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Project Labor Agreements
Gerald Mayer
Analyst in Labor Policy
October 4, 2010
Congressional Research Service
7-5700
www.crs.gov
R41310
CRS Report for Congress
P
repared for Members and Committees of Congress
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Project Labor Agreements
Summary
The National Labor Relations Act (NLRA) gives most private sector workers the right to join or
form a labor union and to bargain collectively over wages, hours, and working conditions. The act
allows workers in the construction industry to enter into a collective bargaining agreement before
a project begins. A project labor agreement (PLA) is a collective bargaining agreement that
applies to a specific construction project and lasts only for the duration of the project.
In February 2009, President Barack Obama signed an Executive Order (EO) that encourages
federal agencies “to consider requiring” the use of PLAs on large-scale construction projects. The
EO defines a large-scale project as one where the total cost to the federal government is $25
million or more. The order states that agencies are not required to use PLAs. Regulations
implementing the EO went into effect in May 2010.
A PLA generally specifies the wages and fringe benefits to be paid on a project, and it usually
includes procedures for resolving labor disputes. PLAs generally include a provision that unions
agree not to strike and contractors agree not to lock out workers. A PLA may require contractors
to hire workers through a union hiring hall. If not, it may require employees to become union
members after being hired. A PLA applies to all contractors and subcontractors on a project.
Opponents and proponents of PLAs disagree on the economic effects of PLAs. Supporters argue
that the agreements provide uniform wages, benefits, overtime pay, hours, working conditions,
and work rules for work on major construction projects. They maintain that PLAs provide
contractors with a reliable and uninterrupted supply of workers at predictable costs for wages and
benefits, and they argue that a PLA makes it easier to manage a large project, which ensures that
it will be completed on time and on budget. Supporters also say that PLAs help train workers and
improve worker safety.
Opponents argue that PLAs have several disadvantages. They argue that PLAs increase
construction costs. Because a PLA sets standard labor costs and work rules, nonunion contractors
cannot win bids based on lower costs. In addition, nonunion contractors may not bid on projects
that are covered by a collective bargaining agreement, resulting in fewer bids and higher costs. If
a PLA requires contractors to hire workers through a union hiring hall, contractors may not be
able to use their own workers. A nonunion contractor’s workers may have to join a union and pay
union dues. If a contractor has to pay into a union pension plan, employees may not be on the
project long enough to vest in the plan. Opponents of PLAs also argue that nonunion contractors
can operate more efficient worker training programs and that evidence does not indicate that
nonunion construction projects are less safe than union projects.
Much of the research on the effect of PLAs on the costs of construction is inconclusive. In part, it
can be difficult to find similar projects where some use a PLA and the others do not. Instead of
comparing similar projects, economists often use statistical models that attempt to control for
differences in the characteristics of the projects. It can be difficult, however, to control for all the
factors that affect the costs of construction. For example, if the Davis-Bacon locally prevailing
wage is the local union wage, contractors may pay workers the union wage whether or not the
project is covered by a PLA. In addition, statistical models may not take into account the quality
of construction, whether projects are finished on time, or the safety records of different projects.
Finally, the relationship between PLAs and construction costs may be interdependent. PLAs may
affect construction costs, but the size and cost of construction may also affect the use of PLAs.
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Contents
Project Labor Agreements ........................................................................................................... 1
The Use of PLAs......................................................................................................................... 2
President Obama’s Executive Order on PLAs .............................................................................. 2
Number of Projects Affected by President Obama’s Executive Order..................................... 4
Advantages and Disadvantages of PLAs...................................................................................... 4
PLAs and the Davis-Bacon Act ............................................................................................. 5
The Economic Effects of PLAs ................................................................................................... 6
Research ............................................................................................................................... 6
Contacts
Author Contact Information ........................................................................................................ 9
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he National Labor Relations Act of 1935 (NLRA) gives most private sector workers the
right to join or form a labor union and to bargain collectively over wages, hours, and
T working conditions.1 The act allows workers in the construction industry to enter into a
collective bargaining agreement (CBA) before a project begins. A project labor agreement (PLA)
is a collective bargaining agreement that applies to a specific construction project and lasts only
for the duration of the project.
