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COUNCIL OF THE DISTRICT OF COLUMBIA
Bill No. 16-345
"Jobs for D.C. First Amendment Act of 2005"
Roderic L. Woodson, Esq.
Holland & Knight LLP
June 24, 2005
Chairman Orange and Members of the Committee on
Government Operations. My name is Roderic L. Woodson, and I am a partner
with the Washington, D.C. office of Holland & Knight LLP. I appear
before you. today with comments on Bill No. 16-345, the "Jobs for
D.C. First Amendment Act of 2005":
A central question before the City today is the rationale
for, and fairness of, the Project Labor Agreement which is being imposed
on construction of the new baseball stadium. It proponents have said
much about the "benefits" to be derived from this PLA
agreement, and the "concessions" made by certain skilled-trade
union guilds to obtain these "benefits". But, other than the
Administration and the Unions, who has been clamoring for this PLA? No
one. Why? Because it is fundamentally unfair and stifles competition.
In a memo to this Council on June 20th, the Metropolitan
Washington Council, AFL-CIO urges, on "behalf of 175 affiliated
local unions ... with their 150,000 union members" that this body
reject the Jobs for D.C. First Amendment Act. (Attachment A) This memo states that the PLA
provides "access to some 20,000 skilled trades persons"
represented by this trades union organization. Who are these
"20,000" individuals? Are we to actually believe they are DC
residents as this comment implies? And if there were no PLA agreement,
are we to believe that these 20,000 individuals would not be able to
work in this project? Of course, this isn't true at all.
What is true is that the PLA mandates that all persons
who work on this stadium maintain union membership and pay dues and.
other fees to those unions. Why is union membership so important for
every worker on this stadium project? PLA supporters say that by doing
so, there will be no strikes or work stoppages in construction. Now, I
ask everyone within listening range of my voice -- when was the last
time any of you ever even heard of a strike at a construction site in
the District of Columbia? In the last 25 years, when has such a thing
taken place? Your memory is right -- nothing of the sort
has occurred. Any why not? Because more than 80% of the construction in
our City is done by non-union workers!
And, so that the record is clear here, these non-union
workers are not "poor little waifs", struggling within
mean-spirited sweatshops for slave-labor wages. These folks are
well-paid, well-treated, skilled craftsmen and craftswomen whose hourly
pay meets or exceeds prevailing wages and fringe benefits within. our
region. Indeed, pay scales can range from over $22/hr for concrete form
carpenters to more than $40/hr for electricians. These are family people
who have often worked for their companies for many years. And, they are
largely minority populations. This is just as true now as it was true many years ago when
the discrimination practices of the construction trade union guilds
barred people of color from their membership and led to the creation of
the non-union, merit-shop employment market in the first instance.
And so, what do we have here? A "concession"
that there will be no strikes. Given the non-union membership of most of
our construction workers, that sounds like the City just-received an
It is said that stadium workers under the PLA will
receive "living wages" for their work. What, exactly, does
that mean? Does this mean "prevailing wages" like those
established in the Davis-Bacon Act.? If so, then we really have been
sold a bill of goods because, as I just noted, almost every contractor,
pays "prevailing wages or greater to their employees in DC and the
surrounding region. It is, in sum, the "market rate" for
hourly construction work. Once again, we get an empty glass.
And, what about all this talk regarding
"encouragement of minority and LSDBE firms"? PLA proponents
say over and over that any company can bid on the stadium project. Why
then, was it necessary to give LSDBEs an "exemption" from the
PLA at all? Because LSDBEs are non-union businesses. They also hire DC
residents for their workforces in great proportions. But, because LSDBE
companies are non-union-employers (like most other DC contractors), the
City knows that they cannot bid on the baseball stadium project. Thus,
LSDBEs receive an exemption from the PLA but, in large
part, only from the union membership requirement.
This brings me to the PLA itself. Just what is a
"project labor agreement"? It is a pre-hire agreement --
that is, it is an agreement specifying terms and conditions of
employment before there are employees actually hired. Such pre-hire
agreements are generally illegal under federal labor laws. Why? Because
they take away the rights of the workers themselves to determine whether
they wish to work under a collective bargaining arrangement. But,
because workers are only hired when the project begins, by the time such
workers organize and get to vote on the matter, the project is over.
