Two bills would mandate the use of Project Labor Agreements (PLAs) in school construction. The legislation was requested by the Superintendent of Public Instruction Chris Reykdal. HB 1723, sponsored by Rep. Mary Fosse (D-38), and SB 5572, sponsored by Sen. Steve Conway, require PLAs for school projects over $35 million.
AGC is strongly opposed to the measures. “The majority of studies done on PLAs show an increase in project costs and timelines due to PLAs,” said AGC Chief Lobbyist Jerry VanderWood in the House Capital Budget Committee hearing. “Interestingly enough, Gov. Newsom in California recently vetoed a bill mandating PLAs, citing cost concerns. And a federal court recently struck down the federal PLA policy, saying PLAs would be anti-competitive and relied on arbitrary and capricious policy.”
The bills allow for an exception process – but the entity charged with considering and granting exception requests is the Department of Labor and Industries, as opposed to individual school districts. An exception could be granted based on these factors:
· Requiring a PLA on the project would not advance the state’s interests in achieving economy and efficiency in state procurement. Such a finding must be based on the following factors: (a) the project is of short duration and lacks operational complexity; (b) the project will involve only one craft or trade; (c) the project will involve specialized construction work that is available from only a limited number of contractors or subcontractors; (d) the school district’s need for the project is of such an unusual and compelling urgency that a PLA would be impracticable; (e) or the project implicates other similar factors deemed appropriate in regulations or guidance.
· Based on an inclusive market analysis, requiring a PLA for the project would substantially reduce the number of potential bidders so as to frustrate full and open competition.
· Requiring a PLA for the project would otherwise be inconsistent with state laws and regulations.
“In a recent survey of contractors, 73% said they are not interested in bidding PLA projects. VanderWood added. “Fewer bidders, less competition, increased costs.”
The Senate Labor Committee has passed its version of the bill, which awaits further action in the Rules Committee (WILL UPDATE AS NEEDED). The House Capital Budget Committee held a hearing on its bill, but no further action has been scheduled as of press time. For more information, contact AGC Chief Lobbyist Jerry VanderWood.