In February 2009, President Barack Obama signed Executive Order 13502, which encourages
federal agencies “to consider requiring” the use of PLAs on large-scale construction projects.
Regulations implementing the Executive Order (EO) went into effect in May 2010.
This report begins with a description of PLAs. It then describes President Obama’s EO and
summarizes regulations to implement it. The report then examines arguments for and against the
use of PLAs and reviews research on the economic effects of the agreements.
Project Labor Agreements
Most collective bargaining agreements are between an employer and a labor union and usually
last for a specific period of time (e.g., for three years or five years). The NLRA allows employers
and unions in the construction industry to enter into pre-hire agreements, which are CBAs
between employers and unions that are reached before workers are hired for a project. Under one
type of pre-hire agreement, one or more unions negotiate a contract with one or more building
contractors. The agreement applies to projects before they arise and lasts for a specific period of
time. A project labor agreement is another type of pre-hire agreement. A PLA applies to a specific
construction project and lasts only for the duration of the project. All contractors and
subcontractors on the project are bound by the agreement.2
A PLA generally specifies the wages and fringe benefits to be paid on a project. A PLA may
require contractors to hire workers through a union hiring hall.3 If not, it may require employees
1 The NLRA is also known as the Wagner Act, after Senator Robert Wagner of New York who sponsored the bill in the
Senate. Representative William Connery of Massachusetts sponsored the bill in the House of Representatives. The
Railway Labor Act covers labor-management relations in the airline and railroad industries. The Federal Service Labor-
Management Relations Statute governs labor-management relations for most federal workers. For more information on
the NLRA, see CRS Report RL32930, Labor Union Certification Procedures: Use of Secret Ballots and Card Checks,
by Gerald Mayer.
2 Section 8(f) of the National Labor Relations Act (NLRA) allows employers and unions in the construction industry to
enter into pre-hire agreements. Section 8(e) of the act allows agreements that limit work on a project to contractors who
agree to the terms of a PLA.
This section of the report is based on CRS Report 98-965, Project Labor Agreements in Federal Construction
Contracts: An Overview and Analysis of Issues, by Gail McCallion; CRS General Distribution Memorandum, Project
Labor Agreements Under Federal and New York Law, by Vince Treacy (a copy of this memorandum is available from
the author of this report); John Lund and Joe Oswald, “Public Project Labor Agreements: Lessons Learned, New
Directions,” Labor Studies Journal, vol. 26, Fall 2001, pp. 1–2; and John T. Dunlop, Project Labor Agreements, Joint
Center for Housing Studies, Harvard University, W02-7, September 2002, pp. 14–15. (Hereafter cited as Dunlop,
Project Labor Agreements.)
3 Under union hiring hall procedures, a union refers members to jobs. Generally, members who have been out of work
the longest are referred first. A PLA that requires contractors to hire through union hiring halls may allow nonunion
contractors to hire a certain percentage of “core” employees outside of the union hall referral procedures. Fred B.
Kotler, Project Labor Agreements in New York State: In the Public Interest, Cornell University, School of Industrial
and Labor Relations, March 2009, p. 4.
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to become union members after being hired. After they are hired, employees may petition the
National Labor Relations Board (NLRB) to decertify the union or reject the requirement that they
join the union.4
A PLA usually includes procedures for resolving labor disputes. For example, if there is a
disagreement between management and the unions over the interpretation of the PLA, the dispute
may go to mediation and then to arbitration. PLAs usually include a provision that unions agree
not to strike and contractors agree not to lock out workers.
