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WI Governor Rejects Labor Agreement Rules

Wednesday, April 19, 2017

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Wisconsin Gov. Scott Walker is the latest in a slew of government officials moving to block mandated project labor agreements. On Monday (April 17) Walker signed into law Act 3, which ensures that a PLA cannot be mandated on state, state-assisted or local construction projects, according to local reports.

Megan McCormick, CC-BY-SA 3.0, Wikimedia Commons

Wisconsin Gov. Scott Walker is the latest in a slew of government officials moving to block mandated project labor agreements.

The Associated Builders and Contractors applauded Walker and has formally backed other moves against PLAs. The ABC was also one of more than a dozen organizations to write a letter to President Donald J. Trump days after he took office, requesting that he prohibit the practice.

PLA Controversy

In 2009, former President Barack Obama signed Executive Order 13502, which didn’t mandate, but “strongly encouraged” government PLAs on federal construction projects and permitted state and local governments working on federally assisted construction contracts to mandate PLAs as well.

The agreements usually ensure that the contracts are only awarded to companies that agree to recognize unions as the sole representatives of their employees on that job, meaning that the company must use the union hiring hall to get workers and follow all union rules.

Proponents of the agreements say that this brings a level of predictability to costs and construction timelines. They also note that PLA projects typically ensure overtime pay and make managing projects easier with everyone under one contract.

© iStock / AlexRaths

The agreements usually ensure that the contracts are only awarded to companies that agree to recognize unions as the sole representatives of their employees on that job, meaning that the company must use the union hiring hall to get workers and follow all union rules.

However, around 80 percent of private construction workers have opted out of unions, and though PLAs don’t make it impossible for non-unionized professionals to work on those jobs, they do create a significant hurdle. This has resulted in cost overruns due to lack of competition, which is the biggest point of contention of those who oppose the agreements.

In the ABC’s press release on Gov. Walker's signing of the legislation, the organization said that the passing of the law was “…guaranteeing that the almost three out of four members of Wisconsin’s private construction workforce who have chosen not to join a labor union can work on projects funded by their own tax dollars.”

Both sides of the coin claim to better protect women- and minority-owned companies.

Recent Movement

The letter penned to President Trump in January is credited with sparking a new wave of actions against PLAs.

Wisconsin is the 23rd state to take action against the agreements. West Virginia became the 22nd in 2015, when Gov. Earl Ray Tomblin signed the “Establishing Fair and Open Competition in Governmental Construction Act,” making him the first Democratic governor to sign a bill against PLA mandates, according to the ABC.

Last week (April 13) Iowa Gov. Terry Branstad, who had already taken a stance against PLAs in 2011 via executive order, signed a bill that not only banned PLAs on state-funded projects, but also construction jobs paid for with tax dollars from cities, counties or school districts, according to Radio Iowa.

Gage Skidmore, CC-BY-SA 2.0, Flickr

Last week (April 13) Iowa Gov. Terry Branstad, who had already taken a stance against PLAs in 2011 via executive order, signed a bill that not only banned PLAs on state-funded projects, but also construction jobs paid for with tax dollars from cities, counties or school districts, according to Radio Iowa.

“Project labor agreements infringe on Iowans’ right to work by denying small businesses, contractors, women- and minority-owned companies the opportunity to competitively bid on these important projects,” Branstad said. “PLAs increase the cost of public projects by preventing competitive bidding on projects and leave Iowa taxpayers to foot the bill for these increased expenses.”

Officials on the federal level have been discussing the issue as well while waiting for President Trump to put forth his infrastructure plan. Last month, U.S. Rep. Dennis A. Ross (R-FL) introduced the “Fair and Open Competition Act (HR 1552)”, which prevents federal agencies and recipients of federal funding from requesting contractors to sign a PLA. A Similar bill was introduced in the Senate by Sen. Jeff Flake (R-AZ).

“We must create a level playing field where more qualified contractors are able to compete for public construction contracts, allowing taxpayers to receive the best possible construction projects at the best possible price,” Ross said. “This common-sense legislation will create more construction jobs, and therefore, help increase competition, reduce waste, and eliminate favoritism in the procurement process. This bill will also create jobs for veterans, minorities, women and local workers not affiliated with unions, and will create opportunities for small businesses and qualified contractors hurt by PLA requirements.”

   

Tagged categories: Bidding; Construction; Government; Government contracts; Laws and litigation; Project Management

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