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ABC Backs Bill to Increase Competition on Taxpayer-Funded Construction Contracts

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Associated Builders and Contractors has voiced its strong support for the Fair and Open Competition Act (H.R. 1858/S. 907), which will benefit taxpayers by encouraging more qualified construction companies to compete for federal and federally funded construction projects. The bill, introduced by Rep. Ted Budd (R-N.C.) and Sen. Todd Young (R-Ind.), prevents federal agencies and recipients of federal funding from requiring contractors to sign controversial project labor agreements as a condition of winning federal or federally assisted construction contracts.

“The Fair and Open Competition Act is win-win for taxpayers and the U.S. economy because it creates an inclusive policy allowing all Americans and all qualified companies to fairly compete to rebuild America’s infrastructure,” said ABC Vice President of Legislative & Political Affairs Kristen Swearingen. “This common-sense reform ensures taxpayers get the best possible construction projects at the best possible price by increasing competition, reducing construction costs and eliminating favoritism in the procurement process of public works projects because governments can neither require or prohibit project labor agreements.”

When mandated by a government agency on a taxpayer-funded project, a PLA typically ensures construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job, use union hiring halls and apprenticeship programs to obtain most or all construction workers and apprentices at the expense of existing qualified employees, and follow inefficient union work rules. In addition, PLAs require payments into union benefit and multi-employer pension plans that workers will never benefit from unless they meet vesting requirements and pay union dues and/or join a union as a condition of employment.

“Government-mandated PLAs discriminate against the 87.2 percent of the private U.S. construction workforce that chooses not to join a labor union and drive up the cost of taxpayer-funded construction by 12 to 18 percent compared to projects not subject to PLA mandates,” said Swearingen. “ABC supports this bill because it will create jobs for veterans, minorities, women and local workers not affiliated with unions, and will create opportunities for small businesses and qualified contractors hurt by PLA requirements. We urge Congress to immediately pass this common-sense legislation and put an end to these anti-competitive and costly contracting schemes.”

This week, an ABC-led coalition of 12 construction industry and business associations sent letters to theHouse and Senate in support of the bill.

In 2009, President Obama signed Executive Order 13502, which strongly encourages the use of government-mandated PLAs on federal and federally funded construction projects. In March 2019, letters sent by ABC and a coalition of construction industry stakeholders asked President Trump to rescind Obama’s pro-PLA policy and replace it with Executive Orders 13202 and 13208, which prohibited government-mandated PLAs on federal and federally assisted projects worth hundreds of billions of dollars from 2001 until it was rescinded by President Obama in 2009.

In the 115th Congress, the Fair and Open Competition Act (H.R. 1552), introduced by Rep. Dennis Ross (R-Fla.), had more than 100 co-sponsors and was passed out of the House Oversight and Government Reform Committee.

On March 21, Kentucky became the 25th state to pass a similar law ensuring fair and open competition on taxpayer-funded projects procured by state and local governments.

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