[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
 REGULATORY IMPEDIMENTS TO JOB CREATION: THE COST OF DOING BUSINESS IN 
                       THE CONSTRUCTION INDUSTRY

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON REGULATORY AFFAIRS,
               STIMULUS OVERSIGHT AND GOVERNMENT SPENDING

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 16, 2011

                               __________

                           Serial No. 112-18

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Regulatory Affairs, Stimulus Oversight and Government 
                                Spending

                       JIM JORDAN, Ohio, Chairman
ANN MARIE BUERKLE, New York, Vice    DENNIS J. KUCINICH, Ohio, Ranking 
    Chairwoman                           Minority Member
CONNIE MACK, Florida                 JIM COOPER, Tennessee
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          BRUCE L. BRALEY, Iowa
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 16, 2011...................................     1
Statement of:
    Ennis, John, Jr., CEO, Ennis Electric, Inc.; Linda Figg, 
      president and CEO, Figg Engineering Group; Dale Belman, 
      professor, Michigan State University, School of Industrial 
      and Labor Relations; John F. Biagas, president and CEO, Bay 
      Electric Co., Inc.; and Maurice Baskin, esq., partner, 
      Venable LLC................................................     7
        Baskin, Maurice..........................................    35
        Belman, Dale.............................................    22
        Biagas, John F...........................................    30
        Ennis, John, Jr..........................................     7
        Figg, Linda..............................................     9
    Gordon, Daniel I., Administrator for Federal Procurement 
      Policy, Office of Management and Budget; Robert A. Peck, 
      Commissioner, Public Buildings Service, U.S. General 
      Services Administration; and David Michaels, PhD., MPH, 
      Assistant Secretary, Occupational Safety and Health 
      Administration, U.S. Department of Labor...................   115
        Gordon, Daniel I.........................................   115
        Michaels, David..........................................   130
        Peck, Robert A...........................................   124
Letters, statements, etc., submitted for the record by:
    Baskin, Maurice, esq., partner, Venable LLC, prepared 
      statement of...............................................    37
    Belman, Dale, professor, Michigan State University, School of 
      Industrial and Labor Relations, prepared statement of......    25
    Biagas, John F., president and CEO, Bay Electric Co., Inc., 
      prepared statement of......................................    32
    Braley, Hon. Bruce L., a Representative in Congress from the 
      State of Iowa, information concerning PLA projects.........   100
    Figg, Linda, president and CEO, Figg Engineering Group, 
      prepared statement of......................................    12
    Gordon, Daniel I., Administrator for Federal Procurement 
      Policy, Office of Management and Budget, prepared statement 
      of.........................................................   117
    Jordan, Hon. Jim, a Representative in Congress from the State 
      of Ohio, prepared statement of.............................     4
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio:
        Information concerning U.S. Court of Appeals.............    48
        Statement of Campaign for Quality Construction...........   106
    Michaels, David, PhD., MPH, Assistant Secretary, Occupational 
      Safety and Health Administration, U.S. Department of Labor, 
      prepared statement of......................................   132
    Peck, Robert A., Commissioner, Public Buildings Service, U.S. 
      General Services Administration, prepared statement of.....   126
    Speier, Hon. Jackie, a Representative in Congress from the 
      State of California, various statements....................    86


 REGULATORY IMPEDIMENTS TO JOB CREATION: THE COST OF DOING BUSINESS IN 
                       THE CONSTRUCTION INDUSTRY

                              ----------                              


                       WEDNESDAY, MARCH 16, 2011

                  House of Representatives,
      Subcommittee on Regulatory Affairs, Stimulus 
                 Oversight and Government Spending,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 1:30 p.m. in 
room 2154, Rayburn House Office Building, the Honorable Jim 
Jordan (chairman of the subcommittee), presiding.
    Present: Representatives Jordan, Buerkle, Mack, Guinta, 
Kelly, Kucinich, Cooper, Speier, Braley.
    Also present: Representatives Issa, Cummings.
    Staff present: Ali Ahmad, deputy press secretary; Michael 
R. Bebeau, assistant clerk; Molly Boyl, parliamentarian; Daniel 
Epstein, counsel; Adam P. Fromm, director of Member liaison and 
floor operations; Linda Good, chief clerk; Christopher Hixon, 
deputy chief counsel, oversight; Justin LoFranco, press 
assistant; Mark D. Marin, senior professional staff member; 
Kristina M. Moore, senior counsel; Kristin L. Nelson, 
professional staff member; Sharon Meredith Utz, research 
analyst; Walker Hanson, legal intern; Sean Sullivan, intern; 
Carla Hultberg, minority chief clerk; Donald Sherman, minority 
counsel; Mark Stephenson, minority senior policy advisor/
legislative director; Cecelia Thomas, minority counsel/deputy 
clerk; and Alex Wolf, minority professional staff member.
    Mr. Jordan. The subcommittee will come to order. We will do 
opening statements from the chair and the from ranking member, 
and then get right to our great panels.
    Today's hearing continues this committee's efforts to 
expose cumbersome regulations that are stifling private sector 
job creation and a full economic recovery. For more than 2 
years, the administration has told the American people that $1 
trillion of Government spending was needed to put people back 
to work. The signature effort of the American Recovery and 
Reinvestment Act was supposed to keep unemployment below 8 
percent, but obviously it is not there.
    Two years later, and $1 trillion later, unemployment is 
hovering just above 9 percent, and has reached as high as 10.1 
percent since the President took office. In the State that both 
I and the ranking member come from, it is even, frankly, 
slightly higher.
    The situation looks even bleaker when you start looking at 
the economy sector by sector. Perhaps most telling are the 
statistics from the construction sector, which is of course our 
focus today. This important part of our economy encompasses 
excavators, pavers, plumbers, bricklayers, roofers and a host 
of other contractors and subcontractors on both residential and 
commercial projects. It includes architects, engineers, 
surveyors and skilled craftsmen of every sort who design and 
construct America's infrastructure.
    For these millions of Americans, the unemployment rate is 
currently 21.8 percent, nearly two and a half times the total 
U.S. unemployment rate. No other sector of the economy has been 
hit harder by the economic downturn, and no other sector was 
supposed to benefit more from the so-called stimulus.
    Last December, when Chairman Issa requested direct feedback 
from job creators across the entire economy, many employers in 
the construction industry were candid with the committee about 
the Federal rules that keep them from growing their businesses, 
hiring new workers and competing in a fair and open market. 
Among the many responses the committee received, two specific 
areas stand out.
    First, every day in the United States, job creators in the 
construction industry are faced with the reality of project 
labor agreements. These agreements tip the scale of an open bid 
process in favor of organized labor and shut out non-union 
shops, many of which are minority-owned and women-owned small 
businesses. In fact, the vast majority of U.S. construction 
work force, nearly 87 percent is non-unionized.
    Moreover, the cost of business increases dramatically 
because of PLAs. Several recent studies have found that these 
agreements add as much as 18 percent to the cost of 
construction. It was not surprising that when the President 
issued an executive order barely 2 weeks into his 
administration, encouraging a preference for PLAs in Government 
contracts, when you calculate the total amount of dollars in 
stimulus spending that is going to construction projects, and 
tack on 18 percent for the cost of PLAs. The extra cash that 
went into the pockets of these organizations is just not what 
the taxpayers want.
    Second, the committee has heard from job creators that 
proposed workplace rules by the Occupational Safety and Health 
Administration threaten to impede economic growth in the 
construction industry. Fortunately, and I want to compliment 
OSHA, they withdrew the proposed rule regarding occupational 
noise and work-related physical disorders, after input from 
people who would have been most burdened by these rules. 
Meanwhile, other rules like OSHA's Injury and Illness 
Prevention program indicate that the administration has yet to 
comprehend how new layers of regulation can slow and even stop 
a full-scale revitalization of our Nation's construction 
industry.
    Make no mistake about it, workplace safety is a priority 
concern. America has built the most successful, robust and 
profitable market economy in the world. And we have done so 
with an unapologetic commitment to worker safety. Safety and 
success are not mutually exclusive in the United States.
    But job creators are concerned about the trend at the 
Federal regulatory agencies that seem to be moving away from 
compliance assistance model toward an enforcement and 
penalization model. This is critical as we move forward.
    Effective regulation does not require a threatening 
adversarial relationship between the Government and the 
industries that it monitors. This hearing will continue the 
important dialog between private sector job creators, Congress 
and the administration about the steps necessary to foster 
economic recovery that puts America back to work. The testimony 
we hear today from the front line of a major sector of our 
domestic work force will help us toward that goal. The 
Oversight Committee is one place in Washington where the 
Government listens to the people and tells the truth about 
policies that are not working.
    I welcome our witnesses, and would now be happy to yield to 
the ranking member for his opening statement.
    [The prepared statement of Hon. Jim Jordan follows:]

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    [GRAPHIC] [TIFF OMITTED] T7566.002
    
