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The case for project labor agreements

Manufacturing and EngineeringDefense EquipmentU.S. Department of Energy

The case often argued against project labor agreements (PLAs) — that they are somehow exclusionary, allegedly favor union contractors and union workers, etc. — misses the mark. The true test of PLAs, which are single-site craft labor agreements used for large construction projects, should not focus on contractors or workers. The true worth and value of PLAs must be examined through the viewpoint of the project owner.

After all, the owner is the one paying tens of millions of dollars (or hundreds of millions or even billions) to have the project it needs delivered correctly, on time and on budget. This is an extremely difficult challenge, and owners in the private and public sectors are held accountable to shareholders and taxpayers respectively to get it right. Two recent projects involving "PLA-Go" decisions put this issue in perspective: Maryland's highly complex $45 million state-owned Cheltenham correctional facility, and the proposed new MGM casino at National Harbor, made possible this month by Maryland voters. Both are to be built in Prince George's County

In judging the merits of these decisions, the focus should be on whether the PLA is advantageous to and in the best interest of the project owner — not any particular group of contractors or workers, union or non-union. For both of these projects, the party responsible for the investment found, after conducting extensive due diligence and reviewing major economic and engineering challenges, the PLA to be a sensible, cost-effective project planning tool that would promote quality, safety and schedule, all essential elements in a construction project.

The underlying reason that drives such PLA decisions: They provide a unique form of quality control over construction craft labor that simply cannot be achieved by any other means. This is because PLAs require all craft workers on a given project be hired though local building trade union hiring halls and referral systems. This ensures that construction workers in all trades and craft specialties needed for the project have the requisite skills. There is absolutely no other way to give such a 100 percent guarantee.

This is the key reason PLAs have been used for thousands of projects around the country worth hundreds of billions of dollars. This is why top corporations, like Toyota, build all their plants with PLAs; the company reports they save at least one-third in project costs as a result of superior skills and productivity. This is the reason government entities, including the U.S. Department of Energy, have mandated PLAs for decades. The DOE's experience shows a solid, proven track record, and the fact it doesn't trust the quality and safety of our nation's nuclear facilities to any other construction method is notable.

Such results have also been documented by at least 17 major studies by universities and government agencies, which confirm cost, schedule, quality and safety benefits of these agreements. Like anything else, this success is built on hard work. Nationally, the building trades unions invest more than $1 billion per year in the world's best craft training programs; the trades in Washington, D.C., area invest more than $26 million per year in training.

PLAs are also fair. Contrary to blatant misrepresentations, they are open to all. All contractors, union and non-union, are free to bid and win PLA contracts, and all workers, union or non-union, by law, must be accepted into the referral systems of building trades unions, provided they are qualified. On top of all this, PLAs promote local hiring and offer valuable careers to workers in local communities. But the real test is whether project labor agreements benefit project owners. On this issue, the evidence speaks for itself.

Vance T. Ayres is executive secretary-treasurer of the Washington DC Building Trades Council, which represents more than 25,000 members in Maryland, Virginia and Washington. His email is vayres@dcbuildingtrades.com.

Copyright © 2014, The Baltimore Sun
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