Thus, while PLAs have been given an exception to the prohibition against
pre-hire agreements, these PLAs (like the one before us today) actually
take away the rights of workers to make decisions about their own work
environment. It is a fascinating contradiction.
Moreover, PLAs generally require something called an
"economic impact analysis" to determine whether a PLA is
appropriate for a given project. On June 20, 2005, the Administration
forwarded to the Council a letter opposing an emergency version of the
Bill and included a memorandum -- written by a California attorney named
Jane Brunner who states why and how the PLA satisfies such an analysis.
Attachment B. It is worthwhile to note that this memo is a
word-for-word recitation of a memo written for the trade union guilds in
April of this year, right down to the footnotes to so-called,
"authorities". Attachment C. Aside from the apparent
plagiarism of this document, it is well as ask whether it represents any
form of impartial or fair analysis, or whether any analysis has taken
place at all?
A look at the PLA document itself reveals that the
construction trade union guilds will control the stadium worksite with
all kinds of rules as to who can do what, when, and how -- and, this
is true regardless of whether there are any so-called "exempted
contractors" of any kind, including LSDBEs. And it is all of this
control that pushes to drive up costs and cause cost overruns. That has
been the experience with baseball stadium construction. Attachment D.
In sum, we do not need a PLA on the baseball stadium or
any other project in the District, and I strongly support the "Jobs
for D. C. First Amendment Act of 2005."
I thank the Committee for its attention to these prepared
remarks, and will be pleased to respond to any questions the Committee
may wish to ask.
Back to top of page
Metropolitan Washington Council, AFL-ClO
1925 K Street NW, Suite 410 • Washington, DC 20006
• (202) 857.3410 • Fax (202) 857.3420
An AFL-CIO "Union City"
20 June 2005
TO: All Councilmembers
FROM: Joslyn N. Williams, President
RE: Councilmember Orange Emergency
Legislation to Gut the Stadium PLA
I am writing on behalf of the 175 affiliated local
unions of the Metropolitan Washington Council, AFL-CIO, with their
150,000 area union members to request most strongly that you VOTE
AGAINST any attempts to gut this Project Labor Agreement (PLA)
negotiated with the City, the Building Trades unions and the Sports
and Entertainment Commission. We adamantly oppose Councilmember
Orange's emergency legislation which he has indicated he will
As more fully demonstrated in the enclosed Statement of
Position, no grounds whatsoever exist to justify the use of emergency legislation
this matter, The PLA that is the subject of this dispute will not come Into
play until approximately February
2006, which is when construction on this project is expected
to begin. While the D.C. Sports and Entertainment Commission is
scheduled to vote on this matter on July 6, 2005, in relation to its
solicitation of a construction manager (CM) for the project, the PLA
will have no real practical effect until construction start-up in
February 2006 at which point the CM 1I start to hire the contractors
and subcontractors who will perform the actual construction work.
This Innovative Project Labor Agreement as negotiated
already allows ANY company to bid on the project, requires that they
pay prevailing wages and benefits, incorporates specific provisions to
encourage and accommodate minority firms, requires the trades to train
and promote DC residents as apprentices, requires certain percentages
of all workers on the project to be DC residents, and has strong
sanctions for violations of these requirements.
Addressing critical scheduling demands of the new
Ballpark project, the PLA also benefits the City by providing access to some 20,000
skilled trades persons represented by local Building Trade Unions of
the Metropolitan Washington Council. In addition, there are-
provisions to re-open bidding If at least 3 contractors do not bid on
any component of the project, which ensures that there will be ample
competition on all parts of the project.
The Associated Builders and Contractors, the anti-union
contractors association, have spent many thousands of dollars hiring
neighborhood. people to protest the PLA, mobilizing a few minority
contractors who have been led to believe, erroneously, that they will
be left out of the action by a PI.A, and sending out slick flyers to
the community to agitate against the PLA. They are doing this because
they want stadium work, but they do of want to pay living wages and
benefits, nor do they want to be encumbered by provisions
mandating bona fide training and recruitment of DC residents.
The PLA is a well-constructed agreement which will be
good for the City and its residents and there is no emergency for the Council to
act upon at this time.
Once again, please VOTE AGAINST Councilmember Orange's
Back to top of page
Jane Brunner, Project Labor Agreement and The Baseball
Stadium, a memorandum to the Mayor of the District of Columbia, described
as the “due diligence report” on the PLA, June
Back to top of page
Washington, D.C. Building & Construction Trades
Statement of Position Regarding PLA Benefits to City
Gerard M. Waites, Esq.
