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Project
Labor Agreements on Federal Construction Projects: A Costly Solution
in Search of a Problem
BOSTON,
MA A new study released today by the Beacon Hill Institute
(BHI) finds that Project Labor Agreements (PLAs), which will be
permitted under an executive order from President Obama, will significantly
increase construction costs on federal projects while doing nothing
to protect the interests of federal taxpayers. The executive order
reverses a prohibition on PLAs that was in effect during the Bush
Administration.
The
purpose of the BHI study, which is entitled Project Labor Agreements
on Federal Construction Projects: A Costly Solution in Search of
a Problem, was to determine whether the reversal of this prohibition
is in the interest of federal taxpayers.
PLAs
are agreements with contractors that establish the rules to be followed
by firms that bid on construction projects. PLAs typically require
a contractor to hire workers though union hiring halls, require
non-union workers to pay dues for the length of the project and
force contractors to abide by union rules on pensions, work conditions
and dispute resolution.
In
February, President Obama issued Executive Order 13502, which allows
executive agencies to require contractors to use PLAs on federal
construction projects costing $25 million or more. The federal governments
deadline for accepting comments on the order is September 23, 2009.The
purpose of a PLA is to assure labor peace during construction
projects.
But
a review by BHI of federal construction projects during the Bush
Administration found no instances of labor disputes that resulted
in significant project delays or increased costs.Our examination
of the record produces no evidence of any systematic connection
between the absence of a PLA, on the one hand, and cost overruns
or delays caused by labor disputes, on the other, said David
G. Tuerck, one of the authors of the study and Executive Director
of the Beacon Hill Institute. Therefore, the justifications offered
by the Obama Administration for reinstating PLAs are not supported
by the evidence. MORE
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