Several states have taken action to either restrict or encourage the use of project labor agreements on public construction. Please contract
plainfo@abc.org for more information on state and local PLA activities.
Visit
www.thetruthaboutplas.com for more information on specific efforts to protect fair and open competition at the state and local levels.
Gov. Mary Fallin (R) signed
H.B. 3043, which prohibits government-mandated PLAs on all state, local and publicly funded construction in the state.
Read moreGov. Robert McDonnell (R) signed
H.B. 33, which prohibits the Commonwealth of Virginia and recipients of state assistance from mandating PLAs and enacting PLA preferences discriminating against bidders unwilling to execute PLAs.
Read moreMichigan Gov. Rick Snyder (R) signed
S.B. 165, which prohibits government-mandated PLAs on all state, local, university and state funded construction in the state.
Read moreMaine Gov. Paul LePage (R) signed L.D. 1257, which prohibits government-mandated PLAs on all state projects through October 2015.
Read more
Louisiana Gov. Bobby Jindal (R) June 27, 2011 signed
S.B. 76, which prohibits government-mandated PLAs on all state, local and state funded construction.
Read moreTennessee Gov. Bill Haslam (R) May 20, 2011 signed
H.B. 1498, which prohibits the use of government-mandated project labor agreements (PLAs) on state and local construction projects, and also prohibits public entities from requiring PLAs as a condition of receiving public financial assistance for construction. HB 1498 also prohibits localities from enacting wage requirements that are higher than the state prevailing wage rates.
Read moreGov. Jan Brewer signed
S.B. 1403 on April 6, 2011, which bans the use of government-mandated PLAs on state and local construction projects. Additionally, this bill prohibits abusing the state's environmental permitting process to pressure project owners into requiring contractors sign a PLA as a condition of performing work. This practice is otherwise known as "
greenmail."
Read moreGov. Butch Otter (R) signed
S.B. 1006 on March 3, 2011 to prohibit the state and political subdivisions from requiring the use of government-mandated PLAs on publicly funded construction projects.
Read more On March 22, 2007, Missouri Governor Matt Blunt (R) signed
S.B. 339, “The Fairness in Public Construction Act” which prohibits union-only PLAs for projects receiving more than half of their funding from the state. For all other building projects receiving public funds, governmental entities would first have to analyze the merits of mandating a PLA and hold public hearings before doing so. This legislation took effect on August 28, 2007.
On April 30, 1999,
S.B. 305, “An Act Prohibiting A Requirement for Project Labor Agreements and Other Types of Prehire Agreements on Public Works Contracts” was signed by Montana Governor Marc Racicot (R).
Utah Code 34-30-14. Enacted by Chapter 72, 1995 General Session
On January 14, 2011, Gov. Terry Branstad (R) issued
Executive Order 69 repealing
Executive Order 22, issued by his predecessor Gov. Chet Culver (D), that had encouraged state agencies to require PLAs on state projects over $25 million. The Branstad order also prohibits the use of PLAs on any state funded construction. By issuing this order, Gov. Branstad fulfilled his campaign pledge to ensure that Iowa taxpayers get the best construction at the best price.
On Jan. 3, 2008
Nevada Governor Jim Gibbons signed an executive order repealing
Governor Bob Miller's April 14, 1994 executive order mandating project labor agreements on Nevada public works construction projects. As reported in the
Las Vegas Review Journal, Governor Gibbons' new executive order will maintain free and open competition on public works projects in Nevada but does not prohibit the Nevada government from implementing PLAs if needed.
On November 21, 2005, Minnesota Governor Tim Pawlenty (R) signed
Executive Order No. 05-17, "Preserving Competition on State Construction Contracts."Click
here for ABC National's related news release. An ABC Newsline article can be found on the MN E.O.
here.
This executive order expired on March 1, 2011 and was not renewed by Gov. Mark Dayton (D).
On July 21, 2005, Arkansas Governor Mike Huckabee (R) signed
Executive Order 05-09, “An Executive Order Concerning State or State-Funded or Assisted Construction Projects.”
Click
here for ABC National's related news release. An ABC Newsline article can be found on the Arkansas E.O.
here.
