Category: News Line

A bill introduced in the Baltimore City Council by Councilmember Shannon Sneed and Council President Brandon Scott would make sweeping changes to the City of Baltimore’s procurement laws. The proposed ordinance, File 20-0488, would impose government mandated project labor agreements on any construction contract valued at $25 million or more. The same mandate would also apply on any long-term capital improvement plan that involves construction projects at multiple locations if the total value of the project is valued at more than $15 million.

This is not the first instance where the Baltimore City Council has debated a PLA mandate on publicly financed construction projects in the city. In 2010, the Council proposed a similar ordinance that would have required PLAs on projects valued at $5 million or more. That legislation never made it into law after widespread pushback, including opposition from the Baltimore City Solicitor and minority contractors that spoke out against the discriminatory nature of PLA mandates.

If passed and signed, the law would go into effect 30 days after enactment.

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A bill introduced in the Baltimore City Council by Councilmember Shannon Sneed and Council President Brandon Scott would make sweeping changes to the City of Baltimore’s procurement laws. The proposed ordinance, File 20-0488, would impose government mandated project labor agreements on any construction contract valued at $25 million or more. The same mandate would also apply on any long-term capital improvement plan that involves construction projects at multiple locations if the total value of the project is valued at more than $15 million.

This is not the first instance where the Baltimore City Council has debated a PLA mandate on publicly financed construction projects in the city. In 2010, the Council proposed a similar ordinance that would have required PLAs on projects valued at $5 million or more. That legislation never made it into law after widespread pushback, including opposition from the Baltimore City Solicitor and minority contractors that spoke out against the discriminatory nature of PLA mandates

If passed and signed the law would go into effect 30 days after enactment.

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On Feb. 6, the U.S. House of Representatives passed the disingenuously named Protecting the Right to Organize Act by a vote of 224 to 194.  Five Republicans voted for the bill: Reps. Don Young (Alaska), John Katko (N.Y.) and co-sponsors Jeff Van Drew (N.J.), Chris Smith (N.J.) and Brian Fitzpatrick (Pa.). Seven Democrats opposed the bill, along with Rep. Justin Amash (I-Mich.): Reps. Henry Cuellar (Texas), Joe Cunningham (S.C.), Kendra Horn (Okla.), Ben McAdams (Utah), Lucy McBath (Ga.), Stephanie Murphy (Fla.) and Kurt Schrader (Ore.). ABC urged members of Congress to oppose the PRO Act, considering the vote a “KEY VOTE” for the ABC Legislative Scorecard on the 116^th Congress.

Thankfully, the bill is dead on arrival in the Republican-controlled Senate, and in a veto threat, the White House said in a Statement of Administration Policy that the legislation would “take the country in precisely the opposite direction from the president’s successful deregulatory agenda, which has produced rising blue-collar wages and record low unemployment.“

The PRO Act is rife with policies that impose radical changes to settled U.S. labor law, benefiting big labor at the expense of workers’ rights and the well-being of the nation’s small businesses. A recent analysis by the American Action Forum proved the PRO Act’s economic cost would be disastrous for the economy. The provision limiting independent contractors’ rights would affect 8.5% of GDP and put up to $12.1 billion of additional annual cost pressure on employers, and the joint employer provision would cost up to $33.3 billion in lost annual output for the franchise business sector alone.

Following the passage of the PRO Act, ABC vice president of legislative and political Affairs Kristen Swearingen issued the following statement:

“This big labor wish list was passed at the expense of workers, entrepreneurs and small businesses by the Democrat-controlled House, and seeks to hamper growth of the U.S. construction sector, which supports more than 7.5 million jobs. Violating privacy rights, eliminating choice and diminishing the freedom of construction employees in order to shift the advantage toward forced unionization would fundamentally harm our nation’s businesses and curb opportunities for hardworking Americans.

“Ignoring sound policy that supports American workers and allows our economy to thrive, Democrats and some Republicans grit their teeth while supporting this bill to gain political favor with labor leaders. Thankfully, President Trump has issued a veto threat against the bill and Majority Leader Mitch McConnell will never bring this harmful legislation to the Senate floor.”

Swearingen also chairs the Coalition for a Democratic Workplace—a coalition of hundreds of organizations representing millions of businesses in nearly every industry nationwide that oppose the PRO Act.

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Thad Claggett, president of Claggett & Sons Inc., has thrown his hat into the Republican primary for Ohio House District 71. Claggett is a civil engineer and a fourth-generation commercial and industrial construction contractor based in Newark, Ohio.

