San Diego airport officials vote to use PLA on $3B airport project

Dive Brief:

Board members of the San Diego County (California) Regional Airport Authority have voted to require that the design-build contractor chosen to lead the $3 billion redevelopment of San Diego International Airport must enter into project labor agreements with local unions.
The regulation requiring the PLAs, according to a staff-prepared report, “ensures labor harmony by eliminating the threat of work stoppages, strikes, slowdowns, and lockouts for the life of the project,” which, airport staff said, is a critical element for keeping the five-year project on schedule.
As part of the PLA, the selected contractor, in order to address concerns about nonunion workers paying into union benefit programs, will negotiate health benefit and pension payments. At least one board member, according to The San Diego Union-Tribune, said he was influenced to vote for the PLA requirement because airlines, which are financing the development, favored it.

Dive Insight:

Also included in the staff report to the authority was the fact that California state law allows a public agency to require a PLA. Lawmakers in many other states, however, don't. Last month, Kentucky became the 25th state to enact anti-PLA regulations mandated by state and local government agencies. Kentucky’s new law keeps its public agencies from requiring that bidders sign on to PLAs, although it does not ban the agreements altogether nor does it prevent contractors from entering into voluntary PLAs.

One of the arguments that opponents of PLAs use is that these agreements raise the cost of construction because higher union wages, fringe benefits and other perks that open shop contractors don’t always pay are written in. If nonunion contractors want to work on a PLA project, they must agree to abide by the agreement's terms.

However, on a $35 million wastewater treatment plant project in Ogdensburg, New York, using a PLA is projected to save taxpayers about $900,000, the Watertown Daily Times reported. An engineering and consulting firm hired to study the impact of a PLA on construction found that the city could save money by negotiating the end to some breaks, reclassifying some types of work and exempting the project from a local law that requires general, electrical, plumbing and HVAC work to be bid separately. Critics of the company conducting the study have criticized its methodologies and have accused it of pro-union bias.

Groups like the Associated Builders and Contractors have consistently fought against PLA mandates imposed by public agencies, claiming that they restrict participation by open shop contractors.