Project Agreements: Best Value for Construction Dollars

by James Parks, Aug 24, 2010

At a time when construction owners are looking to get the best value for their dollar, they are increasingly turning to what they know works—project labor agreements (PLAs)—to ensure the work is on time and on budget.

The AFL-CIO Building and Construction Trades Department (BCTD) reports that this year alone nearly 100 major public and private construction projects worth more than $80 billion have used PLAs, including the first two U.S. nuclear power plant construction projects in more than 40 years.

PLAs are pre-hire agreements between labor and management. The agreements require all construction jobs to be filled by local workers, includes diversity requirements, establishes wages and work rules covering overtime, working hours and dispute resolution and ensures that safety guidelines on the job site are enforced.

Despite the outcry last year from the usual chorus of anti-worker groups when President Obama issued an executive order mandating project labor agreements for federal construction projects, the fact is more and more private companies are jumping on the PLA bandwagon. Scores of agreements have been signed on behalf of such corporations as ConocoPhillips,  Southern Company, Exelon and Pacific Gas and Electric Co. Corporations and agencies ranging from Walt Disney World to the Tennessee Valley Authority, along with dozens of professional sports stadiums, and all eight of Toyota’s American manufacturing facilities, used PLAs. Even Wal-Mart, the world’s largest corporation whose entire corporate culture is focused on cost-cutting, is increasingly turning to PLAs when constructing its retail outlets.

PLAs provide career training opportunities for disadvantaged residents and BCTD says construction owners understand that PLAs promote productivity by allowing construction managers to more effectively coordinate the numerous contractors on the site, standardize working conditions and give contractors ready access to a local pool of well-trained and highly skilled workers who have undergone thorough background checks as part of the agreement.

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