The Use of PLAs
PLAs have been used in the United States since at least the 1930s. According to a 1998 report by
the Government Accountability Office (GAO), PLAs were used in the construction of the Grand
Coulee Dam in Washington in 1938, the Shasta Dam in California in 1940, the Trans-Alaska
Pipeline, Walt Disney World and the Kennedy Space Center in Florida, and the cleanup of Boston
Harbor.5 PLAs were also used in the construction of nuclear power plants in Hanford, WA, and
Oak Ridge, TN.6
According to the GAO report, the total number of PLAs is not known. The report states that there
is no identifiable group in either the private or public sectors that keeps comprehensive data on
the number of PLAs. Nevertheless, GAO’s research concluded that most PLAs are in the private
sector and that they have been used in all 50 states and the District of Columbia on both private
and public projects.7
President Obama’s Executive Order on PLAs
On February 6, 2009, President Obama signed Executive Order 13502, which encourages federal
agencies “to consider requiring” the use of PLAs on large-scale construction projects. The EO
defines large-scale projects as those where the total cost to the federal government is $25 million
or more. The order states that agencies are not required to use PLAs. It also states that agencies
are not prevented from using PLAs on projects not covered by the order.
The EO states that agencies may require a PLA if it will
advance the Federal Government’s interest in achieving economy and efficiency in Federal
procurement, producing labor-management stability, and ensuring compliance with laws and
4 The NLRB administers and enforces the NLRA. The NLRB is an independent federal agency that consists of a five-
member Board and a General Counsel. The General Counsel’s office conducts secret ballot elections and investigates
complaints of unfair labor practices. National Labor Relations Board, “Basic Guide to the National Labor Relations
Act” (Washington, DC: U.S. Government Printing Office, 1997), p. 33, http://www.nlrb.gov.
5 U.S. Government Accountability Office, Project Labor Agreements: The Extent of Their Use and Related
Information, GGD-98-82, May 1998, pp. 4–5. (Hereafter cited as GAO, Project Labor Agreements.)
6 Dunlop, Project Labor Agreements, p. 2.
7 GAO, Project Labor Agreements, pp. 6, 10.
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regulations governing safety and health, equal employment opportunity, labor and
employment standards, and other matters.8
On July 10, 2009, Peter Orszag, Director of the Office of Management and Budget (OMB),
issued a memorandum requesting agencies to submit quarterly reports identifying all contracts
awarded for large-scale construction projects and whether or not a PLA was required on the
project.9
On April 13, 2010, the Administration issued final regulations that implement President Obama’s
EO. The regulations went into effect on May 13, 2010, and they include general requirements for
PLAs. A PLA shall
• bind all contractors and subcontractors on a construction project to comply with
the PLA;
• allow all contractors and subcontractors to compete for contracts and
subcontracts whether or not they are otherwise a party to a collective bargaining
agreement;
• contain guarantees against strikes, lockouts, and similar job disruptions;
• provide binding procedures for resolving labor disputes that may arise during the
term of the PLA;
• provide other mechanisms for labor and management cooperation on matters of
mutual interest and concern, such as productivity, quality of work, safety, and
health; and
• include any additional requirements that an agency deems necessary.
The final rule encourages agencies to consider PLAs early in the acquisition process. The rule
states that an agency may specify the terms and conditions of a PLA. In addition, the final rule
identifies several factors that agencies may consider when deciding whether to use a PLA. These
factors are
• the construction project will require multiple contractors or subcontractors who
employ workers in multiple crafts or trades;
• a shortage of skilled workers exists in the area of the construction project;
8 President Barack Obama, “Use of Project Labor Agreements for Federal Construction Projects,” Federal Register,
vol. 74, February 11, 2009, pp. 6985–6987. President Obama’s EO revoked EOs issued by President George W. Bush
in February and April 2001. On February 17, 2001, President Bush signed Executive Order 13202. The order said that
federal agencies could not “require or prohibit” construction contractors from entering into PLAs. The EO did not
prevent contractors from voluntarily entering into PLAs; President George W. Bush, “Preservation of Open
Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally
Funded Construction Projects,” Federal Register, vol. 66, February 22, 2001, pp. 11225–11226. On April 6, 2001, the
EO was amended to allow PLAs to continue if they were in effect on the date that EO 13202 was issued; President
George W. Bush, “Amendment to Executive Order 13202, “Preservation of Open Competition and Government
Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction
Projects,” Federal Register, vol. 66, April 11, 2001, pp. 18717–18718.
