LECET MARKET LINES

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Volume 2, Issue 2

Market-Related and Other News of Interest to                                           Laborers and Signatory Contractors

A service of the 
Laborers-Employers Cooperation and Education Trust

 

November 7, 2003

                                                                                                                                                                  

 
BEST VALUE, RESPONSIBLE BIDDER PROGRAMS GAIN GROUND

Across the United States, public and private construction users are beginning to replace traditional low-bid procurement systems with alternatives that ensure quality and level the playing field.  Some construction users are adopting best-value and quality-contracting bidding procedures, while others are drafting legislation and regulations requiring contractors to pre-qualify before bidding.  LECET and its affiliates have been working with a growing number of owners and construction users as they change the way construction services are procured. 

El Paso Energy Corporation 

El Paso Energy Corporation, one of the largest owners of natural gas pipelines in the United States, has agreed to consider adopting a quality contracting program proposed by LIUNA, the United Association (Plumbers), the International Union of Operating Engineers, and the International Brotherhood of Teamsters.  Drafted by LECET, the program evaluates construction bids by awarding points not just for price, but for past performance, management plan and schedule, training and safety plans, and local economic benefit.  A follow-up meeting is scheduled to finalize the quality contracting program. 

Over the past several years, LECET has been helping the four unions and their signatory pipeline contractors market directly to El Paso and other major pipeline owners.   

Responsible Employer Ordinances in New England 

More than 20 municipalities across New England have adopted responsible employer ordinances promoted by LIUNA's New England Regional Office and the New England Laborers' Labor-Management Cooperation Trust (NELLMCT).   

The ordinances typically require any contractors wishing to bid on public work to document that they: 

 

Inside this Issue: 

 

 

LECET Market Lines is a publication of the Laborers-Employers Cooperation and Education Trust (LECET), a partnership between the Laborers' International Union of North America and its signatory contractors to secure projects and jobs, increase market share, and advance shared market-related interests.

 

Copyright (c) 2003
Laborers-Employers Cooperation and Education Trust. All Rights Reserved.
  • Are in compliance with prevailing wage laws;

  • Provide health insurance for all their employees;

  • Are affiliated with a state-certified apprenticeship program;

  • Classify workers as employees, not independent contractors;

  • Pay the appropriate workers compensation insurance for their employees;

  • And comply with local residency and minority participation requirements.

 Contractors who do not pass these pre-qualifications can not bid on public works.   

Rather than trying to chase down poor performing contractors after the fact, these ordinances weed them out before the project begins.  NELLMCT and the New England Regional Office have used the ordinances to remove or bar non-complying low-bid contractors from several public works projects, and to sign several new contractors to Laborers' agreements.  

Tennessee State Building Commission 

Ohio Valley and Southern States LECET (OVSS LECET) is helping the Tennessee State Building Commission (TSBC), Tennessee's building contracting authority, to develop and test a best value bidding system in a sample of state construction projects.  Rather than awarding these contracts solely on the basis of price, the program will award points for a wide range of quality-related issues.  Contractors with the highest points will win the work, and the state will compare the results of the best-value pilot projects with other similar projects awarded under the traditional low-bid system.   

Currently, the state cannot deny a contract to the lowest bidder, even if that bidder has a history of safety problems, performance issues, and cost overruns.  State officials are hoping that best-value contracting will protect the state from poor performing contractors while ensuring fairness and maintaining healthy competition. 

General Services Administration, National Capital Region 

As the chief construction contracting arm of the federal government, the General Services Administration (GSA) and its eleven regional offices award billions of dollars of projects and jobs every year.  Mid-Atlantic LECET (MA LECET) recently persuaded the GSA National Capital Region to award as many as 10 source selection points to contractors using a registered craft apprenticeship program.  (The GSA National Capital Region evaluates bidders using a 100-point source selection system.)   

Because not all apprenticeship programs are the same, the new language requires contractors to specify the number of apprentices to be employed, the amount invested in the apprenticeship program(s), and the number and types of safety training courses provided to apprentices.  The new language gives contractors who invest heavily in qualified apprenticeship programs a competitive edge, has helped Laborers and their signatory contractors win three major projects, and is proving to be a powerful incentive for working union.   

MA LECET also has been promoting best-value contracting programs to various public entities in Virginia, West Virginia, and Pennsylvania. 

