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February 10, 2021
In a Feb. 4 letter to President Joe Biden, ABC expressed concerns about the “expansion of existing policies that needlessly limit competition and increase costs on taxpayer-funded federal and federally assisted construction projects.”
The letter, published in its entirety below, addresses the desire to prevent government-mandated project labor agreements on federal and federally assisted construction projects so that ABC and the Biden administration can work together to “create quality jobs for all of America’s workers to help the economy rebound from the COVID-19 crisis and Build Back Better.”
The Fight for Fair and Open Competition Continues
ABC will continue to advocate for fair and open competition on taxpayer-funded construction contracts before the Biden administration and the 117th Congress.
ABC’s campaign for fair and open competition helped prevent PLA mandates and preferences on 99% of federal contracts exceeding $25 million from FY2009-FY2020, preventing PLA requirements on 1,877 contracts worth a total of almost $116.1 billion so all qualified firms could fairly compete to win these contracts.
ABC contractors have taken advantage of a level playing field. From FY2009-FY2020, ABC member prime contractors won 57.5% of the value of large-scale federal contracts subject to Obama’s pro-PLA Executive Order 13502. In total, ABC members have won 976 contracts valued at $67.5 billion.
Since President Obama issued his pro-PLA Executive Order 13502 in 2009, 26 states have responded to the threat of discriminatory PLA mandates and preferences by enacting Fair and Open Competition Act legislation or executive orders prohibiting government-mandated PLAs on state, local and publicly funded construction projects to some degree.
Unfortunately, some of these states have rolled back common-sense FOCA measures following Democratic party takeovers of state government, bringing the total number of current states to enact pro-taxpayer FOCA measures to 25.
ABC’s efforts to enact state FOCA laws prevented government-mandated PLAs on $633 billion worth of state and local construction capital outlay through the end of 2019.
Despite the campaign’s track record of success, government-mandated PLAs remain a threat to free enterprise and fair and open competition in certain markets.
Some municipalities and eight states controlled by union-friendly Democrats have enacted legislation or executive orders pushing the use of government-mandated PLAs on state, state-assisted and local public works projects, shutting out qualified contractors on certain contracts in California, Connecticut, Hawaii, Illinois, New Jersey, New York and Washington—and major municipalities including Chicago, Los Angeles, Honolulu, New York City and Philadelphia—from opportunities to rebuild their own communities.
In addition, it is unclear how many federally assisted contracts have suffered from PLAs mandated by state and local governments, but snapshots of data demonstrate it is significant.
For example, according to a U.S. Department of Transportation Federal Highway Administration January 2021 report, state and local lawmakers mandated PLAs on 513 state and local construction projects (totaling an estimated $12.88 billion) that received federal assistance and formal approval from the FHWA.
As America’s infrastructure needs continue to grow in the face of chronic underfunding, the construction industry unemployment rate hovers around 10% and hardworking taxpayers deserve the best possible construction products at the best possible price, ensuring fair and open competition is a win-win solution to help America Build Back Better.
February 4, 2021
The Honorable Joseph R. Biden Jr.
The White House
1600 Pennsylvania Avenue
Washington, DC 20500
Dear President Biden:
Associated Builders and Contractors, a national construction industry trade association with 69 chapters representing more than 21,000 members, stands ready to be a constructive partner with the Biden administration as we tackle rebuilding America’s infrastructure while ensuring safe workplaces, creating jobs and leading America’s economic recovery.
ABC believes our roads, bridges, schools and water, energy and transportation systems need to be overhauled to accelerate a strong economic comeback and keep America competitive in a global economy. A recent industry report estimates that the U.S. infrastructure spending deficit will total $2.6 trillion by 2029 and more than $5.6 trillion by 2039.
As we work together to address funding solutions that speed investments in transformational infrastructure projects, one of ABC’s top priorities is to ensure that all of the construction industry is welcome to participate in building all of America’s taxpayer-funded infrastructure projects. ABC is concerned about the expansion of existing policies that needlessly limit competition and increase costs on taxpayer-funded federal and federally assisted construction projects.
For example, federal policies that encourage the use of government-mandated project labor agreements on federal and federally assisted construction projects stand to increase construction costs by 12% to 20%, resulting in the funding and construction of fewer projects and reduced jobs and opportunities for small businesses, minorities and women in the construction industry.
Real-world examples, experience and a survey of our membership has found that government-mandated PLAs discourage competition from quality contractors and the 87.3% of the U.S. construction workforce who are not affiliated with construction unions, which are given preferential treatment in typical government-mandated PLAs.
Problematic, anti-competitive terms in government-mandated PLAs require contractors to use union hiring halls to obtain most or all workers instead of their existing workforce; obtain apprentices exclusively from union apprenticeship programs; follow inefficient union work rules; and pay into union benefit and multi-employer pension plans that any limited number of nonunion employees permitted on the project will be unlikely to access unless they join a union and vest in these plans. Research estimates that nonunion employees on PLA projects suffer an estimated 20% reduction in compensation and contractors pay an extra 25% in benefits costs to cover this PLA wage theft to union plans, making firms less competitive against unionized firms.
ABC supports fair and open competition and opposes government-mandated PLAs on federal and federally assisted projects because taxpayers deserve more efficient and effective policies that will encourage all qualified contractors and their skilled workforce to compete to build long-lasting, quality projects at the best price.
According to a model developed by Markstein Advisors, every $1 billion in extra overall construction spending generates an average of at least 6,500 construction jobs, and every $1 billion in extra construction spending on infrastructure generates an average of at least 3,300 construction jobs. As the construction industry faces a 9.4% unemployment rate due to the recession caused by COVID-19 and America’s infrastructure remains critically underfunded, we need to be doing all we can to maximize taxpayer investments in infrastructure while helping all construction workers find quality jobs to rebuild their communities.
The construction industry is in a unique position to help build America’s comeback, featuring careers with low barriers to entry, infinite opportunities for growth and family-sustaining salaries for people from all backgrounds and education levels, including women, minorities, veterans, students, non-graduates, and people seeking new careers, re-entry to the workforce or a second chance.
ABC delivers construction education through 800 ABC education programs at 1,400 locations nationwide, including innovative and flexible earn-while-you-learn models and industry-recognized apprenticeships in more than 50 professions—plus more than 300 U.S. Department of Labor-registered apprenticeship programs across 20 different occupations.
In 2019 alone, ABC members invested $1.5 billion to educate and upskill more than 1.1 million course attendees in craft, leadership and safety education to advance their careers in commercial and industrial construction. Safety education accounted for nearly half of the total workforce investment, averaging $1,147 per employee annually. Ensuring the safety and health of the construction workforce in the workplace will continue to be a top priority as ABC members build America’s hospitals, schools, manufacturing facilities, roads, bridges and power plants.
Unfortunately, tomorrow’s construction industry workforce—those participating in government-registered apprenticeship and industry-recognized apprenticeship programs not affiliated with unions—would not be able to meaningfully participate on government-mandated PLA jobs, stifling a key pipeline of skilled labor needed to meet America’s future infrastructure needs.
ABC members stand ready to fairly compete for the opportunity to safely and ethically build and maintain America’s infrastructure. ABC would welcome the opportunity to discuss this issue further with your advisors.
We look forward to working with you and your administration to advance policies that that create quality jobs for all of America’s workers to help the economy rebound from the COVID-19.
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