Construction unions and related interest groups are driving the recent increase in proposed RCO laws.  While portions of some RCOs are reasonable, typical provisions within RCO laws pertaining to workforce training preclude virtually all merit shop contractors from working on construction projects subject to RCOs.  The purpose of these ordinances is to ensure only union contractors are permitted to work on public construction projects. These types of RCOs are discriminatory and drive up the cost of public construction by limiting competition and exclude almost nine out of 10 private construction workers in the United States--and their employers--from participating in construction projects subject to RCOs.

Associated Builders and Contractors strongly opposes the adoption of discriminatory RCOs and related legislative initiatives across the country.

RCOs: The Good, The Bad And The Unfair

What is a Responsible Contractor Ordinance (RCO)?

Every RCO is different and should be scrutinized carefuly.  A fair or "good" RCO seeks to maintain a level playing field among competing contractors while protecting the public from inferior contractors.  A good RCO requests relevant information about contractors' qualifications, but does not arbitrarily exclude qualified contractors.  Click here to request a sample fair and reasonable RCO.

Every RCO is different and should be scrutinized carefully because the devil is in the details.  Areas of concern to the public and the merit shop construction community in typical union-sponsored RCOs include, but are not limited to, provisions covering:

• apprenticeship;
• local workforce and local contractor hire/preference;
• expansion of state prevailing wage rates to locally funded construction;
• prohibiting the use of legitimate independent contractors;
• stiff employer penalties and blacklisting;
• unreasonable insurance and benefit mandates; and
• increased paperwork and compliance by the contracting entity responsible for monitoring RCO compliance;

Who is promoting discriminatory RCOs? 
Gerard Waites, Esq., of O’Donoghue & O’Donoghue, a Washington, D.C. law firm that represents the Building Trades Unions, crafted this ordinance and is traveling around the country promoting various forms of RCOs.  Additionally, unions associated with the AFL-CIO and BCTD have created the National Alliance for Fair Contracting,which spawned other "fair contracting" groups that push for RCOs and other initiatives dedicated to preventing merit shop contractors from competing with and winning jobs against union signatory contractors.

Why are these groups promoting RCOs?
On the surface, RCOs look like a reasonable effort to protect local communities from contractors and subcontractors that do not perform quality work in a safe manner.  Once examined closely, it is clear that the effect and real purpose of RCOs is to guarantee that only union contractors can meet the criteria of RCOs. Unions have drafted this language and stand to benefit from this tactic by reducing competition from merit shop contractors.

What is the most concerning competition-cutting provision in typical union-sponsored RCOs?
One example of a provision that reduces competition is requiring contractors to participate in a registered apprenticeship training program.  While it makes sense to support a trained workforce, most RCOs limit the source of training to programs offered by unions or those that primarily benefit unions.

Mandating a sole method to train a workforce runs counter to the spirit of innovation that defines our country and the construction industry.  Bureaucratic procedures impede and in some cases prevent contractors from participating in registered apprenticeship programs.  Some states even refuse to register open shop apprentices or non-union apprenticeship programs. Such impediments deny merit shop contractors the opportunity to pay competitive wages to apprentices on construction projects and deny apprentices much-needed work opportunities on jobs their tax dollars help fund.

Quality alternative training programs such as community colleges, trade and technical schools, and colleges and universities offering craft education are not permitted under registered training requirements in typical RCOs.

Construction users must evaluate RCOs sensibly and determine if they will produce quality and affordable construction projects in the spirit of free and open competition or create a bidding environment susceptible to discrimination, limited opportunity and increased costs.

Will union-backed RCOs result in increased construction costs and unnecessary delay?
Yes, for a variety of reasons: 

• Reduced competition on public construction projects equals increased construction costs
• Having state prevailing wage laws apply to a project not normally subject to prevailing wage laws will increase labor costs
• RCOs tend to limit construction bids to only union contractors.  Studies investigating union-only project labor agreements (PLAs) – another tactic used by organized labor to cut competition and monopolize construction work - have demonstrated that work assigned to a union-only workforce increases the cost of construction between 15 percent and 20 percent when compared to similar projects bid in a free and open environment
• Additional administrative costs may be incurred by the contracting entity responsible for monitoring RCO compliance 
• Contractor selection will take much longer, which could lead to increased construction costs

Contact government officials responsible for implementing RCO policies in your community and tell them you oppose RCOs because they are costly to taxpayers and discriminate against the majority of contractors and their employees who do not belong to a union.  Tell them RCOs are just plain un-American. Also, alert ABC Nationaland your local ABC chapter about proposed RCOs.