O'Donoghue & O'Donoghue
4748 Wisconsin Avenue, N.W.
Washington, DC 20016
This position statement is being submitted on behalf of
the Washington, D.C. Building and Construction Trades Council in support
of the proposed Project Labor Agreement (PLA) for the new District of
Columbia Baseball Stadium. As demonstrated below, there are compelling
grounds for using the proposed PLA in this case.
II. Framework for Legal and Economic
PLAs are single-site collective bargaining agreements
between building trade unions and site contractors that govern terms and
conditions of employment for all craft labor on a designated
construction project. PLAs provide project owners with: 1) access to
local labor supply sources for construction craft labor, 2) predicable
labor cost forecasts; and 3) a no-strike clause/alternative dispute
resolution procedures designed to prevent labor disputes and related
When used on large capital projects, PLAs are Included In
project specifications at the direction of the project owner generally
for the purpose . of promoting core project goals: schedule, quality,
safety and cost-efficiency. Economic impact reviews (EIRs) of PLAs
evaluate the application of a proposed PLA to a particular construction
project to determine whether the proposed PLA will serve these core
Evaluation review criteria for EIRs typically include any
factors relevant to assessing whether a proposed PLA promotes core
project goals, especially cost-efficiency and timely project delivery,
Size, scope and complexity of project
Applicability of prevailing wage law to project
PLA's impact on direct project labor costs
Level of construction activity/volume in local area
Availability of skilled craft labor supply
Ability of PLA to promote project cost, schedule,
quality and safety
Ability of PLA to promote labor peace and
Schedule and time constraints of project and consequences,
including financial, of untimely project delivery
Applicable case law regarding the use of PLAs in public
sector construction shows that such criteria are examined by
administrative agencies and reviewing courts to determine if use of a
PLA is in the interest of the project. See Attachment 1 hereto (PLA
Briefing Paper). When EIRs demonstrate that a challenged PLA is in the
interests of the project, PLAs have been uniformly upheld by the courts.
Id. at pp. 47.
Generally, courts give executive branch agencies wide
latitude in determining whether to use a PLA and apply a highly
deferential standard to review administrative findings relating to PLA
decisions. In this regard, District of Columbia courts will "give
great weight to any reasonable construction of a' regulatory Statute
adopted by an agency charged with its enforcement." See, e.g., Winchester Van Buren
Tenants Association v. District of Columbia Rental Housing Commission,
550 A.2d 51 (DC. 1988) (citing McMullen v. Police and Firefighter's
Retirement and Relief Board, 465 A.2d 364, 366 (D.C. 1983)).
Insofar as an administrative decision to use a PLA for
the Stadium Project would involve an interpretation by the District of
its general bidding, and procurement laws, the above-referenced standard
would apply. Under this standard, the District would be . afforded wide
discretion to apply its administrative expertise in the fields of
procurement and public works construction to determine if the proposed
PLA would benefit the project and the City.
III. Economic Impact Review of the
When considered in the context of the above-referenced
economic criteria, the specific facts and circumstances surrounding the
Stadium Project demonstrate that the proposed PLA will strongly promote
core goals and interests of the project. Points and authorities in
support of such 'a finding are as follows:
Factor No. 1: Size, Scope and Complexity of
A number of court cases reviewing PLA Economic Impact
Reviews or similar PLA studies have upheld PLAs on projects of various
sizes, including those significantly less than $200 million. See
Attachment 1, pp. 4-7.
Major capital projects, even those above $10 million
or $20 million tend to support the use of PLA due to the inherent
challenges involved in planning, manning and executing such projects,
particularly meeting labor supply needs and logistics. Id.
The greater a project is In size, scope and
complexity, the greater the need for a PLA. In the instant case, the
size, scope and complexity of the Stadium Project - a modern, hitech,
massive sports arena, valued at a minimum of $244 million (hard stadium
construction cost; see project documents) - strongly support use of the
Factor No. 2: Applicability of Prevailing Wage Law to
The Stadium Project is subject to prevailing wage
law, 40 U.S.C. §§ 276a-276a-5, and the wage/benefit rates of the
Washington, 'D.C. Building Trades generally represent the current
prevailing rates mandated under this law.
