Latest Confirmation that Project Labor Agreements Raise Costs of School Construction Fifteen Percent
In 2011, construction unions went ballistic when the National University System Institute for Policy Research in San Diego released the most comprehensive study ever conducted on the cost of Project Labor Agreements. It confirmed numerous studies and anecdotes showing that Project Labor Agreements are correlated with a cost increase of about 13-15 percent.
Now we have yet another example. The Chula Vista Elementary School District (in San Diego County) is required to rebid contracts without a Project Labor Agreement if there are fewer then three bidders. The staff report for the March 7, 2018 board meeting explains what happened:
As noted in the applicable Project Labor Agreement (PLA), the District seeks to improve local labor participation and improve the number of bids for its projects. However, Section 4.3(a) of the PLA provides that " . . . in the event the District does not receive bona fide bids on otherwise covered work on or before the deadline for receiving such bids from at least three (3) responsible contractors, or the lowest responsive and responsible bid on a covered project is in excess of ten percent (10%) of the engineer's estimate, the District reserves the right to reject all bids and re-advertise the project with or without the application of this PLA."
At the February 14, 2018, Board meeting, the District awarded Prime Bid Package Nos. 1, 2, 4, 6-8, and 10-14, and rejected Prime Bid Package Nos. 3 (Concrete), 5 (Rough Carpentry), and 9 (Glass & Glazing). Bid Package Nos. 3, 5, and 9 were re-advertised, re-bid, and subsequently opened on February 15, 2018, without the application of the PLA pursuant to Section 4.3(a) of the PLA. Bid Package Nos. 3, 5, and 9 are being recommended by District staff for award based on review of the bids, pricing, and other factors. The overall savings on the rebidding of Prime Bid Package Nos. 3, 5, and 9 is $952,258 or 13.5%.
The Chula Vista Elementary School District saved a million dollars in construction costs by re-bidding three contracts without a Project Labor Agreement. Does the school board care?