High-speed Rail

Sunday, Feb 03 2013 09:00 AM

Brawl over unions divides contractors vying for piece of rail project

BY JOHN COX Californian staff writer jcox@bakersfield.com

In a bitter dispute that threatens to divide support for California high-speed rail, union and non-union contractors are fighting over a draft plan for setting aside some of the project's jobs for Central Valley minorities and small businesses.

Anti-union groups have strongly denounced the proposal, sent out in December as part of request for bids on the project's first leg from Merced to Fresno. They say it would raise the project's costs and discriminate against merit shops by, among other things, requiring that hiring be done through union halls.

A top union official counters that the proposed agreement does not exclude non-union contractors, and that it would actually lower costs, promote fair competition and ensure a qualified workforce.

The controversy is largely a reflection of the two sides' ongoing dispute over so-called project labor agreements, or PLAs -- a conflict the California High-Speed Rail Authority was anxious to avoid.

Rail authority CEO Jeff Morales said that the proposal is intended to give at least 30 percent of the first leg's contracting opportunities to small businesses while also promoting local hiring in poor neighborhoods.

He emphasized that each of the five design-build teams vying for the first-leg contract had pre-existing union agreements. When small, non-union contractors began complaining that this arrangement would shut them out of the project, he said, the rail authority came up with the draft as a way for non-union contractors to participate "under certain circumstances."

"Our intent is not debating the pros and cons of PLAs, per se," he said Friday. "It's about ... having a workable contract that maximizes our local participation."

Ongoing dispute

Both sides agree that the rail authority's draft Community Benefits Agreement is a form of project labor agreement. If the proposed agreement is included in a final design-build contract, it would be the nation's largest PLA.

In California, the battle over PLAs is usually waged between the State Building & Construction Trades Council of California -- a union organization -- and groups including Associated Builders and Contractors Inc., which represents non-union construction firms.

ABC contends that PLAs skew project bidding by eliminating competition by non-union contractors. It says the rail authority's proposal in particular would allow non-union firms to use no more than five of their own employees, matched with five or more union workers.

The group points to another draft provision that would require contractors to contribute to pension funds that are hard for non-union workers to draw from unless they perform years of work under a PLA.

Kevin Dayton, a former ABC lobbyist who now runs his own labor policy consulting firm near Sacramento, said the rail authority proposal is ripe for abuse by unions.

For example, he said, the draft agreement favors "disadvantaged workers," which may include a veteran or someone who has completed at least 85 percent of an apprenticeship program. Unions can readily find such people in their ranks who are not truly disadvantaged, he said.

Small businesses won't easily recognize these nuances, he said.

"They are forcing Central Valley small businesses to change how they do business in order to work on this (project)," he said.

Bakersfield contractor Tami Chapman, co-owner of Johasee Rebar, a non-union company, said she opposes the rail proposal for several reasons, but mainly because it would force her to contribute to a pension fund her workers may never be able to use.

"We want there to be fair and open competition guidelines contained so that we're all on the same playing field and that our workers can keep the pension money," she said.

Robbie Hunter, president of the state trades council, said PLAs such as the one the rail authority has proposed effectively serve the goal of employing workers who live near the project. They also ensure that non-union contractors don't gain an unfair advantage by not offering their workers employment benefits.

Moreover, he said, union apprenticeship programs have been more effective than non-union programs at delivering qualified workers to job sites.

"These guys couldn't provide the manpower if they had it, and they don't have it," Hunter said.

Possible compromise?

A local advocate of small business contracting, Kern Minority Contractors Association President Marvin Dean, has worked with the rail authority as a member of its business advisory council. A longtime union member, he said unions and non-union contractors alike generally fail to employ diverse workforces.

Dean has suggested making the rail project's PLA more inclusive by giving half the contract amount to union contractors and half to non-union firms.

"I would say 50-50. Split it up," he said.

Morales, the rail authority executive, said he did not agree with Dean's suggestion. But he said he did meet last week with representatives of the ABC and told them he would consider their ideas for rewording the draft agreement.

He clearly wants to avoid engaging in what he sees as a debate that goes beyond the project's scope.

"There's a certain amount of ideology involved in some of this fight," he said. "Our issue is not ideology but getting the best contract for the state."

By June or July the rail authority hopes to award a design-build contract for the Merced to Fresno segment, estimated at between $1.2 billion and $1.8 billion.

The larger project, pegged at $68.5 billion, is planned to connect Anaheim and the Bay Area with trains traveling at up to 220 mph by 2035.

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