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New Kentucky Law a Win-Win for Construction Industry, State Economy, Says ABC

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Associated Builders and Contractors has lauded Kentucky Gov. Matt Bevin (R) for signing into law the Fair and Open Competition Act (HB 135), which ensures all of Kentucky’s skilled construction workforce and qualified businesses can compete on a level playing field for contracts to build state and local public works projects.

Introduced by Rep. Phillip Pratt (R-62), this measure ensures state and local governments cannot requirecontroversial project labor agreements on taxpayer-funded construction projects, thereby ensuring all Kentuckians can rebuild their communities.

“Ensuring efficient, accountable and effective construction spending and investment free from government-mandated project labor agreements or preferences is a win-win for taxpayers, the economy and Kentucky’s construction industry,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “By awarding construction contracts based on a fair competitive bidding process, this law creates the conditions for the clear majority of Kentucky’s skilled labor and qualified contractors to compete on a level playing field to deliver to taxpayers the best possible public works projects at the best possible price.”

The new law invites the nearly 88 percent of Kentucky’s private construction workforce who have chosen not to join a labor union to work on projects in their own communities, funded by their own tax dollars.

“The passage of HB135 is another giant step taken by state legislative leaders and Gov. Bevin to proclaim Kentucky is a place where the marketplace and workforce thrives, regardless of labor affiliation,” said J.R. Gaylor, president of ABC Indiana/Kentucky. “This can and should become the formula for economic advancement for all.”

Government-mandated PLAs can raise costs by 12 to 18 percent compared to non-PLA projects, which results in fewer infrastructure improvements and reduced construction industry job creation. A May 2017 study by the Beacon Hill Institute, “Project Labor Agreements and the Cost of School Construction in Ohio,” found that PLAs raised the base construction cost of building Ohio schools by 13 percent, or $23 per square foot in 2016 prices.

Government-mandated PLAs typically force contractors to recognize unions as the representatives of their employees and hire most or all employees from the union hiring hall and union apprenticeship programs. Employers must also follow union work rules and pay into union benefit and multi-employer pension plans, in addition to any existing benefit plans, putting them at a significant competitive disadvantage.

In 2009, President Obama signed Executive Order 13502, which strongly encourages government-mandated PLAs on federal construction projects and permits state and local governments procuring federally assisted construction contracts to mandate PLAs. ABC and a coalition of construction and industry stakeholders have petitioned President Trump to issue an executive order similar to President Bush’s Executive Orders 13202 and 13208, which prohibited government-mandated PLAs on federal and federally assisted construction contracts worth hundreds of billions of dollars.

Kentucky is the 25th state to pass a law ensuring fair and open competition on state and local taxpayer-funded construction projects.

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