State cannot afford project labor agreements

BY RICH PURTELL

A project labor agreement is a protectionist strategy, usually applied to public work, which mandates a certain labor pool to be used for a construction project.  New York State already has a prevailing wage law for public construction, which provides for a good deal of protectionism to keep wages high for construction projects in the state.  A PLA further restricts the labor pool to organized labor only.  Furthermore, this type of policy will limit the field of contractors who are eligible to bid a project, and thus limit competition.

A November 2015 report by a 2014 Pulitzer prize winning organization The Center for Public Integrity scored New York with an F in the procurement category, in 48th place out of 50 states.  The flaws in our procurement process for public work will greatly increase the likelihood of PLAs being applied in an unprofessional, unethical, and perhaps even criminal fashion.

  • We have no law which mandates training for public procurement professionals.  On top of this major flaw, procurement agents for these public works projects are often “double-dippers” and are serving in some other role in their primary responsibility, leaving procurement as a secondary responsibility.  There are rife opportunities for conflict-of-interest, and to expect proper and fair application of PLAs, we should have professionally trained procurement agents for these projects whose SOLE duty is to monitor and assure proper, fair, and competitive sourcing of materials and labor for a project.  This simply is not happening.
  • There is no post-bid appeal procedure.  Without a set and formal process for unsuccessful bidders to challenge procurement decisions, this allows for many subjective and discretionary practices, and does not put pressure on government to “dot their I’s and cross their T’s”.  Suspect practices must be challenged in the courts, which becomes very costly for the protester.  Thus few complaints are levied.  The government should be challenged to a higher standard, tantamount to a “guilty until proven innocent” standard.  The state should have to prove that it is not making decisions in a corrupted manner.

One can find ample evidence of financial damage from our weak procurement standards.  The State of Texas did a very detailed analysis of public school construction costsThe average cost for elementary schools is $17,461 per student.  Two major schools in the Binghamton region, MacArthur in Binghamton and Owego Elementary in Owego, tip the scales at over $100,000 per student.  

This is smoking gun evidence what New York has a major problem with cost containment for public construction projects.  Labor cost differences between New York and Texas cannot come close to explaining a 500%+ cost increase, especially when one considers that a construction project has typically as much or more expense in materials as labor, so labor costs in New York would have to be over 1,000% higher than Texas to be able to explain away these cost escalations purely on the impact of unions and prevailing wage.  

There has to be more going on – cronyism and corruption.  We too often see exotic building designs with restrictive specifications that entitle certain specialty vendors to extremely high profits via hidden monopoly quotes to prime contractors.

We simply are not a state which should even consider PLAs for public work.  The construction process is too much deliberately built to enable rampant corruption and cronyism.  PLAs just pile on to an already massive problem.  Our public construction processes are built to encourage lobbying of public elected officials by private entities in order to get special treatment.  We should not even entertain a discussion about the pros and cons of PLAs until our state’s highly flawed procurement process is repaired.

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