Thus, regardless of whether or not there is a PLA,
contractors and subcontractors on the project will, in most cases, be
paying union rates. This factor weighs heavily in favor the proposed PLA,
especially since the PLA provides numerous, substantial benefits to the
project, as Identified below.
Factor No. 3: PLA's Impact on Direct Craft "Labor
One major benefit of PLAs is the significantly higher
productivity rates of union-trained workers. Such productivity
advantages, up to 17%, according to one recent industry report, easily
offset any minimal wage differentials.1
Numerous provisions of the PLA itself also translate
into significant direct labor costsavings, including those which
provide: (a) 4 ten-hour days and 5. ten-hour days; (b) uniform starting
times; (c) uniform holidays; (d) multiple shifts with uniform premium
Moreover, beyond straight labor costs, the ability of
the PLA to provide a reliable local supply of qualified craft personnel
will result in a substantial positive impact on total project cost, as
well as schedule, quality and safety.
Factor No.. 4: Level of Construction Activity/Volume in
Downtown, DC., where the Stadium
Project is to be located has been recognized as the "top real estate market in the country."2 As a
leading national market, billions of construction dollars are invested
here each year.3
In the immediate vicinity of the proposed site for
the new stadium, the City is launching its new Anacostia Initiative, a
mega $8 billion+ public works and economic development program.
In addition, the federal FY 06' budget for
non-military construction alone is over $500 million and local Pentagon
spending is likely 100s of millions dollars more.4 Other local
jurisdictions In the region include some of the fastest growing in the
country, e.g., Loudoun County, VA, Fairfax, County, VA, Montgomery
The level of construction impacts everything from the
availability of equipment and supplies to traffic and congestion to the
availability of craft labor resources. All of these can negatively
impact project schedule, especially labor supply.
The higher the construction volume, the greater
competition there is for an increasingly limited pool of qualified craft
personnel. For these reason, the huge volume of construction in the
Washington, DC metro regions also strongly supports use of the PLA.
Factor No. 5: Availability/Reliabllity of Skilled Craft
According to the Construction Users Roundtable
(CURT), the nation's premiere project owner trade association, craft
labor skill shortages is one of the most critical issues facing the
construction industry today.
So serious is this problem that CURT warned in a 2004
report that owners "are experiencing significant problems in
staffing construction projects, resulting in escalating costs and
schedule delays."5 Given the D.C.'s mega construction market,
availability of trained, skilled local construction workers is severely
With respect to labor that is available n D.C.,
there is no question that the best source of trained, qualified craft
personnel is the union sector. One major indication of this is
apprentice training. Recent data from the District's Office of
Apprenticeship Training shows that the unions affiliated D.C. Building
Trades Council vastly out perform the nonunion sector when it comes to
D.C. apprenticeship records show, for example, that the
union trades represent more than 10 times the number of registered
apprentices than all non-union programs combined (3,094 v. 306. See Attachment 4 hereto, 2005
Data from D.C. Department of Employment Service, Office of Apprenticeship
Nationally, data from the U.S. Department of Labor
shows that union Building Trade apprenticeship programs train and
graduate approximately 75% of apprentices in the nation and enroll and
graduate substantially higher numbers of women and minorities. See
Attachment 5 hereto.
Another indication of the superior skill
qualifications of the union industry is the level of financial
investment devoted to skill training. For example, IBEW Local 26 in the
District and its affiliated contractors contribute at least $2 million
annually to their apprenticeship and training programs. The other D.C.
construction trades likewise make substantial, continuous investments in
skill training programs for apprentices and journeypersons.
Factor No. 6: Ability of PLA to
The PLA provides the Stadium Project with unique
access to the pool of local skilled manpower operated by the DC Building
Trades Council. As a result, it offers unparalleled benefits to the
District by providing a reliable supply of highly trained, qualified
craft labor needed for the project.
Insofar as craft labor is a major, critical component
of any construction project, the quality, productivity and reliability
of the craft labor workforce used on a project has a direct and
substantial impact on the success of any project. Skilled, trained
workers are better able to build a project in accordance with plans and
specifications, generally produce quality workmanship, work more safely
and productively and are more cost-effective and cost-efficient than
workers who do not have formal training.
Workers supplied through the Washington DC Building
Trades' referral systems are required to meet requisite skill and
training standards; usually these workers will be joumeypersons who have
graduated from rigorous apprenticeship programs registered with the D.C.