    Mr. Kucinich. Thank you very much, Mr. Chairman.
    I listened with great interest to your opening statement. I 
had some misgivings about the Recovery Act, but mine were on 
the other side. I felt it wasn't enough. I felt that especially 
in a way you proved it by citing the 21.8 percent of 
unemployment among these various trades people. I saw the 
battle going on on our side of the aisle, where people like Jim 
Oberstar tried to get highway funds for these shovel-ready 
projects that could have put people back to work. And the 
administration wasn't particularly sympathetic to his point of 
view.
    So I think that we have to remember that only a quarter of 
the money that was spent, rather, a fraction of the money that 
went for the Recovery Act went actually for infrastructure and 
the kind of jobs that we are talking about here.
    As far as PLAs, where I come from they equate to higher 
safety standards, higher craftsmanship, reliability. In short, 
you don't want public projects built by fly by-night 
contractors who aren't into craftsmanship and safety, so you 
don't have bridges falling down and schools falling apart. I 
have a prepared statement, I will just read a couple notes from 
it.
    I hope that like other meetings we have, today's discussion 
doesn't focus simply on the cost of regulation of industry. 
Because in order to have a truly productive conversation about 
regulations that yield real results, costs have to be weighed 
against benefits. When we hear industry's concern about PLA, 
let's not ignore the evidence that shows PLAs not only 
facilitate a timely and efficient construction project, but 
they can also reinvigorate a community by employing local 
craftsmen, educating young apprentices and paying competitive 
wages.
    The arguments against PLAs that I have been hearing, that 
PLAs are exclusionary and costly, are not convincing. So I am 
looking forward to addressing these concerns with the 
witnesses. I think it is very timely that we are talking about 
OSHA as well, because we are going to mark the 100th 
anniversary next week of the Triangle Shirtwaist Factory Fire. 
That was the workplace disaster that took the lives of 146 
workers, because the factory failed to provide workers with any 
kind of basic workplace safety plan or provisions.
    So I am going to ask unanimous consent to have the rest of 
my statement go into the record. But I think, Mr. Chairman, 
that the whole idea about PLAs, project labor agreements, it 
actually brings together people who, management and labor, so 
you can actually have a successful project. I think that is a 
model that we ought to be supporting. When we look at those who 
want to attack it because they are concerned about higher 
wages, it is interesting. But I bet you more often than not, 
that is never reflected in a lower cost of the project. What 
they really end up arguing about is trying to get a bigger 
share of their profits for the corporation and not for the 
workers.
    So, thank you, Mr. Chairman.
    Mr. Jordan. I thank the ranking member. And without 
objection, the rest of his statement will be submitted into the 
record.
    Members have 7 days to submit opening statements. I would 
just in response to my good friend from Ohio, I think he is 
right, we are going to have a debate about PLAs and the impact. 
I get that. But I would make two points. Non-union construction 
companies aren't fly by-night companies. They are good 
companies as well. And we don't want to disparage either one.
    Mr. Kucinich. I would agree with that. I would agree with 
that.
    Mr. Jordan. And then second, I would say, the Member makes 
a good point. The stimulus was way too much of spending 
everywhere and not enough focused spending on infrastructure. I 
would agree. I was against it, and was against it for a variety 
of reasons. But I would agree with the gentleman that 
certainly, if you were going to spend that money, it would have 
been better spent had it been put more into infrastructure than 
all the other things it was spent on.
    I thank the gentleman.
    We will ask now for our witnesses to come forward, and we 
will get started.
    Our first panel, we have first of all, Mr. John Ennis is 
the CEO of Ennis Electric Co. Welcome to the committee. Ms. 
Linda Figg is the CEO of Figg Engineering. Dr. Dale Belman is a 
professor at the School of Labor and Industrial Relations at 
Michigan State University. Mr. John Biagas is the CEO of Bay 
Electric Co., and Mr. Maurice Baskin is partner at the law firm 
of Venable LLP.
    Pursuant to committee rules, all witnesses will be sworn in 
before testimony. If you would please rise and raise your right 
hands. It is the standard practice of the committee.
    [Witnesses sworn.]
    Mr. Jordan. Let the record show that each witness answered 
in the affirmative. And we will start right down the line with 
Mr. Ennis. You have about 5 minutes. You have the lighting 
system in front of your name tag, which we can't see, but you 
can see. We have a clock up here, too. So you have 5 minutes, 
if you can keep your testimony close to that, that would be 
great.
    And you are recognized.

STATEMENTS OF JOHN ENNIS, JR., CEO, ENNIS ELECTRIC, INC.; LINDA 
 FIGG, PRESIDENT AND CEO, FIGG ENGINEERING GROUP; DALE BELMAN, 
PROFESSOR, MICHIGAN STATE UNIVERSITY, SCHOOL OF INDUSTRIAL AND 
    LABOR RELATIONS; JOHN F. BIAGAS, PRESIDENT AND CEO, BAY 
ELECTRIC CO., INC.; AND MAURICE BASKIN, ESQ., PARTNER, VENABLE 
                              LLC

                  STATEMENT OF JOHN ENNIS, JR.

    Mr. Ennis. Good afternoon, Chairman Jordan, members of the 
subcommittee. On behalf of the National Federation of 
Independent Business, I would like to thank you for giving me 
the opportunity to speak with you today regarding the impact 
that project labor agreements have on small businesses.
    I am the owner and CEO of Ennis Electric Co., located in 
Manassas, Virginia. Ennis Electric was incorporated in 1974, 
and for the last 37 years has performed projects in and around 
the Washington Beltway from $10,000 to $27 million. Many of 
these projects are with local, State and Federal Governments. 
We complete most projects as a subcontractor.
    Our experience encompasses many special use facilities for 
both Federal and local governments with a special emphasis on 
historic renovations and public education facilities. We employ 
over 120 individuals, many of which have been in our employ for 
years. We strive to foster a loyal work force by providing a 
safe, fair and enjoyable workplace, while maintaining the 
highest possible quality and craftsmanship on our projects, to 
exceed the expectations of our customers.
    The majority of the work we obtain is through the bid 
process. Most of these solicitations are awarded to the lowest 
bidder with varying levels of pre-qualifications and/or 
technical proposals requiring previous work experience. In the 
past, these solicitations, which are funded by public dollars, 
have been free from project labor agreements, and therefore 
open to bidders who meet the technical requirements.
    However, recent Federal policies have changed this 
practice, making it more and more difficult for small 
businesses to fairly compete for these contracts. The use of 
project labor agreements is a discriminatory tactic that 
prevents non-union construction companies from working on 
Government construction projects. The U.S. Department of Labor 
Bureau of Labor Statistics found in their annual report on 
union membership that from 2009 to 2010, membership fell from 
14\1/2\ to 13.1 percent of the U.S. construction work force.
    Consider the fact that the construction industry currently 
has an unemployment rate of over 20 percent, with one-fifth of 
the workers in the construction industry unemployed. How can 
Congress acknowledge that PLAs and other regulations only serve 
as an impediment to job creation?
    In August 2010, Ennis Electric made offers to general 
contractors for three General Service Administration projects 
in Washington, DC. These projects were 1800 F Street 
modernization, the Lafayette Building modernization and the St. 
Elizabeth's adaptive re-use. Ennis Electric was fully qualified 
to execute these projects and our company had more experience 
than our competition did in performing these particular jobs.
    Bidding on these types of jobs is a very intensive process 
for small business, and it can take hundreds of man-hours just 
to prepare an estimate prior to submitting the bid. My company 
spent 600 hours preparing our bids for these projects.
    On all three of these projects our company was listed, as 
required by the solicitation, as the electrical contractor for 
the Offeror's non-PLA bid. It later came to our attention that 
all three of these projects were awarded on the basis that they 
adhered to project labor agreements.
    So despite being fully qualified to do the work, Ennis 
Electric was not selected for the subcontract electrical work 
because of a project labor agreement. Further, because this 
change in the solicitation was made retroactive, we lost 
innumerable man-hours that were spent bidding these projects, 
for which we were qualified, but not considered because of our 
non-union status.
    In this case, the impact of unfair PLA requirement will be 
felt by our company for years. The three aforementioned 
subcontracts represented over $30 million work over the next 
several years. As a result, we have been forced to lay off 
approximately 15 percent of our work force. Unless we can find 
other opportunities, we could end up laying over 50 percent of 
our work force.
    The decision to require discriminatory project labor 
agreements on these three subcontracts could not have come at a 
more unfavorable time for Ennis Electric and our employees, not 
to mention the American taxpayers who have to pay for the 
increased costs associated with these PLAs.
    Thank you for the opportunity to testify on behalf of small 
business.
    Mr. Jordan. Thank you, Mr. Ennis.
    Ms. Figg.

                    STATEMENT OF LINDA FIGG

    Ms. Figg. Mr. Chairman, distinguished members of the 
committee, my name is Linda Figg. I am very pleased to be here 
to represent the members of the Construction Industry Round 
Table, and to participate in this hearing on the critically 
important effort to identify the negative impact excessive 
regulations may have on job growth in our industry.
    The Round Table is composed of slightly over 100 CEOs from 
the leading architectural, engineering and construction firms 
across the United States. Together, these firms deliver on 
billions of dollars of public and private sector infrastructure 
projects that enhance the quality of life for all Americans 
while directly employing nearly half a million Americans, 
easily double that when considering indirect jobs.
    As such, as have extensive experience and first-hand 
knowledge of the challenges and complexities facing the design 
and construction industry when it comes to navigating the vast 
regulatory complex that has arisen with respect to our clients' 
projects.
    Let me state on the onset that CIRT and its members are not 
opposed to regulations. What we oppose is the inefficiency, 
redundancy and overlapping jurisdictional mazes that have come 
to epitomize excessive regulations. America's can-do spirit, 
know-how and innovation still exist. It is just hard to find 
sometimes under the extensive laws, regulations and rules that 
the private sector faces while trying to create jobs that spur 
economic growth and expansion.
    The uncertainty and unintended consequences of what seems 
like a never-ending expansion of Government's reach really 
damages the entrepreneurial spirit and desire to take risks 
which can help jump start a robust economy. When Government 
gives private businesses more freedom, not less, remarkable 
achievements can be accomplished to enhance prosperity for 
Americans.
    In public works infrastructure projects, the Federal 
Government spends taxpayers' money to put people to work, 
create economic growth, improve America's global 
competitiveness and enhance the quality of life in communities. 
But oftentimes, these projects are subject to time-consuming 
and often redundant rules, which weigh down efficiencies and 
delivery time while increasing cost. These excessive procedures 
could be accomplished without unnecessary delays and costs.
    A good example is the new I-35W bridge replacement. We will 
all remember the tragic day on August 1, 2007 when the 
interstate bridge carrying I-35W over the Mississippi River in 
Minneapolis suddenly collapsed during rush hour traffic, 
killing 13 and injuring many more. While rescue efforts 
proceeded, the Minnesota Department of Transportation 
immediately began a fast track process of building a new 
bridge.
    Three days after the collapse, a request for qualifications 
was issued for design-build teams interested in the replacement 
contract, with five teams short-listed 4 days later. Technical 
and price proposals were received on September 14th, this is 
just over a month from the time of the collapse, and evaluated 
on a best value basis by 27 evaluators from 5 agencies 
considering both quality and overall price.
    The design-build contract was awarded on October 8, 2007, 
just a little over 2 months after the accident. To allow 
construction to commence so quickly, the Minnesota Department 
of Transportation developed strong relationships with 
permitting agencies. With good will and a sense of common 
mission, the Minnesota Department of Transportation and the 
agencies agreed to make and keep reasonable commitments. 
Decisions that normally take months and years had to be made in 
hours and days.
    Through this team effort, a project memorandum was issued, 
covering the environmental management issues and permitting the 
$234 million construction project to move forward. Construction 
of the new, 10-lane interstate bridge proceeded at an 
accelerated pace, utilizing a local work force, estimated at 
over 600 tradesmen and laborers, with a 504-foot main span over 
the Mississippi River erected in just 47 days.
    On September 18th, the new bridge opened to traffic, more 
than 3 months early. The design and construction of the 
important interstate link that serves 141,000 vehicles per day 
was completed in just 11 months. This was only possible due to 
the spirit of cooperation and teamwork between the Minnesota 
DOT and the permitting agencies to eliminate road blocks often 
encountered in the environmental and permitting phase of the 
project, while still providing a sustainable, eco-friendly 
bridge that the community is proud of.
    From notice to proceed with construction to opening to 
traffic was 339 days. The private sector was given the freedom 
to enhance the project quality, introduce innovations and 
engage the community in selecting some of the bridge's dominant 
visual features. The bridge highlights innovation with smart 
bridge technology, 323 sensors that provide long-term valuable 
information on the bridge. Landscaping provided better 
drainage. Nanotechnology concrete cleans pollution from the 
air, and LED lighting, a first for highway, cuts the cost of 
energy and maintenance.
    But when it came to innovation, there was no regulation 
that told anyone that these things needed to be done. These 
were choices and benefits that were brought to the project 
through an open, streamlined process. It was a triumph of a 
recovery and our country can have the same recovery.
    The experiences from the new I-35W bridge replacement could 
be left for just one project. Or we can take to heart the 
clear, unmistakable lessons we have learned and put them to 
work across the board on a whole myriad of public projects, so 
that America gets the benefit of efficient, science-based and 
cost-time sensitive regulations in a manner that gets important 
infrastructure built, while still protecting and caring for our 
important environment.
    Private industry, when given more freedom, can achieve 
amazing results to build a stronger America. It is time to 
inspire the recharging of the American spirit to help us grow 
into a strong economy. CIRT and its members stand ready to 
assist the committee in whatever way it can to provide input 
into possible approaches and methodologies that will apply the 
streamlining lessons of successful work to a larger scope of 
Federal projects.
    I want to close by thanking you, Mr. Chairman, and the 
other distinguished committee members, for your time and 
attention.
    [The prepared statement of Ms. Figg follows:]

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    Mr. Jordan. Thank you for giving us some positive news. 
That is good to hear. So often testimony is not that, but it is 
good to hear that it worked so well there. And you are exactly 
right, that is what we want to foster in the future.
    Dr. Belman.

