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.
Studies and real-life examples show that construction projects that don’t have an open competition bidding process are 12-20% more costly.
Here’s a recent example.
In September of 2014, the Pinole City Council approved a union-negotiated Project Labor Agreement (PLA) by a 4-0 vote for the construction of the joint Pinole-Hercules Water Pollution Control Plant Upgrade despite education efforts that explained that the PLA would decrease local opportunities for the majority of construction workers in Contra Costa County and increase costs. The City of Hercules voted against the PLA.
Eight contractors originally pre-qualified to bid the project. The recently released bid results
show that only two bids were received and they were 11% and 29% over the engineer’s estimate of $39M
($43M and $49M respectively).
A differential of $4M+ that could go into other community projects.
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.
A Project Labor Agreement (PLA), also known as Community Workforce Agreement or Community Benefit Agreement, is a bargaining agreement with one or more labor organizations that establishes the employment terms and conditions for a specific construction project.
PLAs typically require that employees hired for the project are referred through union hiring halls, that nonunion workers pay union dues for the length of the project, and that the contractor follow union rules on pensions, work conditions and dispute resolution.
- 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, there's a very good chance that the project is not going to employ a local workforce.
- PLAs restrict the bidding process. Restricted bidding means less competition. 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.
ABC NORCAL responds to SAC Arena PLA