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Project Labor Agreements: A Better Deal for All

An update on the President's efforts encouraging executive agencies to consider requiring the use of project labor agreements (PLAs) when they engage in large-scale construction projects.

One of the first actions taken on behalf of the Middle-Class Task Force was President Obama's signing of Executive Order (EO) 13502, encouraging executive agencies to consider requiring the use of project labor agreements (PLAs) when they engage in large-scale construction projects. Project Labor Agreements are pre-hire collective bargaining agreements with one or more labor organizations that establish the terms and conditions of employment for a specific construction project.

The use of a Project Labor Agreement can provide structure and stability to large construction projects. PLAs also help ensure compliance with laws and regulations governing workplace safety and health, equal employment opportunity and labor and employment standards. The coordination achieved through PLAs can significantly enhance the economy and efficiency of Federal Construction projects.

As Secretary of Labor Hilda Solis said, "Project Labor Agreements are a win-win; they benefit businesses, workers and taxpayers. I've seen the track record in cities like Los Angeles -- high quality work on projects done on time, on budget and good job and training opportunities that strengthen our communities."

The final rule that technically implements the President's EO goes on the books tomorrow. It builds on the extensive use of PLAs by Federal Agencies, the Department of Energy and the Tennessee Valley Authority, the use of PLAs in the private sector and the extensive use of PLAs in state and municipal construction projects.

As of the summer of 2009, 21 of 25 Department of Energy construction projects were, or were slated to be, covered by PLAs. As Ines Triay, Assistant Energy Secretary for Environmental Management put it, "PLAs have been a valuable tool for the accomplishment of the environmental clean-up and management mission of the Department of Energy. They contribute to the economy and efficiency of Department of Energy construction projects by ensuring timely completion of our projects within budget. They also lead to lower rates of injuries and illnesses."

The Tennessee Valley Authority has used Project Labor Agreements on its construction projects for nearly 19 years. In the nearly 200 million person hours of work on Tennessee Valley Authority construction projects using Project Labor Agreements, there have been no formal strikes or any organized work stoppages. The rate of injuries on these projects has also been significantly reduced.

Project Labor Agreements have been used at the State and municipal levels in all 50 States and the District of Columbia. Use of PLAs at the State and local level has been connected to an array of construction projects covering an expanding range and size of projects -- from schools, hospitals, roads, bridges and police buildings to convention centers, courthouses, manufacturing facilities, airports, power plants, transit systems, stadiums, and a prison.  And increasingly, PLAs have included provisions that ensure access to construction careers -- good safe jobs and valuable job training -- to all members of the community.

Project Labor Agreements have also been used by the private sector for a variety of construction projects that are similar in nature to those undertaken in the public sector, including for manufacturing plants, power plants, parking structures, and stadiums. The EO and the final rule now enable Agencies to consider whether their projects might gain some of the benefits found in the private, state and local construction sectors as well.

Despite their growing use in the private, state and local sectors, Federal use of Project Labor Agreements has been curtailed twice since 1992, including most of the past two decades. Many agency contracting offices have little knowledge of or experience with PLAs. To boost implementation of the President's Executive Order, the Middle Class Task Force convened an Inter-agency PLA Working Group to provide technical assistance to agencies on PLAs.

The working group currently includes the Department of Energy, the Department of Labor, the Department of Commerce, the Department of Justice, the Department of Housing and Urban Development, the Department of Agriculture, the Department of Transportation, the Department of the Interior, the Tennessee Valley Authority, the National Aeronautics and Space Administration, the General Services Administration, the Department of Defense and the Office of Management and Budget.  The Department of Labor is also funding a survey of key participants in the contracting process to help us better understand how best to use PLAs in the future.
The Middle Class Task Force Working Group on PLAs will continue to compile resources and provide assistance to Agencies as they work to implement EO 13502, helping to coordinate large projects while generating efficiency gains for businesses, the government and taxpayers.

Jared Bernstein is Chief Economic Advisor to the Vice President