9 Peter Orszag, Office of Management and Budget, Memorandum for the Heads of Executive Departments and
Agencies, M-09-22, July 10, 2009, available at http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-
22.pdf.
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• a project will last an extended period of time;
• PLAs have been used on comparable public or private projects in the area;
• a PLA will promote the agency’s long-term program interests, such as training
workers to meet the agency’s future construction needs; and
• any other factors that an agency thinks are appropriate.10
Number of Projects Affected by President Obama’s
Executive Order
The Administration has estimated that, annually, federal agencies may use PLAs on
approximately 30 construction projects of $25 million or more. The estimate is based on federal
construction data for FY2008 and FY2009.11
Advantages and Disadvantages of PLAs
Proponents of PLAs argue that the agreements have several advantages, including the
following:12
• A PLA provides uniform wages, benefits, overtime pay, hours, working
conditions, and work rules for work on major construction projects.
• A PLA provides contractors with a reliable and uninterrupted supply of workers
at predictable costs for wages and benefits. PLAs prohibit strikes and lockouts.
Because local unions are generally members of a national union, a union can
recruit workers both locally and nationally.13
• A large project is easier to manage if there is a PLA. Instead of dealing with
several unions that may have different wages and benefits and whose contracts
may have different expiration dates, contractors must deal with a single collective
bargaining agreement.
10 Department of Defense, General Services Administration, and the National Aeronautics and Space Administration,
“Use of Project Labor Agreements for Federal Construction Projects,” Final Rule, Federal Register, vol. 75, April 13,
2010, pp. 19168–19179.
11 Ibid., p. 19176. Department of Defense, General Services Administration, and the National Aeronautics and Space
Administration, “Use of Project Labor Agreements for Federal Construction Projects,” Proposed Rule, Federal
Register, vol. 74, July 14, 2009, p. 33955.
12 Dunlop, Project Labor Agreements, pp. 15–17. U.S. Senate, Committee on Health, Education, Labor, and Pensions,
Examining if Project Labor Agreements and Their Use of Public Funds are Really in the Best Interest of Taxpayers,
Hearing, 106th Cong., 2nd Sess., June 5, 2000 (Washington, DC: U.S. Government Printing Office, 2000), p. 46. Also
see Project Labor Agreements on Public Construction Projects: The Case For and Against, Worcester Municipal
Research Bureau, Report No. 01-4, May 21, 2001, http://www.wrrb.org/files/downloads/reports/pub_admin/2001/01-
4pla.pdf.
13 PLAs typically include provisions that require local unions to provide an adequate number of workers when the
workers are needed. If the unions cannot provide enough workers, the PLA may allow contractors to hire their own
workers. Dale Belman and Matthew M. Bodah, Building Better: A Look at Best Practices for the Design of Project
Labor Agreements, Economic Policy Institute Briefing Paper No. 274, August 11, 2010, available at http://epi.3cdn.net/
179fd74170130cd540_ibm6ib3kd.pdf, p. 7.
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• Because labor costs are predictable and because a PLA makes it easier to manage
a large project, a PLA helps ensure that a project will be completed on time and
on budget.
• A PLA may help train workers by requiring contactors to participate in
apprenticeship and training programs.
• A PLA can improve worker safety by requiring contractors and workers to
comply with project safety rules.
