April 13 was the first day that the new Obama styled contracting guidelines requiring that all Federal projects with budgets of over $25 million have negotiated Project Labor Agreements or PLAs. The guidelines further suggest that those agreements can only be negotiated with Union contractors and subcontractors according to Fox News . The Presidential Executive Order was quietly signed a few days after Obama took office last year. According to the news article, “Those agreements require contractors to negotiate with union officials, recognize union wages and benefits and generally abide by collective-bargaining agreements” effectively shutting all “Merit Shop” or “Open Shop” contractors and subs out of this work.
Opponents to the policy including the Associated Builders & Contractors and the Associated General Contractors have claimed that this policy will add as much as 20% to the cost of those projects; stifle competition and block out the 85% of contractors and subs who are not unionized but who might wish to compete for Federal contracts.
According to the article, “Proponents of the new policies (actually the reinstatement of Clinton era policies under an Obama banner) such as Mark Ayers, president of the AFL-CIO Building and Construction Trades Department praised the policy.
Contrary to claims by those who oppose these agreements -- who subscribe to a 'race to the bottom' mentality, where success is predicated on the ability to assemble a low-wage, easily exploitable workforce -- PLAs have proven over and over that they are a valuable, market-based tool that ensures superior job site management, project efficiencies and workforce productivity and development."
In Texas, projects like the expansion of the South Texas Nuclear Plant will likely fall under these guidelines and could lead to additional union shop contractors moving operations into Texas.
What the President needs to realize is that there are socially responsible “merit Shop” contractors and subs that provide the appropriate training, wages and benefits to their workers even though they are not unionized. By excluding those firms like the firms who embrace the principles outlined in Construction Citizen, the Federal government is limiting the opportunities for construction industry workers where the unemployment rate exceeds 25%.
More reading: Wall Street Journal (subscription required)