Apprenticeship programs or will be apprentices' currently enrolled in
The demanding schedule for the Stadium Project will
require timely, efficient deployment of literally hundreds of skilled
craft workers in numerous trades and specialty fields in the midst of a
tight labor market in a booming industry. The DC Building Trades
represents over 20,000 local skilled trade persons and offers the best
means for ensuring the Stadium will receive the workforce it needs to
deliver this project in a timely manner.7
The proposed PLA also has several key provisions
designed to promote recruitment of local D.C. residents into the union
skill training programs and referral systems, including apprentice
participation requirements and local community outreach and local hiring
initiatives. These provisions, combined with the existing training and
referral systems operated by the Building Trades provide a carefully
organized craft worker recruitment and deployment infrastructure needed
to meet the critical labor demand for this project.
By imposing the PLA specification/requirement, the
project owner essentially creates a type of craft labor insurance policy
for the project that allows it to substantially limit risks of schedule
delays, deficient quality workmanship, safety incidents and other
problems caused by insufficient craft labor supply and/or the use of
unskilled or improperly trained construction craft personnel.8
In sum, the PLA provides the City with an effective
quality-control check over the entire construction workforce and ensures
that the craft labor utilized for the project will come from known
sources connected with the best, formal skill training systems in the
region. The key advantages the PLA offers in terms of promoting quality,
safety, schedule and cost-efficiency thus strongly justify use of the
PLA for the Stadium Project.
Factor No 7: Ability of PLA to Promote Labor Peace and
In addition to the benefits discussed above, the
Stadium PLA has a number of important provisions designed to promote
timely project delivery by ensuring labor peace and stability throughout
the duration of the project.
These provisions impose safeguards
against project delays and disruptions that can occur from labor
disputes during construction by:
strictly prohibiting work stoppages;
requiring any type of jurisdictional issues to be
resolved through adherence to the Plan for Resolving Jurisdictional
requiring any disputes regarding employment terms and
conditions for all craft employees on site to be resolved through
uniform grievance and arbitration procedures.
Since employees have established legal rights under
federal labor law to strike under federal labor law, initiate work
stoppages or engage in other concerted activities to address grievances,
PLA provisions such as these are used to promote timely delivery and
avoid costly delays.
Further, while the DC Building Trades have a long and
generally stable relationship with the union contractor community, this
does not exist between the Building Trades and the non-union sector of
the industry. The Building Trades Council itself and a number of
individual trades engage in various organizing activities on a regular
basis, including picketing, hand-billing, demonstrations and other
legally protected, concerted activities.
Such activities can result in labor disputes on job
sites and litigation before the National Labor Relations Board and the
courts, but can be effectively eliminated by labor peace provisions,
such as those in the PLA. The DC Building Trades have an outstanding
record of complying with such provisions, whether they have been
negotiated in the context of multi-craft PLAs or individual union
Factor No. 8: Schedule and Time Constraints of Project
This project, massive in size and scope and complex in
design, must be completed in months, i.e., by March 2008 (?). Timely
delivery under this schedule will be extremely difficult -- even with the local craft labor
resources secured by the PLA.
The schedule challenges presented here are heightened by
current labor market conditions and the intense level of construction
activity in D.C. Another factor taxing this already daunting schedule is
the project's location, which presents an additional, significant burden
on the proposed schedule.9
Compliance with the established project schedule is
critical. If the City fails to construct the Stadium in accordance with
this schedule, it faces staggering cost increases and financial
penalties, including payment of [$5M?] for the cost of additional rental
fees for the RFK Stadium; plus, loss of critical tax and fee revenues
from Stadium operations needed to repay interest and ultimately
principal on hundreds of millions of dollars of municipal bonds.
The facts and circumstances surrounding the Stadium
Project demonstrate that the proposed PLA would substantially benefit
the District and its Interest in securing timely, cost-effective delivery
of this important project. Accordingly, the District would be well
within its discretion to apply a PLA specification requirement in this
1. Union Jobs Almost 17% More Productive, NEA Alert,
(Attachment 2 hereto) (research of hundreds o€ projects by
professional research firm, Independent Project Analysis) January 2003.