Contractor Registration and Pre-qualification in New Jersey 

Over the past few years, New Jersey State LECET has worked with allies in state government to pass and refine the Public Contractor Registration Act.  The law requires that all contractors and subcontractors wishing to bid on public projects first register with the state and pay a $300 fee, which helps fund prevailing wage enforcement.  Contractors applying for registration must: state that they carry proper workers' compensation insurance; document their corporate ownership; and list any pending, current, or previous violations of state or federal labor laws over the past five years.  Contractors applying for registration agree to open their records and their businesses to follow-up verification and investigation.   

Staff from NJ LECET and the union-sector NJ Building Contractors Association also worked with the School Construction Corporation (SCC), which oversees all aspects of construction in the state's poorest school districts, to draft pre-qualification requirements for contractors wishing to bid on school work.  The requirements include apprenticeship, health and safety, and prevailing wage compliance language.  NJ LECET continues to promote responsible bidder language to public entities throughout the state, and to monitor enforcement of existing regulations. 

Burned in the past by unscrupulous contractors who bid low, bill high, and cheat to compete, public and private construction users are beginning to strike back.  They are demanding proof of compliance with federal and state laws, researching past performance, and assessing training, skills, productivity, safety, and other intangibles.  LECET and its affiliates will continue to help elected officials and corporate leaders develop contracting standards and practices that promote high quality, support a trained, skilled workforce, and level the playing field for all bidders. 

Additional Resources and more information: 

  • El Paso Corporation/national quality contracting efforts: Terry Bumpers, LIUNA Director of Construction, tbumpers@liuna.org or (202) 942-2237.

  • New England: Jack Amaral, Administrator, New England Laborers' Labor-Management Cooperation Trust, jamaral@nellmct.com or (401) 751-1011.

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Recently, the federal Office of Pipeline Safety (OPS) declared that its new Operator Qualification (OQ) regulations were being insufficiently implemented.  To start, there is no single standard for developing training and covered tasks, contractors find they must repeatedly qualify the same staff, owners are wary of accepting qualifications from others, and the proprietary practices of qualification firms have made record keeping costly and complicated.  In response, the American Society of Mechanical Engineers (ASME) has convened a technical task committee to craft an industry-wide consensus standard for developing OQ programs, and LECET has a voting seat on the committee.

The B-31 Q Committee has been meeting regularly to help the industry respond to regulators' concerns.  Committee members hope to develop a model Operator Qualification program that would guide pipeline owners as they develop their own OQ programs, and that would satisfy the demands of OPS.  If successful, the new standard would greatly simplify what has become a headache for an industry already confronting an aging infrastructure. 

The B-31 Q Committee's work likely will shape operator qualification programs throughout the industry for the foreseeable future; since it is a technical task committee, most of what it develops probably will be directly incorporated into future pipeline legislation and regulations.  As one of only 27 voting members on the committee, LECET is giving skilled pipeline workers and their signatory contractors a real voice in critical discussions and deliberations that will affect their work for years to come.

Among those who requested LECET's input on the committee was El Paso Energy Corporation, one of the largest owners of gas distribution pipelines in the United States, and a target of sustained marketing efforts over the past few years.  LECET will continue to work with the B-31 Q Committee, both as it crafts these regulations, and as it works on the expected next round, known as OQ-3, which industry experts hope will specify standards for training and covered task lists.

 Additional information and resources:

  •  National Pipeline Construction Market Representative Laura Hughes, laura.hughes10@gte.net, or                 (541) 269-7579.

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Unable to agree on a multi-year replacement for the Transportation Equity Act of the 21st Century (TEA-21) before it expired on September 30, the U.S. Congress passed a five-month extension to keep the federal highway and transit administrations running.  But stalled transportation projects may worsen traffic congestion, and amount to a loss of more than $2 billion and 90,000 jobs throughout the transportation construction industry.   

LECET and its partners in the Transportation Construction Coalition (TCC) continue to push for a fully funded, needs-based six-year transportation program.  TCC members currently prefer the $375-billion proposal from the House Transportation and Infrastructure (T&I) Committee, to more miserly alternatives put forward by the Senate and the Administration.  LECET and the TCC continue to meet with members of Congress and their staffs to urge quick passage of the T&I Committee's bill.  As in the past, the TCC has been running an aggressive campaign of pro-transportation radio and print ads targeting swing members of Congress. 

Several other critical transportation and infrastructure bills remain stalled in Congress, delaying more projects, and costing more money and jobs.  Even as travelers struggle with crowded airports, busy runways, and the need for increased security, the reauthorization of the Aviation Investment and Reform Act of the 21st Century (AIR-21) remains on hold.  Meanwhile, Congress also failed to pass funding for the $72-billion Rail Infrastructure Development and Expansion Act for the 21st Century (RIDE-21), the $25-billion Clean Water Infrastructure Financing Act of 2003, and several smaller infrastructure appropriation bills. 

