1/8/08

Curbing non-union labor in California

In November 2002, a bare 55 percent of Solano (CA) County voters approved Measure G, a $125 million bond measure to fund construction in the Solano Community College District. The bond barely squeaked to victory, despite a campaign in which supporters greatly outspent the opponents. If 775 Solano County citizens had voted against the bond instead of for it, the bond would have failed.

Before construction actually started, the college board of trustees demonstrated why so few Solano County voters have confidence in its management of $125 million of their tax dollars. The board voted 6-1 to require contractors to sign a Project Labor Agreement (PLA) with construction unions for four large projects and an initial "pilot project" meant to evaluate the effectiveness of the PLA.

Despite a report from the program's construction manager that PLAs in other jurisdictions had increased the costs of construction up to 15 percent, the board eagerly gave a monopoly on the work to the unions. Warnings from Associated Builders and Contractors that the PLA would reduce bid competition were ignored.

In May 2005, a mere two union contractors submitted bids for the pilot project, a $3 million classroom renovation that typically would have received several bids. Numerous contractors reported to the construction manager that they would not bid the project because of the
PLA.

The project ended up with an additional $486,000 in unexpected expenses, $72,000 of which resulted from errors and omissions by the contractor. The project was finished on time only through some extraordinary measures by the contractor.

Nothing about this pilot project indicated that the
PLA brought anything special to construction. If anything, the lack of bidders and the restrictions to use union subcontractors probably artificially increased the low bid. Without another project of similar scope to serve as a control group for comparison, no one really knows for sure, although basic economics would suggest less competition equals higher costs.

Then, in September 2007, the college withdrew a bid notice for a gymnasium renovation and then re-advertised the contract with a
PLA in effect, even though the PLA approved by the Board of Trustees did not include this project. Associated Builders and Contractors filed a Public Records Act request with the college to find out how a new project had fallen under control of the unions.

It turns out that a law firm representing construction unions had sent a letter to the college president threatening "lengthy and costly litigation" unless the Project Labor Agreement was "enforced" for the gymnasium renovation, even though it was not covered in the agreement. The letter also claimed, without any evidence of course, that "the pilot projects were completed very successfully."

Finally, the letter claimed that "the amount of damages sustained by the unions and their members of having this work performed outside of the scope of the
PLA would be substantial." How interesting to see that construction unions would be "damaged" if they did not have a government-mandated monopoly on the work. Evidently they cannot compete for taxpayer-funded construction without a special deal, even when the state's prevailing wage requirement applies to a project.

Solano County voters should be aware that unions are controlling the construction at Solano Community College and using their lawyers to expand their monopoly beyond even what the college Board of Trustees had originally approved. When Solano Community College's Board of Trustees again asks taxpayers for yet more money for college construction projects, consider how one special interest group has a firm grip on the college at your expense.

(thereporter.com)

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