Why is ABC fighting RCOs?
ABC is committed to free enterprise, merit construction and open competition, regardless of union affiliation. Union-sponsored RCOs offend ABC’s core principles because they are designed to drive ABC contractors out of business.

How Can ABC Help My Community With Existing or Proposed RCOs?

• Individual ABC chapters and ABC National staff can collaborate with trade associations, building contractors, construction users, municipalities and school districts to craft fair and effective RCOs
• ABC serves as a resource for information on the commercial and industrial construction industry
• ABC can provide credible and knowledgeable speakers who will educate groups or government officials about RCOs
• ABC will monitor RCOs across the country and plan to measure and record their negative impact on communities

Please visit this webpage often for updated studies, talking points, news and other information about RCOs

Your tips and feedback are always welcome.  Write to stateaffairs@abc.org   to ask questions or request help fighting RCOs in your community.  All emails will receive a timely response and may be added to this website as examples of frequently asked questions.

Below are some questions we have already received.

Q. Is this a union versus non-union issue?

A. No. ABC's mission is the advancement of the merit shop construction philosophy, which encourages open competition and a free enterprise approach that awards contracts based solely on merit, regardless of labor affiliation.  ABC members would benefit from provisions in RCOs that weed out unqualified contractors, as long as the criteria and process is fair and not manipulated to give preference to union contractors.

Q. Are there existing alternatives to RCOs that ensure responsible contractors are selected to perform public construction work?

A. Contractors typically must secure bonding as a prerequisite to performing work on a public construction project. In order to secure bonding, a contractor must demonstrate they are financially sound, operate safely and have a proven track record of performing construction work. Also, additional safeguards regarding contractor performance that do not discriminate against a company based on labor affiliation can be inserted into bid requirements and often are codified in existing local or state contracting laws.  Many communities have existing prequalification standards for contractors that do not discriminate against merit shop contractors and have produced on time, on budget and quality construction projects.

Q. Is ABC opposed to RCOs because ABC does not offer registered apprenticeship training?

A. No.  ABC provides formal apprenticeship training programs that are registered with the United States Department of Labor, Bureau of Apprenticeship and Training (BAT). These programs meet all federal and state requirements for formal apprenticeship and prevailing wage work including employer-sponsored classroom instruction and on-the-job training. Upon successful completion, craft professionals are recognized at the journey level in their trade and are awarded their BAT certificate.  Learn more about ABC Craft Training and Apprenticeship.

RCO Resources

Public Relations and Educational Materials

• ABC MA RCO Position Paper

• Merit Construction Alliance RCO Website
• ABC Southeast Pennsylvania's RCO Website
• ABC Southeast Pennsylvania's one-page informational leave behind for public officials and construction users
• ABC Southeast Pennsylvania's My Daddy Can't Work in Falls, Lower Makefield and Middletown Townships ad.

Studies, Articles and Editorials

• Worcester, MA Regional Research Bureau's Feb. 2008 paper, Where Have All The Builders Gone?: The Impact of "Responsibility" on Public Construction and March 2008 testimony to the Worcester City Council and related article
• Worcester Telegram Feb. 26, 2008 editorial opposing Worcester, MA RCO policy
• Patriot Ledger Dec. 1, 2008 Op-Ed, "Union Pressure on City Officials Costing Qunincy Taxpayers" by Merit Construction Alliance Director Ron Cogliano opposing Quincy, MA RCO Policy. Op-Ed pdf.

RCO Examples

• Falls Township Ordinance
• Lower Makefield Township Ordinance
• Middletown Township Ordinance
• Delaware County Ordinance

Where Have Union-sponsored RCOs Been Implemented?

