ABC is strongly opposing a decision by the U.S. Naval Facilities Engineering Command (NAVFAC) Northwest to mandate that contractors use a project labor agreement (PLA) on the construction of a $450 million to $550 million explosives handling wharf at Naval Base Kitsap-Bangor in Washington.
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NAVFAC mandated a PLA in Phase 2 of the project’s bidding process after Sens. Maria Cantwell and Patty Murray, and Reps. Norm Dicks and Jay Inslee, all Democrats from Washington, wrote to the Navy in support of a PLA at the request of construction trades unions.
“It is clear this PLA mandate is nothing more than a scheme by this Administration to steer federal contracts to special interests that support the White House and Democrat members of Congress,” said Ben Brubeck, ABC National director of labor and federal procurement.
Although NAVFAC did meet with local trade unions to discuss the PLA mandate, they did not consult the merit shop contracting community about the negative impact of PLA mandates on qualified federal prime contractors, subcontractors and their local employees prior to issuing the PLA requirement.
“ABC is staunchly opposed to inefficient, anti-competitive and costly PLAs mandated by federal agencies.” Brubeck said. “With the help of our local chapters, we will do all we can to remove this PLA mandate so taxpayers can benefit from increased competition, reduced costs and local job creation for all qualified federal contractors and skilled tradespeople.”
Mandate Creates Inefficient Contract Requirements
In addition to failing to evaluate the effect this mandatory union agreement will have on competition from the employers of the 87 percent of the U.S. construction workforce and 84.2 percent of Washington’s construction workforce that chooses not to belong to a union, NAVFAC's inclusion of a PLA mandate in the Phase 2 solicitation creates many problems for contractors and an inefficient procurement process.
“At first, NAVFAC followed typical procurement procedures and invited a short-list of qualified contractors participating in Phase 1 to submit a bid under the premise there was no PLA mandate,” said Brubeck. “Then, following political pressure, NAVFAC’s Phase 2 solicitation instructed short-listed contractors to negotiate a PLA with specific trade unions and submit an executed PLA within 10 days of contract award.”
NAVFAC also asked short-listed contractors for feedback on the terms and conditions of an agreement NAVFAC pre-drafted with unions that must be included in the executed PLA in order for the winning contractor to proceed with construction. ABC responded to requests for help from short-listed contractors and identified numerous problems contained both in NAVFAC's inefficient procurement approach and pre-drafted PLA language. ABC’s suggestions were contained in contractors’ comments submitted to NAVFAC.
NAVFAC is expected to review and share comments with unions to create a PLA that contractors must use as a starting point in future PLA negotiations – that means contractors may not have an executed PLA before bidding, making it extremely difficult to accurately determine labor costs and other costs reflected in their final price proposal.
Final proposals are due to NAVFAC by Feb. 13.
“NAVFAC is asking for the impossible with this inefficient procurement approach,” said Brubeck. “They expect bidders to submit an accurate proposal and price in a tight schedule, yet firms may not have a finalized PLA, which affects their labor costs and final bid costs. It is one of the many problems with any procurement process that requires a PLA. It is not surprising that government-mandated PLAs restrict competition and interfere with a contractor’s ability to deliver to taxpayers the best possible product at the best possible price.”
First PLA Mandate on a Navy Project Since E.O. 13502
The explosives handling wharf PLA marks the first time NAVFAC has required a PLA on a Navy project since President Obama issued Executive Order 13502 in Feb. 2009, which strongly encourages federal agencies to mandate PLAs on a case-by-case basis on federal construction projects exceeding $25 million in total costs.
However, NAVFAC has considered PLA mandates in the past and has solicited feedback on PLAs from the industry in the form of surveys and requests for information. For example, after requesting comments from ABC National and the merit shop contracting community, NAVFAC decided not to mandate
a PLA on billions of dollars worth of construction for the Guam base realignment.
ABC takes every opportunity to respond to PLA surveys issued by federal agencies, in addition to encouraging members and chapters to do the same. ABC will continue to fight the expansion of E.O. 13502 and government-mandated PLAs on any federal or federally funded construction projects.
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To learn how you can help fight this PLA and other federal PLA mandates, please contact Brubeck@abc.org