Low Number of Bidders, Few Minority- and Women-Owned Firms Bid, & Bids Exceed Estimates
Today’s ribbon cutting on the Holyoke Veterans Home $500 million project seems like a good time to check on the impact of the project labor agreement. So far, the PLA has had an impact, but not as intended.
Aside from being patently unfair to merit shop contractors and their talented employees who are otherwise qualified to work on state construction projects, the PLA has:
1. Suppressed the number of prequalified bidders and the number of those who bid.
2. Led to bids for 4 subtrades exceeding cost estimates by about $4.3 million.
3. Led to zero bids (as in none) submitted for masonry, electrical and HVAC work.
"It’s been hard to get enough subs in some areas, and it’s been even harder to get good bids within our budget,” said the project manager in an April public meeting. (Video at 11:18)
So far, the project has:
Experienced a lack of contractors interested in prequalifying for the project. DCAMM had to extend the deadline to apply for prequalification in order to recruit more contractors.
Of 49 prequalified subcontractors in 10 trades, only 27 submitted bids – 45% of prequalified bidders did not submit bids.
Zero bids were received for the masonry, electrical and HVAC work. No contractors were interested in being prequalified, let alone bid.
One bid was received for Miscellaneous and Ornamental Iron.
Two bids were received for Waterproofing, Dampproofing and Caulking; Resilient Floors; Roofing and Flashing; and Glass and Glazing.
Union-Only Mandates Hurt MWBE Firms Because Most Are Merit Shops
To rationalize mandating a PLA in the project funding law, legislators claimed it would increase minority and women participation. Only 5 of the 27 bids were from minority- and women-owned business enterprises. Of those, two MWBEs were winning bidders – roofing & flashing and resilient floors. One veteran-owned business enterprise won the bid for waterproofing.
Merit shop contractors avoid PLA projects because they have full-time, nonunion employees who are ineligible to work on a union-only jobsite even though they are as experienced, qualified and licensed. Most minority- and women-owned construction firms are merit shops. (A point made to, but ignored by, legislators.)
DCAMM Acknowledges PLAs Impact
To his credit, the project manager acknowledged the impact of PLAs when presenting to the Holyoke Soldiers Home Access, Inclusion and Diversity Committee meeting on April 21, 2023.
“As I’ve mentioned everyone is busy right now. It’s been difficult to get enough bidders in some trades. We’ve had some stiff challenges with the scale of the project, its location, and even a little bit, the PLA. It’s all had a cumulative effect on the team’s efforts. At times it seems like we’ve been swimming upstream during a rainstorm,” said the project manager for the state’s Division of Capital Assets Management and Maintenance. (Video at 13:03.)
We suspect it had a much larger impact. Why? Because, on other projects where a PLA was removed and the project rebid, we’ve seen the number of bidders double and the bid totals drop, saving the projects money. Consider the experiences of Braintree, Fall River and the U.S. Department of Labor – all three saw bid prices plummet and the number of bidders increase after PLAs were removed from projects.
Subtrade Bids Received, According to DCAMM