According to the Construction Labor Report, a Congressional Research Service report released July 1 observes that much of the research on project labor agreements (PLAs) are inconclusive.

Despite widespread, long-term use of PLAs, studies can be difficult to conduct and have shown mixed results on the economic effects of PLAs.

The report (R41310), prepared by Gerald Meyer, an analyst in labor policy, notes that PLAs have been around for more than 75 years. “PLAs have been used in the US since at least the 1930′s,” according to the report. “… [the Government Accountability Office's] research concluded that most PLAs are in the private sector and that they have been used in all 50 states and the District of Columbia on both private and public projects.”

According to the report, “to some extent, projects that use PLAs may be different from projects that do not use them, which can make it difficult to isolate the effects of PLAs.”

COMPARATIVE RESEARCH STUDIES

Recent studies conducted by the Beacon Hill Institute, the fiscally conservative research arm of Suffolk University, concluded that PLAs raise the cost of construction, CRS found. A 9 year study of Boston school construction projects led BHI researchers to conclude that PLAs raised the cost of construction by $16.51 per square foot. A 2004 BHI study of Connecticut school construction projects attributed a $30 per square foot rise in costs to PLAs.

However, a 2003 study of new school construction projects in Mass, Conn, and Rhode Island, conducted by researchers from Michigan State University, concluded that “PLAs did not have a statistically significant effect on the costs of construction,” according to the report.

STUDIES ON INDIVIDUAL PROJECTS

Research on individual projects was just as ambiguous, the report found.

A study conducted by the ABC concluded that PLA raised bids on two NY state projects by 26%, while a consultant hired to negotiate a PLA on a different NY state project concluded that the PLA reduced the cost of the project by $6 million, or 4.6%.

QUALITATIVE STUDY

In a qualitative study conducted by the ELECTRI International, the Foundation for Electrical Construction, interviewees cited both advantages and disadvantages of PLAs. Though a PLA can lead to “timely completion of the project” and provide a “steady flow of qualified labor,” interviewees were concerned that PLAs “increase the bargaining power of construction unions.”

“In areas where a large share of jobs are covered by PLAs, construction unions may make greater demands during negotiations over the new union contracts. If one union is successful, other unions may make similar demands,” according to the report.

Though the report pointed out that the final regulations concerning Exec. Order 13502, regarding PLAs, went into effect May 13 (56 CLR 197, 4/15/10), it drew no conclusionsabout their effects. The EO encourages federal agencies “to consider requiring” the use of PLAs on large-scale construction projects (54 CLR 3194, 2/11/09).

The regulations include general requirements for PLAs, stipulating that they must bind all contractors and subcontractors, contain guarantees against strikes and locouts and provide binding procedures for resolving labor disputes, among other things.

The report’s author was not immediately available for comment.