2. Investors Flock to Washington, DC, Commercial Real
Estate Markets, Pienta, G., Washington Building Congress, February 2004 Report (Reprinted with permission from
Commercial Investment Real Estate, Vol. XXII, 8, p.42-43).
www.fedbizopps.com, listing current federal
project solicitations; see also, Commerce Business Daily reports, 2004-05 project solicitations.
Bush Finds Space In Budget for Washington-Area Projects,
Washington Business Journal, March 25, 2005 at: www.bizjournals.com/washington/stories/2005/03/28
5. Confronting the Skilled Construction Workforce
Shortage, The Construction Users Roundtable, The Owners Voice to the Construction Industry, WP-401, 2004, p. 14
(Attachment 3 hereto) (emphasis added). See also, The Perfect Storm: Factors Come Together Creating a Storm In the
Construction Workforce, The Construction Executive, Associated Builders
and Contractors, Inc., June 2004 pp. 21-25.
6. These programs typically require 4,000 to 10,000 hours
of closely supervised, on-the-job training, plus hundreds of additional
hours of related classroom and/or shop instruction.
The proposed PLA covers 15 Independent local unions,
which are organized along traditional craft lines, such as electricians,
plumbers, pipe fitters, cement masons, laborers, etc.
8. There can be little doubt that the D.C. Building
Trades provides the best source of qualified manpower for this project.
As noted above, records from the D.C. Apprenticeship Office show that
the apprenticeship training programs maintained by the Building Trades
have roughly ten times the number of apprentices in all of the non-union
training programs combined. See Attachment 4. The quality of training
and the level of financial investments in skill training are also vastly
superior in the union industry. For union-trained workers, all of these
factors payoff -- as seen in their much higher productivity rates, as well
as the general higher quality of services they offer. See Attachment 2.
9. Under current plans, the project is expected to be
built at a location in the South Capitol/Anacostia section of DC, known
the M Street site or South Capitol Street site. This area, a mix of
residential and commercial property within a short distance of the U.S.
Capitol, is a busy, congested, urban part of the City, where traffic is
further challenged by national security concerns, Transporting the
personnel, vehicles, equipment and materials needed for a $244M+ stadium
project to this location under the proposed schedule will present will
present immense logistical problems.
Back to top of page
Statistical Statements on the Impact of Union-Only PLAs
"The examination of the construction labor market
and the facts concerning the postures of organized labor, unionized
construction, and their political supporters, as well as of the cases in
various states, demonstrate that the claimed advantages of
government-mandated PLAs are not supported by factual evidence"
(Dr. Herbert R. Northup, Journal of Labor Research, Winter 1998).
List of Studies:
Project Labor Agreements and the Cost of Public' School
Construction Projects in Connecticut - Paul Bachman, Jonathan Haughton
and David G. Tuerck, Beacon Hill Institute at Suffolk University
Project Labor Agreements and the Cost of Public School
Construction Projects in Massachusetts - Paul Bachman, Jonathan Haughton
and David G. Tuerck, Beacon Hill Institute at Suffolk University
Union-Only Project Labor Agreements: The Public Record of
Poor Performance - Maurice N. Baskin (2001)
Erie County Courthouse Construction Projects: Project
Labor Agreement Study - Ernst & Young (September 2001)
Project Labor Agreements on Public Construction Projects:
The Case For, and Against - Worcester Municipal Research Bureau (May
Government-Mandated Project Labor Agreements in
Construction: The Institutional Facts and Issues and Key Litigation:.
Moving Toward Union Monopoly on Federal and State Financed Projects.
Government Union Review, Volume 19, Number 3. Herbert R. Northrop and'
Linda E. Alario. (October 2000)
Analysis of the Impacts on the Jefferson County
Courthouse Complex through Project Labor Considerations - Prepared for
the Jefferson County (NY) Board of Legislators - Professor Paul G. Carr,
P.E., Engineering and Management Consultant (September 2000)
Project Labor Agreement Study: Prepared for Clark County
(NV) School District - Resolution Management (June 2000)
Government-Mandated Project Labor Agreements in
Construction: A Force to Obtain Union Monopoly on Government-Financed
Projects. Herbert R. Northrop, The Wharton School (January 2000).
