The Mechanical/Electrical/Sheet Metal Alliance is the construction industry's leading and broadest employer group representing mechanical, electrical, and sheet metal construction firms operating in the Nation's commercial, heavy industrial, institutional, and residential construction markets in both the public and private sectors.
The businesses that comprise the Mechanical Contractors Association of America (MCAA), the National Electrical Contractors Association (NECA), and the Sheet Metal and Air Conditioning Contractors' National Association (SMACNA) perform the demanding skilled trades work in the high-value-added sector of the construction industry with employees whose skills are developed and whose work performance is facilitated by the terms and conditions of local area multi-employer collective bargaining agreements with building and construction trades unions.
The Alliance members and their professional staff in hundreds of local affiliates nationwide have longstanding, in-depth experience negotiating, administering, and delivering contractual commitments working with local area multiemployer collective bargaining agreements.
In virtually all areas, local agreements serve the industry and workforce members very well ---- and only in unique cases would project labor agreements stand as a satisfactory substitute to those local agreements that are responsible for developing and maintaining the local skilled workforce over time.
While project labor agreements can be beneficial for project owners in virtually all cases, they have not always operated to promote labor relations stability in local area collective bargaining and continuing workforce development and standards maintenance over time.
It is based on this experience that the Alliance submits these comments and the following recommendations on the President's June 5 Memorandum on Use of Project Labor Agreements for Federal Construction Projects.
RECOMMENDATIONS:
The Alliance urges the Administration to take expeditious action with the Office of Management and Budget (OMB), the Office of Federal Procurement Policy (OFPP), and the Federal Acquisition Regulatory Council to publish in the very near term Interim Federal Acquisition Regulations implementing the consideration of project labor agreements on a project by project basis only, on both direct Federal and federally assisted construction projects.
Interim FAR regulations are required because the separate implementation procedures issued by the General Services Administration and the Department of Defense are divergent, and present the risk of conflicting government agency procedures on considering PLAs.
The legality of project labor agreements, in both the public and private sectors, is now established to a certainty with the Supreme Court's 1993 Boston Harbor decision, and a growing trend of validation in state court challenges establishing their validity under state and local procurement policies (for example, Associated Builders and Contractors v. Metropolitan Water District of Southern California, Calif Court of Appeals, Dec. 15, 1997.) Moreover, the massive and unique Boston Harbor project itself, and its very successful prosecution under budget and ahead of schedule, proves the validity of PLA's practically as well as legally.
The criteria set out in the President's Memorandum for agencies to follow in exercising their proprietary judgments on whether a PLA would best serve the government's interest in efficient and economical construction project delivery is a balanced template for proprietary judgment that mirrors accepted practice in the private sector. Moreover, the criteria present a careful balance between the government's proprietary judgments, and its governmental responsibilities with respect to prevailing workforce standards, affirmative action and EEO, safety, and other matters.
With respect to these other matters, the Alliance urges that the FAR to take cognizance of the recent important private sector initiative taken by the influential Business Roundtable in urging member firms to recognize the long-term cost/benefit advantages of contracting with construction firms that invest in bona fide workforce training and development programs. (See The Business Roundtable's Confronting the Skilled Construction Work Force Shortage: A Blueprint for the Future.)
At a minimum, a PLA specification in any low bid selection (Invitation for Bids) or negotiated best-value procurement selection (Request for Proposals) should certainly follow BRT's lead and include a training metric along with the other elements set out in the President's Memorandum. Furthermore, to be consistent with the BRT proposal, the PLA also should include fair share investment by the public purchaser in all the sophisticated workforce development training and advancement mechanisms developed in local area collective bargaining, including apprenticeship training and industry advancement funds.
Finally, the FAR regulations should not expire on any date certain, as the FAR includes sufficient independent regulatory authority (FAR Subpart 1.1) for agencies to consider PLAs in the same manner as private owners exercise valid proprietary judgments in their authorized discretion to seek the best value and outcome for their programs. While it may be a narrow legalism that the effect of a Memorandum may have a limited effective duration compared with an Executive Order, the recent history of various failed legislative proposals against PLA's (S.606) and even President Bush's Executive Order 12818 in 1992 attempting to ban PLAs demonstrate that PLAs have been and remain a viable option for contracting agencies even independent of the June 5th Memorandum.
# # # # # # # # # # # March 29, 1998