President Barack Obama promised “change we can believe in,” but we are discovering that the more things change, the more they stay the same. In fact, the president is promoting an egregious scheme that serves only to reward his political benefactors, while needlessly driving up the cost of taxpayer-funded construction by nearly 20 percent.
Last month, the Obama administration released final rules to enact President Obama’s Executive Order 13502, which will radically change federal contracting policy to favor his largest political supporters: construction trade unions. The order encourages federal agencies to award federal construction contracts greater than $25 million to contractors not based on price and quality, but rather on their political affiliation with Big Labor.
His order, which went into effect this week, will allow federal construction costs to skyrocket by denying the vast majority of construction workers (more than 85 percent do not belong to a labor union) the opportunity to work on public work projects unless their employers agree to costly and discriminatory conditions contained within wasteful project labor agreements (PLAs).
The president is putting special interests before the public interest. Let’s be clear, PLAs are nothing more than costly kickback schemes designed to benefit the Big Labor bosses who spent hundreds of millions of dollars to elect the president and a union-friendly, Democrat-controlled congress.
Contracts should be awarded on the quality of work at the best price – not union affiliation. Taxpayers deserve nothing less.
By ending competitive bidding and forcing contractors to adopt inefficient union work rules, studies have demonstrated that PLAs raise construction bid and final costs by as much as 20 percent when compared to similar non-PLA projects.
According to a September 2009 study by The Beacon Hill Institute (BHI) at Suffolk University, PLAs significantly increase construction costs on federal projects without benefiting taxpayers. The study found that if President Obama’s Executive Order 13502 were in effect in 2008, federal construction costs would have increased an additional $1.6 billion to $2.6 billion.
We can expect similar waste in 2010. Money that could be spent on more schools, safer roads and cleaner parks instead will cover unjustified and wasteful construction costs that will line the pockets of President Obama’s political patrons.
In an era where government budgets are stretched to the limit, can we afford to spend more than is necessary on construction projects?
With the federal government financing approximately $140 billion in federal and federally assisted construction in last year’s stimulus bill, it is unconscionable for the president to promote a policy rife with favoritism toward special interests while wasting taxpayer dollars.
The president’s payback plan to Big Labor bosses won’t stimulate the economy or create jobs. With the construction industry reeling from an unemployment rate of nearly 25 percent, Washington’s latest red tape will deny jobs to skilled and local construction professionals in your community.
President Obama has exchanged the politics of change for business as usual: crony contracting. This country is facing enormous challenges. Now is the time for hope, not costly special interest kickbacks at taxpayers’ expense.
Carole Bionda is VP of Nova Group, a general engineering contractor headquartered in Napa, Calif.