Illinois Gov. Pat Quinn (D) July 27, 2010 signed
H.B. 2987,
The Project Labor Agreements Act, which codified two earlier executive orders issued by Gov. Quinn and former Gov. Rod Blagojevich (D), encouraging state entities to require PLAs on a project-by-project basis.
Illinois PLA policy had been established by
Executive Order 2010-03, which Gov. Quinn signed on March 31, 2010. The Quinn order reaffirmed
Executive Order 2003-13, issued by disgraced former Gov. Blagojevich in 2003.
The Heartland Institute published an
article on this topic and E.O. 2003-13’s negative impact on Chicago taxpayers and non-union construction companies at:
http://www.heartland.org/Article.cfm?artId=16548 Read more On July 18, 2000, the New Jersey Educational Facilities Construction and Financing Act was signed into Law. It resulted in full funding by the state of all school construction and renovations in 30 special needs districts, known as the Abbott School Districts, as well as approximately 25 districts receiving 55% or more in state aid. In addition, it provides grants to fund the state share on projects in districts that receive less than 55% in state funding.
On August 26, 2002 the New Jersey Schools Construction Corporation (NJSCC) was created to oversee the state's school construction program. The NJSCC has decided to implement PLAs on all Abbot School construction and renovation. It is unclear if the NJSCC extended the PLA requirement to all schools in NJ, regardless of their Abbot status. However, this NJSCC document sheds some light on PLAs and Abbot Schools.
On January 18, 2002, New Jersey Governor McGreevey (D) signed Executive Order No. 1.E.O. #1 provides that on a project-by-project basis, a state department, authority, or instrumentality shall include a PLA in a public works project where it has been determined that the agreement advances the state's interests of cost efficiency, quality, safety, timeliness, skilled labor force, labor stability, and the state's policy to advance minority and women-owned businesses.
On July 30, 2002 Governor McGreevey signed A. 1926, authorizing the use of Project Labor Agreements on all major public works projects into New Jersey law. See code here and here.
On February 12, 1997, New York Governor George Pataki (R) signed Executive Order No. 49, “Establishing Procedures to Consider, in its Proprietary Capacity, the Utilization of One or More Project Labor Agreements.”
Executive Order No. 49 orders each State agency to establish procedures to consider, in its proprietary capacity, the utilization of project labor agreements with respect to individual public construction projects.
In addition, No. 49 sets a policy of when a project labor agreement should be considered by a State agency. The State agency must determine if the use of a project labor agreement is in compliance with standards established by the New York Court of Appeals in the case AGC v. NY State Thruway Authority.
AGC v. NY State Thruway Authority found that the utilization of a project labor agreement is justified if it meets the interests underlying the New York State’s competitive bidding laws. In order to use a project labor agreement, it must be established that a project labor agreement will satisfy the following state competitive bidding criteria:
(1) obtaining the best work possible at the lowest possible price; and
(2) preventing favoritism, improvidence, fraud and corruption in the awarding of public contracts.
The Executive Order warms that:
“…agencies should be mindful that, in the past, the courts of the State of New York have struck down any such agreement wherein a contracting entity was unable to show a proper business purpose for entering into such agreement.
No project labor agreement shall be approved by an agency unless the decision to enter into a project labor agreement has, both as its purpose and likely effect, the advancement of the interests of the State’s competitive bidding statutes.”
One of the consequences of Executive Order No. 49 is that public agencies considering the use of PLAs prior to large public works projects, authorize costly studies in order to determine the necessity for a PLA. As a result of Executive Order No. 49, a small industry has blossomed of firms that publish these PLAs studies. The studies often justify the need for a PLA and have been criticized by the construction community because they tend to be “cookie cutter” studies that “rubber-stamp” endorse the use of PLAs without any unbiased and true analysis of costs, labor market forecasts, construction density and other factors that may vary from region to region. The arguments by PLA opponents are rarely countered or addressed in these studies. Frequently, firms with an existing and large clientele of organized labor, union contractors and union-only construction owners produce these studies - which adds yet another reason to question their objectivity and importance in determining sound public policy.
