New Analysis Shows PLAs Produce Fewer Bidders & Higher Costs

[Source: Charts published by Mass. Fiscal Alliance Foundation, Project Labor Agreements: Higher Costs and Less Competition for Massachusetts Public Construction, by Paul Bachman, Visiting Fellow at the Fiscal Alliance Foundation.]

Whenever a Project Labor Agreement is proposed for a Massachusetts public job, the pitch is familiar. A PLA, we are told, will keep the project on time and on budget, guarantee skilled labor, prevent strikes, and serve the community. Governor Healey’s Executive Order 641 restated that case when it directed state agencies to consider PLAs on public works above $35 million.

A new Fiscal Alliance Foundation study by Paul Bachman, and years of evidence compiled by the Merit Construction Alliance, show those claimed benefits do not hold up. What PLAs reliably produce is fewer bidders and higher costs.

Mass. Fiscal Alliance joins a growing chorus of impartial observers who argue against restricting competitive bidding by utilizing PLAs. The Pioneer Institute and The Boston Globe – two ends of the political spectrum – have both opposed PLAs on public projects.

Start with the central claim: PLAs keep projects on budget. Across ten studies of school construction, housing, and public buildings, Bachman finds an average cost premium of 16.2 percent. Beacon Hill Institute school studies clustered around 12 to 20 percent. California school research found 13 to 15 percent. New Jersey’s own Department of Labor reported a 30.5 percent premium per square foot on PLA schools. RAND’s work on Los Angeles supportive housing found PLA projects cost more per unit, took longer, and produced fewer homes — about 800 units left unbuilt because developers shrank projects to duck the mandate.

In Fall River, five schools bid under a PLA drew thin participation and bids far over budget.

After the city dropped the PLA, sub-bids on three schools fell from $21.58 million to $19.62 million. A school never bid under a PLA drew 62 sub-bids; its PLA counterpart drew 24. Former Mayor Edward Lambert said the obvious: “With more bidders you tend to get a better price.”

In Springfield, water ratepayers saved at least $5 million when a PLA was dropped and merit shops allowed to bid. The winning electrical bidder, a merit shop, bid $5 million under the second-best bid, from a union shop. The merit shop bidder is every bit licensed, DCAMM-certified, and experienced as any union shop.

The New Hampshire Job Corps Center told the same story. After two PLA solicitations collapsed under protest, the job was rebid without one. The winning bid was more than $6 million below the lowest PLA-restricted bid.

That is not a mystery. A PLA requires contractors to hire through union halls, pay into union benefit funds even if they already cover their own employees, and accept union work rules. Merit shops — the firms that employ more than four in five Massachusetts construction workers — do not bid on those terms. They will not park their own crews to take temporary hall referrals. Fewer qualified bidders means a higher winning price. Courts have said as much. In 2024, Hampden Superior Court Judge Michael Callan blocked a Springfield water-plant PLA, finding it “most assuredly” not open to all bidders and a severe disadvantage to open-shop firms. In 2025, the U.S. Court of Federal Claims struck a broad federal PLA mandate as a restriction on full and open competition.

What about labor peace? MCA has documented the hole in that promise. Vineyard Wind, covered by a PLA, was shut down for six days in 2023. “That’s how we roll,” one union member told reporters. Merit shops do not strike. MCA notes that in the two decades after the Callahan decision limited PLAs in Massachusetts, work stoppages across public and private jobs were rare — a handful of incidents totaling about 13 days. Public owners already have prequalification, prevailing wage, safety regulation, and contract remedies. A PLA does not add a skill or a safety rule the Commonwealth does not already require. It subtracts competitors the state has already deemed qualified.

The community-benefit claim fares no better. Most DCAMM-certified minority- and women-owned firms are nonunion. MCA’s analysis found 87.5 percent of certified MBEs and 72 percent of certified WBEs operate as merit shops; almost none run a state-registered apprenticeship program that a PLA-style mandate would demand. A PLA does not widen the tent. It closes the gate on the contractors the Commonwealth certifies as disadvantaged.

Massachusetts needs more qualified firms competing for the work taxpayers are already buying. The alleged benefits of PLAs – schedule certainty, budget discipline, safety, inclusion – are the same outcomes public bidding and prequalification are designed to produce. The evidence says a PLA makes those outcomes harder and more expensive. Executive Order 641 should not become a standing invitation to pay that premium. Open the bids. Let every prequalified contractor, union and merit shop, compete. That is the public interest.