Opponents argue that PLAs have several disadvantages:14
• PLAs can increase costs. Because a PLA sets standard labor costs, nonunion
contractors cannot win bids based on lower costs. Nonunion contractors may
choose not to bid on projects that are covered by a PLA, resulting in fewer bids
and higher costs.
• PLAs can impede efficiency. If a PLA requires contractors to hire workers
through a union hiring hall, contractors may not be able to use their own workers.
Standard work rules can prevent contractors from managing the project in the
most efficient manner.
• If a contractor is able to use his own workers, the workers may have to join a
union and pay union dues.15 If a contractor has to pay into a union pension plan,
the employees may not be on the project long enough to vest in the plan.
• Nonunion contractors may operate more efficient worker training programs.
Instead of apprenticeship programs of a fixed duration, nonunion contractors can
train workers for specific tasks.
• Evidence does not indicate that nonunion construction projects are less safe than
union projects.
PLAs and the Davis-Bacon Act
On some federal construction projects, workers may be paid a union wage whether or not the
project is covered by a PLA. The Davis-Bacon Act requires employers to pay workers at least the
locally prevailing wage and fringe benefits on construction projects of more than $2,000 to which
the federal government is a party. Prevailing wages and fringe benefits are based on U.S.
Department of Labor surveys of construction contractors, subcontractors, and building trades
unions.
14 Herbert R. Northrup and Linda E. Alario, “‘Boston Harbor’– Type Project Labor Agreements in Construction:
Nature, Rationales, and Legal Challenges,” Journal of Labor Research, vol. 16, Winter 1998, pp. 1, 9, 12–14, 17–19;
Maurice Baskin, “The Case Against Union-Only Project Labor Agreements on Government Construction Projects,”
Journal of Labor Research, vol. 16, Winter 1998, p. 117.
15 In 22 right-to-work states, collective bargaining agreements cannot require workers to join a union or pay union dues.
In other states, collective bargaining agreements may require employees to provide financial support to a union as a
condition of employment. Workers who do not join the union pay the union an agency fee. Nonunion members are
represented by the union, but do not participate in union activities. Nonmembers may choose to pay a reduced agency
fee if they object to the use of their payments for political activities.
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Under the Davis-Bacon Act, if more than 50% of workers in a job classification are paid the same
wage, the majority wage is the prevailing wage. The majority wage may be a wage negotiated
under a collective bargaining agreement. If a majority of workers in a job classification are not
paid the same wage, the prevailing wage is the weighted average wage of workers in the job
classification.
For some occupations in some areas, the Davis-Bacon locally prevailing wage may be the local
union wage. Thus, on some federal construction projects, contractors may pay some, if not most,
workers the local union wage, even if the project does not use a PLA.16 On some projects,
workers in certain crafts may be covered by a collective bargaining agreement even if the project
does not use a PLA.
The Economic Effects of PLAs
Opponents and proponents of PLAs disagree on the economic effects of PLAs. To some extent,
projects that use PLAs may be different from projects that do not use them. Based on interviews it
conducted, GAO observed that
Proponents and opponents of the use of PLAs said it would be difficult to compare
contractor performance on federal projects with and without PLAs because it is highly
unlikely that two such projects could be found that were sufficiently similar in cost, size,
scope, and timing.17
If projects that use PLAs are different from projects that do not use them, it may be difficult to
isolate the economic effects of PLAs.
It may also be difficult to identify the economic effects of PLAs if contractors use PLAs because
of the advantages that PLAs may provide. If, for example, contractors are more likely to use
PLAs on large and expensive projects, it may be the size and cost of a project that determine the
use of a PLA. Thus, it may be difficult to measure the economic effects of PLAs if the
characteristics of a project determine whether a PLA is used.
Research
This section summarizes the findings of research on the economic effects of PLAs.
