Project Labor Agreements

PLAs help projects come in on time and on or under budget

For general contractors and project owners, two of the big fears for any construction project is not finishing on time and going over budget. 

There is a tool within the industry that helps ensure this does not happen. 

For many years in the private and public sectors, Project Labor Agreements (PLAs) have been used to ensure high quality and efficient work is performed on jobsites, which allows the project to finish on time and on or under budget.

A PLA is a pre-hire, Collective Bargaining Agreement with all the labor organizations needed to work on a specific project that establishes the terms and conditions of employment including: 

  • Pay
  • Healthcare
  • Retirement
  • Work hours
  • Leave
  • Safety policies
  • Training

PLAS also help promote labor peace on jobsites by resolving issues at the bargaining table, which avoids conflict. This, in turn, reduces employee turnover by promoting open communication and job security.

A PLA guarantees only highly skilled and highly trained building trades members work on a project. This means the work is done right the first time and since it is high quality craftsmanship, there will be lower maintenance costs down the road. 

Numerous research studies have shown PLAs do not raise the overall cost of a construction project. 

Affiliated Construction Trades (ACT) Ohio and the Ohio State Building and Construction Trades Council released an in-depth study entitled Project Labor Agreements in Ohio: A Survey of the Data and Cost Benefit Outcomes.

It showed numerous examples of PLA projects in the Buckeye State and how those projects saved taxpayers money.

For instance, between 2012 and 2019, Lucas County saved a total $4,780,600.41 in direct cost-savings from the use of Project Labor Agreements on 104 public facility and infrastructure projects.

A 2015 Franklin County project to renovate the Hall of Justice came in on time and $2.4 million under budget thanks to a PLA. 

The study also lists numerous PLAs enacted with private entities to build the following projects: 

Aristech Chemical Phenol Plant, Cincinnati Broadway Commons Casino, CEMEX Industrial Complex, DPL Energy Turbine Generator, Church+State Development, Honda of America Anna Engine Plant expansion and PennNational Gaming Dayton Racino.

A 2005 study, The Effect of Project Labor Agreements on the Cost of School Construction in New England, found no evidence that PLAs increased school construction costs.

A recent study in the Public Works Management & Policy journal showed PLAs do not reduce the number of bidders on project. The study reviewed 263 bid openings for community college construction in California between 2007 and 2016 and the data showed the presence or absence of PLAs did not alter the number of bidders on a project. 

The data is simply overwhelming, PLAs work.

Community Benefits Agreement

A Community Benefits Agreement, also known as a CBA, is similiar to a PLA. In both instances, they are contractors signed between building trade unions and contractors, project owner or developer of a specific project.

The main difference however is a Community Benefits Agreement creates direct benefits for residents of a community.

A CBA can set goals that can outline:

  • Employment – a percentage of minority workers or workers from within an identified community who must be hired for a project
  • Educational  opportunities
  • Types of contractors used – new contractors, small business, Women Business Enterprise (WBE) or Minority Business Executive (MBE)
  • Involvement of certainorganizations
  • Community aesthetics

In essence, Community Benefit Agreements are structured to meet the community’s needs, the size and type of project and the end user’s expectations.

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