                    STATEMENT OF DALE BELMAN

    Mr. Belman. Let me thank the distinguished members of the 
committee for this opportunity to talk about project labor 
agreements.
    A project labor agreement is an agreement between a public 
or private owner, a building trades union or unions, and more 
frequently, construction employers. And the owner assures that 
the project will be built under union terms and conditions, but 
not necessarily by union workers, and receives in turn a number 
of benefits. One is an assurance against strikes or other 
disruptions of construction activity. And typically, very close 
labor-management cooperation, and an informal means of 
resolving disputes. An assurance of ready access to 
appropriately skilled labor, within 48 hours of the need.
    They can and often do obtain concessions from building 
trade unions with regard to wages, benefits and working 
conditions. And PLAs can be used to achieve socially valued 
goals, such as advancing individuals from low income and 
disadvantaged groups into construction training programs and 
into good jobs in the construction industry.
    Now, PLAs can provide value to owners of construction 
projects, but that requires choosing the right project, writing 
the right PLA. Owners need to know what they need from a PLA, 
and how to write the PLA they need. It is used extensively in 
the private sector because there is knowledge of this, because 
it is possible to do this. We find that Dow Chemical, Toyota, 
Pfizer pharmaceuticals, Donald Trump used PLAs to obtain value 
in their construction work.
    Now, PLAs provide two forms of value. We need to 
distinguish these. First of all, there is construction value. 
This can be, with a well-written PLA on the right project, 
cheaper to complete, on-time completion, better quality 
construction, better safety and health outcomes, and reduced 
need for oversight by project managers.
    There is also social value. And this can be provision of 
superior training and access to jobs, family supporting wages 
and benefits, adherance to labor and employment law, reduction 
in medical-social costs to local community, local hire. It can 
also have possibly negative consequences of excluding non-union 
employers. But we will talk about that.
    Where do we expect to see value from PLAs? In terms of 
industrial and commercial projects, my interviews, I have 
interviewed more than 200 people, or my co-authors have, larger 
projects, $5 million to $10 million is the threshold for 
industrial and commercial. Projects where completion time is 
important, projects where skill levels and training are 
important, projects built under prevailing wage requirements.
    How do PLAs create value? First of all, direct concessions. 
Change overtime and premium rates, modify apprentice ratios and 
so on. There can also be harmonization of working time across 
trades, changing start times, holidays, flexible scheduling, a 
number of other steps that increase the efficiency of the 
utilization of labor. And I should say that these issues face 
non-union as well as union contractors in terms of the terms of 
the trade and how the employees actually expect to be treated.
    Provision of skilled labor on an expedited basis. There was 
a big issue in obtaining skilled labor, and it delayed many 
projects from 2002 to 2007. In fact, it killed a number of 
private sector projects. And yet, a PLA was a good investment 
in making sure that if you were going ahead with a project, you 
would have the labor when you need it. Employers do not need to 
carry excess labor.
    We can also talk about how PLAs improve communication and 
cooperation on projects, and better coordination in a litigious 
and potentially chaotic industry. The management structures in 
many of the other parts of the construction industry today make 
it very hard for construction managers or DCs to actually 
control the project and get the results they want. PLAs become 
a tool to improve coordination.
    The no strike provision has also allowed numerous PLA 
projects to continue during local contract disputes.
    I don't have time right now to talk about whether, how PLAs 
affect project costs, but would be happy to answer questions on 
this. I will say that if one reviews studies that meet minimum 
standards of scholarly quality, the evidence isn't there that 
PLAs affect project costs. Indeed, most of the work that is 
cited is bad quality in the sense that it is quite inaccurate.
    But I would like to speak to the issue of exclusion and 
this issue of whether it is a bad thing that non-union 
contractors are potentially excluded from project labor 
agreements. A first point is that the controversy, we should be 
clear, this is not about construction value, this is about 
social values. This is not about making a project cheaper, 
making a project come in on time. This is about social values 
and whether the potential exclusion of part of the labor force 
is an issue that we should respond to. And it may well be a 
public policy issue.
    We need to understand that there are a series of other 
social values that PLAs advance, such as adherence to labor and 
employment law in an industry which has a very mixed record on 
following employment law, that PLAs encourage the provision of 
training through apprenticeship and pre-apprenticeship 
programs, that they assure the provision of family supporting 
wages and benefits, even for non-union workers on the job. That 
there is, PLAs generally encourage the use of a local labor 
force, so that wages and benefits stay in the local area. And 
they generally reduce social costs to an area when unbenefited 
construction workers use free community medical services.
    Now, what I am arguing here is that if a social value is 
that we not exclude non-union workers from projects, these need 
to be weighed against the positive social values. That seems 
legitimate. A second is, it is not that hard to write a PLA 
that includes provisions which would make it more possible for 
non-union contractors to participate. The Toyota PLA only 
requires a letter of assent. It allows non-union contractors to 
bring current work force onto the job, and paying union-level 
benefits into their own funds and a trust fund for employees. 
But they pay union rates, and indeed, Frank Mahomet, who is an 
ABC representative at a conference we had at Michigan State 
University, said that he could see a PLA which non-union 
contractors would not have an issue with.
    I am clearly out of time. I thank you for your patience and 
look forward to answering your questions.
    [The prepared statement of Mr. Belman follows:]

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    Mr. Jordan. Thank you, Doctor.
    Mr. Biagas.

                    STATEMENT OF JOHN BIAGAS

    Mr. Biagas. Thank you, Mr. Chairman, ranking member, 
members of the committee. Thank you for allowing me to give 
testimony today.
    Being the youngest of 14 children, 8 boys and 6 girls, from 
the great State of Louisiana, Lake Charles is where I was born, 
I have had the opportunity to work in the electrical and also 
join the construction field for many years. The trade is one 
that all the males in the family learned from our father, Alvin 
Biagas, who was a master electrician. Most of us learned both 
on the job and some later served as electrical apprentices, 
trained in the classroom through the IBEW, Local 861, in Lake 
Charles. I served in Local 26 here in Washington, DC, from 1987 
to 1991.
    I am a licensed master electrician in the State of 
Virginia, Maryland, Georgia, Louisiana, North Carolina, 
Washington, DC, and also several other States.
    In the spirit of the American dream, I purchased Bay 
Electric Co., Inc., in 1997. Bay is a non-union merit shop and 
began in business over 47 years ago. The company had revenues 
of just over $1 million when I bought it, and over the years, 
our team has grown this enterprise to roughly over 85 times 
that size. We have grown the size of our work force from 18 
when I purchased it to over 190 today.
    Our work force has 155 field workers, which are licensed 
electricians, apprentices, which are registered in State and 
Federal programs, foremen, laborers, superintendents, office 
staff of 35 persons, project managers and so on.
    Bay performs a large amount of work and service work with 
the Department of Defense, the Army, Navy, Air Force and all of 
the Defense groups, State and local governments, as well as 
private customers from Maine to Florida and as far west as 
Louisiana. The projects range in size from $31 million to as 
small as a $68 Service order. We perform large-scale, complex 
electrical projects which include low voltage fire alarms, 
lighting, high voltage, up to 35,000 volts, controls, motors 
and many electrical tasks.
    Bay also is a full service general contractor. Over the 
last 5 years, we have performed in excess of $300 million worth 
of design-build and also renovation projects as both prime 
contractor and also subcontractor for numerous Federal clients, 
such as USDA, DOD and Homeland Security.
    All of the projects that we have done were completed on 
time and under budget. Bay has a 99.9 on-time project 
completion rate, and has never been assessed LDs for late 
delivery by any Federal, State or local agency or any other 
private customer, for that matter. Bay Electric also has a 
99.97 percent budget completion rate, on budget or below 
budget. Also on safety, Bay has an EMR rate of 0.91, and after 
our audit this year, we expect that rate is going to go down 
again. So we are a very safe contractor.
    As you will find a listing of the projects we receive, 
there are a number of projects, and just in the interest of 
time, I am going to move on. But we have done projects as large 
as $31 million, we have done for Braddock, we have done work at 
Belvoir, just about every State from Maine to Florida, and 
certainly continue to do so.
    The issue I want to discuss with the committee is the 
executive order 13502, which encourages project labor 
agreements on Federal projects over $25 million, and 
effectively discriminates against over 85 percent of the 
construction industry. Unions account for less than 6 percent 
of the private work force in Virginia, and over 90 percent of 
the work, both public and private, is performed by non-union 
firms, such as Bay Electric Co. No merit shop contractor would 
sign a PLA because, among other things, the non-union workers 
would have wages taken out for health plans, welfare, 
retirement and also other deductions to which the worker will 
never see a benefit of, and will not be vested in these union 
plans.
    Union-only agreements drive up costs by limiting 
competition and in Virginia, less than 5 percent of the 
construction firms are union. These agreements have a chilling 
effect on the number of firms which would undertake such bids. 
Unions also have a huge issue with unfunded pension 
liabilities, and merit shop contractors would be crazy to take 
on such massive liabilities with no benefits to the workers.
    PLAs also drive up costs by enforcing inefficient work 
rules and limiting production, hurting morale and in most 
cases, add numerous man-hours to projects and drive up costs, 
both direct and indirect. With the tenuous state of our economy 
nationally and the difficult times we are in with real 
unemployment in construction, nearing over 23 percent, can any 
Government entity afford to waste precious funds? As a former 
union member, it troubles me that unions would want a special 
deal just for them when fair competition is a cornerstone of 
our total economic system.
    The proponents of PLAs will say that labor work stoppages 
are a benefit to using them. The truth is that there has never 
been a man-hour lost to strikes, picketing, work stoppages, 
slowdowns or other disruptive activity on the non-union merit 
side, just the union side. As a former union member, I have 
witnessed first-hand the tactics used by unions to slow down 
work, drag out projects for the union benefit. PLA proponents 
also will say that they help to promote fair wages and higher 
pay. This is also a farce. We at Bay Electric pay on average 
more than unions in wages, benefits and offer paid vacations, 
holiday pay, health insurance and 401(k) plans.
    I am going to close, because I have a little bit more to go 
in between there. But in closing, most of the folks that are 
actually affected by the PLAs are ethnic minorities who do not 
belong to a union and not have no hope of being employed by 
union shops as shown in the attached Washington National 
Stadium studies. Union minority membership rates are horrible. 
And the union leadership does not represent minorities in any 
fashion, except for a few token positions at union halls.
    PLAs on the surface are racist and should not be used or 
allowed to be adopted in Federal projects. I thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Biagas follows:]

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    Mr. Jordan. Thank you, Mr. Biagas.
    Mr. Baskin.

