5/27/08

Century-old law crushes non-union contractors

Public works law comes under fire

A new measure that was supposed to reform an expensive, union-backed law for public works projects was crafted in a way that now appears will block hundreds of non-union companies from bidding on government projects, critics say. As a result, the recently passed measure will cost jobs, especially upstate, and drive up construction expenses for school districts, municipalities and the state, private industry claims. “It’s a real can of worms,” said Heather Briccetti of the Business Council of New York State.

“It’s basically going to shut us out of projects. It’s going to put us all out of business and all of our employees, too. It’s just an outrageous situation,” said Tom Ballard, president of Cloverbank Construction, a small Buffalo general contracting firm that bids exclusively on public works projects.

“I can’t believe they put it through. It makes you wonder who our legislators are. If they’re not watching out for what gets through, who is?” he added.

Union leaders say opponents are worried about non-union companies losing more profits from public works projects, companies they say hire lower-skilled workers so they can pay them less.

“You would expect people who want to exploit their workers to have this point of view,” said Denis Hughes, president of the state AFL-CIO.

Business groups are now trying to persuade the Legislature, before its 2008 session ends next month, to either undo or at least postpone what was slipped into the thousands of pages of the state’s budget bill in early April.

The provision, they say, will disproportionately affect upstate construction companies compared with those in New York City, where most are unionized. They warn minority-and women-owned firms, which are generally smaller and non-unionized, will be especially harmed.

At issue is the Wicks Law, which requires state and local governments to use multiple construction contracts for public works projects. The law has been blamed by municipalities for driving up construction costs of projects such as new schools by more than 20 percent.

The changes, which start July 1, raise the threshold for the Wicks union labor requirements from the current $50,000 per project to $500,000 upstate and $3 million in New York City.

But the new law also includes an escape hatch that governments can use to avoid the Wicks requirements: They can enter into a project labor agreement with local unions that all but guarantees union construction workers will be the major, if not only, workers on the jobs.

And there are other poison pills, detractors say. A company wanting to bid on a public project must agree, according to state Labor Department officials, to participate with an apprenticeship program that is offered almost exclusively by unions or unionized companies. Critics say the requirement comes at a time when the state has put a moratorium on new apprenticeship programs, making it impossible for nonunion companies to comply.

“This is public work, and the taxpayers are best served by more competition, and these provisions will arbitrarily restrict who can do public construction. When you limit competition, you raise costs,” said John Faso, a lobbyist for a trade group of non-union construction- related companies and the 2006 GOP gubernatorial nominee.

Faso added that the new Wicks bill includes another troublesome provision: Municipalities can set up prequalification lists of companies that can work on public construction projects. That puts a new political element — allowing mayors to reward allies more easily with lucrative work — into the public works process.

“It simply makes no sense for taxpayers because this is going to increase the cost for public works at school districts and municipalities throughout New York,” said Faso, who represents the New York chapter of Associated Builders and Contractors. He added it also works against the interests of construction workers, 70 percent of whom are not part of a union.

The Paterson administration’s Labor Department declined to comment on the effort to delay the July 1 effective date.

But Christopher Alund, director of the department’s Bureau of Public Work, said project labor agreements have been a part of government construction projects for years. He noted the big Buffalo school building program has one. And he said the agreements with labor have to demonstrate cost savings. For instance, unions entering into a project labor pact often agree to lower wage rates and give up their right to strike to help lower costs.

The Legislature isn’t budging yet to the appeals.

“Where were they a year ago?” said John McArdle, a spokesman for Senate Majority Leader Joseph L. Bruno.

He said the Senate did not act for a year on the Wicks Law measure that the Assembly and former Gov. Eliot L. Spitzer agreed to, in part, because of concerns that the threshold levels were too low. He said businesses did not previously raise these new complaints.

Hughes, the ALF-CIO president, called the opponents’ attempt to stop the law from kicking in “a blatant attempt” to drive more money to their companies.

“They’re trying to get more in profits and pay less in wages, which is really not good for the economy of the upstate area,” Hughes said.

The critics say they are hoping to persuade Albany to rethink the bill it just passed — an uphill challenge, especially in an election year when lawmakers rely on unions for support.

“The Legislature passed this hidden in 10,000 pages of the budget as part of an overall package. The provisions are far more negative than positive for upstate, and the way it was passed is an embarrassment. It was buried by three men in a room at the eleventh hour. Nobody knew it was there,” said Andrew Rudnick, president of the Buffalo Niagara Partnership.

“Literally, it’s going to put people out of business. That’s the bottom line,” said Tricia Nowak, who owns a Lancaster general contracting firm. She said lawmakers she has talked to insisted they didn’t know the provision was in the budget bill.

(buffalonews.com)

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