Claggett previously served as chair of the ABC Central Ohio Chapter and the statewide association, ABC of Ohio. His company has deep roots in the Central Ohio area construction industry dating back to 1953 when the company was founded by Claggett’s grandfather, Lloyd Claggett. Thad himself has been involved in the family business for more than 40 years.

Claggett is mounting a primary challenge against speaker-appointed incumbent Rep. Mark Fraizer in a race that has been named one of the top 10 legislative primaries to watch in Ohio this year by Cleveland.com. The winner of the primary will be a heavy favorite to win a full term this fall for House District 71, where the Republican nominee has exceeded 60 percent of the vote in every general election since 2012.

Claggett has been endorsed in the election by ABC of Ohio.

The Ohio Republican Primary is quickly approaching on March 17, and we encourage you to visit ClaggettforOhio.com to learn more about his candidacy.

ABC is excited to follow the race of yet another ABC member who is exemplifying the association’s mantra of “Get Into Politics or Get Out of Business,” and we look forward to updating you on the outcome of this important race.

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The U.S. Department of Labor’s Veterans Employment and Training Service is accepting employer applications for the 2020 HIRE Vets Medallion Program Award, which recognizes employers for their efforts to recruit, employ and retain our nation’s veterans. In 2019, the program recognized 427 employers for their dedicated efforts to hire American veterans, including ABC member United Rentals. The deadline to apply is April 30.

DOL – Frequently Asked Questions about the Program:

• Why should an employer apply?

The HIRE Vets Medallion Award is the only veterans hiring award at the federal level. Its criteria allow for the highest level of recognition for employers who are committed to veteran careers, including recruiting, employment, and retention. These employers set an example to other employers about the importance of prioritizing and encouraging successful veteran hiring and retention. The award also signals to veterans that an employer is committed to and supports our nation’s heroes.

• How Does an Employer Apply for the 2020 HIRE Vets Medallion Program Award?

Applications opened Jan. 31, 2020, at hirevets.gov. Applicants will complete the application form, provide chief executive officer or chief human resources officer attestation and submit it electronically. The application period will close on April 30, 2020.

• What are the Different Types of HIRE Vets Medallion Awards?

HIRE Vets Medallion Awards will be awarded by employer size: large employer awards for employers with 500 or more employees, medium employer awards for employers with more than 50 but fewer than 500 employees and small employer awards for employers with 50 or fewer employees. Within each of the three employer categories, there are two levels of awards: platinum and gold.

Learn more about the program’s criteria, timeline and application fee on this FAQ page. For more information about the program and the application, go to hirevets.gov.

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In control for the first time since 1993, Democratic leadership in Virginia’s General Assembly is poised to pass legislation at the expense of Commonwealth taxpayers who finance the construction and maintenance of schools, affordable housing roads, bridges, transportation projects and other infrastructure projects in disrepair.

Legislation introduced by Sen. Richard L. Saslaw (SB 182) and Del. Alfonso Lopez (HB 358), will eliminate Virginia’s Fair and Open Competition statute restricting government-mandated project labor agreements, which will allow state and local governments to mandate PLAs on public works construction projects. Other bills by Sen. Scott Surovell (SB 995) and Del. Lopez (HB 1635) eliminate fair and open competition protections on Metrorail construction projects procured by the Washington Metropolitan Area Transit Authority, which would permit future PLA mandates on metro construction projects similar to the controversial failed attempt to mandate a PLA on Phase 2 of the Silver Line.

When mandated by governments, PLAs prevent nonunion contractors and subcontractors—which employ 97.8% of Virginia’s construction workforce—from building and working on projects funded by taxpayer dollars. As a result, taxpayers can expect to pay 12% to 20% more on all government-mandated PLA projects.

Yesterday the Virginia Pilot published this op-ed by an ABC Virginia member in opposition to SB 182/HB 358 and in support of Virginia’s existing fair and open competition statute.

In addition, legislation introduced by Sen. Saslaw (SB 8) and Del. Jennifer Carroll Foy (HB 833) would result in prevailing wage requirements on construction projects at non-market rates set by the U.S. Department of Labor, via the 1931 Davis-Bacon Act. As amended, Sen Saslaw’s SB 8 sets a threshold of $250,000 on all state construction projects. And as amended, Del. Carroll Foy’s HB 833 requires prevailing wages on all state construction projects and allows localities to pass an ordinance requiring prevailing wages on local projects.

