February 12, 2018

State must end project-labor agreements

Chris Fryxell

When it comes to fiscal stability, Connecticut has not had a good run in recent years.

Perpetual deficits, record tax increases and economic stagnation have become the norm for a state that is commonly perceived as being full of wealth. Recently, a lot of ink has been spilled reporting and analyzing the dire outlook of our state's Special Transportation Fund (STF), which will likely result in important projects being cancelled or delayed.

The closely divided legislature will have its hands full developing a plan to bolster the STF while also finding creative ways to maintain a balanced budget. However, there is one simple action that our state government can enact that would lower project costs while maintaining the quality of work being performed: put an end to the use of project-labor agreements.

A project-labor agreement (PLA) is a discriminatory practice that requires contractors to recognize a union as the sole representative of their employees on a project. Oftentimes the language of a PLA requires contractors to hire from union halls or their employees to join the union; pay union wages and dues and contribute to union benefit plans; and abide by archaic union work rules and job classifications.

Due to these stipulations merit shop (or nonunion) contractors, who make up more than 80 percent of the construction industry in Connecticut, refuse to bid on any project with a PLA. Limiting competition to just two out of 10 qualified contractors and requiring labor work rules can increase costs by 20 percent or more for the same product.

There are thousands of qualified open-shop contractors in Connecticut, with great reputations for quality, skill and safety. Connecticut taxpayers realize no benefit from excluding these companies from bidding on state projects.

Gov. Dannel P. Malloy has been particularly fond of using PLAs for state infrastructure work. An upcoming project on the Gold Star Bridge will purportedly include a PLA and, recently, a PLA was announced for a $100 million road and bridge rehabilitation project on I-84 and Route 8 in Waterbury.

The language of that PLA gives undue preference to union contractors by requiring any signatory company to enter into agreement with labor unions, requiring workers on the project to pay an hourly fee if they choose not to join the union, and forcing workers to abide by archaic union jurisdictional rules thereby eliminating the use of multi-trade personnel utilized by open-shop contractors.

The Beacon Hill Institute at Suffolk University concluded in a 2009 study that the benefits of PLAs were unproven but that PLAs do, in fact, result in higher construction costs.

As part of that study, Beacon Hill looked specifically at Connecticut public school projects. A statistical analysis of 71 public school projects, some with a PLA and some without, showed the presence of a PLA raised the cost of building the schools by 18 percent.

A similar look at school construction in New York found PLAs raised the construction bids by 20 percent. For a more recent local example, look at Dunkin' Donuts Park Hartford, built with a PLA, which was behind schedule, over budget and resulted in court battles that are ongoing. That's not to say that the PLA caused those problems; but, it certainly didn't prevent them.

It is never a good idea for government to pick winners based on labor affiliation. Doing so is not just damaging to taxpayers footing the bill, but also to reputable companies and their hardworking employees who are shut out of opportunities to win work on state projects.

Particularly now, when our state is faced with the prospect of cutting important projects due to insufficient funds, our elected officials should be encouraging as much competition among responsible bidders as possible, both union and nonunion, instead of currying favor from special interests.

It is within the governor's authority to unilaterally end the discriminatory practice of attaching PLAs to public-works projects. Just as he has decided to use them throughout his tenure as governor, he can, and should, decide to let future projects be bid competitively.

If Malloy fails to act, the legislature should step in.

Chris Fryxell is the president of the Connecticut Chapter of the Associated Builders and Contractors.

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