Flake Introduces Bill to Lower Federal Construction Costs and Increase Opportunities for Underrepresented Contractors
Posted on Mar 14 2017
Washington, D.C. – U.S. Sen. Jeff Flake (R-Ariz.) today introduced the Fair and Open Competition Act, a bill to level the playing field for government contractors by rolling back an Obama administration executive order encouraging Project Labor Agreements (PLAs) on federal projects. Flake’s bill would restore the Bush administration’s policy of neutrality toward PLA’s, making clear that agencies may neither require nor prohibit PLAs as a condition for receiving a federal contract.
PLAs are union bargaining agreements that all contractors must sign in order to work on a construction project. Under PLAs, non-unionized firms are forced to subject their employees to union control. These non-union employees are required to pay union dues and contribute to union pension and health care funds, despite the fact that they will never benefit from these mandatory contributions unless they join and vest in a union.
Starting in 2001, federal policy prevented agencies from requiring or prohibiting the use of PLAs on federal construction projects to prevent this kind of unfair treatment of non-union firms, which represent about 86 percent of the construction workforce. However, in 2009, President Barack Obama signed an executive order encouraging the use of PLAs by federal agencies.
While this executive order did not require federal agencies to use PLAs, subsequent implementing guidance and regulatory changes led some agencies to interpret the order as requiring consideration of PLAs as a condition of awarding federal contracts. Studies have found that this agency preference for PLAs has had a chilling effect on the bidding process for non-union firms, which in turn has empowered politically-connected unions to drive up construction costs due to the lack of competition. The non-partisan Government Accountability Office (GAO) determined that it is impossible to show any cost savings or increase quality derived from government-mandated PLAs.
“The federal government should not support policies that discriminate against Arizona businesses and artificially inflate construction costs,” said Flake. “By expanding opportunities for Arizona’s non-union firms, this bill will help drive down costs on federal construction projects and ensure that taxpayer dollars are invested in construction and job creation, not lining the coffers of politically-connected unions.”
- On Jan. 24, 2017, Flake introduced the Transportation Investment Recalibration to Equality (TIRE) Act, a bill to make federal transportation and infrastructure dollars go further in Arizona and across the nation by suspending the prevailing wage provisions of the Davis-Bacon Act on a federal highway construction contracts. To view Flake’s speech on the Senate floor in support of the bill, click here.
- In the 114th Congress, Flake filed 21 amendments to the 2016 budget resolution to eliminate more than $6 billion in federal spending. One of his amendments, which would establish a spending neutral reserve fund to prohibit the federal government from awarding contracts based on use of PLAs, was agreed to by a vote of 51-49. Read more about the amendment here.