Research suggests prevailing wage regulations increase compliance and regulatory burdens on small businesses and increases construction costs from 10% to 25%.

The net impact of both of these bills is that it will lead to tax hikes or fewer public works construction projects procured by the Commonwealth and local governments. In addition, it will needlessly increase construction costs and steer contracts to out-of-state unionized businesses and unionized workers at the expense of Virginia’s construction industry and small, women- and minority-owned businesses.

Tuesday was Virginia’s legislative crossover deadline, and all six of these bills passed their chamber of origin. Both chambers must now pass their opposite chambers’ bills by the legislative session’s sine die adjournment March 7 in order to give Gov. Ralph Northam (D) 30 days to consider the legislation.

The General Assembly is scheduled to reconvene on April 22 for the purpose of considering bills which may have been returned by the governor with a veto or recommendations for their amendment.

Virginia residents can contact their lawmakers through this easy-to-use ABC grassroots campaign. Alternatively, stakeholders can communicate to lawmakers with language from this message and email it to targeted House and Senate lawmakers.

Please share this news with colleagues and friends who will be negatively impacted by these controversial bills. Together, we can make keep Virginia competitive by educating lawmakers and the public about how these bills will increase costs and hurt the Commonwealth’s construction industry and economy.

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A study released in January 2020 by the Beacon Hill Institute found that Connecticut schools built under controversial government-mandated project labor agreements cost 19.8% more than schools that were bid and constructed through fair and open competition, free from PLA requirements.

The study, “The Effect of Project Labor Agreements on Public School Construction in Connecticut,” which reviewed data on 95 school construction projects from 2001 to 2019, found that those built under a PLA mandate cost $89.33 more per square foot (in 2019 prices) relative to non-PLA projects. Taxpayers would have saved $503.5 million, or more than $9.7 million per project, if PLAs had not been used.

“This study confirms what we have been saying all along: Government-mandated project labor agreements unnecessarily and significantly drive up construction costs, forcing taxpayers to pay more,” said Chris Fryxell, president of the Connecticut Chapter of the Associated Builders and Contractors. “For years, our state has struggled with fiscal and budgetary issues, including the availability of funds for construction projects. We should be looking to spend every tax dollar as wisely and efficiently as possible, and step one should be the elimination of government-mandated PLAs.”

Fryxell noted that costs are not the only consequence of PLAs— they also have the effect of discriminating against local workers and contractors, based solely on their non-affiliation with a labor union. This can also allow out-of-state union contractors to obtain Connecticut public construction work ahead of local merit shop contractors if the local unions cannot meet labor demands for a project.

“Roughly 85% of the construction industry in Connecticut chooses not to sign on with a union,” said Fryxell. “PLAs effectively prevent those local, qualified workers and contractors from getting a fair opportunity to work on public projects paid for by their own tax dollars, and that’s just wrong.”

Currently, 25 states prohibit government-mandated PLAs, but Connecticut is not among them. Fryxell urged legislators and government officials to read the report and look at the data when they make decisions on the use of PLAs.

“The latest study by the Beacon Hill Institute corroborates 2019 research in New Jersey, and previous research in California, Connecticut, Massachusetts, New York and Ohio that found anti-competitive government-mandated PLAs prevent taxpayers from getting the best return on their investment,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “There is a reason a total of 25 states have passed laws restricting government-mandated PLAs: All taxpayers deserve efficient, accountable and effective construction spending and investment in schools and infrastructure free from costly schemes that discourage competition from qualified, local workers and contractors.”

ABC has long opposed wasteful and discriminatory PLA mandates, which past academic studies have shown drive up the cost of construction projects by 12% to 20% and which discriminate against the 87.4% of U.S. construction workers who choose not to join a union.

 “ABC encourages lawmakers to take the study’s findings into consideration as they deliberate legislation promoting government-mandated PLAs on public works projects,” said Brubeck. “Additionally, ABC encourages President Trump to rescind President Obama’s Executive Order 13502, which promotes costly PLA mandates on federal and federally assisted construction projects, and replace it with a common-sense policy that would guarantee fair and open competition from America’s best construction companies and create opportunities for America’s entire skilled construction workforce.”

PLAs typically ensure construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; follow inefficient union work rules; pay into union benefit and multi-employer pension plans workers will never benefit from unless they meet vesting requirements; and force workers to pay union dues and/or join a union as a condition of employment.

