As Juneau taxpayers who pay sales and property taxes used to fund city bid jobs, we all have a stake in the current union-only project labor agreements being placed on them. It is important to know how a union-only PLA adversely impacts the bidding process by reducing the number of potential bidders.
The competitive bid process is a tool used by government entities to ensure fiscal responsibility and receive the best overall value for the purchase of goods and services. Its purpose in city government is to protect the taxpayer. The underlying principal for its use is to attract as many bidders to a project, keep competition high and receive the lowest price to meet the project requirements. The decision made by the city of Juneau to include union-only PLAs compromises the competitive bid process, by eliminating qualified independent, taxpaying, non-union affiliated bidders.
There are a number of upcoming city projects (approximately $60 million-plus) that have been flagged for PLAs. The current union-only PLA, written by union representatives and approved by the Juneau Assembly, requires that all shops and workers pay union benefits and dues to work the job.
Many independent shops already have benefits for their work forces. The current union-only PLA potentially duplicates the cost of benefits to independent employers. Health and retirement benefits cannot be turned off for the duration of a job and then turned back on after its completion without adversely affecting the employer and worker. Insurance companies have strict rules with regard to employee coverage affecting pre-existing conditions and probationary periods. 401k plans are legal contracts that cannot be ignored simply because they have signed a union contract requiring funding into another retirement plan.
Non-union workers, required to pay fringe benefits to the union and accustomed to receiving the full fringe benefit portion of Davis-Bacon Act wages, face less take-home pay when deductions (union dues, etc.) are made and paid to the union. In most cases the worker will not work long enough to realize the benefits of those contributions. In the end, the union is the only one to benefit from them.
With these obstacles, most non-union shops will not bid a union-only PLA job. As a result the local bidding pool is being decreased through its use and at a time when the local economy is already facing a construction labor shortage.
In a Juneau Empire article on May 4, Assembly member Bob Doll said the union-only PLA "sets a standard by which everybody comes to be judged." There are already many standards set by law and regulated by state and federal government. Title 36, Laborers' & Mechanics' Minimum Rates of Pay, put out by the state Department of Labor and Workforce Development, Davis-Bacon sets the wages and benefit levels for trades that are required to be paid to workers on any government job that is more than $2,000. As for everything else that can be gained by a PLA, labor harmony, etc., these objectives can be met without a union-only PLA.
Harborview Elementary School renovation bids are due today. The project contains a union-only PLA. In early April, city personnel received two letters outlining how changes can be made to the current PLA that would continue to protect the city of Juneau and make it possible for independent shops to competitively bid city jobs.
The recent lawsuit challenging the PLA on this bid was in response to these letters and suggestions being ignored. The lawsuit was submitted May 1. On May 6, two labor unions, the International Brotherhood of Electrical Workers and the Laborers Union intervened monetarily and legally on the behalf of the city of Juneau. It is legal for them to do this, but what does it tell you as a taxpayer?
The Bartlett Regional Hospital renovation job, bid a few years ago was a union-only PLA bid job. It had one bidder and was $10 million over the architect's estimate.
The plaintiffs in the lawsuit are only asking for an open bid process that will allow independent shops to bid competitively. The right thing for the city to do for all of the citizens of Juneau is to re-evaluate the currently endorsed union-only PLA and make the changes necessary to include all potential bidders.
Melissa Plosay works for Anchor Electric and has worked in accounting in Southeast Alaska for the past 18 years. She lives in Juneau.
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