TRENTON — School construction contracts designed to allow only unionized workers cost taxpayers 30 percent more in the last decade and took longer to complete than projects that didn’t include special preferences, according to a report from the state Department of Labor and Workforce Development. Focusing on school construction completed between July 2002 and June 2008, the report found...
Clik here to view.
As students line up for lunch, a parking lot, warehouse and trailer storage facility can be seen in this February 2010 file photo.TRENTON — School construction contracts designed to allow only unionized workers cost taxpayers 30 percent more in the last decade and took longer to complete than projects that didn’t include special preferences, according to a report from the state Department of Labor and Workforce Development.
Focusing on school construction completed between July 2002 and June 2008, the report found legislatively sanctioned union-only projects on average cost an additional $60 a square foot or $7,745 a student.
Using that measure, the state could have saved more than $240 million on new school construction in the past decade — the cost to build five new high schools — by not limiting contracts.
The union-only contracts are established through “project labor agreements,” or PLAs, which are included in requests for bids and limit the work force in exchange for a promise by the unions not to strike and a relaxing of some work rules.
Advocates for the use of PLAs say the agreements keep down costs, ensure public projects finish on time and prevent strikes or lockouts involving a single union that can disrupt an entire project.
Opponents say by eliminating non-union contractors from the start, the agreements stifle competition and drive up costs.
Gov. Chris Christie called for the elimination of project labor agreements on the campaign trail. The School Development Authority, the government entity responsible for nearly all PLAs issued in New Jersey, is reviewing its construction policies and is expected to depart from the union-friendly practice.
The Legislature and then-Gov. Jim McGreevey in 2002 approved the use of PLAs for projects costing more than $5 million. Since then, the Labor Department has been tasked with issuing annual reports examining the impact of PLAs on public construction costs.
Two years behind in its annual reporting, the department released the most recent findings in October and posted them on its website. The first report released in Christie’s administration strongly indicates the practice is driving up costs, a deviation from the hedged reports under former Gov. Jon Corzine.
Fewer than half of school construction projects since 2002 have used PLAs, but all projects funded by the School Development Authority and its predecessor the Schools Construction Corporation, have used them. There are six school construction projects under way that include PLAs.
The Labor Department report found that a secondary goal of PLAs, encouraging more minority, women and apprenticeship workers on projects, also is not being met. In the one-year-period ending in June 2008, 24.8 percent of work on PLA projects was done by minorities, missing the goal of 36.4 percent.
However, minority participation on non-PLA public projects was lower at 18.8 percent.
THE GREAT DEBATE
Proponents of PLAs argue they ensure a higher quality job, while opponents liken them to extortion by unions.
A non-union contractor can employ untrained workers to do highly specific jobs, said Susan Schurman, professor in Rutgers University’s School of Management and Labor Relations. The PLA gives the union contractor more flexibility while ensuring quality work, she said.
“If I put my citizen taxpayer hat on, we want the most efficient construction project for our public money that we can get, and I believe that PLAs are intended to do that,” Schurman said.
New Jersey project labor agreements also include provisions that every employee be drug-tested and screened regularly for alcohol use, said Edward W. Fedorko, spokesman for the New Jersey State Building and Construction Trades Council, a group of construction unions.
"There is a guarantee it will be a safer project for that reason alone,” Fedorko said. “The PLA enhances the possibility of the job going smoother, not having problems, and there won’t be any picket lines.”
But opponents of the agreements say all those things can be accomplished without contracts that mandate union workers.
Because PLAs require that all contractors hire through the union halls, non-union contractors won’t even bid on the projects, said David Tuerck, executive director of the Beacon Hill Institute at Suffolk University in Boston. Without the non-union contractors, less competition drives up costs, he said.
Beacon Hill surveys of PLAs by the federal government and several states found the agreements average 14 percent higher in costs than projects without them.
By waving the threat of union employees striking without a PLA, Tuerck likens the agreements to coercion from the unions.
“It’s extortion,” Tuerck said. “It’s saying if you behave yourself and enter into this agreement then we’re not going to cause trouble for you.”
The New Jersey chapter of the Associated Builders and Contractors has joined its national organization in pushing for the elimination of all project labor agreements. The chapter in San Diego was successful last month in using a referendum to eliminate the use of PLAs on public projects in the county.
“Let the best guy win,” Patrick Stewart, spokesman for the New Jersey ABC chapter said. “Let the most qualified person get the job. PLAs stifle that open competition.”