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Thursday, October 8, 2009

Builder confronts union law

Chelsea Conaboy reports in the Concord Monitor about a legal challenge to the Obama Administration's requirements for union labor in projects funded by the stimulus package.
The Department of Labor last month put out a request for bids on the construction of a 160,000-square-foot Job Corps center in Manchester, a project that has been nine years coming. The department said contractors must sign a "project labor agreement," which often means the labor will be done by union workers.

Unions say the agreements ensure that the job is completed by highly skilled workers and on time without labor disputes. Nonunion contractors say it discriminates against them, requiring them to pay into union benefits and pension plans - on top of the benefits they may already provide workers - and preventing them from submitting a competitive bid.

President Obama signed an executive order in February urging agencies to use labor agreements on projects in which the total cost to the federal government is $25 million or more. The Manchester project is estimated to cost about $35 million.

North Branch Construction, which is nonunion, filed a bid protest Monday with the Government Accountability Office saying the requirement is discriminatory and restricts competition.
The $787 billion stimulus boondoggle was always more about spreading political favors than stimulating the economy. In a classic case of rent-seeking, the work rules put in place ensure that politically-connected unions are protected from being outbid by more efficient non-union firms. I don't know how strong the legal challenge will be in court. Congress had broad latitude to waste our money, after all.

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