Posted on 08/31/2009 4:52:37 AM PDT by IbJensen
An executive order issued by the Obama administration poses a significant challenge to nonunion contractors, right-to-work advocates and, those groups assert, American taxpayers.
Issued in February, it has undergone several months of governmental review and enhancement and it could begin impacting federal contracting policy any day now. Nonunion outfits are weighing their options to oppose it.
On February 6, President Barack Obama signed an executive order recommending that federal agencies enter into project labor agreements (PLAs) every time they hire a contractor for a construction project costing at least $25 million. These documents are accords between labor organizations and an agency that typically insist that unions gain bargaining rights for the duration of a project.
In practice, this means that 84.4 percent of construction workers – those who are not union-affiliated – are highly unlikely to be considered to work on a federal project in the next several years.
Opponents of this measure, such as the Associated Builders and Contractors (ABC), say cutting out so many nonunion companies reduces competition in the bidding process and leads to higher project costs.
PLAs were issued frequently during President Bill Clinton’s administration from 1993 to 2001 but weren’t in use at all during the following eight years when George W. Bush was president. Brett McMahon, a member of the Associated Builders and Contractors’ legislative committee, said he believed PLAs comeback owes to the lavish support Mr. Obama has gotten from the labor movement.
“To cut out that type of percentage of people for no other reason than pure political payback is despicable,” Mr. McMahon said. “We’ve seen it enough from this administration. It’s really getting out of hand.”
He said organized labor now need government supports like PLAs and “card check” – a proposal Mr. Obama supports that would make unionization by secret ballot more difficult – because union pensions are in poor shape and threaten the solvency of organized labor. According to a report by the Washington, D.C.-based Hudson Institute, only about 60 percent of union pension plans are funded above 80 percent, thereby escaping being branded “at-risk.”
Some labor economists, however, contend that government entities have good reasons to pursue PLAs that have nothing to do with advantaging a particular constituency.
Ross Eisenbrey, vice president of the union-backed Economic Policy Institute, said one reason a federal agency would want to issue PLAs is that they allow the agency to take advantage of the vaunted skills of union workers.
“They’re the best-trained, most skilled workers in the occupation,” he said.
Nonunion advocates counter that union shops impose a number of drawbacks that outweigh whatever advantages they present to the agency that hires them, particularly regarding what many regard as antiquated and sometimes peculiar work rules. Those rules often govern which workers may perform tasks as simple as carrying materials and turning on machines.
As such, nonunion contractors are often able to outbid union contractors on government projects, despite the fact that prevailing-wage laws ensure that contractors must pay their workers above a certain wage.
And Mr. McMahon said some prominent PLA-governed projects don’t indicate that union shops reliably produce quality work. He noted that Massachusetts’ calamitous Big Dig, which tunneled Interstate 93 through downtown Boston, was such a project. It was several times over budget, persisted for years after its expected conclusion and resulted in a deadly ceiling collapse.
Mr. McMahon said there are legal problems with PLAs as well as practical ones and that ABC is currently reviewing its options in this regard.
“Just because it’s an executive order doesn’t mean it’s immune from legal challenge,” he said.
In mid-August, the National Right to Work Legal Defense Foundation (NRTW) issued comments to the federal General Services Administration opposing Mr. Obama’s executive order on the grounds that it unfairly discriminations against nonunion companies and workers. NRTW has asserted that the order violates the National Labor Relations Act, which generally forbids regulations that stipulate an employer must enter into an agreement with a union. Federal courts, however, have made exceptions to this rule.
Pennsylvania has recently experienced some controversy over PLAs concerning the building of new prisons in various parts of the state. The state Department of General Services delayed building a prison in Benner Township, Centre County because after a PLA was issued, construction-firm bids came in tens of millions of dollars above the $200 million the state envisioned the project actually costing.
Stimulus indeed!
Give us our money back you Washington crooks.
I work in a Gov’t contracting office - we award construction contracts. You have no idea the stupid rules that exist. One of the biggest thorns in the side is the Small Business Administration. Want some light reading...here’s the Federal Acquisition Regulation (FAR):
http://farsite.hill.af.mil/vffar1.htm
It will take a revolution.
bump
This will led to a national pension fund under the Progress Socialist plan. Watch for IRS rules to changes for 401k’s IRA’s and Roth IRA’s
84.4 percent of construction workers will not be considered to use stimulus money. If the ignorant public only knew some of these facts.
The communist central government wants to get their greasy hands on our savings. Look for a surcharge to be placed on them based on their year end values.
As we continue down the fast track to communism more and more of our life savings will disappear as will the middle class. We are now governed by a cabal that despises the American people.
This impacts the self-employed of all colors, races, and creeds etc.
Purely unconstitutional.
this is surprising????
And in a world free of government intervention, which companies create more jobs— union or non-union....
hh
Smells like Rahm.
The thinking is too “multilayered” to have Obama’s fingerprints on it.
Yes, and they will take our money (among other things) to bail out union pension plans.
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