Should you start waving the union flag?

PLAs may be required for working large federal projects - are you ready?
Thursday, April 22, 2010

WASHINGTON—A new federal rule issued April 14 by the Obama administration changes a Bush administration ban on project labor agreements and now allows federal agencies to require what are known as PLAs for contracting jobs of $25 million or more. Though it’s complicated to describe in full, what this essentially now means is that certain large government projects will now only be available to contractors with union-represented employees.

The rule does not require PLAs for these projects, however, and there is nothing specific that would require contractors be union shops. The Obama administration has stated it believes PLAs make jobs more efficient, make sure that workers are treated fairly, and make it more likely that winning bidders be responsible contracting firms.

What are project labor agreements? They are a pre-job collective bargaining agreement between the agency doing the hiring and all employees of contractors and subcontractors who successfully bid on the project. “PLAs usually require that a non-union contractor, for example, has to get their labor from union hiring halls, and that they then have to tell their own employees, ‘sorry, you can’t work here,’ unless they join the union,” said Ben Brubeck, director of labor and federal procurement with Associated Builders and Contractors, a national trade association that opposes the use of PLAs. The ABC believes that PLAs create inefficiencies for non-union contractors who suddenly have to pay into union benefit programs, or take on extra workers, while still paying their current employees and contributing to their pre-existing benefit programs. Thus, while they don’t exclude non-union contractors, “there are so few non-union contractors that win PLA jobs, and many don’t even bother to bid. I think it’s so rare that it just doesn’t happen,” said Brubeck.

Actual wages and benefit negotiation are excluded from PLAs, however. And, in exchange for this pre-hire agreement, the employees agree not to create any work stoppages for the life of the project.

This last thing, however, Brubeck sees as a hollow concession: “The unions are solving a problem only they create,” he said. “It’s like the mob throwing a brick through your window and then asking you to pay to make sure no more bricks come flying through.”

Security Systems News has been requesting comment from the IBEW for four days, but has yet to hear back. We will continue to report on the story.

The security industry is thus far taking a wait-and-see approach to the rules, which would take effect May 10. Will security installers be forced to employ union installers if they’re subcontracted onto a large federal job? Which employees will have to be union members? “I’ve read the rule,” said Don Erickson, head of government relations at SIA, “and we won’t know a lot of these answers until they’re decided on a case-by-case basis. It’s going to be a patchwork of different interpretations among different agencies and because they have discretion, you’re not going to know when you’re going to even get an answer. Talk about creating uncertainty...”

Dan Moceri, CEO of Convergint Technologies, an integrator with offices throughout the United States, said it might be similar to working in a union environment like downtown Chicago or Philadelphia, in which case it wouldn’t be too out of the ordinary. “In a lot of places we use installers that are union,” he said, “then the technicians and the engineers, the professional people, come in after the fact. We have union guys that we sub-contract out to. On a new building in Chicago, there’s no way you can use non-union labor to do the installation. They have to do the pipe, the wire, the mounting of the sensors.”

However, he wonders, “does the whole thing have to be union? Even the fire alarm guy, the data guy, and does the whole company have to be union? ... If they’re going to demand that it’s union, there’s no way you can find all those different trades that are union companies. They might have union installers, but then they’ve got to have technicians and engineers that are non-union.”

Tim Miller, head of government sales for ASG Security, based near the capital, said he doesn’t often work in union environments. “Except for the government employment union, it’s not a very big union town,” Miller said. “I know there’s not a whole lot of union outfits around here.” Considering the likelihood of a large government contract in Washington, he wondered who’d do the security work if there was a PLA involved.

Neither, however, does Miller often get sub-contracted by the big federal-project companies, he said. ASG’s preference for being the prime contractor, he said, and status on the GSA schedule, which includes a pre-negotiated rate for labor, should preclude any difficulties with PLAs. “This fiscal year we’ve gotten about $5 million in direct government contracts,” he said, “and it’s much more attractive because we’re the prime and we don’t have to jump through the hoops of the big contractors. We’d be less excited about working with a larger prime.”

Because the PLAs only kick in at the $25 million level, it seems unlikely, Miller said, that the new union rules would affect ASG at all.

Erickson at SIA said no one really seems to know who might actually be affected or when. How much union involvement is there in security in the first place? “I’ve never really gotten a clear answer on that,” said Erickson, who has inquired about that a number of times in the past. “It’s hard to figure either in terms of which unions or which chapters, or how many.”

One thing he does know is that the industry will start discovering some of these answers in a hurry. “What I don’t think is going to happen is that May 10 will come and then it will be months and months before a PLA is issued,” Erickson predicted. “I think they’ve already been thinking about it. The proposed rule was out there a year ago. I think we’ll see one right out of the box. So, it’s wait and see. The short-term impact is just a lot of confusion.”