ABC President and CEO Urges N.J. Governor Not to Sign PLA Expansion Law

ABC Jan. 17 sent a letter to New Jersey Gov. Chris Christie urging him not to sign legislation that would allow the state and local government entities to mandate project labor agreements (PLAs) on even more public construction contracts than are currently permitted, including Superstorm Sandy relief efforts. The legislation, which passed the New Jersey Senate on Jan. 14, would expand a law passed in 2002 to allow PLA mandates on bridges, pumping stations, and water and sewage treatment plants, all of which are excluded under current law. 

In the letter, ABC President and CEO Michael D. Bellaman called attention to the detrimental impacts PLAs have on construction contractors and taxpayers, pointing out that annual reports from the New Jersey Department of Labor and Workforce Development show PLA mandates lead to construction cost increases of about 30 percent. 

“In the wake of the Sandy disaster, it is critical that taxpayer funds be used as efficiently as possible to ensure they do the most good for communities impacted by the storm,” Bellaman wrote. “Unfortunately, as a result of their discriminatory requirements, PLAs have an established history of increasing construction costs on taxpayer-funded projects.” 

He went on to point out that construction contracts subject to PLAs almost always are awarded exclusively to unionized contractors and their all-union workforces, but that only 23 percent of New Jersey’s construction workforce chooses to join a labor organization. As a result, PLA mandates on Sandy relief projects would ensure the vast majority of New Jersey’s construction workforce would be denied the chance to compete effectively for these critical recovery projects, including ABC members.

“ABC and its members stand ready to help New Jersey recover from this devastating storm,” Bellaman wrote. “We strongly urge you to guarantee them the opportunity to help by vetoing any legislation that would deprive them of the opportunity to compete for Sandy relief projects in their own communities.”

The New Jersey Legislature enacted a statute authorizing the use of PLA mandates on certain public works projects costing more than $5 million in 2002.  The state’s Supreme Court had previously found that PLA mandates violated New Jersey competitive bidding laws.  The definition of “public works” in the 2002 law is limited primarily to vertical construction projects. The bill that the legislature is considering would expand that definition to roads, bridges and other types of construction not covered by the 2002 law.

ABC’s Northeast Region Vice Chairman Kirby Wu, president of Wu & Associates, Inc., Cherry Hill, N.J., was interviewed Jan. 18 on the impact this law would have on New Jersey. See the video below: