Project Labor Agreements will help advance Design Build Projects
March 27, 2022
Hon. Kathy Hochul
Governor of New York State
Executive Chambers
State Capitol Building
Albany, NY 12224
Dear Governor Hochul:
The New York State Building and Construction Trades Council (“NYS BCTC”) is an organization of 14 local building trades councils, 12 district councils and state associations, and 135 local unions representing over 200,000 unionized construction workers throughout the State of New York. The NYS BCTC’ s mission is to advance working conditions for our affiliates’ members, to raise and protect the standard of living for all workers in New York State, and to advocate for policies that support union careers in the construction industry.
Project Labor Agreements (“PLAs”) PLAs are project wide agreements that govern the terms and conditions for workers in multiple trades and contractors and are used to harmonize work rules, avoid delay, and promote efficiency. PLAs are particularly valuable in the Design Build context because they provide predictable labor costs at the very earliest phases of project planning and design. PLAs provide a framework for estimating and evaluating project costs. PLAs are a risk management tool that reduce project timeline risk, ensure a reliable source of skilled labor, and provide for accelerated dispute resolution procedures, all of which advance the benefits of Design Build project delivery. Since the New York City (“NYC”) Public Works Investment Act (PWIA) was enacted in 2019, which incorporated a PLA requirement for NYC’s Design Build program, NYC has issued its first annual report, which reveals both a vigorous program and robust competition. [1]
PLAs have been in use in our country since the early 20th century and have survived numerous legal challenges from the non-union sector of the industry, including in the Supreme Court and New York state and federal courts of appeal. [2] PLAs have been determined to be good public policy by the courts, the legislature, agencies of the state, municipalities, and several executive administrations. [3] President Biden recently signed Executive Order (EO) 14063, [4] requiring project labor agreements on federal construction projects over $35 million, which is expected to cover $262 billion in federal construction contracting and improve job quality for nearly 200,000 workers.
Despite, overwhelmingly favorable treatment by the courts and policy makers, non-union contractors and their advocates continue to argue that PLAs are unfair, alleging that they are excluded from PLA work. This has been rejected by the courts, policy makers, and public project owners. “The fact that certain nonunion contractors may be disinclined to submit bids does not amount to the preclusion of competition.” Thruway Authority, 88 N.Y.2d 56, at 71 (1996). PLAs do not prohibit non-union or open shop contractors from participating and bidding for work covered by a PLA. PLA work is often awarded to non-union or open shop contractors. Public PLAs do not require non-union contractors to sign underlying collective bargaining agreements or force their workers to become union members. Instead, PLAs offer contractors access to a pool of well-trained and highly skilled workers through union referral procedures throughout the life of the project. Most, if not all, modern PLAs include provisions for recruitment and engagement with local and disadvantaged communities and provide for pathways into well-paying union construction careers.
PLA opponents also claim that PLAs raise the cost of construction. While you can find reports on either side of that argument, there is significant and credible evidence that PLAs do not increase construction costs. [5] However, the best evidence of this is the fact that agencies and authorities that must comply with New York state’s competitive bidding law, have both studied and used PLAs repeatedly, including but not limited to New York City on behalf of multiple agencies, the NYC School Construction Authority, the Dormitory Authority of the State of New York, and the NYS Department of Transportation.
As noted by the Biden administration, PLAs benefit taxpayers, contractors and workers [6] by:
- Alleviating the coordination challenges on large, complex projects.
- Raising quality standards for contractors bidding on projects.
- Reducing uncertainty in the contracting process.
- Increasing training for the contracting workforce.
New York’s competitive bidding law allows for public owners to evaluate their own projects for the appropriateness of a PLA to achieve economic benefits, efficient project delivery, and quality and safe work. It is the benefits of PLAs and the success of PLA projects that has fueled the growth of PLAs in our state. PLAs will be of particular value in Design Build projects.
Thank you. I am always available for a deeper conversation on this very important topic.
Sincerely;
Gary LaBarbera
[1] https://www1.nyc.gov/assets/ddc/downloads/contracts/DB_Report_Final.pdf
[2] Bldg. & Const. Trades Council of Metro. Dist. v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218 (1993) (“Boston Harbor”). New York State Chapter, Inc. v. New York State Thruway Auth., 88 N.Y.2d 56, at 71 (1996) (“Thruway Authority”). Bldg. Indus. Elec. Contractors Ass’n v. City of New York, 678 F.3d 184 (2d Cir. 2012) (“BIECA”).
[3] For a general review of the value of PLAs in New York State see; Kotler, Fred, 2009 Report , Cornell School of Industrial Labor Relations, “Project Labor Agreements in New York State: In the Public Interest, at https://faircontracting.org/wp-content/uploads/2019/05/Project-Labor-Agreements-in-New-York-State-In-the-Public-Interest-Kotler-2009.pdf ; Kotler, Fred 2011 Report, “Project Labor Agreements in New York State: In the Public Interest and of Proven Value, https://ecommons.cornell.edu/bitstream/handle/1813/74333/LaborAgreementsinNYS_II.pdf?sequence=1&isAllowed=y
[4] https://www.whitehouse.gov/briefing-room/presidential-actions/2022/02/04/executive-order-on-use-of-project-labor-agreements-for-federal-construction-projects/
[5] https://www.epi.org/blog/project-labor-agreements-on-federal-construction-projects-will-benefit-nearly-200000-workers/
[6] https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/03/fact-sheet-president-biden-signs-executive-order-to-boost-quality-of-federal-construction-projects/
