepared to operate on a union basis.

“In addition to limiting competition for federal projects, the survey found that imposing project labor agreements will make it harder for firms to find enough workers to hire. Nearly 40 percent of the survey respondents operate under a collective bargaining agreement. Of these respondents, 83 percent said there are not enough union workers to guarantee the completion of the project on time and on budget. Among firms that have worked on a project that involved a governmentmandated project labor agreement, 67 percent said the agreement made it harder to find workers to hire.

“AGC neither supports nor opposes contractors’ voluntary use of project labor agreements on federal projects but strongly opposes any government mandate or prohibition of contractors’ use of project labor agreements. Such a choice should not be imposed as a condition to competing for, or performing on, a publicly funded project.

“The proposed rules will result in ‘build back fewer’: fewer firms, hiring fewer people to build fewer projects.”

For more information, visit agc.org.

Source: Associated General Contractors of America (AGC)

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Construction Employment in July Trails Pre-Pandemic Levels in 15 States as Lack of Qualified Workers Leaves Many Jobs Unfilled

By Subcontractors USA News Provider

onstruction employment in

CJuly continued to trail prepandemic levels in 15 states as contractors struggled to find qualified workers to fill openings, according to a new analysis of federal employment data recently released by the Associated General Contractors of America. Association officials called on government officials to allow employers to sponsor more foreign-born workers and support more career and technical education to broaden opportunities for individuals to gain construction skills.

“Although demand for projects is strong, there are too many states where contractors can’t find enough workers,” said Ken Simonson, the association’s chief economist. “The high level of openings and the low unemployment rate among experienced construction workers shows the industry needs more workers.”

Construction employment in July lagged the total in February 2020—the month before the coronavirus pandemic caused huge job losses—in 15 states and the District of Columbia. The biggest gap was in New York (-38,800 jobs, -9.5 percent), followed by Pennsylvania (-10,000 jobs, -3.7 percent), New Jersey (-8,800 jobs, -5.4 percent), Louisiana (-6,600 jobs, -4.8 percent), and Maryland (-5.8 percent, -2,200 jobs). New York had the largest percentage shortfall, followed by Hawaii (-6.6 percent, -2,500 jobs), New Jersey, and Louisiana.

July employment topped the February 2020 level in 33 states and matched it in Michigan and Ohio. Florida added the most jobs (18,200 jobs, 3.2 percent), followed by Utah (15,800 jobs, 13.9 percent) and Tennessee (15,500 jobs, 11.7 percent). The top percentage gains were in Utah, South Dakota (12.9 percent, 3,100 jobs), Idaho (12.9 percent, 7,100 jobs), and Tennessee.

In July, 32 states added construction jobs, 16 states and the District of Columbia lost jobs, and there was no change in Idaho and Rhode Island. California added the most construction jobs over the month (11,400 jobs, 1.3 percent), followed by Florida (7,700 jobs, 1.3 percent), Alabama (3,100 jobs, 3.1 percent), and Texas (3,100 jobs, 0.4 percent). North Dakota had the largest percentage gain (3.7 percent, 1,000 jobs), followed by Alabama, Wyoming (2.7 percent, 600 jobs) and Connecticut (2.5 percent, 1,500 jobs).

New York lost the most construction jobs in July (-2,000 jobs, -0.5 percent), followed by Louisiana (-1,500 jobs, -1.1 percent) and Illinois (-1,400 jobs, -0.6 percent). The largest percentage loss was in D.C. (-3.2 percent, -500 jobs), followed by Louisiana and West Virginia (-0.9 percent, -300 jobs).

Association officials said there is plenty of demand for construction, especially for infrastructure, manufacturing plants, and power and energy projects. They urged government officials to ease sponsorship of qualified foreign-born workers and increase training and education programs to widen job opportunities.

“The fastest way to ensure there are enough workers for urgently needed projects is to enable employers to sponsor qualified foreign-born workers,” said Sandherr, the association’s chief executive officer. “In addition, all levels of government must invest more in career and technical education and training to provide individuals with the skills needed to qualify for rewarding, wellpaying careers in construction.”

For more information, visit agc.org.

Source: Associated General Contractors of America (AGC)