Why is the federal General Services Administration, the government's purchasing agent and landlord, sending millions of tax dollars to unions? Last week, 19 members of Congress, including incoming House Oversight Chairman Darrell Issa, R-Calif., sent a letter to Martha Johnson, administrator of the GSA, asking why it is forcing contractors that are refurbishing federal buildings to accept Project Labor Agreements. A PLA mandates the use of union labor on government construction projects, which translates to inflated costs, delays, and inflexible work rules.
The congressional letter was spurred by
Examiner columnist Mark Hemingway's report that the GSA had awarded a $52 million stimulus contract to renovate a Department of Veterans Affairs building, only to turn around and require the winning contractor to sign a PLA that adds at least $3.3 million to the project's cost. The agency, which received $6.6 billion in stimulus funds for construction projects, imposed the stipulation on the contractor after changing its policy from favoring low bidders to preferring contractors who agree to sign PLAs. This is a sop for a favored Obama constituency because only 14 percent of all construction workers are unionized. The unionized 14 percent now have what is probably an unconstitutional leg up on the nonunion 86 percent.
This PLA policy comes straight from the top. Obama signed Executive Order 13502 just 16 days after taking office, mandating PLAs whenever possible on government projects of $25 million or more. The Beacon Hill Institute, a free-market think tank at Suffolk University in Boston, reports that, on average, PLAs make construction projects 12 percent to 18 percent more expensive. When you consider that the stimulus bill had an estimated $180 billion in funding for construction projects, that is an awfully big favor for Obama's Big Labor friends. So is the requirement that stimulus-funded contracts comply with the Davis-Bacon Act, which mandates union-scale wages. Heritage Foundation labor policy expert James Sherk estimates that about $17 billion of the $180 billion could be saved if the Davis-Bacon requirement were lifted.
The GSA decision indicates it has been Christmas for the union bosses ever since Obama took office. He bailed out the moribund UAW, gutted Labor Department regulations requiring transparency of union finances, and now he is using PLAs to milk taxpayers for more dough to give to his biggest campaign contributors. Oh yes, Obama has also stopped meaningful oversight of union corruption. Under President Bush, the Department of Labor prosecuted more than 1,000 union officials, winning at least 929 convictions and $93 million in restitution to workers of misspent union funds. Obama's Labor Department was supposed to release a report tracking union corruption last January. Nearly a year later, the report remains undone. Issa and the incoming Republican House majority should make oversight of Obama's too-cozy relationship with Big Labor a top priority.