                  STATEMENT OF MAURICE BASKIN

    Mr. Baskin. Mr. Chairman and members of the subcommittee, 
[remarks off microphone] of Venable. I appear before you today 
on behalf of the Associated Builders and Contractors. It is a 
national construction industry trade association, representing 
23,000 merit shop contractors employing 2 million workers.
    ABC's members believe that construction contracts should be 
awarded to the lowest responsible bidder through full and open 
competition based on merit, with no discrimination based on 
labor affiliation. These same principles have been written into 
Federal law. The Competition in Contracting Act requires 
Federal agencies to award procurement contracts on the basis of 
full and open competition to the maximum extent practicable. 
Those are direct quotes from the law.
    Unfortunately, the administration's efforts to impose 
project labor agreements as part of the Federal procurement 
process threaten to violate the Competition Act at the expense 
of taxpayers. As we have already heard, according to official 
Government statistics, 87 percent of construction workers 
currently choose not to belong to any labor unions. I must 
respond to something said a couple of speakers ago, that 
exclusion of non-union contractors is a mere social value, I 
would think that inclusion of 87 percent of the construction 
work force is not only a social value and a construction value, 
it is a fundamental right in our country.
    Government-mandated PLAs result in the award of Federal 
construction contracts primarily to the much smaller group of 
unionized contractors and their union employees. This is 
special interest favoritism. It is not full and open 
competition. It is not what the law requires.
    That is why in 2001, President Bush issued an executive 
order, which was upheld in the courts, that prohibited the 
Federal Government from requiring contractors to enter into 
project labor agreements. During the 8 years of that executive 
order, there were no significant labor-related problems on any 
Federal contracts. The buildings did not fall down. Indeed, it 
was on project labor agreements, some of the most notorious 
ones, such as the Big Dig, the Iowa Events Center, Miller Park, 
all project labor agreements that were Government-mandated, 
those did fall down causing fatalities and untold damage.
    Open competition on the Federal sector under the Bush 
Executive order obviously worked. Nevertheless, with no 
evidence of any labor-related problems on Federal construction 
projects, President Obama signed his own executive order in 
February 2009 which revoked the Bush order that was working, 
and instead encouraged Federal agencies to mandate PLAs on 
Federal construction projects exceeding $25 million in costs.
    But the President does not have the authority to override 
the Competition Act's requirement of full and open competition. 
There has been no factual justification for the change in 
policy offered up by any of the Government agencies, including 
those who are in attendance today. We have heard a couple of 
rationales for it, that it is to avoid strikes. Well, there 
were no strikes going on on Federal projects. To gain access to 
a larger pool of labor? Tell us how that is possible when you 
exclude 87 percent of the work force, just to name a few of the 
false rationales that have been offered up.
    That is why ABC members have filed a series of bid protests 
with the Government Accountability Office to stop unjustified 
PLA mandates from being imposed by Federal agencies. Through 
these protests, we have forced a number of agencies to withdraw 
those mandates. Yet, we continue to see threatened PLA 
requirements showing up on agency procurement around the 
country, as was confirmed again in Mr. Peck's testimony today, 
that we are going to hear, but that we saw on the 
subcommittee's Web site.
    We intend to file a protest against the GSA's new 
preference policy in favor of PLAs on an upcoming project. That 
policy has already resulted in a multi-million dollar increase 
in the cost of construction on a project awarded here in the 
District of Columbia that Mr. Ennis' company was excluded from. 
And GSA should be required to make public the price comparisons 
between PLA and non-PLA bids on each of the projects listed in 
Mr. Peck's testimony.
    Many independent studies, scholarly ones, I might add, have 
found that PLAs increase the cost of construction by as much as 
18 percent. In fact, studies commissioned by the Federal 
Government have found that. Studies commissioned by State 
governments have found cost increases from PLAs. The Government 
mandates of PLAs will therefore result in reduced job creation 
within the construction industry at a time when we have this 
staggering 22 percent unemployment figure.
    They hurt small businesses, particularly subcontractors. 
They discriminate against minorities and women-owned 
businesses, which are overwhelmingly non-union. They do nothing 
to increase or stabilize construction employee wages, which I 
also heard referred to today, because the Davis-Bacon Act 
already protects construction industry wages at a very high 
rate.
    I will refer the rest of my remarks, given I have run out 
of time, that is in my written testimony. But I appreciate the 
opportunity to speak to you today.
    [The prepared statement of Mr. Baskin follows:]

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    Mr. Jordan. Thank you, Mr. Baskin.
    We appreciate all our witnesses' testimony.
    Mr. Biagas, you just want to compete, right, on a fair--
what did you say, you had 13 siblings?
    Mr. Biagas. Yes, sir. I learned a young age, being the 
youngest, that I needed to compete.
    Mr. Jordan. The youngest of 14, so you definitely know how 
to compete. You just want to compete.
    Now, Mr. Belman and Mr. Baskin, Dr. Belman had talked about 
PLAs and the advantage there. But you don't have a problem with 
your workers striking, is that right?
    Mr. Biagas. No, sir.
    Mr. Jordan. No work stoppages, no picketing?
    Mr. Biagas. Never have.
    Mr. Jordan. Mr. Ennis, have you ever had that problem?
    Mr. Ennis. No, sir.
    Mr. Jordan. No. So the idea that is in the PLA agreement is 
not really a point. You have training programs and apprentice 
programs for your employees, I assume?
    Mr. Biagas. Yes, sir, full-fledged. Thirty apprentices are 
trained in our 4-year program, 788 hours in the classroom, over 
8,000 on the job training.
    Mr. Jordan. Recognized and given a thumbs-up by the 
regulatory agency?
    Mr. Biagas. Yes, sir.
    Mr. Jordan. Imagine that. Mr. Ennis, is that the same with 
you?
    Mr. Ennis. Yes, sir, full 4-year apprenticeship, and it is 
registered by the State of Virginia.
    Mr. Jordan. Yes. The way we do it in Ohio is we work 
closely with our vocational schools. It is a big element in our 
joint vocational schools and programs. I have been out to see 
it. I have actually spoken at many of their banquets. They do a 
great job. And these kids, they all get placed. They do a great 
job for several of the companies that I have the privilege of 
representing in Ohio. So we appreciate that.
    I want to get right to the agreement and I want to try to 
yield some time, we have some Members who have really been on 
this issue, like Mr. Guinta from New Hampshire, I want to give 
some time to him. But let me just ask you this. I want to 
understand how this works.
    We under GSA, and they are going to be on the next panel, 
they give a kind of a 10 percent bonus criteria to PLA 
agreements. So is it this simple, if you do a bid, Mr. Ennis, 
on a public project, and let's say your bid is $91, and the 
union shop with the PLA agreement comes in at $100, thereby 
they get that 10 percent bonus, so they are really at $90, do 
they get the bid on that basis alone, or do we not know that?
    Mr. Ennis. We do not know that.
    Mr. Jordan. And this is to your point, Mr. Baskin, we want 
to know why exactly.
    Mr. Baskin. Yes. It is actually worse than that, because 
they say it is not based on price. One price could be lower 
than the other. The non-union price could be lower, but they 
are just going to give this extra bump on the technical phase 
of the PLA.
    Mr. Jordan. That is my point. Mr. Ennis' bid comes in at 
$91, let's say their bid comes in at $100, but it gets some 10 
percent bonus, we don't know how that is applied, so they could 
apply it just on the dollars and say 10 percent less, well, 
they are actually $90, so now we are going to award the bid 
based on that. It is actually costing the taxpayers more money 
then, because it is still $100?
    Mr. Baskin. Correct.
    Mr. Jordan. I wanted to make sure I understand.
    I want to yield time to first the chairman of the 
committee, then we have 2\1/2\ minutes, if we have time, I want 
to get Mr. Guinta rolling too, because he had the amendment.
    Chairman Issa. Thank you, Mr. Chairman. I am not going to 
take any time, except to thank you for looking into what is 
undoubtedly costing the American taxpayers an opportunity to 
have better roads, better bridges, or at least more of them. I 
have nothing else at this time, but I truly appreciate your 
attention and yield back.
    Mr. Jordan. I am going to yield 2 minutes and 15 seconds to 
the gentleman from New Hampshire, who has been working on this 
issue very hard.
    Mr. Guinta. Thank you, Mr. Chairman.
    In full disclosure, I support and proposed an amendment to 
ban PLAs. I want the witnesses to know that before we start 
this commentary. I personally feel that PLAs, based on the 
estimates that I have seen, in 2008 alone, have cost taxpayers 
somewhere around $2.6 billion, to $2.8 billion.
    In an era when we have to find and do more with less, and 
in an era where we have a budget crisis, and I believe it is a 
crisis, where we have a $1.6 trillion deficit, and a $14 
trillion debt, I think it is incumbent upon us, and the country 
expects it is incumbent upon us to really navigate through 
these issues and find a better way to invest in our country and 
improve on our country. I find it disheartening that we would, 
as a PLA does, give greater access to one group and not 
another.
    That is really the substance of the frustration I have with 
this issue. I wouldn't say that asking for equality is anti-
union or pro-small business. I think it is an equity and 
fairness issue. I have heard from every small business owner 
who is non-union that they would like to do nothing but 
compete. And I heard you, Mr. Biagas, say that.
    I think that would be better for the market, better for the 
project, better for the consumer, better for the taxpayer. And 
I would argue, better for both the union and non-union shop.
    So with that in mind, I can certainly stay for some 
questioning later. I would like to get to the crux of why there 
is this assumption that a union must have an advantage over a 
non-union shop. That is a question that I think deserves to be 
answered, and the American public deserves recognition and 
understanding of that and its correlation to the costs of PLAs 
in this country.
    I yield back. Thank you, sir.
    Mr. Jordan. I thank the gentleman.
    We now recognize the distinguished ranking member from 
Ohio, Mr. Kucinich.
    Mr. Kucinich. Thank you very much, Mr. Chairman.
    One of the witnesses claimed that PLAs were racist. That is 
a pretty serious charge, so I asked staff to look at Federal 
cases to see if there are any cases that have been filed on 
this question that relates to whether or not people's 14th 
Amendment protections are being violated. And I didn't intend 
to bring this up, but I just asked staff to come back with it. 
What they came back with was a case out of the U.S. Court of 
Appeals for the Ninth District that, where the defendants 
included the IBEW Local 441, the Construction Trades Council of 
Los Angeles and Orange Counties, Building and Construction 
Trade Council.
    And the findings, substantive and procedural due process 
claims, here is what the court said, this is the court of 
appeals: ``The plaintiffs contend that the PSA,'' they call 
them PSAs there, ``violated their rights to substantive and 
procedural due process by depriving them of liberty and 
property interests protected by the 14th Amendment.'' And the 
court says ``We conclude that plaintiffs cannot make this 
threshold showing.''
    So I just wanted to submit this for the record.
    Mr. Jordan. Without objection.
    [The information referred to follows:]

