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ABC, AGC, NAHB lead push to scrap Obama project labor agreement order

Sources: Associated Builders & Contractors, Washington, D.C.; CP staff

An ABC-led coalition letter requests President-elect Donald Trump to consider rescinding his predecessor’s Executive Order 13502, which encourages project labor agreements on federally funded contracts exceeding $25 million.

 

"Taxpayers are not getting the best bang for their buck when experienced and quality contractors and their skilled employees are shut out of federally assisted construction contracts procured by state and local governments with PLA mandates because of President Obama’s failed policy,” contends ABC President Michael Bellaman. “The coalition encourages the Trump administration and Congress to advance policies that ensure fair and open competition and job creation for all of America’s construction industry as a result of government investment in federal and federally assisted construction projects."

Despite the outgoing administration’s efforts, ABC notes, PLA-rooted problems resulted in nearly 99 percent of federal contracts subject to President Obama’s order being bid without an agreement mandate. Those problems kept 1,173 contracts worth nearly $65 billion PLA mandate free, allowing all qualified firms to bid on the taxpayer-funded projects. Complications surrounding PLA, however, did not prevent organized labor-influenced California, Hawaii, Illinois and New York lawmakers from mandating agreements on state or local infrastructure projects receiving federal assistance. Under E.O. 13502, ABC finds, PLA mandates on more than 400 state and local contracts totaling $8.7 billion received assistance from the Federal Highway Administration alone.

“When mandated by government agencies, PLA can interfere with existing union collective bargaining agreements and unfairly discourage competition from nonunion contractors and their employees, who comprise 86.8 percent of the U.S. private construction workforce,” the coalition tells President-elect Trump and Vice President-elect Mike Pence. “Multiple studies of hundreds of taxpayer-funded school projects found PLA mandates increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA projects. Recent government-mandated PLA on federal and federally assisted projects have resulted in litigation, reduced competition, increased costs, needless delays, and poor local hiring outcomes.”

ABC members’ number one priority, notes Bellaman, “is government neutrality in contracting by ending anti-competitive and costly government-mandated PLA on federal and federally assisted contracts.” From FY2009-FY2016, he adds, members were awarded $41.8 billion (63 percent) of all federal construction contracts exceeding $25 million in total cost.

Joining ABC in the coalition are the Associated General Contractors of America, National Association of Home Builders, U.S. Chamber of Commerce and eight other construction-allied or business groups.