With President Joe Biden recently signing a historic Executive Order mandating the use of Project Labor Agreements on all federally funded projects over $35 million, the Mechanical Insulators LMCT has created this blog to help separate fact from fiction when it comes to PLAs.
What is a Project Labor Agreement or PLA?
To put it simply, a PLA is the following:
- A business model that increases the efficiency and quality of complex construction projects for the private sector, as well as for local, state and federal governments.
- It establishes the terms and conditions of employment for all construction crafts on the project by way of an agreement between contractors and their workforce, before the project breaks ground.
- For nearly 100 years, they have been used on all types of complex projects such as military bases, schools, hospitals, NASA facilities, nuclear and other types of power generation facilities, semiconductor and battery manufacturing facilities, government research facilities, locks and dams, bridges and tunnels, sports stadiums and much more.
How does this help American’s union construction workers?
Project Labor Agreements reduce the chance of predatory, low-quality employers who do not have the welfare of their workforce in mind. These companies usually bid the lowest and consist of mostly unskilled workers, which not only makes the jobsite unsafe, it also jeopardizes the entire project in terms of completion time and quality.
In February, Mechanical Insulators LMCT Executive Director Pete Ielmini appeared on the America’s Work Force Union Podcast and discussed how PLAs are a cost-effective management tool that promotes efficient project delivery. He made the following points:
- PLAs help the end-user (project owner) increase the efficiency and quality of a project because it coordinates all the actors on the project and ensures the use of a well-trained and highly skilled workforce.
- A well-trained and highly skilled workforce ensures projects are built correctly the first time, on time and on a budget (or under budget in some cases).
- PLAs prevent costly delays that result from a lack of knowledge by unskilled workers regarding the proper use of building materials, equipment and/or tools, as well as construction methods.
- Since the work performed on the project is high quality, future building maintenance costs are often lower.
PLAs and training
PLAs often require construction workers complete a registered apprenticeship program and/or complete certain journeyman upgrade training.
The various building trades apprentice programs, including affiliated International Association of Heat and Frost Insulators and Allied Workers training programs, are federally recognized training programs. In order to become a federally recognized program, certain benchmarks must be achieved not only by the students, but by the instructors and the facility, as well. This is due to the rigorous training offered by HFIAW affiliated Joint Apprentice Training Committees, which produce the highest quality workforce capable of handling large, multimillion-dollar projects, that will stay on budget and complete jobs on time.
PLAs are not a one-size-fits-all option
At the core of each PLA is flexibility, financial certainty and communication with the workforce. It is why they are commonly used by companies such as Disney, Microsoft, Walmart, Boeing, GM and Ford. They offer the ability to be tailored to the specific needs such as:
- Each agreement is customized to meet the requirements of the type of project, needs of the project owner and contractor, the skilled workforce necessary to complete the project, the needs of the community hosting the project and other factors that impact a jobsite.
- The customization of PLAs is one of the major advantages and reasons why they are used by businesses to complete their complex construction projects.
- PLAs facilitate more accurate budgeting and cost forecasting for project owners and contractors by establishing a set wage and benefits package for all craft workers and apprentices on a project.
- PLAs guarantee constant communication between contractors and their workforce throughout a project by having them coordinate each craft’s work schedules and scope. This coordination translates into the efficient use of materials, job site equipment, workers and contractors to help keep a project on time and on budget.
When jobs use PLAs, they not only create a more efficient and safer project, but they help companies in regard to financial forecasting. Project owners and their financing partners know a PLA helps create certainty in budgets and timelines.
PLAs increase jobsite safety
Project Labor Agreements are a tool to increase job safety, improve job security and guarantee there will be no shortage of highly skilled workers. During his AWF appearance, Ielmini noted:
- PLAs ensure a project is safer (compared to projects built without a PLA) by guaranteeing all workers are well-trained. This is paramount since construction is one of the most dangerous industries. The training not only helps them to work safer, but helps keep everyone else on the jobsite safer as well, because tasks are performed within all safety guidelines.
- Often times, PLAs will require workers to have specific safety certifications such as OSHA-10, OSHA-30 or ICRA.
- PLAS can also require certain workers to have certain certifications, which could include things like Aerial Lift or Confined Space.
- Using a highly skilled workforce protects project owners and contractors by reducing jobsite accidents. Contractors also pay less for workers' compensation as a result of employing a safer workforce.
- On projects that require security clearance and monitoring the entrance, exit and travel around the grounds of a jobsite, PLAs ensure end-users and contractors know who is working on the project.
- PLAs provide guaranteed access to a steady pipeline of well-trained and highly skilled individuals to ensure there is no shortage of craft workers throughout all phases of a project.
Good for the community
One notable point Ielmini made on AWF was how PLAs create careers for local residents and veterans.
- Provisions included in a PLA can mandate employment and training opportunities for local residents and military veterans.
- Such language creates a pathway to a career for veterans and young workers to earn while they learn. This means they receive on-the-job training from skilled, experienced workers and also receive classroom instruction, while earning a good wage and great benefits.
- PLAs help local businesses because they promote hiring local workers, who in turn spend their paychecks in the cities and towns where they live and, in the area where the PLA project is located.
As he pointed out, politicians on both sides of the aisle benefit from PLAs because they help the areas these politicians represent. PLAs create jobs in their district, and in turn, the workers support small businesses within the same district and the communities where they live. Everyone wins when work and workers stay local and receive great pay.
The PLA Mandate Myth
Following President Biden’s Executive Order, a myth began to circulate regarding PLAs and the non-union construction industry.
- The myth that the federal government can prohibit the hiring of non-union construction workers on a project built under a PLA is false. The fact is, the federal government is legally prohibited from mandating workers on a federal government project built under a PLA be union members.
- The PLA business model does not mandate or pre-determine that a workforce be union or non-union. It allows for the project owner, such as the government or private sector entity, to ensure successful project delivery by establishing uniform workforce standards that both union and non-union contractors and their workforce must meet as a condition of participating in the project.
- These workforce standards are defined by the type of construction project or maintenance work and has nothing to do with union membership.
The Mechanical Insulators LMCT is working hard to break the stereotypes and misconceptions of PLAs. We believe project owners should strive to have high work standards, want the best-trained construction workforce (union building trades members) to build their project and want a high quality project completed on time and on or under budget. This is not too much to ask.
The results of using PLAs speak for themselves. Simply look at the hundreds of thousands of projects built using this tool.