Republicans challenge Obama guidance on labor agreements in contracts

The Obama administration's policy of giving agencies the option of awarding preferences to unionized contractors on major federal projects drew fire on Friday during a House Republican-led hearing on "restoring competition and neutrality to government construction projects."

The session also produced partisan fireworks on procedures for determining committee witness lists.

Opening the discussion of President Obama's 2009 executive order encouraging agency contracting officers to make use of project labor agreements, James Lankford, R-Okla., chairman of the House Oversight and Government Reform subcommittee that handles procurement, asked, "Does requiring a small business with no union affiliation to sign up to a labor agreement as a condition of doing business with the government 'increase opportunities for small businesses'?"

The answer, Lankford said, is that "requiring a PLA as a condition to compete serves only to restrict, not increase, competition. The current policy discourages or even excludes nonunion firms, including the vast majority of small businesses, from competing for government projects."

Lankford and fellow Republicans are pursuing a bill, H.R. 735, introduced by John Sullivan, R-Okla., and backed by an array of construction firms that seek federal contracts, to nullify the executive order. Sen. David Vitter, R-La., has introduced a companion bill.

Two federal witnesses defended PLAs, which are encouraged on construction contracts of $25 million or more as a "pre-hire collective bargaining agreement" designed to assure stability, an adequate labor force, and reduce the risk of strikes or other labor unrest.

Daniel Gordon, Office of Management and Budget's administrator for federal procurement policy, stressed that his agency monitors PLAs to "to make sure they are not exclusionary," and that results have shown that contract awards are not "tilted in favor of union contracts." The controlling rule assures that PLAs "are treated as a tool for consideration," he said, "and not a one-size-fits-all solution for every large-scale construction project."

He said the advantages attributed to PLAs "reflect the experience of federal agencies, such as the Department of Energy and the Tennessee Valley Authority, other governmental entities, and private sector entities, in analyzing planned construction projects to determine whether a project labor agreement is likely to promote smooth, successful and timely performance."

Susan Brita, deputy administrator of the General Services Administration, noted that under the Obama order, contractors whose submissions include a PLA get a 10 percent score increase in agency technical evaluations.

"In selecting a contractor for award, GSA uses the `best value' method of award, which takes into consideration both cost and technical qualifications," she said. "While cost is always considered, the value of using well-qualified contractors who are able to perform the contract efficiently and effectively is also part of the decision process. GSA weighs numerous technical factors to evaluate a contract proposal. The inclusion of a PLA is one of these factors."

Britta added that PLAs were considered a positive in tests in 10 pilot projects under the 2009 Recovery Act.

But panel vice chair Mike Kelly, R-Pa., was unconvinced. He argued that the PLA advantage discourages some contractors by "tilting" the requests for proposals toward PLAs. "It's a 10 percent bonus that is exclusionary," he said. "Instead of widening the field of contractors, it narrows it down."

The appearance of the administration witnesses came after a dust-up over committee hearing procedures. Full committee Chairman Darrell Issa, R-Calif., on May 25 had announced to Democrats that he was changing the rules so that administration witnesses would now count as the minority side's witnesses for purposes of balance in selecting witness lists. At the Friday hearing, Rep. Elijah Cummings, D-Md., ranking minority member, raised a point of order in protest. He and seven other Democrats on June 3 sent a letter to Issa challenging the policy as a rules violation.

Rep. Gerry Connolly, D-Va., threatened at the hearing to instruct the administration to decline to send witnesses to the committee until the matter is resolved.