In contrast, the Virginia General Assembly has sent legislation to Northam that would needlessly increase taxpayer-funded construction costs, discourage competition from Virginia’s construction workforce and steer contracts to out-of-state campaign contributors instead of creating opportunities for certified small, women- and minority-owned companies like mine to compete for public works contracts on a level playing field.
At issue is legislation introduced by Sen. Majority Leader Dick Saslaw (Senate Bill 182) and Del. Alfonso Lopez (HB 358) that would rescind a 2012 Virginia law requiring taxpayer-funded public works construction contracts procured by state agencies to use a competitive bidding process that is truly open to all qualified businesses, regardless of whether contractors are willing to sign project labor agreements (PLAs) with construction unions as a condition of performing taxpayer-funded projects.
These bills, along with SB 995/HB 1635, would replace Virginia’s existing statute with a policy permitting government-mandated PLAs on school buildings, affordable housing, public hospitals, roads, Metrorail renovations and other infrastructure procured by state and local governments.
When mandated by governments, PLAs discourage qualified nonunion contractors such as my company — which employ 97.8 percent of Virginia’s construction industry — from competing to build projects funded by taxpayer dollars.
In short, government-mandated PLAs force Virginia contractors to follow inefficient union work rules and hire most or all craft workers on a job site from specified union hiring halls and union apprenticeship programs instead of journeyman and apprentices already employed by their company. That limits the pool of bidders, because nonunion contractors don’t want to abandon their existing employees and quality-control practices — key components of a safe and productive workplace — for strangers from union halls governed by unfamiliar rules.
In addition, members of Virginia’s construction industry could suffer wage loss because nonunion workers (and some union workers) lose an estimated 20 percent of wages and benefits earned on a PLA project unless they accept union representation, join a specific union, pay membership dues and meet the union benefits plan’s vesting requirements.
A January 2020 study by the Beacon Hill Institute found that government-mandated PLAs raised the final construction costs of building Connecticut schools by almost 20 percent relative to non-PLA school construction. Additional studies on the effect of government-mandated PLAs on California, Massachusetts, New Jersey, New York and Ohio school construction also found PLAs increase the cost of construction by between 12 percent and 18 percent. The commonwealth simply cannot afford such waste with so many school construction and other infrastructure needs.
For these reasons, Virginia and a total of 25 states outlaw government-mandated PLAs on public works projects, thereby ensuring fair and open competition on taxpayer-funded construction projects so the public can get the best possible construction project at the best possible price.
Unfortunately, construction union lobbyists and their members, who make up just 2.2 percent of Virginia’s private construction workforce, made passage of PLA and prevailing wage (SB 8/HB 833) legislation a top priority in the recent legislative session. These controversial bills will push public works contracts to out-of-state union-signatory contractors and result in more jobs set aside for union members.
At least 46 construction unions gave a total of $1.68 million in direct contributions to Democratic political campaigns during Virginia’s 2018-2019 cycle, according to campaign filings compiled by the Virginia Public Access Project, a nonprofit that monitors campaign contributions by special interest groups.
But if these bills become law, Virginia’s certified small, women- and minority-owned contractors, such as my company, Athena Construction Group — a service-disabled veteran, woman-owned contractor — will be harmed because they are predominantly nonunion and will be discouraged from competing for projects subject to these special-interest schemes. Meanwhile, large companies and their unionized workforce from Maryland, the District and other states would have an unfair advantage and disrupt the local market at the expense of the commonwealth’s small, women- and minority-owned businesses and skilled construction workforce.
It isn’t a coincidence that almost 62 percent of the aforementioned $1.68 million in political contributions to Democratic General Assembly lawmakers this election cycle came from out-of-state construction unions with a vested interest in getting Virginia’s new leadership to stifle competition from local and qualified businesses.
Northam can support the commonwealth’s taxpayers, small, women- and minority-owned contractors and the construction industry by vetoing these bills. Sending a message to the General Assembly that Virginia contractors and taxpayers come first is the right thing to do and the best way to achieve objectives in Northam’s ambitious contracting plan.