Blue Mass Group

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Can we have an intelligent conversation about PLA’s here on BMG?

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Now, full disclosure.  I’m definitely pro-union.  I won’t cross a picket line, I’m not getting my coffee fixes at Dunkin Donuts right now, and I get chills up my spine when I hear “Solidarity Forever.”  Nevertheless, I think that Deval Patrick did the right thing with flaggers, I believe that the Quinn Bill needs to be tightened up, and I’m glad that the Mass. Turnpike Authority is gone.

So when it comes to PLA’s, I’m looking for reasonable arguments.  And here’s one that made an impression on me.  On July 1st of this year, the Congressional Ressearch Service put out a report on PLA’s by Gerald Mayer.  It’s not a polemic for or against PLA’s, just an attempt to summarize what the reseach about PLA’s shows.  Here’s the part that woke me up:

PLAs have been used in the United States since at least the 1930s. According to a 1998 report by the Government Accountability Office (GAO), PLAs were used in the construction of the Grand Coulee Dam in Washington in 1938, the Shasta Dam in California in 1940, the Trans-Alaska Pipeline, Walt Disney World and the Kennedy Space Center in Florida, and the cleanup of Boston Harbor. PLAs were also used in the construction of nuclear power plants in Hanford, WA, and Oak Ridge, TN.

According to the GAO report, the total number of PLAs is not known. The report states that there

is no identifiable group in either the private or public sectors that keeps comprehensive data on the number of PLAs. Nevertheless, GAO’s research concluded that most PLAs are in the private sector and that they have been used in all 50 states and the District of Columbia on both private and public projects.

A part of that last sentence must be repeated:  “most PLAs are in the private sector.”  Now, if that’s the case, what’s the big deal?  If the private sector chooses to rely on PLA’s, in appropriate projects, why shouldn’t the public sector have the same option?

There’s much, much more in that report, most of which supports the use of PLA’s, some of which doesn’t.  But that’s the one point that hit me the hardest.  Did Walt Disney decide to build Disney World with a PLA because he was beholden to unions as special interests, or was it just because it made good business sense?  And if it made good business sense to Walt Disney, what’s wrong with it for U. Mass. or other public projects in Massachusetts?  And, please spare me the Beacon Hill Institute research — I’ve seen it, it’s been rebutted, and we need to get unbiased information to really make a sound judgment.

So can we, the BMG community, have a rational disucssion about PLA’s?

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Comments

  1. you state: “Did Walt Disney decide to build Disney World with a PLA because he was beholden to unions as special interests, or was it just because it made good business sense?”

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    p>The business sense for Walt is different than for a govt entity.  Walt may have decided that if he did not use a PLA many of the unions would ask for a boycott of Disney World which could have cost him more money than going without a PLA.  The government does not have that concern.

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    p>I guess my thoughts would come down to:
    Are projects done through a PLA any cheaper/safer/faster/better in any way than projects done without one.

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    p>If UMass can get the exact same quality with a lower cost without a PLA, then they should go without one.  If they feel that the end result will be better in some way with a PLA then they should use one.

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    p>What is the benefit of using a PLA over not using one?  

  2. The arguement that Disney didn’t want to upset the unions in fear of a boycott may be true, but he could have hired union contractors regardless of a PLA.

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    p>I helped build AMGEN pharmaceutical in Rhode Island, it was a PLA project worth $500 million dollars.  Now a union boycott of ENBREL drugs seem far fetched.  

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    p>The reason a PLA was used for this project is it gave a uniform contract to all trades and contractors.  AMGEN knew it only had a certain amount of time before their PATENT ran out and they needed to be in production phase quickly.

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    p>The PLA set time tables for the entire project,created mandatory overtime if you were hired at a certain point in the project. This ensured the project was built on time so AMGEN could get the drug on the market before generic drug companies could compete.  

  3. Going by just the words “Project Labor Agreement” I assume it’s some sort of contract that says only union workers will be used, but I really don’t know all the nuances.  Is there a nutshell definition or examples of projects where one was used and one wasn’t used and what the differences are?

  4. But that Callahan decision uses some very circular reasoning. Malden estimated the cost of the project to be $100 million while entering into the PLA. That means that the (potentially) increased costs of the PLA were already built into the $100 million. Then Malden used the total cost of the project to justify the PLA. And the SJC agreed. Completely circular.

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    p>I really can’t comment on whether PLA’s are good or bad. But if using a PLA increases the size, duration, and complexity of a project then the PLA is a self-fulfilling prophecy under this Callahan decision.

    • in addition to size, duration, and complexity… it also improves quality, safety, and aesthetic?

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      p>I’m not arguing that it does for any given project, merely pointing out that neither size, duration, nor cost are always joined with higher cost, nor that a higher cost is necessarily a bad thing if it comes with a better product.

      • the SJC’s Callahan decision does not mention “quality, safety, and aesthetic” in the Callahan decision. The test for determining when a PLA does not violate MA open bidding law is, as David notes above in his promotion commentary,  based on “size, duration, timing, and complexity.”

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        p>Presumably a public project would be defined at the outset as requiring a certain level of quality, safety, and aesthetic. Then the public entity would determine the most cost effective way to achieve the defined project. At that point, the public entity can only use a PLA under the Callahan decision if the project has a certain level of size, duration, timing, and complexity. But those things depend, in part, on the bidding process. So if the public entity uses a PLA before the bidding process then the size, duration, timing, and complexity of the project might increase to the required level because of the PLA.  A self-fulfilling prophecy.

