12/9/2014 Cuesta College PLA Presentation San Luis Obispo County Building Trades Council Presentation Why use a PLA? PLA’s allow a Governing Agency – like a College District – a legal method of outlining economic or social goals for their community when the taxpayer’s money is used Local Hire goals – your residents at work Core Employee Language Limitation Debate Less Core Employees = More Local Hire More Core Employees = Less Local Hire Helmets to Hardhats (H2H) – re ‐ integrating and employing returning Armed Forces Veterans. Since 2007 there has been confirmed placement of over 6,000 returning Veterans into quality careers, including those who have disabled status Contractor Bid Requirements – setting levels for the number of bidders to ensure satisfactory competition Apprenticeship – providing your local youth a career pathway PLA’s promote the use of a streamlined highly skilled local workforce, under the lowest bid, using the least amount of workers in the shortest amount of time. Build it Once, Build it Right . 1
12/9/2014 PLA’s have been proven to be such effective construction management and economic development tools, that the use of PLA’s has expanded greatly in California. PLA’s have been used since the 1930’s by private business to ensure well ‐ built, efficient and cost effective projects. Their success came to be recognized in the public sector as a viable and replicable management option for Public Works projects. Since 2008, PLA’s on K ‐ 12 and CCD Construction in CA have increased by over 500%, and the number continues to increase due to their proven effectiveness. PLA’s have been used on School construction projects from small single projects to Billion Dollar, District Wide Bond Programs. Recent studies from San Diego USD, LAUSD and others have provided statistical data showing that PLA’s regularly meet or exceed their stated Local Hire Goals Money generated in the form of wages has an economic development multiplier of 2.5, and the money that is spent as disposable income changes hands and average of 12 times. Trends in CA Policy California continues to become more aggressive in creating enhanced public policy targeted at reducing risk to workers and Public Agencies for the violations of wage theft (wage and hour violations and back wages), workers compensation fraud, failure of an employer to remit benefit contributions, and worker misclassification. Labor Law violations have received new and more visible attention as the economic stress of the past 7 years (“Great Recession”) prompted more willful and blatant contractor violations. 2
12/9/2014 SB 922 (2011 California) SB 922 addresses the following issues: Codifies into CA Law the permissibility of the use of – and entrance into – PLA by Public Agencies (including School Districts as defied under Section 1100 of the Public Contract Code) under Section 2500 of the Public Contract Code Section 2500 of the Public Contract Code also codifies the minimum requirements for basic PLA language text. “…permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements.” Codifies drug testing language protocols, reinforces anti –strike language, and resolution by neutral arbitration SB 922 does not exclude allowing an Entity to enter into a PLA Policy that adopts PLA’s for all projects meeting a determined set of criteria as determined by the approved policy. SB 785 SB 785 (Chaptered into Law on 9.22.2014) created Article 6, Section 22164 of the Public Contract Code Provides language that establishes training requirements for apprenticeship and Journey level usage on Public Works Projects: By January 1, 2016 20% of the workforce must graduate from DAS approved apprenticeship programs for the occupation they are classified in. By January 1, 2017, 30% By January 1, 2018, 40% By January 1, 2019, 50% By January 1, 2020, 60% Provides that an “entity’s commitment” for the purposes of satisfying the term of “enforceable commitment” to the Director of the State Public Works Board as defined under Article 6, Section 22164 – in order to meet the above standards – can be demonstrated by the “entity’s” entrance into a PLA. 3
12/9/2014 SB 854 SB854 (June 20, 2014) established the Public Works Contractor Registration program and at the same time eliminated the mandatory Compliance Monitoring Unit for Public Works Projects. No longer an umbrella program to monitor compliance (the CMU fund) with Labor Code on Public Works Projects, it must now be done by the local agencies or a third party “watchdog”. Contractors must register with the State in order to bid Public Works Projects. If they are found – even after they are placed on your project – to be ineligible to work on Public Projects, State Law requires their immediate removal and replacement. Replacement of contractors (either General or Subcontractors) during in ‐ progress projects is a costly and cumbersome undertaking leading to project delays, legal fees and construction cost impacts PLA vs. Pre ‐ Qualification Key Differences between these policies are: PLA is a Project LABOR Agreement. It sets a baseline for the qualifications, origin and training of your LABOR FORCE Pre ‐ Qualification is a set of baseline standards for your CONTRACTORS. It sets a baseline of skills, performance history, origin, certifications and financial history of the CONTRACTORS the District enters into a contract with. Is one mutually exclusive of the other? No. PLA’s and Pre ‐ Qualification set performance standards for two differing groups the owning entity is engaged with. Nothing in a standard Pre ‐ Qualification will serve to address Labor Force Qualifications or Labor Force Issues. 4
12/9/2014 What policy combination will best serve your Agency? Is there an “Ideal” Combination? YES. Ideally, a Governing Agency would overlay the two policies to create a baseline of expected performance: Use of a PLA Policy to address LABOR FORCE qualifications, set Local Hire Goals, engage returning Veterans for Employment, and engage apprenticeships for youth opportunities Use of a Pre ‐ Qualification Policy – at either the “Better” or “Best” level – to ensure that your agency is contracting with financially stable, reputable, qualified and committed CONTRACTORS who will most effectively and efficiently serve the City in the Construction/Remodel/Upgrades of Agency Property. Why just two? Local Hire is most effectively and legally addressed via a PLA. To Maximize effectiveness a PLA should address Local Hire by Zip Code/Geographic Definition preference and include a provision for a nominal number of “core workers”. So what is this going to cost? PLA Policy has no cost increases associated with it. Despite claims to the contrary, there are no definitive statistics that show increased costs. Construction work is economically cyclical. Correlative data showing cost increases (vs. engineers estimate or bid pricing) is linked to the volume of work available in the current economy, the performance of the contractor/contractors on the site on each project and any managerial (CM, GC, Contractors, Architect, etc.) mistakes that get made. Of note: regardless of what you may be told, there are no two projects alike enough to do an “apples to apples” comparison. The variables fluctuate too widely. The National University Study that is pushed by the opponents of PLA’s and touts that there is a cost of 15 ‐ 20% attributed to PLA’s has been openly empirically rebutted by Dr. Bellman ‐ whose data was used to formulate the body of the report – to show that had the data been correctly applied the 15 ‐ 20% increase cited would not have been an accurate conclusion. 5
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