New York's Wick's Law Reform Leads to More PLAs
In 2008, New York "reformed" their Wicks Law, which is an archaic and unpopular procurement law that requires individual contracts for construction projects worth more than a defined threshold amount. For years, many municipalities claimed that Wicks Law increased construction costs and needed reform to decrease construction costs and increase competition. During the 2008 legislative session, as part of an 11th hour deal, Wicks Law was altered in a manner that left just about everyone in the business and construction community unhappy with the final outcome except for organized labor.
The new Wicks Law mandates that all contractors on public works projects valued more than $500,000 in upstate New York, $1.5 million in Nassau, Suffolk and Westchester counties, and $3 million in New Yor City are to have a state-registered apprenticeship program, and the program is required to have been in place for three years.
The new threshold amounts, increased from $50,000 - an amount unchanged since 1964 - is still too low and will provide relief to few construction projects. Worse yet are the Wicks Law Reform state-registered apprenticeship program requirements that will exclude non-union contractors from New York from bidding on public works projects.
The new apprenticeship requirement contained within the Wick's Law Reform initiative is particularly devastating to non-union contractors because NYSDOL placed a moratorium on developing new apprenticeship programs in August 2007. This decision ensured that most non-union contractors can't compete for public projects. The New York State Apprenticeship Council (SAC) approves training programs and is stacked with members representing organized labor. The NY SAC has a history of refusing to recognize and register non-union apprenticeship training programs, thereby granting unions a monopoly on training in New York. Wicks Law Reform coupled with the moratorium on new apprenticeship programs essentially gives away all public construction projects in New York to organized labor.
Finally, public works projects that meet the new Wicks Law Reform threshold amounts are exempt from Wicks Law if a contractor agrees to enter into a PLA. The PLA exemption is trading one costly mandate (PLAs) for another (Wicks Law).
Please read "Hijacking Wicks Law" - an excellent May 30, 2008 Op-Ed from the Central New York Business Journal.
Major changes to the Wicks Law
Dollar amounts
Now: Wicks Law requirements govern a public project if it costs more than a certain amount. Legislators set up a three-tiered system of thresholds: $500,000 for upstate projects, $1.5 million for projects in Long Island and Westchester, and $3 million for the New York City area.
Before: The law previously set one minimum amount for the entire state: $50,000. And that had gone unchanged since the early 1960s.
Project labor agreements
Now: A public entity can waive all Wicks Law requirements if it signs an agreement with one general contractor, who will largely determine work on a project.
Before: This option did not exist before.
Apprenticeship programs
Now: All firms working on a public project must have had a state-approved apprenticeship program in place for at least three years.
Before: This requirement did not exist before.
Dec. 6, 1996 Governor Mike Lowry signed Executive Order 96-08, which directs “State Offices” and other “State Agencies” to consider project labor agreements (PLAs) for appropriate public works projects which meet the criteria established Executive Order 96-08 on a project-by-project basis.
“The decision to use a project labor agreement shall be made on a project-by-project basis, and only where such an agreement will promote labor stability and advance the State’s interest in cost, efficiency, quality, safety and timeliness.”
Dec. 6, 1996 Governor Mike Lowry signed , which directs “State Offices” and other “State Agencies” to consider project labor agreements (PLAs) for appropriate public works projects which meet the criteria established Executive Order 96-08 on a project-by-project basis.“The decision to use a project labor agreement shall be made on a project-by-project basis, and only where such an agreement will promote labor stability and advance the State’s interest in cost, efficiency, quality, safety and timeliness.”
When making the decision whether to use a PLA, the following factors must be considered by the agency;
potential labor disruptions which could affect completion of project;
the number of trades and crafts anticipated to be used on the project;
the need and urgency of the project and the harm to the public if completion of the project is delayed;
the size and complexity of the project and the time needed for completion; and
the benefits of the public from the use of a PLA relative to cost, efficiency, quality, safety and timeliness.
Finally, Executive Order 96-08 defines requirements that must be present in each PLA and directs a “State Office” to support a decision to use a PLA “by written findings which clearly demonstrate how the use of a project labor agreement will benefit the project and the interests of the public and the State from a cost, efficiency, quality, safety and timeliness standpoint.”
Subsequent Washington Governors Gary Locke (D) and Christine Gregoire (D) have not rescinded Executive Order 96-08 and PLAs frequently appear on major state public works projects in Washington.