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Roderick L. Woodson, Holland & Knight
Testimony on “Jobs for DC First Amendment Act of 2005,” Bill 16-345, before the Committee on Government Operations
June 24, 2005

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Woodson testimony	Joslyn Williams, AFL-CIO letter
Jane Brunner “draft due diligence report”	Gerald Waites, DC Building and Construction Trades Council statement on PLA
Statistical Statement on the Impact of Union-Only PLAs

BEFORE THE
COUNCIL OF THE DISTRICT OF COLUMBIA
COMMITTEE ON GOVERNMENT OPERATIONS

Bill No. 16-345
"Jobs for D.C. First Amendment Act of 2005"

Testimony of
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 empty glass.

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.

ATTACHMENT A

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 introduce tomorrow.

As more fully demonstrated in the enclosed Statement of Position, no grounds whatsoever exist to justify the use of emergency legislation in 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 emergency legislation.

Thank you.

ATTACHMENT B

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 20, 2005.

ATTACHMENT C

DRAFT 4/28/05

Washington, D.C. Building & Construction Trades Council
Statement of Position Regarding PLA Benefits to City

Gerard M. Waites, Esq.
O'Donoghue & O'Donoghue
4748 Wisconsin Avenue, N.W.
Washington, DC 20016

I.Introduction

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 Analysis

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 project delays.

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 project goals.

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, including:

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 stability
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 Proposed PLA

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 Project

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 proposed PLA.

Factor No. 2: Applicability of Prevailing Wage Law to Project

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 Costs"

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 pay.
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 Local Area

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 County, MD.
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 Labor Supply

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 limited.
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 skill training.
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 Training.
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 Promote Cost/Schedule/Quality/Safety

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 such programs.⁶
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 Stability

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:
1. strictly prohibiting work stoppages;
2. requiring any type of jurisdictional issues to be resolved through adherence to the Plan for Resolving Jurisdictional Disputes; and
3. 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 agreements.

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.

Conclusion

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 case.

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).

3. See www.fedbizopps.com, listing current federal project solicitations; see also, Commerce Business Daily reports, 2004-05 project solicitations.

4. 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.

7. 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.

ATTACHMENT D

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 (September 2004)

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 (September 2003)

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 2001)

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 (May 1995)

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)

Construction Costs:

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 (September 2000).
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 Washington stadium
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 higher.
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 study.
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 Davis-Bacon rates.

Work Opportunities:

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."

Safety:

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 counterparts.

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.

Roderick L. Woodson, Holland & Knight Testimony on “Jobs for DC First Amendment Act of 2005,” Bill 16-345, before the Committee on Government Operations June 24, 2005