"Boston Harbor"-Type Project Labor Agreements
in Construction: Nature, Rationales and Legal Challenges - Journal of
Labor Research. Herbert R Northrop and Linda E. Alario. (Winter 1998)
Project Labor Agreements: The Extent of Their Use and
Related Information - GAO Report (May 1998)
Comparison of Nonunion and Union Contractors Construction
Fatalities - National Center for Construction Education and Research
Analysis of Bids and Costs to the Taxpayer for the
Roswell Park Cancer Institute, New York State Dormitory Authority
Construction Project-Associated Builders & Contractors-Empire State
Chapter (March 23, 1995)
By limiting bidders and forcing construction users to use
union workers, pay into union benefit plans, and follow outmoded and
inefficient union work rules, union only PLAs drive up costs on
construction projects. Far from their claim of eliminating waste,
union-only contracts guarantee it, by forcing open shop contractors to
adopt inefficient union work practices and use unfamiliar workers.
A September 2004 study by the Beacon Hill Institute (BHI)
at Suffolk University in Boston, Massachusetts, completed an extensive
statistical analysis of the effects of PLAs on bid and final costs of
school construction projects in Connecticut for the period of 1996
through 2004. The study found that PLAs raise the cost of building
schools by an average of almost 18 percent. BHI concluded that
"our key finding is that PLA projects cost more that non-PLA
projects, holding the effects of project size and type constant. This is
true whether one considers bid costs or final project costs. The effect
is statistically significant and robust."
A September of 2003 study by the Beacon Hill Institute
(BHI) at Suffolk University in Boston analyzed Massachusetts school
construction projects and concluded that bid prices on projects with a
PLA were on average 14 percent higher than bid prices on non-PLA
projects. In addition, the average actual cost of construction was 12
percent higher for projects executed with a PLA.
In September of 2001, the firm of Ernst & Young was
commissioned by Erie County in New York to analyze a project labor
agreement on the Erie County Construction Project. Ernst & Young
concluded that "bidder participation was diminished because the
county chose to utilize a PLA. Further, the use of PLAs adversely
affects competition for publicly bid projects to the likely detriment of
costeffective construction. Our research revealed that the use of PLAs
strongly inhibits participation in public bidding by non-union
contractors and may result in those projects having artificially
inflated costs." They went on to say that "there are no
apparent valid economic justifications for the continued use of a PLA on
Phase II of the Project."
The Worcester Municipal Research Bureau released their
study "Project Labor Agreements on Public Construction Projects:
The Case For and Against" on May 21, 2001. The study concluded that
"PLAs tend to constrict the number of bidders on a project compared
to those without PLAs, and are likely to reduce the savings to the
public that would accrue if nonunion contractors who are employed were
allowed to follow their customary methods."
A study commissioned by the Jefferson County Board of
Legislators concluded that "[t]he additional costs estimated with
the use of a PLA could range upwards of $955,000. With the loss of even
on general contractor from the bidding [as a result of the PLA], the
cost increase could approach $200,000." On this estimated $14
million project, this would mean a cost increase of upwards of 7 percent
The Clark County School District (CCSD) retained
Resolution Management to perform an objective study of the use of
project labor agreements on School District Projects. In an independent
and unbiased study, they found "no compelling reason for CCSD to
enter into PLAs for school construction at this time.
The Employment Policy Foundation estimates that if
all federally-funded government contracts were to include PLAs, the
result would be either an increase in the cost of construction by. $4.8
billion annually, or a reduction in the amount of federal construction
spending by 30 percent (April 1997).
A study of public-sector PLAs concludes, "While
assuring that projects are performed union, they provide little, if any,
savings to the [public] owner. In addition, they provide little, if any,
competitiveness to the union contractor and may be disruptive to other
owners and contractors involved in the local construction market."
It concluded that, "restraints imposed by governmentdirected PLAs
are political decisions which have little or no economic rationale, nor
can they be defended on grounds of labor peace, enhanced safety, or
other such reasonable criteria." (Dr. Herbert R. Northrop, Journal
of Labor Research, Winter 1998).
