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Cities Reject PLAs

Worcester & Lowell Embrace Fair & Open Competition

Why Spend More?

"Municipal leaders everywhere need to rethink the whole idea of entering into PLAs for school and other construction projects, in that PLAs result in spending more tax dollars than necessary on these projects and thus reduce the number of projects that can be built."

- David G. Tuerck,

Executive Director,

Beacon Hill Institute

The cities of Worcester and Lowell chose fair and open competition in 2019. They rejected organized labor's demands for project labor agreements.

 

Why?

  • Increased costs to taxpayers

  • Construction laws govern public projects

  • No additional public benefit

  • Delays to schedule

 

Critiquing PLAs is not union bashing.  A fair evaluation of the policy suggests PLAs discriminate against a majority of Massachusetts and New England construction workers whose tax dollars are paying for the project; unfairly limit competition among qualified, responsible contractors; and cause construction costs to skyrocket.

LOWELL HIGH SCHOOL

No known school project since the formation of the Massachusetts School Building Authority has had a PLA.​ 

"According to our consultant a PLA would add 10-15% onto construction costs. With an estimated $270.5 million in construction costs, this would equate to $27-40.5 million added to the project, exclusively funded by the City and residents."

Lowell City Manager Eileen Donoghue,

May 23, 2019, memo to the Lowell City Council

POLAR PARK, WORCESTER

The Worcester Redevelopment Authority asked it's construction consultant for its opinion on a PLA:

  • "PLA's cost more, historically, and this has been cited in the 2003 and 2017 studies by the Beacon Hill Institute."

  • "One of the factors that increase construction costs on these projects are requirements from the unions to have some number of support workers on site at all times, whether needed or not. These workers merely drive up the cost without a resultant benefit to the project, but the unions require them."

  • "Historically the unions are not as able to guarantee a diverse workforce, either."

  • "The Massachusetts public procurement laws were established to provide, in a pre-qualified environment, fair and open competition across all trades. This has proved to provide the lowest responsible costs for public projects, and any firm, whether union or not, merely needs to be prequalified by DCAMM to submit a proposal."

Source: Project Labor Agreements on Chapter 149a Projects, Jan. 23, 2019, by Keith Martin, Skanska USA Building.

CASE STUDY: What happens when a project is bid with and then without a PLA?

Project: U.S. Department of Labor Job Corps Center

Location: Manchester, N.H.

Bid with a PLA and then without a PLA.  The results:

  • 3 general contractors bid under the PLA and 9 bid when the PLA was removed.

  • Faced with competition, the winning bidder under the PLA dropped its bid by $3.6M without the PLA.

  • A merit shop firm won the project with a bid $6M less than the original winning bid, a 16.47% savings for taxpayers. 

  • The final winning bidder was a merit shop firm from New Hampshire.  Under a PLA, a Florida union firm won the bid.

 

Bottom Line

Without a PLA:

  1. The number of bidders tripled

  2. The winning bid was $6M lower, and

  3. A local firm was hired