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    Mr. Kucinich. When you say racist, you had better be able 
to back it up.
    Also, Mr. Chairman, I would like a yes or no answer from 
Dr. Belman. Did you say that these project labor agreements 
cover both public and private jobs? Yes or no.
    Mr. Belman. Yes.
    Mr. Kucinich. And yes or no, Ms. Figg, did you say, when 
you were talking about that bridge project in Minnesota, was 
that done by a project, was there a project labor agreement 
involved in that bridge project, yes or no?
    Ms. Figg. Yes.
    Mr. Kucinich. OK, thank you.
    Now, Dr. Belman, you have heard the testimony of several 
individuals and associations from the construction industry 
claiming that Federal agencies' use of PLAs will negatively 
impact competition and drive up construction costs. As you 
know, Executive Order 13502 focuses on large-scale construction 
projects where the total cost to the Federal Government is $25 
million or more and which are generally more complex and of 
longer duration. Can you tell us how competition among bidders 
for these types of large construction projects impact costs?
    Mr. Belman. Yes. There actually is very limited careful 
research on this. But what is clear, in some work done by a 
colleague of mine, Professor Peter Phillips of Utah, suggests 
that on large projects, having three to four bidders is more 
than enough to get close to minimum cost, because the gains 
from winning a bid are so large that employer bidders want to 
make sure that they get it.
    Smaller projects, one is more willing to roll the dice, 
kind of a Las Vegas approach to construction contracting, 
because if you can get, if you put in a high bid but you still 
win, you make a lot of money. So the bottom line is it is not 
clear that you need to get huge numbers of contractors on a job 
for the public to get the low price and the low bid on it.
    Mr. Kucinich. Have you found that PLAs have a negative 
impact on competition for contracts?
    Mr. Belman. I haven't researched that question.
    Mr. Kucinich. In his written testimony, Mr. Ennis expressed 
concern regarding the Government's insistence that all 
Government contracts of a certain size must use union labor, 
despite shrinking levels of union membership. Dr. Belman, based 
on your research and familiarity with various project labor 
agreements, do PLAs prevent non-union contractors from being 
included in large Federal construction projects?
    Mr. Belman. It depends on the PLA. I know, I am aware of 
Federal PLAs that are fairly open. The most recent ones----
    Mr. Kucinich. So some are open? They do not prevent them?
    Mr. Belman. No, they do not prevent them, nor do they 
impose undue burdens on them.
    Mr. Kucinich. Some of the other witnesses, Dr. Belman, have 
claimed that requiring the use of PLAs for Federal construction 
projects increases the costs to taxpayers. In fact, some 
reports have supported this claim that PLAs increase the cost 
of construction. Your research, however, suggests that these 
concerns are overstated. What about this discrepancy?
    Mr. Belman. There is considerable anecdotal evidence. You 
can find projects where PLAs were more expensive. You can find 
examples, case studies of projects where PLAs were less 
expensive. In terms of careful research, what I would say is 
there are two peer reviewed studies, one by Beacon Hill, that 
suggests that PLAs increased project costs in Massachusetts 
schools by about 12 percent, 14 percent. My own work in 
industrial relations, which takes a much closer look at this, 
and allows for the differences, you don't use PLAs on a plain 
vanilla school, you use them on a more----
    Mr. Kucinich. OK, I----
    Mr. Belman. No cost.
    Mr. Kucinich. Final question. You don't contend that PLAs 
should be used on every single large scale construction 
project, is that correct?
    Mr. Belman. No.
    Mr. Kucinich. OK, no, meaning what?
    Mr. Belman. No means right project, right PLA. Then they 
make sense to use.
    Mr. Jordan. I Thank the gentleman.
    I now yield to the vice chairman, Ms. Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman. And thank you to all 
of our panelists for being here today.
    This Congress has made the economy and job creation our No. 
1 priority, as this Nation has faced 20 plus months of 
unemployment at 9 percent or above. So to you all in the panel 
who are the job creators, thank you, and we look forward to 
working with you to create an environment where you can create 
jobs and you can be successful, and the Government isn't in the 
way of your progress and your success. So thanks for being here 
today.
    My first question is to Mr. Biagas. And I might say to you, 
my chief of staff is the oldest of 14. So you two have a lot in 
common, or not so.
    I want to give you the opportunity, because the allegation 
in what you stated in your statement is a serious one. Maybe 
you could cite for us some specific examples.
    Mr. Biagas. Yes, ma'am. In the attachment, the handout I 
had, there was a study that was done on the Washington National 
Stadium, which had a PLA it also had goals, and also hard 
goals, for hiring of inner city and minorities that actually 
reside in the District of Columbia. Due to the way the work 
actually went, that was never fulfilled. I would further say, 
if you would look into that study, you would certainly find 
that there was an obvious attempt not to hire these inner city 
minorities, which the intent, or the bill of goods that was 
sold with the PLA was they were going to hire a bunch of inner 
city youth and/or folks and put them through the apprenticeship 
to let them become trades workers.
    It did not happen, nor does it ever happen on PLAs. It is 
all smoke and mirrors.
    Ms. Buerkle. Thank you very much.
    Mr. Baskin. May I supplement that response? It goes to your 
question as well as to Congressman Kucinich. In Chicago, 
African American and female construction workers were awarded 
$1.3 million under a consent decree, arising out of a PLA 
project asking for cases of racism. An Alameda County jury 
awarded a black construction worker $490,000 for racial 
harassment on the PLA San Francisco airport project.
    The Philadelphia City Council found that minority standards 
were not being met under PLAs in that city. The mayor of 
Buffalo, New York made similar criticisms, and the Washington 
National Stadium, already referenced to. These and other 
specific instances of racism and racist problems and minorities 
and women under PLAs are set forth in our reports on the poor 
performance of PLAs. A new edition is coming out, and I would 
be happy to provide that to the committee.
    Ms. Buerkle. Thank you very much.
    My next question is to Ms. Figg. Because when you were 
asked the yes or no question regarding the PLA project for the 
bridge, the I-35 bridge, I had the feeling you wanted to 
explain that. But my understanding is you are here to talk to 
us about regulations. And that is what this subcommittee is 
about. So perhaps you could just give us, first of all, it is 
encouraging to know that a project of that magnitude could be 
accomplished in that short a period of time.
    Had that not been on the fast track, can you give us some 
estimate of the cost and what it would have cost with the 
standard operating procedure, as well as the length of time?
    Ms. Figg. There is some information that would suggest that 
a project like that would take anywhere from 10 to 15 years to 
bring to actual construction. The processes are overlapping in 
that both State and Federal Governments require the same 
things. But there is no working together on those. So you have 
to go through these review processes.
    Private industry knows what the regulations are. So they 
put forth a proposal that accomplishes meeting those. It is the 
review process that takes so long to just confirm that in fact 
what you put forward was meeting the criteria. So we see many 
times where you submit information for an environmental 
process, for instance, and it goes on for a number of years. 
But the project doesn't change from the day you submitted the 
original proposal.
    So it is just, it is a time waster. And there are 
indications that there is at least a 10 percent additional cost 
and more. Some have indicated, in our Construction Industry 
Round Table sentiment indexes up to 50 percent of additional 
cost due to these overlapping regulations.
    Ms. Buerkle. Thank you.
    Mr. Ennis, just briefly, you mentioned in your opening 
statement that you bid on three jobs and you did not 
successfully get any of those jobs. Can you just tell us if you 
have received any feedback as to why you didn't get the 
contract?
    Mr. Ennis. Because they were awarded as PLAs. Two of the 
three were actually, one was awarded as a PLA and a subsequent 
change order was issued, a couple million dollars, to make it 
PLA. We were asked on one of the projects to sign a PLA. The 
third project, from what I understand, they never could come to 
an agreement on a PLA. I believe they withdrew it.
    All three of these proposals are technical proposals, of 
which any of that information was never available to us. But 
with the contractors that we bid with, we were told we were out 
because we would not sign a PLA.
    Ms. Buerkle. Thank you. I am out of time, but just quickly, 
was the shop that it was awarded to a union shop or a non-union 
shop?
    Mr. Ennis. To a union shop.
    Ms. Buerkle. Thank you very much. Thanks to all the 
panelists.
    Ms. Jordan. I thank the gentlelady.
    Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman. I thank the witnesses.
    Obviously a lot of scar tissue is built up on this issue. 
It seems like under the George H.W. Bush administration, 
project labor agreements were banned. Then under Clinton they 
were encouraged, then under George W. Bush, they were banned 
again. Now under Obama they are encouraged. So we have gone 
back and forth, back and forth.
    And I know Mr. Baskin is a professional at figuring this 
stuff out. But it strikes me as odd that in a couple of panels 
of sworn witnesses here, we have such a completely different 
understanding of the facts. It is almost hard to imagine we 
could have such a different impression. Because on the face of 
the Executive order, it says that Executive agencies may 
require these things. It doesn't say they have to.
    And then in the next panel, Mr. Gordon is going to testify, 
I believe, I don't want to jump the gun here, that he says on 
page 5, ``Any contractor may compete for and win a Federal 
contract requiring a project labor agreement, whether or not 
the contractor's employees are represented by a labor union.'' 
And he goes on to describe a lot of other flexible provisions 
that these may contain, because these have to be negotiated.
    So it is kind of hard for me to understand who is telling 
the truth here. Here, we hear from many panelists gloom and 
doom, from the other side we hear flexibility.
    I don't have a dog in this fight. Who am I supposed to 
believe? It just depends on previous scar tissue or previous 
experience. As I say, you are all sworn witnesses. How do you 
reconcile those conflicts? Mr. Baskin, I will give you an 
opportunity, since you are a known professional in this area.
    Mr. Baskin. I think we have some agreement on this panel, 
which is that Dr. Belman has conceded that PLAs generally do 
exclude the non-union contractors. It is a totally false 
premise to say, well, they can bid, they just can't perform the 
work unless they agree to become----
    Mr. Cooper. Well, sir, Dr. Belman is shaking his head. So 
you may have spoken, let Dr. Belman speak for himself.
    Mr. Baskin. And as well his previous testimony. But you 
asked about the Executive orders. President Bush's was the 
first Executive order to clearly prohibit but also stay neutral 
on the issue.
    Mr. Cooper. Which President Bush?
    Mr. Baskin. President Bush, George W. Bush. President 
Clinton did not issue an Executive order.
    Mr. Cooper. His father had also prohibited project labor 
agreements, according to Dr. Belman.
    Mr. Baskin. At the very end of his administration, when 
there was not time to implement it.
    Mr. Cooper. But he had still done that, his father had done 
it.
    Mr. Baskin. And then President Clinton came in with a, did 
not issue an Executive order, merely a memorandum.
    I guess the point about the current Executive order, let's 
talk about the present day. It says they shall encourage 
agencies to require. And under what right should any agency be 
able to require a restricted bid specification, which is what a 
PLA is? That reduces competition. That is really what this is 
all about. All we are asking for is full and open competition 
in a meaningful way without the restricted bid specifications.