A comparison of bids for a Middletown, Connecticut,
school renovation proposal demonstrated a PLA would have added 20
percent to the cost. The town initially issued 72 sets of bid
specifications with a PLA, and received only four responses, with the
lowest bid ($9.1 million) at $600,000 over the project's $8.5 million
budget. When the project was re-bid without the PLA, it received more
than double the number of bids, with the lowest at $7.6 million,
producing a savings for the town of $1.5 million
A comparison of two stadiums built in Maryland at
approximately the same time (Jack Kent Cooke Stadium near Washington, DC
and Ravens Stadium in Baltimore), indicates that the cost per seat of
Ravens Stadium, built primarily with union labor under prevailing wage
laws, was over 13 percent higher than the cost for Jack Kent Cooke
Stadium, a merit shop project. Overall, the preliminary results of this
study indicate that costs associated with union labor and prevailing
wage made the Baltimore stadium costs 4 1/2 to 5 percent higher than the
A Nevada Water Authority project PLA cost taxpayers
an additional $200,000, because the true low bidder refused to sign the
PLA. The project then went to a union contractor whose bid was $200,000
A study of the taxpayer costs for Roswell Park Cancer
Institute in Buffalo, New York, assessed bids for the same project both
before and after a PLA was temporarily imposed in 1995. It revealed that
there were 30 percent fewer bidders to perform the work and that costs
increased by more than 26 percent.
Another GAO report, issued May 5, 1998, demonstrated
that it is nearly impossible to show any savings or increased quality
derived from the use of project labor agreements, largely because of the
difficulty in finding two identical projects with or without a PLA to
A U.S. General Accounting Office (GAO) report on
Department of Energy Idaho Laboratory Project found that the labor costs
under the union-only PLA were 17-21 percent above the federally mandated
The U.S. Department of Labor's Bureau of Labor
Statistics (BLS) Jan. 27, 2005 report states that 14.7 percent of the
nation's construction workforce was unionized in 2004. Therefore, since
union-only PLAs effectively preclude open shop companies from working as
such on a project, PLAs discriminate against the majority of companies
and the 8.5 out of 10 workers who choose not to join a union. These
workers' hard-earned tax dollars fund these projects.
Ernst & Young's September 2001 study stated that
their "research revealed that the use of PLAs strongly inhibits
participation in public bidding by non-union contractors and may result
in those projects having artificially inflated costs."
In his analysis of government-mandated PLAs, Dr. Herbert
Northrup concludes, "To exclude or to limit the right of open-shop
contractors, who have won 75-80 percent of the national construction
dollar spent, from the opportunity to bid on public financed
construction, and thus to limit or to eliminate their participation in
construction paid for by taxpayers unless they are willing to work as if
they were unionized contractors is palpably both unfair and contrary to
sound public policy" (Journal of Labor Research, Winter 1998).
In addition, minority and women's groups have been
vocal opponents of union-only agreements. The American Asian Contractors
Association, the National Association of Women Business Owners, the
National Black Chamber of Commerce and the Latin Builders Association
are among the groups that have gone on record as opposed to PLAs. The
National Black Chamber of Commerce described PLAs as
"anti-free-market, non competitive and, most of all,
discriminatory." These groups represent workers that are
significantly underrepresented in all crafts of the construction union
shops. Encouraging PLAs on public works projects will make it even more
difficult for minority-owned contractors to compete.
Productivity and Quality
Union-only PLAs do nothing to guarantee better quality,
skills, or productivity. Merely having a union status does not guarantee
better performance as there is no evidence that union labor is more
skilled than open shop. Some of the largest and most successful projects
completed every year are built on time and within budget with open shop
companies and without PLAs. The union label is not needed for
construction to be of top quality. Project quality is governed by
voluminous procurement laws and regulations, project specifications, and
bonding requirements. Safeguards against shoddy work practices and stiff
market competition also prevent unqualified companies from competing on
public contracts. Moreover, quality lies with the worker's individual
motivation and performance. Quality is not determined by race, creed,
national origin, gender, or labor affiliation.
Although the unions promote PLAs by claiming open shop
contractors do not have the capability of managing very large
construction jobs, a study by Dr. Herbert R. Northup concludes that,
"the facts demonstrate that open-shop contractors can and do
successfully both perform and manage large projects." (Journal of
Labor Research, Winter 1998).
After performing a thorough study of PLAs in the New
York area, Ernst & Young (September 2001) concluded that "[t]here
is no quantitative evidence that suggests a difference in the quality of
work performed by union or open shop contractors."
Unions claim projects are unsafe without union workers.
There is no statistical evidence to support this claim. In fact, OSHA
statistics consistently demonstrate that open shop craftspeople have
better safety records and lower fatality rates than that of their union
A 2004 Clemson University study of construction
industry fatalities between 1994 and 2002 concluded that the nonunion
workers experienced 12.8 percent less fatalities per 100,000 workers
than union workers.