WIN WITH FAIR, OPEN, COMPETITION

Really, it's common sense. The more qualified contractors bidding on a construction project, the lower the price. Competition drives down the costs. It forces contractors to sharpen their pencils and reduce prices in order to win a bid.

Eliminate the competition, and the price goes up. That's Economics 101.

The MCA encourages private and public organizations to open their construction projects to all qualified bidders - open shop and union alike. We believe it is good for the organizations, good for the economy, and in the case of public construction, great for the taxpayers.

RESTRICTING COMPETITION IS EXPENSIVE

In 2005, the City of Fall River adopted a Project Labor Agreement on a five-school construction project. PLAs restrict bidding to only union contractors. Because of the PLA, fewer than half the qualified bidders submitted proposals and those bids were millions over budget. After the mayor reluctantly dropped the PLA, taxpayer costs dropped $8.5 million.

Project Labor Agreements add $16.51 per square foot to new schools. (Source: The Beacon Hill Institute, 2006.) On a new 125,000 square-foot school, a PLA adds an additional $2.1 million to the cost.

The fact is, there is no benefit to the end-user for this additional cost. The state's Prevailing Wage Law dictates the wage rate, not a PLA. Open shop contractors provide health insurance and other benefits to employees, and a requirement for health insurance can be written into a bid specification rather than adopting a PLA. The only guarantee from a PLA is that unions promise not to strike.

BENEFITS OF OPEN SHOP

The end-user sees real benefits from employing open-shop:

• Lacking the burdensome staffing requirements of union construction, open-shop companies are able to deploy manpower more efficiently. Open-shop contractors also lack many of the "terms and conditions" provisions found in union construction. These terms and conditions, which include such things as "show up pay," add an expensive premium to the cost of union construction.
• A common misperception about open-shop companies is that they are all small, without the capability to do big projects. In truth, some of the biggest companies in the construction industry are open-shop.
• Hourly union wages may sometimes be higher, but annual open-shop wages are competitive because open-shop companies are employers in the true sense, offering workers year-round employment. In addition, as noted Wharton School labor economist Herbert R. Northrup has noted, "all but the smallest" open-shop companies provide vacations, health and life insurance, and even profit-sharing plans.
• Open-shop companies employ 84 percent of the construction workforce in Massachusetts - four out of five workers - according to the U.S. Department of Labor statistics as compiled on www.unionstats.com.

WHAT OTHERS SAY

"...Construction on Worcester's $90 million vocational school project, the largest public works project in the city's history, is on time and on budget ..."

"Let all the construction firms bid on the jobs and if the unions come in with the lower bids for the same work, let them have the contracts."

"People have a range of reasons for joining or not joining unions, and none of Smith’s experience suggests that non-union workers bring any less commitment or skill to their jobs or to the projects of which they are a part"

"The state's new MSBA reimbursement formula, annual funding ceiling and stringent auditing mean that the cities and towns need to be much more cost conscious in their school construction projects, or bear a higher burden for failing to do so."