Advantages and Disadvantages of Project Labor Agreements

Much of the research on the impact of LPAs on construction costs is inconclusive. In part, it can be difficult to find similar projects where some use a PLA and others don`t. Instead of comparing similar projects, economists often use statistical models that try to control for differences in project characteristics. However, it can be difficult to control all the factors that affect construction costs. For example, if the predominant Davis Bacon wage locally is the local union wage, contractors can pay workers the union wage, whether the project is covered by an APL or not. In addition, statistical models may not take into account the quality of construction, whether projects are completed on time, or the safety records of various projects. Finally, the relationship between APLs and construction costs can be interdependent. APLs can affect construction costs, but the size and cost of construction can also impact the use of APLs. Opponents argue that LPAs have several drawbacks. They argue that APLs increase construction costs. Non-unionized contractors cannot submit bids for projects covered by a collective agreement or, if they submit a bid, they cannot receive contracts on the basis of lower costs. If they have to hire workers through a union hiring room, contractors may not be able to use their own workers.

Workers of a non-unionized contractor may have to join a union and pay union dues. If a contractor is required to contribute to a group pension plan, employees may not participate in the project long enough to participate. Opponents of the PLA also argue that non-unionized contractors can offer more effective worker training programs and that the evidence does not suggest that non-unionized construction projects are less safe than unionized projects. Finally, opponents argue that federal and state authorities enforce occupational health and safety laws. The government has estimated that federal agencies can deploy APLs each year for about 30 construction projects worth $25 million or more. The estimate is based on federal construction data for fiscal year 2008 and fiscal year 2009.11 Project employment contracts allow unionized and non-unionized companies to bid on projects. The People`s Liberation Army offers the same agreement for all workers and prohibits discrimination by trade union organizations against non-unionized candidates. The People`s Liberation Army allows non-unionized workers to choose not to become full members of the union. Non-unionized workers may also pay reduced union dues or choose not to pay union dues, depending on the state in which the construction project takes place. The 2009 study examined the potential impact of LPAs on construction costs in five cities where VA was planning projects.

The five cities were Denver, New Orleans, New York, Orlando and San Francisco. Rider Levett Bucknall, Project Labor Agreements: Impact Study for the Department of Veterans Affairs, June 2, 2009, pp. 6, 32-33. Opponents and supporters of the PLA do not agree on the economic impact of the PLA. The proponents argue that the agreements provide for uniform wages, benefits, overtime pay, hours of work, working conditions and working rules for working on large construction projects. They claim that APLs provide contractors with a reliable and uninterrupted supply of labor at predictable costs for salaries and benefits, and they argue that an APL makes it easier to manage a large project, ensuring it is completed on time and within budget. Proponents also claim that LPAs help train workers, improve worker safety, and ensure compliance with labor, health and safety laws. Project employment contracts (LPAs) are a point of contention among many players in the construction industry. While some see them as a necessity to ensure a balance of power between the workforce and construction companies, many see them as an unnecessary and discriminatory burden on the industry.

In this two-part series, a Greensboro construction lawyer at Cotney Attorneys & Consultants will discuss the pros and cons of APLs. If you have any questions about your rights to a government-funded construction project, please contact an experienced attorney at our Greensboro construction company. A study by the National University System Institute for Policy Research examined the impact of APLs on the cost of building schools in California. The study collected information on 551 school construction projects, including 65 projects using the PLA. The projects were built between 1996 and 2008 and were worth $5 million or more. The study concluded that projects built with a PLA cost 13% to 15% more per square foot than projects not built with a PLA. But 47 of the 67 projects built with an APL were in the Los Angeles School District, where construction costs were higher. The intersection of high construction costs and the use of PLA has made it difficult to identify the unique contribution of LPAs to construction costs.22 In addition to studies examining the use of APL and their impact, there are reports detailing the history of PLA use and the arguments for and against its use. Reports examining the history of PLA use include a 2001 california state library report compiled for the California Senate that tells the story of APLs in California and uses case studies to examine the characteristics of public and private APLs.

[108] In a 2001 article in the University of Pennsylvania Journal of Law, the author sets out the arguments on both sides of the PLA and assesses the state of the law since the 1993 Boston Port case was decided. The article notes that, although there are advantages to the use of pla, they may present risks and should only be allowed for projects where they promote the objectives of the tender statutes, namely timely, efficient, high-quality and cost-effective designs. [109] On 6. In February 2009, President Barack Obama signed Executive Order 13502,[1] which calls on federal agencies to consider using APLs on a case-by-case basis for federal construction projects costing $25 million or more. [29] This law served to revoke the Bush Executive Orders 13202 and 13208 eight years earlier, which banned state-mandated LPAs for federal, state-funded construction projects. [30] The Obama Ordinance states that federal agencies can require an APL if such an agreement meets federal goals of economy and efficiency. Under the terms of the order, non-unionized contractors can compete for contracts subject to LPAs, but they must agree to the various terms of each LPA in order to obtain a federal contract and build a project. [15] An important change from the 2001 ordinance is that by repealing the Bush Ordinance, Obama`s executive order allows recipients of federal funds, such as owners of state, local, and private buildings, to order APLs for public works projects of any size. However, the ordinance does not encourage or oblige recipients of federal aid to use a government-mandated People`s Liberation Army. [15] In August 2001, the U.S. District Court struck down Executive Order 13202 in a case investigating Maryland`s use of an APL for the Woodrow Wilson Bridge replacement project.

The court ruled that the order was invalid because it was contrary to the National Labour Relations Act. [23] The judge issued a permanent order on November 7, 2001 to block the execution of the order. [25] [26] In July 2002, the United States The District of Columbia Court of Appeals overturned the District Court`s decision and ordered the injunction set aside. [22] As a result of this decision, the Department of Defense, NASA, and the General Services Administration formally recognized the Federal Register Ordinance and incorporated it into their construction tendering procedures. [26] This report begins with a description of the LPAs. He then describes President Obama`s EO and summarizes the regulations to implement it. The report then examines the arguments for and against the use of APLs and provides an overview of research on the economic impact of the agreements. The agreements have been used in the United States since the 1930s and were debated in the 1980s to be used for publicly funded projects. In these cases, government agencies have made the signing of LPAs a condition for working on taxpayer-funded projects. This type of PLA, known as a government-mandated PLA, is different from a PLA voluntarily entered into by contractors for public or private works – as permitted by the NLRA – as well as a PLA ordered by a private entity for a privately funded construction project.

Executive orders issued since 1992 have impacted the use of state-mandated APLs for federal construction projects, and the most recent executive order issued by President Barack Obama in February 2009 encourages their use by federal agencies. A number of groups oppose the use of LPAs and argue that the agreements discriminate against non-unionized contractors and do not improve efficiency or reduce the cost of construction projects. Studies on LPAs have mixed results, with some studies concluding that LPAs have positive effects, while others conclude that agreements increase costs and can have a negative impact on entrepreneurs and non-unionized workers. .

Comments are closed.