In a 1998 report, GAO summarized three studies on the effect of PLAs on project costs. The first
study was conducted by the Associated Builders and Contractors. The study concluded that PLAs
raised bids by 26% on two New York state projects. In the second study, the New York Thruway
Authority hired a consultant to negotiate a PLA for a project to refurbish the Tappan Zee Bridge.
The consultant concluded that the PLA reduced the cost of the project by $6 million (or 4.6%).
Instead of 19 local CBAs (each of which would have expired during the project), the PLA
standardized the terms and conditions of the project. The third study involved construction at the
Department of Energy’s Lawrence Livermore National Laboratory in Livermore, CA. An official
16 For more information on the Davis-Bacon Act, see CRS Report R40663, The Davis-Bacon Act and Changes in
Prevailing Wage Rates, 2000 to 2008, by Gerald Mayer.
17 GAO, Project Labor Agreements, p. 12.
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from the laboratory provided GAO with documents that indicated that the project contractor
estimated that the PLA lowered the cost of the project by about 0.4%. Most of the estimated
savings were due to lower costs for overtime, shift differentials, and holiday pay, as well as the
greater use of apprentices instead of higher-paid journeymen.18
More recent studies have reached different conclusions about the economic impact of PLAs. The
Beacon Hill Institute at Suffolk University in Boston has published a series of studies on the
effects of PLAs. The studies conclude that PLAs raise the costs of construction. In a study of 62
school construction projects in the Boston area from 1995 to 2003, researchers at the institute
concluded that PLAs raised the cost of construction by $16.51 per square foot (in constant 2001
dollars), or 12%. The study controlled for the size of construction (i.e., square feet) and whether
the project was new construction or renovation.19
The Beacon Hill Institute also published a study in 2004 of school construction projects in
Connecticut. The study concluded that PLAs raised the cost of construction by $30.00 per square
foot (in constant 2002 dollars), or 18%. The estimate controlled for the size of the project,
whether the project was new construction or renovation, the number of stories, and whether the
project was an elementary school.20
On the other hand, a study of 70 new school construction projects in Massachusetts from 1996 to
2002 concluded that, after controlling for several characteristics of the projects, the relationship
between PLAs and school construction costs was not statistically significant. The study found that
projects with PLAs were larger and more expensive than projects that did not use PLAs. The
authors concluded that their statistical model may not fully capture the relationship between
construction costs and PLAs.21 If PLAs are more common on larger and more expensive projects,
PLAs may not raise the costs of construction. Instead, the size and cost of a project may cause a
contractor to use a PLA to take advantage of the benefits it may provide.
18 Ibid, pp. 13–14.
19 The study included projects of $5 million or more and excluded small and large projects (defined as projects of less
than 40,000 square feet and projects of more than 400,000 square feet, respectively). The $16.51 estimate is based on
the actual cost of construction, as opposed to the bid cost, which is the initial price for a project reported by the
successful bidder. The study concluded that PLAs raised the bid cost of 126 construction projects by $18.83 per square
foot (or 14%). The study found that the effect of PLAs is smaller on new school construction than on renovations; Paul
Bachman, Darlene C. Chisholm, Jonathan Haughton, and David G. Tuerck, Project Labor Agreements and the Cost of
School Construction in Massachusetts, Beacon Hill Institute, September 2003, pp. 8–11.
20 The study included 71 projects of more than $1 million from 1996 to 2004; Paul Bachman, Jonathan Haughton, and
David G. Tuerck, Project Labor Agreements and the Cost of Public School Construction in Connecticut, Beacon Hill
Institute, November 2004, pp. 9–11, 14. The Beacon Hill Institute also published a study in 2006 of school construction
projects in New York state. The study concluded that PLAs raised the bid cost of construction by $26.98 per square
foot (or 18%). The study included 117 projects of more than $1 million from 1996 to 2005. The $26.98 estimate
controlled for size, number of stories, and whether the project was an elementary school; Paul Bachman and David G.
