Why is open competition in construction so important?
An unrestricted, competitive bidding process levels the playing field. Everyone has equal opportunity to bid on work.
With open competition, costs go down and quality goes up. Taxpayer funds are used efficiently and money is invested back into the community. As a result, community prosperity increases.
Work also stays local with open competition. Restricted competition narrows the field and supports the minority. The numbers don’t add up so jobs go to folks outside of the community.
and real-life examples show that construction projects that don’t have an open competition bidding process are 10-20% more costly.
Here’s a recent example.
On March 5, 2018, the Selma City Council approved a Community Workforce Agreement between the
City and Building Council and Construction Trades Council and Unions Requiring the Agreement to be Bound as a Condition to Consideration of Bids for Award of Construction Contract for the Police Station Project.
On August 30, 2018, the City of Selma received one bid from Seals Construction for $7,952,000 far exceeding the construction estimate for hard costs of $6,000,000.
On September 4, 2018, the City of Selma rejected the bid and authorized City Staff to revise the project and return to the City Council with a revised scope and estimated cost.
On September 26, 2018, the Selma City Council learned from Chuck Riojas Secretary-Treasurer of the Fresno, Madera, Tulare, Kings County Building and Construction Trades Council that there will be no compromise on adjusting the apprentice language in the CWTA/PLA to include merit shop apprentices. It is highly unlikely that any changes to the existing CWTA/PLA requested numerous times by the
contracting community will be allowed.
On January 22, 2019, the City Council directed Staff to rebid the Police Station Project (the “Project”) with six alternates i.e., enhanced features/improvements, and to seek additional funding sources for the
estimated increase in construction costs with the original unchanged CWTA/PLA.
Vanir Construction, the City’s construction manager for the Project, estimated that the total cost for the rebid would be between three and ten percent above the original estimate. This equated to between $238,560 and $795,200, for an estimated Project cost of between $8,190,560 to $8,747,200. Total Project costs would range between $9,277,350 and $9,878,496, which is between $2,009,964 and $2,611,125
more than what is available to cover the costs for the Project.
The City is seeking additional funding sources to cover the increase in the costs.
Bids were opened on March 14, 2019, and the results were as follows:
Katch Environmental’s bid, totaled $8,601,085. It was the only bid submitted.
The City Council delays decision to April 15th.
The Council voted 3-2 on April 15th, 2019 to award the contract to Katch Environmental and will use precious ambulance funds to cover the $3M shortfall.
http://www.cityofselma.com/PDFs/Web%20Site%20Applications/City%20Clerk/2019/Council%20Packet%2003-18-19.pdf (starting at page 118)
PLA Defeated on $129M High School at Central USD
On February 12th, it was a terrific example of grassroots mobilization. ABC NorCal members, workers, merit shop apprentices from various programs, and merit shop allies responded to a last minute PLA threat, organized quickly, attended the Central USD Board meeting and successfully discouraged the Board of Trustees from considering a Project Labor Agreement for the $129M new high school. ABC NorCal would like to thank everyone who attended as it was their community involvement that truly made the difference.
PLA defeated on Statewide Prison Construction – Our voices, together, matter!
SB 825 (Beall) - ABC Chapters and merit shop construction industry groups worked in tandem to stop SB 825 (Beall) State prisons: preapprenticeship program, a significant precedent setting threat to the merit shop that would have ultimately lead to Project Labor Agreement (PLA) mandates on all state construction. This was the first time we saw PLA mandates and MC3 curriculum monopoly language in the same bill, a bill that would limit inmate training curriculum for pre-apprenticeship in the prisons to union curriculum exclusively and authorize the Department of Corrections and Rehabilitation to award contracts for construction projects over $500,000 using the design-build contracting process or construction manager at-risk contracts, as defined, if, on or before September 30, 2019, the department enters into a 10-year community workforce agreement with the State Building and Construction Trades Council of California. A multi-pronged plan was developed to engage members, workers, elected officials, community groups.
We would like to thank the 200+ men and women who turned out to testify in opposition to SB 825 at three separate hearings. Each time, we outnumbered the support two to one. The visual of the room full of orange safety vests, and in many cases hard hats, was impressive. Without them, this could not have been accomplished.
The National Labor Relations Board's (NLRB) "quickie" or "ambush" election rule went into effect on April 14, 2015. Under this ruling, the amount of time between when a union files a representation petition and an election takes place is drastically reduced from the current average of 38 days.
The following resources cover the recent ruling:
ABC Members: Please contact us
for the NLRB Tool Kit. Let us know if you would like access to counsel; we are happy to provide you with referrals.
Project Labor Agreements (PLAs), also known as Community Workforce or Community Benefits Agreements, create barriers for local, minority and women-owned construction employers and their employees from participating in building their community because they contain provisions that do not allow for the full utilization of their own workforces.
Furthermore, studies show these types of agreements increase project costs – anywhere from 10-30% because they restrict competition. Open competition is healthy and increases quality. It levels the playing field and local money is invested into the community.
And finally, project labor agreements exclude the men, women, and veterans who have chosen to enter into state approved, unilateral apprenticeship training programs in pursuit of a construction career from the opportunity to work and gain the invaluable on-the-job training experience that provides stability for them, their family and their community.
- 84% of California's construction workforce does not belong to a union. So when a PLA mandates that all workers be hired through a union hall restricting a contractor's core workforce (current employees), there's a very good chance that the project is not going to employ a local workforce.
- PLAs discourage the bidding process. Less competition means higher costs. When the project in question is a public works project, the funding comes from local taxpayers. So ultimately you and your neighbors are the ones paying for unnecessary and inflated construction costs.
- Under a PLA, all apprentices must come from state-approved union programs. So young and emerging professionals training with a state-approved merit shop program (like ABC NorCal's), cannot be employed.
- Under a PLA, workers are required to make pension payments into union programs which they are likely never to vest. Workers make less money on paycheck.
ABC nORCAL responds to SAc Arena PLA