Local governments across the Hoosier State no longer could obtain a labor peace guarantee on certain public works projects, under legislation recently approved by the Republican-controlled Indiana House.
House Bill 1024 would prohibit localities from requiring contractors sign on to a project labor agreement (PLA) as a condition of bidding on or participating in a public project organized on a construction-manager-as-constructor (CMc) basis.
CMc project management is increasingly popular for public works projects because it generally obligates the construction manager to deliver a project at or below a guaranteed maximum price. If costs exceed that price, the construction manager is on the hook for the overage.
A PLA is a prehire contract primarily used in the construction industry that establishes the terms of employment for all workers on a major public or private project, such as wages and benefits, workplace safety rules and dispute resolution procedures.
The agreement applies to union and nonunion employees at a construction site. It generally ensures that all contractors bring in a sufficient number of trained workers to get the job done with minimal work stoppages, such as a strike or a lockout, and maximum coordination between different trades to complete the project on time.
Nearly all Northwest Indiana counties and municipalities mandate PLAs as part of any major construction project. PLAs are also employed on many private-sector projects in the Region, including the $300 million Hard Rock Casino Northern Indiana.
However, Rep. Jerry Torr, R-Carmel — the architect of Indiana's 2012 anti-union right-to-work statute — believes it's not fair for localities to require PLAs as a bidding condition because it denies nonunion contractors an opportunity to bid on the work, potentially at a lower price and better value for the taxpayer.
On Tuesday, Torr told the House that he considers local PLA mandates to be discriminatory, echoing a sentiment expressed by Matt Bell, lobbyist for the nonunion Associated Builders and Contractors of Indiana and Kentucky.
"You will find contractors who have been prohibited from participating in projects built under construction manager-as-a-constructor guidelines because of their lack of affiliation with a labor union, and yes, I think that is discriminatory," Bell told the House Employment, Labor and Pensions Committee on Feb. 16.
Torr said his legislation also prohibits localities from discriminating against CMc contractors who choose to continue inking PLA agreements for public works projects.
In addition, his proposal would enable design-build contractors to establish their own worker training programs instead of participating in industry-recognized apprenticeships, prohibit cash payments to construction workers, and require compliance with minimum wage, worker compensation and similar statutes.
Rep. Ryan Hatfield, D-Evansville, led the opposition to Torr's legislation at the Statehouse. He said it's ridiculous for the General Assembly to tell locally elected leaders how to manage their public works projects.
"The idea of local control in this building is a wild and funny concept," he said. "At the heart of this bill, it is really whether we believe our local officials should have the ability to negotiate these agreements based on the standards and timelines and parameters that they feel is best for their local communities."
Hatfield noted that most of the local leaders across the state are Republicans, like Torr, and his legislation basically is saying local GOP officials cannot be trusted to effectively manage taxpayer dollars.
"In this particular bill, it aims to take away a tool that Republican local officeholders all over the state use to guarantee quality work that's done on time, sober and in accordance with the things that they want to see in their building projects in their community," Hatfield said.
The legislation ultimately was approved by the House, 52-39, garnering just one vote more than the minimum needed to advance it to the Republican-controlled Senate.
Every Northwest Indiana lawmaker voted "no" on the measure, except Rep. Kendell Culp, R-Rensselaer, a former Jasper County commissioner, who supported it; and Reps. Ragen Hatcher, D-Gary, and Ed Soliday, R-Valparaiso, who did not vote.
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