    Mr. Cooper. I am sure you would be interested in litigating 
that, if there is a fee involved.
    Mr. Baskin. We already have been. We already have it. It is 
regrettable that money has to be spent on litigating something 
that was already in the Competition and Contracting Act. But we 
have brought four protests that have all been successful, I 
think, because the agencies have Recognized that there is an 
over-reach involved here.
    Mr. Cooper. But how about this direct statement that any 
contractor may enter into the PLA whether or not a contractor's 
employees are represented by a labor union?
    Mr. Baskin. And because of the discriminatory aspects of 
telling, what are you doing there, you are telling a non-union 
contractor to completely revamp his way of doing business, that 
which has made him successful and would make the Government 
successful if they used his services. Certainly, to accept 
union representation for employees who don't want it.
    Mr. Cooper. Dr. Belman.
    Mr. Belman. One, you can write PLAs many different ways, to 
be private sector PLAs often do require that a contractor be a 
permanent signatory to a local agreement. I haven't done a 
thorough enough study of public PLAs to know where they stand. 
But they are certainly moving toward greater openness to non-
union contractors, to drag-along clauses and to dealing with 
benefit issues.
    But I do have to say is, that while open competition is 
important, the point of the open competition is to provide the 
public with value. And there are projects, and that public 
value can be increased through the use of project labor 
agreements. I am not sure that it is wise to come up with a 
policy that would prevent the public from realizing that value.
    Mr. Cooper. My time is expiring. It seems to me that a good 
lawyer could write a good PLA.
    Mr. Belman. Many have.
    Mr. Jordan. I Thank the gentleman.
    The gentleman from New Hampshire, Mr. Guinta, is 
recognized.
    Mr. Guinta. Thank you, Mr. Chairman.
    I think the point that I would make is, why does a good 
lawyer have to write a good PLA? Mr. Baskin, if your preference 
would be, I assume, not to have to engage in writing a PLA, 
correct?
    Mr. Baskin. Yes, but it is not just me. We are talking 
thousands of contractors around the country who have voiced 
their opposition to being forced to change their way of doing 
business and to force unions on employees who work for them who 
don't want it. Have a vote, if that is what the unions want. 
Why are they being subjected to this? It is about them, it is 
not about me.
    Mr. Guinta. And second, if this Executive order was not in 
place, you or any other lawyer wouldn't have to sue for a fee, 
correct?
    Mr. Baskin. Absolutely right. Correct.
    Mr. Guinta. Now, I think we all know what the definition of 
require is. I just want to read Section 3 of the Executive 
Order 13502. And if I am not reading this correctly, I would 
like someone to correct me, please.
    It states, ``In awarding any contract in connection with a 
large-scale construction project, or obligating funds pursuant 
to such a contract, executive agencies may, on a project by 
project basis, require the use of a project labor agreement by 
a contractor.''
    So what it says to me is a very clear suggestion that you 
should require project labor agreements. Now, technically, 
under the law, the word may covers the fact that you don't have 
to. But what I would like to know is, how many of these 
projects do not require a project labor agreement? Does anyone, 
Dr. Belman, would you know the answer to that question?
    Mr. Belman. I haven't studied that in terms of Federal 
contracts recently.
    Mr. Guinta. You had testified earlier, and I would like to 
hear about this a little bit more, I apologize, I had to step 
out of the room. But you talked about value. Can you just talk 
to me a little bit more about the social value that you are 
referring to?
    Mr. Belman. OK, well, let me give you an example. On the 
west coast, there are a number of project labor agreements that 
contain very extensive provisions for moving individuals in low 
income areas or from minority groups through pre-apprenticeship 
training programs into apprenticeship programs and then into 
full journeyman status.
    Now, having, and there are extensive systems of community 
overview, there are extensive joint panels that make sure that 
these are effective and every review I have read suggests that 
they are extremely effective in moving particularly African 
Americans and Hispanics into well-paid, highly trained jobs 
where they are very productive members of the work force. So 
that is, I interpret that as a positive social value that can 
be generated by PLAs, and isn't generated in their absence.
    Mr. Guinta. So am I to assume based on that described value 
that non-union companies do not engage in apprenticeships with 
minorities?
    Mr. Belman. What I would tell you is that from my own 
research and that of Johannes Beldens, and a number of others, 
is that, and also you can read in the engineering news record 
and from the construction users round table, is that there is a 
crisis in construction training, that there is under-investment 
in construction training, and that is largely on the non-union 
side.
    Can we find good non-union construction companies? You bet. 
Are there non-union construction companies that will go out 
there and compete for PLA work, get the contracts and do well? 
You bet. But on average, non-union companies are much more 
dependent on public training contributions and provide much 
less training than do union construction firms.
    Mr. Guinta. The testimony that I heard from Mr. Ennis and 
Mr. Biagas would refute that last statement you made.
    Mr. Belman. No, they don't. They simply say, as I said, 
there are some great companies, non-union companies out there 
that do very well. But the typical non-union company does much 
less training and invests much less in training than a union 
company. Just like contrary to some of the things that are said 
here, there is, African Americans make up a smaller percentage 
of the non-union work force today than the do the union work 
force. So if you hire a union company, you are more likely to 
have an African American worker on the job than if you hire a 
non-union company.
    Mr. Guinta. So based on that argument, we should apply this 
standard to every industry in the country?
    Mr. Belman. Which standard?
    Mr. Guinta. The requirement that unions participate in any 
industry, not just the construction industry. Because unions, 
according to what you are saying, spend more time training. Yet 
the rest of the free market society would suggest otherwise.
    Mr. Belman. There is, you can look at Peter Capelli's work 
on this. There is a strong suggestion that the U.S. spends 
considerably less on employee training than do most other 
industrialized countries. That is a reason why our economy is 
not functioning as well as we would like.
    Whether unions are the solution to this, I have to be 
neutral on. But I do know that in construction, unions and 
their signatory employers, I should make that point, these are 
through joint labor management committees, spend far more on 
training through private means than does the non-union sector. 
And that in many times, the non-union sector is dependent on 
their, for their most skilled workers, on people who have left 
the union sector, people like, to some degree, like Mr. Biagas.
    Mr. Guinta. Thank you, Mr. Chairman.
    Mr. Jordan. Thank you.
    I now recognize the gentlelady, Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman. And thank you for 
holding this hearing.
    Let me first request unanimous consent that two statements 
be submitted for the record, by Tammy Miser and Kathryn Rilett.
    Mr. Jordan. Without objection.
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    Ms. Speier. Thank you.
    Just a couple of points. I think this is just a fascinating 
discussion, because as Mr. Cooper had said, it seems like we 
are talking over each other and not necessarily getting much 
clarity. The project labor agreement that Toyota has embraced 
is one that is worth spelling out a little bit. And Jeff 
Caldwell said, as the former head of the construction for 
Toyota North America, ``I have numerous real world experiences 
with PLAs, and I can say without any equivocation that they are 
valuable tools for any entity seeking an economical and 
efficient construction process. Toyota has constructed numerous 
automobile, truck and engine production facilities in the 
United States, each of these construction projects was 
completed or is being completed under a project labor agreement 
that ensures that our facilities were built with a steady 
supply of high-skilled and productive workers.''
    In every instance, and I underscore this, this process 
worked beautifully. And the proof is in the results. Toyota 
North America construction costs are roughly one-third less 
than other major automobile manufacturers who eschew the use of 
project labor agreements.
    Now, a big point is being made that somehow the Government, 
under the Executive order by President Obama, is forcing these 
PLAs by various Federal agencies. Mr. Baskin has made that 
point over and over again.
    But let me point out, in an article that just appeared, 
nine workers were detained in a raid at a VA hospital job site 
in Florida. These nine people are in the United States 
illegally, were found to be working on the construction of a 
new Veterans Administration hospital in Orlando, Florida. It is 
estimated costs of over $600 million that the VA project 
represents. VA has strongly opposed doing PLAs.
    So on the one hand, we have some Federal agencies that are 
not interested in doing PLAs. We have an example where one was 
clearly not using a PLA and they have nine workers who have 
been detained because they are illegal and working in this 
country. I am sure they are jobs that American workers would 
love to have.
    Let me just speak a little bit about Tammy Miser, who is 
the sister of a man that was burned to death at a job site in 
this country. It was a company that did not follow the U.S. 
Chemical Safety and Hazardous Investigation Board's 
recommendations relative to dust collectors. And the CSB 
concluded that had the company adhered to the National Fire 
Protection Association standard for combustible metal dust, the 
explosion would have been minimized or prevented altogether.
    I guess my question is to you, Dr. Belman, do you think 
that we have a productive discussion today about the impact of 
OSHA regulations without involving stories like the worker who 
lost his life?
    Mr. Belman. Any economist would say, if you are going to 
take a look at regulations, you need to look at the benefits as 
well as the cost. One could of course look at purely the costs 
of building a containment vessel on a nuclear reactor and 
conclude they are a bad idea. But every now and then their 
benefits are very great. So you need to look at the benefits of 
regulation, fewer lives lost, and so on, as well as their 
costs.
    Ms. Speier. Thank you. I think my time has expired.
    Mr. Jordan. I thank the gentlelady.
    Mr. Belman, the OSHA deciding to back off the noise 
regulation that they were initially talking about relative to 
machines and manufacturing facilities, do you think that was a 
good move? Do you think they heard that in this situation that 
what perceived benefit was not there, and that it was a cost 
issue?
    Mr. Belman. Although as an academic I believe I know all 
things, I don't have enough information to answer that question 
yes or no.
    Mr. Jordan. I appreciate it.
    I recognize the gentleman from Iowa, Mr. Braley.
    Mr. Braley. Thank you, Mr. Chairman.
    Let me begin by stating that I strongly support project 
labor agreements. Apparently, the bipartisan majority of the 
House of Representatives does as well. Because recently, during 
the debate on the job-killing spending bill that we passed, my 
colleagues on the other side of the aisle attempted to end all 
PLAs on public constructionsites across the country and that 
amendment failed on a tie vote in the House. If you do the 
math, you realize that would not have passed or would have not 
been prevented without Republican support in opposition to that 
amendment.
    PLAs play an important role for economic development in 
Iowa and across the country. They provide good-paying jobs for 
hard-working Americans. And now they are under attack, not just 
here, but also in my State.
    The truth is that PLAs have proven to be very cost-
effective. In the 1990's, in Dubuque, Iowa, the local building 
trades council negotiated private sector PLAs for nine sites. 
Four of these sites were for the Dupaco Community Credit Union. 
