Time to End The Debate -
PLAs/CWAs Work. PERIOD.
By Sean McGarvey
In what is proving to be the worst economy in a generation, the utilization of project labor agreements (PLAs) in both the private and public sectors remains unabated. Since 2008, over 500 PLAs - with an accumulated value well in excess of $200 billion - have been negotiated and put in place all across the United States. Even so-called "right-to-work" states have not been immune to this trend. The new $1.2 billion Toyota manufacturing facility in Blue Springs, Mississippi is just one example of construction owners who have weighed the facts against distortions and outright falsehoods and have concluded that PLAs are a valuable project management tool.
Further, public officials and agencies - ranging from Philadelphia Mayor Michael Nutter and the Metropolitan Washington Airports Authority, to name just two - are utilizing PLAs and subsequent Community Workforce Agreements (CWAs) not just for their exemplary record of ensuring jobsite efficiencies, quality construction, and "on time, on budget" results, but for the career training opportunities in the skilled trades that can be formally structured for local residents.
Yet in spite of these trends, the Associated Builders and Contractors (ABC) continue in their brazen misinformation campaign against PLAs. The shrill and unbalanced nature of their efforts is testimony to the fact that the ABC is becoming more and more agitated over the fact that construction owners - both public and private - are taking an increasingly hard look at the two predominant business models that constitute the U.S. construction industry today. The first is a business model that is epitomized by the use of PLAs. PLAs are a market-based tool that offer increased jobsite efficiencies, productivity, and on-time, on-budget results through a steady, LOCAL supply of the world’s safest, most highly trained and productive skilled craft workforce; a workforce that has been developed through almost a billion dollars a year in private investments in skilled craft apprenticeship programs. These program, in turn, produce highly skilled and productive craft professionals that command a pay and benefits package reflective of their skill and productivity levels (which numerous and rigorous academic studies have shown actually reduces costs).
Furthermore, the PLA model promotes the development of career training opportunities in the skilled trades for local residents – particularly women, minorities and military veterans (through a program called "Helmets to Hardhats" www.helmetstohardhats.com ).
Now, this PLA model lies in stark contrast to the “open shop” or "merit shop" business model – which is widely becoming known as the “race to the bottom” model because its advocates and defenders, like the ABC, staunchly believe that contracts in the construction industry ought to be awarded solely upon a contractor’s ability to assemble the lowest-cost, oftentimes the most vulnerable and exploitable, workforce possible. They believe that PLAs work at the expense of taxpayers and to the detriment of fair and open competition. But, that begs the question as to whether the use of illegal and undocumented workers (estimated by the Pew Hispanic Research Center to be over 20% of the U.S. construction industry prior to 2008), or the systematic abuse of the H2(b) visa program to import skilled workers from other countries, or the misclassification of workers as “independent contractors” constitutes “fair and open competition.”
The other troubling aspect to the ABC's opposition to PLAs stems from the fact that on any and all construction projects, the property owner, developer, lawyers, suppliers, architects, financial institutions, engineering firms and contractors all have written agreements that are enforceable by the courts. There is no ABC contractor in his or her right mind that would EVER start work on a project without a written, enforceable agreement. So, again it begs the question: Why is every professional entity involved in a construction project entitled to a written agreement...except for labor?
Further telling is that fact that the ABC confines its criticisms of PLAs to the public sector. Perhaps that's because they know full well that PLAs have been utilized for decades in the private sector by large, sophisticated, experienced, and cost-conscious owners, developers, construction managers and contractors, all of whom are driven by a strong profit motive. These companies want the best results in the most cost-effective and time-sensitive manner possible. The $4.5 billion GlobalFoundries computer chip plant in Malta, New York, the the $2.5 billion California Pacific Medical Center, the $3 billion Revel Casino in New Jersey, and the $1 billion Fairfield Energy Project in Maryland are but a small example of major private sector projects that are today moving forward under PLAs. Even Wal-Mart, the corporate “poster child” of cost-conscious and efficiency management, is turning increasingly to PLAs for the construction of its retail facilities.
The lesson here is that Project Labor Agreements continue to be utilized by the profit-oriented private sector because of one paramount rationale: THEY WORK! And if they work for the private sector, they will work for the public sector.
And on that score, the evidence just keeps piling up.
The latest occurred on December 9 in San Diego, CA. On that day, the San Diego United School District release a detailed report that concluded that under the Project Stabilization Agreement (PAS) that has been in place for the Proposition S school construction bond projects the cost of individual projects has been lower than what was budgeted and they've been finished much faster.
But the real eye-opener was that this report was requested and initiated by School Board member Scott Barnett, a strong, fiscal conservative who was head of the San Diego Taxpayers Association. During his campaign for the school board, Barnett was critical of the PSA - having, at the time, bought into the spurious claims being bandied about by the ABC. As a result, one of his first acts as a member of the Board was to commission this study, and he insisted it be done by the research firm of Rea & Parker.
At the press conference announcing the results of the study, Barnett had this to say about both the PSA and the ABC:
"The facts are clear -- the PSA is good for taxpayers in San Diego. There has not been any increase in costs from before the PSA to after the PSA."
He then went on to accuse the ABC of "cherry-picking" data to come up with figures that support their argument.
Kudos to Scott Barnett for having an open mind and for letting the true facts speak for themselves. As we have long argued, the time has come for PLA critics to put aside their unfounded emotional, philosophical, and rhetorical pleas and to consider PLAs on a rational, case-by-case basis, as the courts and private sector owners have found to be the most reasonable and responsible approach to the issue.
And when they do, they will reach the obvious conclusion. PLAs Work. Period.