“Opponents of government-mandated PLAs argue these controversial agreements end fair and open competition and discourage local nonunion contractors from working on projects in their own communities, which effectively limits competition during the bidding process and drives up construction costs,” said David G. Tuerck, president of the Beacon Hill Institute and co-author of the report. “Our recent study of 96 Connecticut school construction projects showed that PLAs added 19.84% to construction costs, with the result that the state spent $503 million more on those projects than it would have without the PLAs. This in accord with past studies we have done showing that PLAs consistently add more to costs or bids compared to non-PLA projects. The only possible interpretation is that PLAs are an expensive way of kowtowing to the construction unions wherever they are implemented.”

ABC members overwhelming reported that government-mandated PLAs harm their businesses, hiring and workforce development practices and ability to complete work safely, on time and on budget, according to the results of a membership survey published in 2019.

Ninety-eight percent of survey respondents said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions, and 97% of survey respondents said a construction contract that required a PLA would be more expensive compared to a contract procured via free and open competition.

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On Jan. 29, ABC President and CEO Michael Bellaman joined President Trump as he signed the United States-Mexico-Canada Agreement at a ceremony on the White House South Lawn. USMCA is the president’s signature trade deal to deliver more jobs and better labor protection for American workers. This rule will replace the North American Free Trade Agreement, known as NAFTA, once it is approved by Canada (Mexico has already approved it).

ABC believes the USMCA will help to ensure certainty in the supply chain and reduce volatility in pricing for building materials from Mexico and Canada to further lift the economy, support more projects and help address the much-needed modernization of our nation’s infrastructure. ABC also believes this USMCA rule will further benefit the U.S. economy, with estimates that it will add $68.2 billion to the U.S. economy and create approximately 176,000 new jobs.

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On Jan. 23, the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers signed a final rule revising the definition of “waters of the United States,” which are federally regulated under the Clean Water Act. The final rule will go into effect 60 days after publication in the Federal Register.

According to an EPA news release, the revised definition identifies four clear categories of waters that are federally regulated under the CWA:

• Territorial seas and traditional navigable waters;
• Perennial and intermittent tributaries;
• Certain lakes, ponds and impoundments; and
• Wetlands that are adjacent to jurisdictional waters.

The final rule also details waters that are not subject to federal control, including features that only contain water in direct response to rainfall; groundwater; many ditches, including most farm and roadside ditches; prior-converted cropland; farm and stock watering ponds; and waste treatment systems.

An unpublished version of the final rule, titled “The Navigable Waters Protection Rule: Definition of ‘Waters of the United States,’” can be found on the EPA website.

Previously, EPA and the Corps issued a final rule rescinding the 2015 final Clean Water Rule: Definition of “Waters of the United States,” also known as the WOTUS final rule, on Sept. 12, 2019, as the first of a two-step process to repeal and replace the 2015 rule. That final rule went into effect on Dec. 23, 2019.

ABC has long been a vocal opponent of the Obama-era WOTUS rule since it was first proposed in April 2014 ABC submitted comments on EPA and the Corps’ proposals on step one and step two of the WOTUS rulemaking, stating its continued commitment to work with the agencies and ensure the clearest possible regulations so that its members have the information they need to comply with the law. Additionally, ABC filed comments as a member of the Waters Advocacy Coalition.   

More information on the final rule can be found on the EPA website.

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Construction industry employment grew by 192,000 wage and salary workers to 8.35 million in 2019, according to a new report from the U.S. Bureau of Labor Statistics.

However, the report found the share of construction industry employees that belong to a union dropped 0.2 percentage points from 12.8% in 2018 to just 12.6% in 2019.

The nonresidential merit shop construction sector continues to perform more than 10 years into the U.S. economy’s longest expansion. Backlog hovers near record highs at 8.8 months, according to ABC’s Construction Backlog Indicator. And the latest ABC Construction Confidence Index increased with respect to sales, profit margins and staffing.

“The merit shop value proposition continues to deliver for workers and employers alike,” said Michael Bellaman, ABC president and CEO. “Allowing contractors to pay their skilled workforce based on merit, experience and productivity and compete to win work on a level playing field fuels the American economy and millions of career dreams.”

Across all industries, union membership declined to 10.3%, down 0.2 percentage points from 2018. That is the lowest unionization rate on record since BLS began tracking comparable data in 1983. The number of wage and salary workers belonging to unions, at 14.6 million in 2019, was little changed from 2018.

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