These projects were completed ahead of schedule and under 
budget. One of them is shown up on the screen.
    The President and CEO of Dupaco stated that ``building 
construction exceeded our expectation because it was finished 
30 days ahead of schedule and 10 percent under budget.'' I have 
a list here of 280 PLA projects in the Quad Cities that were 
completed either on time or ahead of schedule. Mr. Chairman, I 
ask unanimous consent to enter them into the record.
    Mr. Jordan. Without objection.
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    Mr. Braley. These projects include the Putnam Museum in 
Davenport, the St. Ambrose University science library, the 
Palmer Chiropractic College. And just recently, our Governor, 
Terry Branstead, issued an executive order banning PLAs on 
public works projects in Iowa, including an existing PLA in 
Cedar Rapids for the Cedar Rapids Convention Center, a city 
that was devastated by flooding 2 years ago when its entire 
downtown was underwater.
    Ironically, Mr. Chairman, the No. 1 supporter for this PLA 
project moving forward is the current mayor of Cedar Rapids, 
Ron Corbett, who used to be the Republican leader of our State 
Senate. After the executive order was issued, Mayor Corbett 
asked the Governor to consider using $15 million from a State 
jobs fund to finish the project. But our Governor refused the 
Mayor's request, and as a result, this enormously important 
economic development project is now on hold. Putting a work 
stoppage on this project is harmful to Cedar Rapids' community 
and to Iowa. If PLAs are banned in Congress, what is happening 
in Cedar Rapids will happen all over the country.
    That is why I urge my colleagues to continue opposing any 
efforts to end PLA funding.
    And now I want to talk about that PLA on the bridge in 
Minneapolis, which I happen to have in my hand. One thing we 
know is that this project finished early and under budget. That 
is correct, isn't it, Ms. Figg? It was completed under a PLA in 
only 11 months and for less than the $250 million earmarked by 
Congress. And the Transportation Secretary, Mary Peters, said 
it should not take a tragedy to build a bridge this fast in 
America.
    And I should point out, this PLA was entered into when 
George W. Bush was President. Isn't that correct?
    [No audible response.]
    Mr. Braley. So then Mr. Baskin, you brought up something I 
want to talk about, and you went off script in your opening, so 
I wasn't prepared for this, but you mentioned the Iowa Events 
Center, something I happen to know a great deal about. You 
said, when referring to these building projects, those did fall 
down, causing fatalities and untold damages. Do you remember 
saying that?
    Mr. Baskin. Yes.
    Mr. Braley. In fact, the Iowa Events Center did not fall 
down, did it?
    Mr. Baskin. Only a large crane, which killed a construction 
worker.
    Mr. Braley. The Events Center did not fall down, did it?
    Mr. Baskin. Part of the construction did, yes.
    Mr. Braley. Well, semantics. Certainly the building itself 
never fell down. And tragically, one worker, a 65-year old 
steel erector, was killed. And we know that on massive 
construction projects of this size, regrettably, fatalities are 
not uncommon, whether or not they are union contractors. Isn't 
that true?
    Mr. Baskin. Yes, we will agree that the safety level 
between union and non-union is roughly the same.
    Mr. Braley. And so one of the things that you talk about is 
the challenges that your group has filed to these PLAs. In 
fact, you filed a challenge in Iowa on that Events Center 
project, and the Iowa Supreme Court in a six to one decision 
upheld the right of that PLA to move forward, even though my 
State is a right to work State, isn't that true?
    Mr. Baskin. Well, I didn't, the local chapter did.
    Mr. Braley. The local chapter of the group you are here 
testifying on behalf of today filed that suit. It went all the 
way to our Supreme Court and they upheld this PLA.
    Mr. Baskin. Right, and as a result, there were cost 
overruns, construction defects, nearly 50 construction 
accidents and it was not a model project. There have been 
papers written on just that project and the problems that 
happened with it.
    Mr. Braley. And is it your testimony today that on massive 
construction projects built by non-union contractors, those 
problems you identified have never occurred.
    Mr. Baskin. No, but the risks----
    [Simultaneous conversations.]
    Mr. Braley. Mr. Chairman, my time is expired, I yield back.
    Mr. Baskin. If I might respond, the burden is on those who 
are seeking to discriminate. And the justification has been 
that PLAs are better somehow, and that PLAs don't have safety 
problems and that they don't have delays and all the things we 
just heard. And that is simply not the case. They do have these 
problems and then some.
    And so then what is the justification for discrimination, 
which they unquestionably have? That is our only point. And we 
are only talking about Government-mandated PLAs. We are not 
concerned here today with the private. What the private sector 
wants to do with their own money is for them to decide. 
Sometimes it is under coercion. We are not arguing about that.
    Mr. Braley. So is it your testimony today that the ABC is 
not opposed to private PLAs?
    Mr. Baskin. We are not, we stand for the proposition that 
private employers can decide how to spend their own money.
    Mr. Braley. All right, thank you.
    Mr. Jordan. I quickly recognize the ranking member, and 
then I want to get to the ranking member of the full committee.
    Mr. Kucinich. For unanimous consent, to submit to the 
record, from the Campaign for Quality Construction, testimony 
that says PLA do not discriminate against non-union contractors 
and workers.
    Mr. Jordan. Without objection it will be entered.
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    Mr. Jordan. But we come back to this point that Mr. Cooper 
raises, too. When the President of the United States tells the 
agencies they may require, that is not just any old citizen 
telling how an agency is going to make a decision. So this idea 
that somehow that is neutral I just don't think people buy that 
concept.
    The ranking member of the full committee, the gentleman 
from Maryland.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Belman, let me ask you this. In my district, we have 
some situations where I would guarantee you that African 
American male unemployment is like 65 percent. And I assume 
that a PLA would be helpful there. Do you think?
    Mr. Belman. A properly designed PLA that was sufficiently 
large could be used to move disadvantaged men and women through 
various stages of training to much better jobs than they 
currently fill.
    Mr. Cummings. And what happens so often in these 
neighborhoods is that folk come in and they do work right in 
front of their houses, and they're sitting on the sidelines, 
not having an opportunity to work. They come from everywhere. I 
see it all the time.
    And so a PLA, I take it, you could have provisions in there 
that would help with regard to training, so that they would be 
given an opportunity to use their tax dollars to take care of 
their families, learn a trade or, and then move forward in 
life. Has that been your testimony?
    Mr. Belman. In point of fact, most of the west coast port 
and other PLAs which have these training programs also have an 
effective local hire provision, which sets very clear goals for 
movement through pre-apprenticeship into apprenticeship 
programs. They are pretty thoroughly reviewed, and there is 
oversight by community group as well as by employers, the ports 
or other owner organizations in the building trades. And the 
reports that I have read and people I have talked to have 
indicated they have been very effective in this.
    And PLAs have an advantage over any other training program. 
Because they are connected, one problem with Government-
supported training programs it that they tend to not be 
connected to jobs at the end. You train people, they come out, 
there is not a job. For most of the PLA work, there is a job 
and there is a clear advancement, pre-apprenticeship, 
apprenticeship and then into journeyman status. All relatively 
high wage and solid benefits.
    Mr. Cummings. So in other words, these folks get an 
opportunity to participate in a process that then opens the 
door for opportunity. In other words, it is like an engagement 
and then hopefully a marriage.
    Mr. Belman. Yes, because the pre-apprenticeship programs, 
in particular, can do, there are people who this is the perfect 
job for. There are people who don't like working outside. If 
you are going to be a construction worker, some, figuring out 
whether you want to work outside is very good before we invest 
a lot of money in training. But that is very important.
    So it is not a guarantee, simply because you show up, that 
you are going to end up in a wonderful career. But for the 
right person, it opens up opportunities that otherwise don't 
seem to exist.
    Mr. Cummings. And so when you have, for example, the 
African American unemployment rate consistently, consistently 
almost double the general unemployment rate, and if you are 
talking about creation of jobs, and you are talking about long-
term jobs, and you are not just talking about jobs, but you are 
talking about careers, and you are talking about people 
contributing back into society, a PLA may not be a bad idea if 
it is structured right and if it has the proper oversight. Is 
that right? Is that a reasonable statement?
    Mr. Belman. That is very reasonable. An example would be 
the San Jose school system, which used a PLA as a basis for 
establishing a construction academy. They were rebuilding a 
high school. It has been very successful. Indeed, the 
construction academy and the linkage from high school students 
taking courses and then doing internships over the summer and 
having privileged access to apprenticeship opportunities has 
continued, even though the PLA has expired. And indeed, the 
construction industry is so enthused about getting very good 
students, and into white collar as well as blue collar jobs, 
that they have now started a training program for high school 
math teachers, so they can take their experiences in 
construction back to the classroom and encourage better 
students to think about construction careers.
    Mr. Cummings. So it is about opportunity?
    Mr. Belman. Yes.
    Mr. Cummings. I yield back.
    Mr. Jordan. I thank the gentleman. We do have to get to a 
vote.
    One last question, and it may be better for the second 
panel. Mr. Biagas, I believe, mentioned in his testimony only 6 
percent of the construction firms in Virginia, maybe it is 
northern Virginia, are union firms. Is that right, Mr. Biagas?
    Mr. Biagas. Yes, sir.
    Mr. Jordan. Do we have any data on what percentage of 
Federal projects are awarded to, what is the percentage awarded 
to union and non-union? Do we have any of that data? To me, 
that seems to be the central question. If only 6 percent are 
union, if they are getting the vast majority of the contracts, 
then that shows you how skewed the system is. Do we have any of 
that data?
    Mr. Biagas. I don't have that data with me, Congressman.
    Mr. Jordan. Mr. Belman.
    Mr. Belman. No.
    Mr. Jordan. We are going to ask GSA in the next panel.
    Mr. Belman. But I would be fascinated to learn.
    Mr. Baskin. And it is a moving target, because the PLA 
program has not been fully implemented yet. We are fighting as 
hard as we can to stop it, and we are calling for help from 
Congress.
    Mr. Jordan. I understand that.
    Thank you all very much. We have to recess for a vote on 
the floor.
    [Recess.]
    Mr. Jordan. We will welcome our second panel of witnesses. 
I don't know if any of you were here for the first round, but 
it is the practice of the committee to swear our witnesses in. 
So if you would just stand up and raise your right hands.
    [Witnesses sworn.]
    Mr. Jordan. Let the record show that all witnesses answered 
in the affirmative.
    You guys know the game. Well, I should introduce you, I 
apologize. Mr. Gordon is the Administrator for the Office of 
Federal Procurement Policy, Executive Office of the President. 
The Honorable Robert Peck is the Commissioner for Public 
Buildings, U.S. General Services Administration. And the 
Honorable David Michaels is Assistant Secretary for 
Occupational Health and Safety, U.S. Department of Labor.
    We thank each of your gentleman for your public service and 
your willingness to be in front of the committee today. We will 
probably, as you know, have Members join us, we hope so, but we 
want to hear your testimony. So let's go right down the row. 
Mr. Gordon, you are up first.

