NH Construction Law
  • Home
  • Blog
  • Links

#53:  Project Work Agreements

2/27/2017

2 Comments

 
New Hampshire’s recent renewed attempt to enact “right to work” legislation, prohibiting labor unions from charging fees to open shop employees who benefit from union-negotiated collective bargaining agreements, has been much in the news. Not as well publicized, but running on a parallel track, was House Bill 446.

Intended to outlaw project-specific labor agreements in state construction contract procurement, the bill proclaimed that “fair and open competition in state construction contracts is necessary to provide for more economical, nondiscriminatory, neutral, and efficient procurement of construction related goods and services by this state and political subdivisions of this state as market participants.” It defined “project labor agreement” as “any pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project,” and forbade state contracting officers from either requiring or prohibiting them as a condition of bidding on a state contract.

PLAs have been around since the 1930s. They are negotiated by labor organizations, and require all contractors and subcontractors who bid on a construction project – whether they are unionized or open shop – to sign on to the PLA as a condition of working on the project. PLAs typically offer a guarantee to the owner that no work stoppage will occur during the life of the project, in exchange for granting the labor organization the ability to set wages, benefits and employment terms for the job. This results in favoring unionized contractors and requiring nonunionized contractors to hire union workers for the project and pay in to union benefit plans. In practical effect, PLAs require a project to be built solely with union labor, regardless of whether the successful bidder and its subs are otherwise open shop employers. Unions obviously love them. Contractor associations generally hate them.

Thus far about twenty states have forbidden their public procurement officials from utilizing PLAs. But New Hampshire will not be among them, at least not this year. On February 15 House Bill 446 was killed in Committee, where the “inexpedient to legislate” vote was 17-2 and the explanation was “This bill is an unnecessary and burdensome new government regulation, which seeks to tie the hands of our state contracting agencies, making it more difficult for the state to get the best deal for our taxpayer dollars. What’s more, this bill is a solution in search of a problem. The bill’s sponsor admitted in testimony that the practice this bill seeks to ban, so-called project labor agreements, have literally never been utilized in New Hampshire and are not planned to be.”

It is difficult to argue with an “if it ain’t broke, don’t fix it” rationale (although the notion that PLAs might result in “the best deal for our taxpayer dollars” could spark a chuckle). Unions have not taken root in the Granite State to the same extent that they have in many “blue” states. The focus now shifts to federal contracts, where President Obama’s 2009 Executive Order encouraging the use of PLAs on construction contracts in excess of $25 million will undoubtedly be reviewed by the Trump administration.

In a state like ours, where only about 10 percent of the construction work force is unionized, one wonders whether PLAs will scare off bids by local contractors and result in decreased competition. The debate over whether PLAs are likely to yield higher bids will continue to rage, but we do have one basis for comparison right here in New Hampshire. In 2011 the Department of Labor’s Job Corps Center project in Manchester went out to bid with a PLA, and the low bid was $37.87 million. All of the bidders were out-of-state contractors. After a bid protest was filed, the General Accounting Office advised the Department to withdraw the solicitation and re-bid the project without a PLA – which it did. In 2013 the re-bid project drew three times as many bidders, and was awarded to Eckman Construction for $31.63 million – a savings of $6.2 million.

2 Comments

    Author

    Frank Spinella

    Archives

    May 2025
    April 2025
    March 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    April 2024
    March 2024
    February 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    January 2019
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014

    Categories

    All

    RSS Feed

Proudly powered by Weebly