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Contractors brace for project labor agreements showdown

By Justin Carinci
Dolan Media Newswires

Portland, Ore. — In size alone, the Edith Green-Wendell Wyatt Federal Building project in Portland would be unusual: It’s a remodel estimated to cost $125 million.

But this project also marks the return of project labor agreements in federal contracting. Under the agreements, labor organizations set terms, including a ban on strikes and other stoppages, for the project.

The agreements have been controversial, and administrations dating back to the first George Bush have, alternately, banned or encouraged them in federal contracts. But their return under the Obama administration could signal a middle ground, according to some opponents of the agreements.

As contractors have prepared bids for Thursday’s bid deadline, they have worked on two cost estimates: one that includes a project labor agreement and one that doesn’t. That sort of side-by-side comparison puts the value of the agreements on trial, said John Killin, president of the Pacific Northwest Chapter of the Associated Builders and Contractors, a project labor agreement opponent.

“I think it’s a great idea,” Killin said. “There has been a lot of debate over the years on whether a PLA is beneficial.

“And a key component of ‘beneficial’ is ‘Does it save money?’ ”
The proof of that will come in December, when the government is expected to choose a contractor, technically a construction manager as constructor, for the project.

Contractors bidding on the project won’t reveal which estimate is cheaper, citing competitive pressure and the restrictions placed on federal projects.
“That’s not something we can do,” said Troy Dickson, project executive for Howard S. Wright Constructors.

“We wouldn’t disclose that because we’re competing with other contractors.”
Hoffman Construction Vice President Bart Eberwein also had no comment. “The owner has asked us to be very discreet and asked us not to talk about (this project),” he said.

Skanska is also among the contractors bidding on the project, but a representative there had no comment. Andersen Construction will not bid, said senior project manager Brad Nile.

When President Obama signed an executive order in February promoting the use of project labor agreements on federal projects worth $25 million or more, he left the details for the General Services Administration, the federal government’s property management agency, to sort out. The GSA’s Public Buildings Service in August identified 10 eligible projects across the country, including the Green-Wyatt building.

The document that sets guidelines on project labor agreements also spells out the two-bid process. The government may, under this process, accept a bid that doesn’t include a project labor agreement.

Bob Shiprack, executive secretary of the Oregon State Building and Construction Trades Council, said he’s confident that a project would cost less under a project labor agreement because of the efficiency built in before work starts.

Project labor agreements also mandate safety meetings and streamline other processes, Shiprack said. And union leaders like the projects because they expose more contractors to union workers.

Under a project labor agreement, a nonunion subcontractor may work on the project but typically would use union-hall labor. Sometimes, Shiprack said, the contractors then sign on with unions.

“That’s one of the reasons nonunions don’t like these (agreements),” he said. “Because their contractors try it, and they like it.”

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