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PLAs to be Used for $3B CA Airport Reno

Wednesday, April 10, 2019

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The $3 billion San Diego International Terminal 1 project—the airport’s largest ever—will officially be under the rules of project labor agreements as the San Diego Regional Airport Authority approved using PLAs for the project last week.

The board action followed a contentious three-hour public hearing, according to the San Diego Union-Tribune.

What Happened

Plans for the $3 billion overhaul include the construction of an entirely new building for 19 gates, demolishing the old building and adding 11 more gates.

GrapefruitSculpin, CC BY-SA 4.0, via Wikimedia Commons

The $3 billion San Diego International Terminal 1 project—the airport’s largest ever—will officially be under the rules of project labor agreements as the San Diego Regional Airport Authority approved using PLAs for the project last week. Picture above is Terminal 2, which underwent a $1 billion renovation about six years ago.

Airline officials reportedly urged the authority to mandate PLAs for the project arguing that they “ensure project harmony and minimize construction delays.”

“There are many benefits to PLAs—promoting the use of local labor, utilizing apprenticeship programs, ensuring safe working conditions, better wages, and by law, they will prohibit discrimination,” said Johanna Schiavoni, one of five board members who voted in favor of the requirement.

Proponents noted that the agreements don’t totally exclude non-union workers, but those opposed argue that the hiring pool is going to be limited in a time of worker shortages and go on to dispute other parts of the agreement, such as pension payments.

“My electricians on your job would have $10.38 an hour going into a union they don’t benefit from,” said Ace Electric President Jeff Hinds. “It’s counter-intuitive to me that you’d limit the work force locally.”

A requirement within the requirement was made, however, that the contractor selected would address health benefits and pension concerns while negotiating contracts.

If everything moves forward according to plan, construction should start in 2021, with gates opening in 2024.

About PLAs

The debate among board members in San Diego is reminiscent of talks across the country, with heavy division between those who support PLAs and those who do not.

Just last month, the Minnesota/North Dakota chapter of the Associated Builders and Contractors decided to sue a Minneapolis school district over what it says are unconstitutional PLAs.

The complaint discusses the school district’s requirement that any contractor working on a project must agree to a PLA between the district and a union called the Minneapolis Building and Construction Trade Council.

Zolnierek / Getty Images

Just last month, the Minnesota/North Dakota chapter of the Associated Builders and Contractors decided to sue a Minneapolis school district over what it says are unconstitutional PLAs.

Within the requirements, the contractors need to hire from union halls and pay into fringe benefits funds. In addition, the contractors need to agree to the terms before they even bid on a project. This process has reportedly been in place with the district since 2004.

According to Courthouse News, one of the plaintiffs’ attorneys, Wen Fa, with Pacific Legal Foundation, said the school district “requires contractors to take workers from union hiring halls at the expense of their own workers.”

“It’s no surprise that these project labor agreements serve as a barrier to entry to qualified contractors that are unwilling to upend their business,” Fa said. “This ultimately hurts not just contractors, but taxpayers who have to pay more as a result of these anticompetitive agreements.”

The ABC itself has a long history of standing against PLAs, and about 24 states in the country have regulations forbidding their use on public projects.

In 2017, the group applauded then-Wisconsin Gov. Scott Walker, who signed into law the prohibition of PLAs on state, state-assisted or local construction projects.

Proponents of the agreements, on the other hand, say that PLAs bring a level of predictability to costs and construction timelines, as noted in San Diego. They also note that PLA projects typically ensure overtime pay and make managing projects easier with everyone under one contract.

However, around 80 percent of private construction workers in the country have opted out of unions, and though PLAs don’t make it impossible for non-unionized professionals to work on those jobs, they do create a significant hurdle. This has resulted in cost overruns due to lack of competition, which is the biggest point of contention of those who oppose the agreements.

   

Tagged categories: Airports; Contracts; Good Technical Practice; Labor; NA; North America; Terminals; Upcoming projects

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