OPINION: Project Labor Agreements Shut Out Veteran-Owned Contractors

Above, the Healey Administration's plans for a new Sagamore Bridge also include Project Labor Agreements.

On Veterans Day, the Merit Construction Alliance of Massachusetts called on state and local leaders to stop imposing Project Labor Agreements (PLAs) that deny merit shop construction firms – including most state-certified veteran-owned construction firms in Massachusetts – a fair opportunity to compete for public projects.

Of the contractors certified by the Division of Capital Asset Management and Maintenance (DCAMM) to perform public construction work, 20 are designated as veteran-owned business enterprises or service-disabled veteran-owned business enterprises, per DCAMM’s public database. Twelve of those 20 firms are merit shops, according to an MCA analysis. When a PLA is placed on a public project, those merit shops – and the veterans who own them – are effectively barred from bidding.

“On a day when we honor the service and sacrifice of our veterans, Massachusetts should not be locking their businesses out of taxpayer-funded construction work,” said Jason Kauppi, president of the Merit Construction Alliance. “PLAs are sold as open to all bidders. In practice, they are not.”

Superior Court Judge Michael K. Callan reached the same conclusion when he struck down a PLA in Springfield, writing: “Notwithstanding the lip service the PLA pays to being open to all bidders, it most assuredly is not.” He found that the PLA “poses such a significant disadvantage to open shops as to render a competitive bid impossible.”

The same barrier applies more broadly. An MCA review of DCAMM-certified firms shows that 87.5 percent of minority business enterprises and 72 percent of women business enterprises are merit shops. PLAs require contractors to use union labor under a collective bargaining agreement. Merit shops employ their own full-time tradespeople and already provide competitive wages and benefits. Taking a PLA job would force them to set aside their own workforce, hire temporary union labor, and pay into benefit funds their employees will never receive.

The parties to the Holyoke Veterans Home PLA tacitly admitted the problem. They inserted a limited provision allowing M/W/VBE merit shops to work on packages under $1 million without adhering to the union agreement, while stating in the document itself: “The Parties recognize that there are barriers to entry for many M/W/VBEs on construction projects in Massachusetts.”

“The biggest barrier is the PLA,” Kauppi said. “Instead of lip service about supporting veterans, minorities, and women, public officials should level with taxpayers. PLAs are a giveaway to organized labor. They raise costs by rigging the competitive bidding process and shut out the majority of certified firms that operate as merit shops – including most of the veteran-owned contractors in the state.”

MCA is urging state leaders to reject PLAs on public construction projects and restore open, competitive bidding that gives every qualified firm, including those owned by veterans, a fair chance to compete.

About the Merit Construction Alliance of Massachusetts

The Merit Construction Alliance of Massachusetts is a trade association representing merit shop (nonunion) contractors. MCA advocates for open competition, taxpayer value, and fair opportunity for all qualified firms on public construction projects.

Jason Kauppi, President

Merit Construction Alliance of Massachusetts