Cuomo makes case against PLAs

by Ken Girardin |  | NY Torch

In cutting the figurative ribbon on a big Capital Region highway project, Governor Andrew Cuomo made a convincing argument against his own policy of steering state work to building trade unions.

The governor staged a Sunday morning press conference at the Albany Airport Connector in Colonie, which will become I-87 Northway Exit 3, to announce the $50 million project will be completed sooner than planned.

“Three words you very rarely hear for a government project: this project is ahead of schedule,” Cuomo told reporters. “The project was supposed to be completed next year and we are only weeks from the total completion.”

“People have a stereotype of government being slow and inefficient,” he added. “It doesn’t say anywhere in the Bible government must be slow and inefficient and this project proves the exact opposite.”

But the governor left out a crucial detail: departing from a pattern set in other large public construction projects, the state didn’t force the winning bidder, L&T Construction of Schoharie County, to sign a project labor agreement (PLA) with local construction unions. Mandatory PLAs have the effect of preventing non-union contractors from bidding on jobs, which shrinks the pool of eligible bidders and drives up costs.

To be sure, L&T still had to pay inflated union rates under the state’s Section 220 “prevailing wage” law, which covers public works jobs. But without a PLA, a contractor is free to use its own employees instead of having to hire most of its workers from union halls, as PLAs typically require. And they aren’t saddled with inefficient union work rules.

The result: an early opening—and a strong argument against Cuomo’s pledge that “every project we build will be built with organized labor.

Coincidentally, Lancaster Development—L&T’s managing member—was at the center of what amounted to a controlled experiment regarding project labor agreements early in Cuomo’s tenure. An administrative snafu at the state Department of Transportation invited bids on a project in Orange County from contractors both with and without agreements to use project labor agreements. Lancaster came in the lowest by $4.5 million—but didn’t plan to use a PLA.

The Cuomo administration fought in court to reject Lancaster’s bid—that is, for its right to pay more for the same work, in order to steer the work to a union contractor and to Hudson Valley trade unions politically aligned with the governor.

The Orange County project was ultimately delayed by a year. And the consequences for taxpayers didn’t end there:

Not only did DOT disregard the lowest bid in favor of one $4.5 million higher, it also saddled taxpayers with up to $22 million in costs from having to stop the work after a judge ruled it had wrongly awarded the contract.

“Slow and inefficient” doesn’t begin to describe it.

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- Ken Girardin is the Policy Analyst at the Empire Center for Public Policy.