Tuerck, Project Labor Agreements and Public Construction Costs in New York State, Beacon Hill Institute, April 2006,
pp. 7–8, 10–11, 18.
21 Of the 70 projects, nine used a PLA. The study controlled for several characteristics, including area in square feet,
number of stories, whether demolition work was performed, whether the project was an elementary or other type of
school, whether the school was public or private, whether the school has a basement, whether athletic fields or tennis
courts were built, whether a boiler or central air was installed, the type of roof, whether it was built in the Boston
school district or elsewhere, and whether the project included science labs, vocational shops, a gymnasium, swimming
pool, auditorium, kitchen, band room, or library. The study’s authors found that the PLA variable and the control
variable were not independent; there was multicollinearitly. Dale Belman, Russell Ormiston, Richard Kelso, William
Schriver, and Kenneth A. Frank, “Project Labor Agreements’ Effect on School Construction Costs in Massachusetts,
Industrial Relations, v. 49, January 2010, pp. 45, 49, 51.
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Qualitative research has been conducted on other aspects of PLAs. For instance, a group of
researchers interviewed approximately 40 people experienced with PLAs to identify advantages
and disadvantages of the agreements. Results from such a small sample may not be representative
of all PLAs. Nevertheless, the researchers concluded that “interviewees seemed most convinced
that the greatest benefit of a PLA was in assuring timely completion of a project. Foremost, PLAs
nearly guarantee a steady flow of qualified labor.” 22 One interviewee said, “Anything above five
to eight million dollars we will go to a project labor agreement because we find it a more
effective management tool.... Basically it’s the labor pool, the supply of labor, [and] the quality of
the workmanship.” Interviewees were also critical of PLAs, however. The main criticism was that
PLAs can increase the bargaining power of construction unions. According to the study, in areas
where a large share of jobs are covered by PLAs, construction unions may make greater demands
during negotiations over new union contracts. If one union is successful, other unions may make
similar demands.23
A study conducted for the U.S. Department of Veteran Affairs concluded that the effect of PLAs
on construction costs is strongly influenced by the degree of unionization in an area. In highly
unionized cities, where most large construction projects use union workers, the study concluded
that PLAs can have a beneficial effect. In these areas, a PLA can provide consistent wages and
work rules. But, in cities with a low degree of unionization, PLAs can increase construction costs
by 5% to 9%.24
In short, much of the research on the effect of PLAs on the costs of construction is inconclusive.
In part, it can be difficult to find similar projects where some use a PLA and the others do not.
Instead of comparing similar projects, economists use statistical models that attempt to control for
differences in the characteristics of construction projects. It can be difficult, however, to control
for all the factors that affect the costs of construction. For example, if the Davis-Bacon locally
prevailing wage is the local union wage, contractors may pay workers the union wage whether or
not the project is covered by a PLA. In addition, statistical models may not take into account the
quality of construction, whether projects are finished on time, or the safety records of different
projects. Finally, the relationship between PLAs and construction costs may be interdependent.
PLAs may affect construction costs, but the size and cost of construction may also affect the use
of PLAs.
22 Dale Belman, Matthew M. Bodah, and Peter Philips, Project Labor Agreements, ELECTRI International, 2007, p.
27. (ELECTRI International is a nonprofit organization that, among other things, funds research on issues important to
the electrical construction industry; ELECTRI International, Facing the Future of Our Industry, Report to Stakeholders
2008, Bethesda, MD, pp. 2, 18, 24.)
23 Ibid., pp. 27, 31.
24 The 2009 study examined the potential effect of PLAs on construction costs in five cities where the VA was planning
projects. The five cities were Denver, New Orleans, New York, Orlando, and San Francisco. Rider Levett Bucknall,
Project Labor Agreements: Impact Study for the Department of Veterans Affairs, June 2, 2009, pp. 6, 32-33.
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Author Contact Information
Gerald Mayer
Analyst in Labor Policy
gmayer@crs.loc.gov, 7-7815
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