California

• City of Los Angeles (LAAC 10.40.5) (2002)
• Sacramento

Connecticut

• City of Danbury (Sec. 2-149)
• City of Hartford (1999)
• City of Middletown (Sec. 7-5, 7-6) (1999)
• City of Norwalk
• City of New Haven (Sec. 12.5-33, 12.5-19, 12.5-20 (1999)

Deleware

• New Castle County (Ord. No. 06-117 07) (2006)

Illinois

• City of Anna (Ordinance No. 97-6) (1997)
• City of Aurora
• City of Bllomington (Resolution 2000-54)
• County of Bond (2001)
• County of Bureau (Amends 55 ILCS 5/5-1022) (2002)
• City of Chicago Heights (Ordinance No. 01-13) (2001)
• Village of Coal City (Resolution No. 00-07) (2000)
• County of Cumberland (Resolution 2-14) (2002)
• Town of Decatur (Section 85-30) (2001)
• Village of Downs (Ordinance No. 98-05) (1998)
• Village of Gardner (Resolution No. R99-227) (1999)
• County of Kane (Resolution No. 04-223) (2004)
• Kankakee County (Amendment to Chapter 5) (2000)
• Knox County (Resolution No. 2004-016) (2004)
• LaSalle County (1997)
• Macon County (Resolution No. G-1942-5-00) (2000)
• Marion County (Resolution No. 2001-121) (2001)
• Village of Mark (Ordinance No. 99-5-20) (1999)
• City of Marseilles (Ordinance No. 922) (1997)
• City of Mendola (Ordinance No. 5-3-99) (1999)
• New Lenox School District
• City of Oak Forest (Ordinance No. 2659) (2002)
• Village of Orleans (Ordinance No. 04-13) (2004)
• Village of Orland Park (Ordinance No. 4017 2005-0233) (2005)
• City of Ottawa (Ordinance No. 09-97) (1998)
• City of Palos Hills
• Richland Community College (Resolution No. 01-19) (2001)
• Rock Island County (Ordinance 2004-723) (2004)
• City of Rockford (Art. X, Div. 6, Sec. 2-284 (b)(16)
• County of Sangamon (Ordinance 18-1) (2004)
• City of Springfield (Ch. 38, Art. IV, 38.35) (2003)
• Springfield Park District (Ordinance #940-03) (2003)
• City of Streator (Ordinance 1999-2000) (2000)
• Will County (Part B, 1-201 (2000)
• Winnebago County (Ch. 2, Art. IV, Div. 3, Sec 2-332)

Indiana

• Hendricks County (Contractors Listing Ordinance 1996-43) (1996)

 
Massachusetts

• Town of Amherst
• City of Boston (Section 8-9.1) (1998)
• City of Brockton (Chapter 13) (1997)
• City of Cambridge (2.66.010-2.66.070) 1995)
• City of Everett (Everett Residents Construction Employment Ord.) (Section 4.3) (1997)
• City of Fall River (Section 2-294) (2000)
• City of Lawrence (28C-1, 29C-2)
• City of Malden (Section 3.5A)
• City of New Bedford (Chapter 10, Article II, Sec. 10-77) (1997)
• County of Plymouth (2003)
• City of Quincy (Section 15.26.1-15.26.6 (2000)
• City of Springfield (Chapter 4.14) (1998)
• Somerville
• City of Waltham (Chapter 2)
• Town of Weymouth
• City of Woburn (Title 17)
• City of Worcester 

 
Michigan

• Public Schools of the City of Muskegon (2003)

New Hampshire

• City of Manchester (2002)
• City of Mancester (Airport Construction Projects) (2002)

 
New York

• State of New York (Establishment of Responsibility of Contractors and Subcontractors and Construction Contract Lowest Responsible Bidder Registry) (Labor Law Section 220) (2000)

 
Oregon

• (Relating to award of public contracts based on competitive bids; creating new provisions; and amending ORS 279C.375 and 279C.835) (SB 1006) (2005)

Pennsylvania

• Bristol Bourough School District (2006)
• Bristol Township (2006)
• Bucks County
  • Falls Township
  • Lower Makefield Township
  • Middletown Township (2006)
  • Lower Southampton Township (2006)