        • How would requiring a PLA influence the
          * size
          * duration
          * timing
          * complexity
          of a project?

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          p>Most projects don’t go out to bid with a schedule requiring overtime; the exception tends to be either (a) projects involving transportation due to off-hours or the minimization of obstruction, or maybe (b) things like schools if they’ve got to get it done in time for a school year start.  In either case, a PLA or not shouldn’t alter duration/timing… that’s being driven by the project details itself.

          <

          p>So, again: how would requiring a PLA influence the s/d/t/c of a project in the first place, thereby generation your alleged self-fulfilling conspiracy prophecy?

          • In this case, the “size” of the project was measured in dollars. The PLA required the city to pay all workers according to the MA Dept of Labor pay rates and required the city to contribute to union benefit funds and comply with union schedules, holidays, and overtime rules. Again I’m not an expert, but I don’t think it’s a “conspiracy” to acknowledge the possibility that these provisions in the PLA increased the size (i.e. cost) of the project. Therefore, having a PLA potentially increased the size of the project to $100 million, then the $100 million size of the project was used to justify the PLA. It’s circular – Malden used a PLA to estimate (increase) the size of the project, then used the size of the project to justify it’s PLA.        

            • In a non PLA setting, contractors are paid the prevailing union wages (I stress contractor, because having non-union workers kickback a portion of their legally mandated wages is a common, although maybe not widespread problem).  Now maybe you’re arguing that union rules on schedules, holidays and overtime increase the size in a way that creates a self fulfilling justification for a PLA.  For public projects, however, the wages for a union PLA project versus a non union competitively bid project shouldn’t be too far off from each other even if some of the ‘extras’ do increase the cost.  If the competitive bid could bring down wage rates 20 or 30%, you’d have a point, but a big portion of the size of the project is going to be determined by multiplying the prevailing wage by the number of hours it is expected to take.  Only the number of hours is really variable – so the relative size of a project is going to be something that can be determined with some accuracy.  

  5. that considers only their monetary costs and not their benefits is intellectually flawed. In any context, a financial or economic discussion  that doesn’t weigh both costs and benefits of a proposal or situation is not worth having.

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    p>There are benefits to unions and union wages starting with, and going beyond, those who earn them; however, our political discourse omits even the idea of benefits 99.9% of the time.

  6. Maybe simple but I’ll ask…

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    p>Is it worth paying for a PLA project if the result is employing 15% less people due to higher costs? Is it worth having more unemployed people in MA vs. paying union laborers their rate and benefit scale?

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    p>We need common sense governance concerning issues like this. Unions have too much power on Beacon Hill!

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    p>PLAs should be illegal.

    • employing 15% fewer people, but the opposite question is also germane: is it worth driving wages down in order to drive employment up? Not saying that’s possible, but you get my drift.

      <

      p>But I’m so glad you asked. For society at large, unions

      Reinforce the middle class and lift up America’s communities. States with higher rates of unionization have lower rates of poverty, crime, and failing schools.

      Benefit local economic development. In partnerships with employers, community organizations, and local governments, unions have helped revitalize local economies by saving and expanding family-supporting jobs.

      Raise wages for all workers. Studies show that a large union presence in an industry or region can raise wages even for non-union workers.

      Fight for all workers’ health and safety. In 2008 the AFL-CIO and the United Food and Commercial Workers sued to get employers to provide personal protective equipment. Now, workers in hazardous jobs which require safety gear-like hard hats or protective glasses-must be provided this equipment, instead of being asked to buy it themselves.

      Advocate for increases in the minimum wage and push for living wage ordinances. Unions have been instrumental in efforts to increase the federal minimum wage, state minimum wages and in the successful living wage movement which has already resulted in over 150 local living wage laws nationwide.

      Reduce wage inequality. Unions raise wages the most for low- and middle-wage workers and workers without college degrees.

      <

      p>Are crucial in passing legislation benefiting all workers, including:

      *Fair Minimum Wage Act of 2007, providing an increase in the federal minimum wage.

      The Occupational Safety and Health Act of 1970, a comprehensive federal law ensuring safety in the workplace.

      Workers’ compensation laws, giving workers injured on the job medical coverage and compensation for lost time.

      Mine safety laws strengthening mine safety standards and protecting the rights of mine workers..

      *The Fair Labor Standards Act of 1938, creating the 40-hour work week and the first minimum wage.

      The Social Security Act of 1935, providing benefits to unemployed and retired workers.

    • I think this post exemplifies much of the misinformation that abounds about PLA’s.  If we’re talking about public projects, all workers have to be paid the prevailing wage, which is the union wage, so there’s really no difference in labor costs.  And how much of a construction project goes into wages — maybe 20%?

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      p>I’ve seen all the anti-PLA arguments, but I’ve never heard the argument that PLA’s employ fewer workers than non-PLA projects.  That’s a first for me.  In fact, union construction projects are much more likely to employ apprentices, who work at lower rates, than non-union projects, and that usually translates into larger employment numbers.

      <

      p>And do you really believe that all PLA’s should be illegal?  That private businesses who want PLA’s because of the benefits should be barred from building their projects that way?

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