In the wake of the recent Northeast power blackout, and growing public concern about infrastructure stability, LECET continues to work with industry partners to urge Congress to act.  LECET also will continue to push for Davis-Bacon provisions in all infrastructure bills.   

More resources: 

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RECENT BOOKS, STUDIES, DOCUMENT HIGH SOCIAL COSTS OF LOW WAGES

As Laborers and contractors promote and defend prevailing wage laws, a growing body of literature documents the devastating social costs of minimum- and low-wage jobs.  Economist Peter Philips has shown that states that repeal their prevailing wage laws often increase the burden on public and private social services (Market Lines, Volume 2, Issue 1).  Now, three separate and disturbing studies describe that burden in human terms, showing how the race to the bottom of the wage scale is hurting workers, communities, and the economy.  They offer powerful ammunition to those fighting to ensure tax dollars support good jobs and strong communities. 

  • In The Betrayal of Work, former United Food and Commercial Workers (UFCW) Vice President Beth Shulman demonstrates how low-wage jobs are failing those who labor in them.  Of particular interest to those engaged in the prevailing wage debate, Shulman supports ordinances that require companies and contractors who receive public funds to pay livable wages. 

  • In Nickeled and Dimed, writer Barbara Ehrenreich describes her experiences working in, and trying to make ends meet on, a variety of low-wage jobs in Florida, Maine, and Minnesota.  Advocates of prevailing-wage and living-wage laws will find vital social ammunition in this first-hand account of the struggles low-wage workers face. 

  • Out of Reach 2003, the National Low Income Housing Coalition's (NLIHC) fifteenth annual study of housing costs throughout the United States, is a vital resource for advocates of prevailing and living wages.  Visitors to www.nlihc.org/oor2003/ can quickly access the median fair market value of rental housing in every jurisdiction in the United States.  The site also translates that figure into an hourly “housing wage,” and compares that wage to the minimum wage.

Taken together, these three studies portray a growing number of hard-working Americans left economically stranded and socially dependent by inadequate wages and exploitive working conditions.  Rather than cutting costs, low wages merely shift them from irresponsible employers to public agencies and private charities, while undercutting employers who pay livable wages.

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When promoting the work of Laborers and signatory contractors, there is no need to re-invent the wheel.  LECET’s on-line clearinghouse at www.lecet.org continues to display the latest ideas, programs, and materials developed by LECET and its 29 affiliates throughout the United States and Canada. 

Looking for ways to publicize your work with public schools?  This brochure (at www.lecet.org/Clearinghouse_Public/NewEngland/charter/charter.htm) describes the work of the New England Laborers/Cranston Public Schools Construction Career Academy.  Established in 2002, the school is the first Laborers-run, construction-centered, public charter high school in the United States (Market Lines, Volume 1, Issue 2). 

Developing a radio or television ad campaign?  Over the past few years, the Northwest Cooperation Fund has aired two series of commercials on area television and radio stations.  Visit www.lecet.org/Clearinghouse_Public/Northwest/marketing_ads.htm to view the series of ads promoting Laborers and their contractors to construction users. Visit www.lecet.org/Clearinghouse_Public/Northwest/workforce_ads.htm to view advertisements that promote a career as a construction craft laborer. 

Have you developed legislative, marketing, advertising, or workforce development materials or programs that have been particularly effective?  Contact LECET Manager of Communications Ed Rehfeld at ed@lecet.org or (202) 508-4413 to arrange posting it on LECET's Resources Clearinghouse.

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  • Thirteenth Annual Tri-Fund Conference, January 18-22, Orlando, Florida 

  • World of Concrete/World of Masonry, February 17-20, 2004, Orlando, Florida 

  • LIUNA Annual Pipeline Conference, February 18-19, Las Vegas, Nevada 

  • LECET Seventh Annual Computer Services Conference, May 26-28, 2004, Newport, Rhode Island

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Laborers-Employers Cooperation and Education Trust

Labor Trustees Management Trustees
 
Armand E. Sabitoni, Co-Chairman
Mike Quevedo, Jr.
Raymond M. Pocino
Edward M. Smith
Joseph S. Mancinelli
Rocco Davis
James C. Hale 
 
Bill Bergfeld, Administrator
 
John C. Bartnett, Co-Chairman
Richard E. Gardner
Lee Smallman
Thomas T. Holsman
John D. O'Reilly
Michael D'Antuono
Massimo Marino
 
Christopher P. Engquist, Executive Director
Market Lines Editor/Writer: Ed Rehfeld

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