   STATEMENTS OF DANIEL I. GORDON, ADMINISTRATOR FOR FEDERAL 
PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET; ROBERT A. 
  PECK, COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL 
    SERVICES ADMINISTRATION; AND DAVID MICHAELS, PHD., MPH, 
      ASSISTANT SECRETARY, OCCUPATIONAL SAFETY AND HEALTH 
            ADMINISTRATION, U.S. DEPARTMENT OF LABOR

                 STATEMENT OF DANIEL I. GORDON

    Mr. Gordon. Thank you, Mr. Chairman.
    Mr. Chairman, other members of the subcommittee, I 
appreciate the opportunity to appear before you today to 
discuss the regulatory implementation of Executive Order 13502, 
which governs the use of project labor agreements, PLAs, in 
Federal construction contracts.
    I was pleased to sit in and listen to the first panel, with 
the diverse views that were expressed there, and to hear the 
Members' questions. I will be happy to followup with any 
questions you want to raise with me.
    As Administrator for Federal Procurement Policy, I am 
responsible for overseeing the development of Government-wide 
contracting rules and policies and ensuring that those rules 
and policies promote economy and efficiency. This afternoon, I 
would like to briefly describe the steps my office has taken to 
shape the Federal Acquisition Regulation [FAR], as we usually 
call it, rule implementing the Executive order.
    Let me first, though, address a misperception, or a 
misconception about what the FAR rule says about the use of 
PLAs. Contrary to what the subcommittee members heard from some 
people earlier this afternoon, the FAR rule does not require 
the use of PLAs. Like the Executive order, the FAR rule gives 
each contracting agency the discretion to decide for itself on 
a project by project basis whether use of a PLA will in fact 
promote economy and efficiency on a specific construction 
contract.
    The FAR rule calls PLAs, and I am quoting from the rule, 
``a tool that agencies may use to promote economy and 
efficiency in Federal procurement.'' In offering PLAs as a tool 
to the contracting agency, the FAR rule on PLAs is similar to 
many other provisions of the Federal Acquisition Regulation. 
For example, the FAR lets contracting agencies decide, based on 
the specifics of their needs and their circumstances, whether 
they should purchase through the Federal supply schedule or on 
the open market, whether they should seek bids with price as 
the only evaluation criterion, or rather, run a competitive 
procurement with other selection factors, such as past 
performance or technical excellence, in addition to price.
    The FAR does not dictate to our acquisition professionals 
which choices to make. It gives them the tools to make the 
choices so that they can tailor a procurement to an individual 
agency's specific requirement. That tool kit approach and the 
flexibility that comes with it lie at the very heart of our 
ability to get the best value for every taxpayer dollar that we 
spend, whether we are buying lawnmower services or war planes 
for the Air Force.
    Our approach to PLAs is no different. We have structured 
the FAR rule to create a process where decisions are made on a 
case by case basis. The FAR rule sets out factors that an 
agency may decide to consider. But it doesn't dictate the 
factors. It doesn't prohibit agencies from considering other 
factors.
    Among the factors that are named in the FAR are whether the 
project will require multiple construction contractors and/or 
subcontractors employing workers in multiple crafts or trades, 
and whether completion of the project will require an extended 
period of time.
    As with other FAR rules, though, the PLA rule sets 
boundaries. Most significantly, the agency may require a PLA 
for a specific project only, only if it decides that doing that 
will advance the Government's interest in achieving economy and 
efficiency in Federal procurement.
    But equally importantly, with respect to the content of any 
PLA created pursuant to the FAR rule, and this is particularly 
relevant in light of what the subcommittee heard from the first 
panel, the FAR rule requires that any PLA allow all firms to 
compete for contracts and subcontracts without regard to 
whether they are otherwise parties to collective bargaining 
agreements. This mandate ensures that if an agency decides that 
they should be using a PLA, it is done consistent with the 
principle of open competition, a bedrock of our Federal 
procurement system, so that all interested bidders are given an 
opportunity to have their offers considered by the Government.
    We appreciate that taxpayers would not benefit from a rule 
that requires the use of PLAs regardless of circumstances. But 
we also don't think taxpayers would benefit if agencies were 
prohibited from taking advantage of opportunities where a PLA 
could help them achieve or increase efficiency and timeliness.
    With these thoughts in mind, my office intends to continue 
working with the agency, with the agencies across the executive 
branch, to facilitate the sharing of experiences and best 
practices for the consideration and appropriate use of project 
labor agreements in the Federal marketplace.
    I will be delighted afterwards to answer any questions the 
subcommittee members have. Thank you.
    [The prepared statement of Mr. Gordon follows:]

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    Mr. Jordan. Thank you, Mr. Gordon.
    Mr. Peck.

                  STATEMENT OF ROBERT A. PECK

    Mr. Peck. Thank you, Mr. Chairman and other members of the 
subcommittee.
    I too heard the first panel, and I am happy to be here to 
set the record straight and discuss GSA's measured business 
approach to the implementation of project labor agreements on 
our construction contracts. We share with you an interest in 
seeing that our construction projects are finished as 
expeditiously as possible and with the best value and cost to 
the American taxpayer.
    A PLA is a proven tool to help provide structure and 
stability to a project, especially on certain large projects. 
The private sector uses PLAs also for a variety of construction 
projects, similar to those GSA manages. PLAs are also used at 
the State and local levels for a wide array of construction 
projects varying in size and scope.
    PLAs have been used in all 50 States and the District of 
Columbia. They can help reduce risks associated with wage 
stability, avoidance of work stoppages, increase labor 
availability and project-specific coordination of work rules. 
PLAs can also include provisions that promote career 
development through valuable job training for construction 
workers.
    GSA uses PLAs when they promote economy and efficiency in 
Federal procurement. Executive Order 13502 and the FAR 
encourage executive agencies to consider requiring contractors 
to use PLAs on projects totaling at least $25 million. As Mr. 
Gordon said, the Executive order does not mandate that Federal 
agencies require PLAs, but encourages the consideration of 
PLAs.
    Our procurement process provides for the consideration of 
PLAs. We allow contractors to submit a proposal with a PLA, 
without a PLA or both. We evaluate these proposals on a project 
by project basis. If we accept a PLA proposal, the awardee is 
required to execute a PLA in accordance with the Executive 
order and the FAR. In GSA's contracts, the PLA is an agreement 
between the contractor and the labor organization, rather than 
between GSA and the labor organization.
    As we typically do on our major construction projects, GSA 
selects the proposal with the best value to the Government by 
weighing a number of technical factors against cost. A PLA 
recently has been included as one of those technical factors. I 
should note that the other technical factors for many more 
points are past performance, key personnel and a management 
plan which often includes the requirement of their being a plan 
to include small business.
    Proposals with a PLA receive 10 percent, 10 of the possible 
100 points for technical evaluation. If you consider that then 
the technical factors as a whole are balanced against price on 
the other hand, you will see that the PLA in and of itself is 
far less than 10 percent, more like probably 5 or 6 percent of 
total award. And we don't really quantify them that way, which 
I will be happy to explain.
    We award to contractors who usually work with labor 
organizations, and we also award to contractors who do not 
usually work with labor organizations.
    Shortly after the Executive order was signed, GSA received 
$5\1/2\ billion through the American Recovery and Reinvestment 
Act of 2009. These funds, which were used principally to help 
modernize and green our federally owned inventory, provided GSA 
the opportunity to conduct a PLA pilot program. I am proud to 
tell you today that in our spending on the Recovery Act so far, 
we estimate we have created 16,000 jobs in the American 
construction industry.
    For the pilot PLA program, GSA selected 10 projects with 
budgets of more than $100 million. The selected projects cover 
seven States and the District of Columbia. Of the 10, 7 ended 
up with PLAs and three did not. From our comparisons, in most 
instances, it appears that there has been little to no cost 
differences, although I will be the first to tell you, in some 
cases, that is hard to tell.
    Our experience in this pilot program has shown us that our 
bidding process has not hindered competition. In all of our 
projects, we received sufficient bids to ensure adequate 
competition and the best value to the American taxpayer. We 
typically receive between three and eight offers for our 
projects, for the pilot projects.
    Through the construction of these projects, GSA plans to 
assess the use of PLAs for future implementation of best 
practices and updates to our policies. This pilot program has 
enabled GSA to obtain real market data regarding the impact of 
PLAs on competition. We have recently reached out to 
contractors and union officials to hear their feedback on our 
pilot projects in order to develop ways to further improve our 
PLA procurement process.
    Mr. Chairman and members of the subcommittee, this 
concludes my prepared statement. I am of course happy to answer 
any questions.
    [The prepared statement of Mr. Peck follows:]

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    Mr. Jordan. Thank you, Mr. Peck.
    Mr. Michaels.

                  STATEMENT OF DAVID MICHAELS

    Mr. Michaels. Chairman Jordan, Ranking Member Kucinich, 
members of the subcommittee, thank you for inviting me to 
testify about the important work of the Occupational Safety and 
Health Administration, and to listen to your suggestions about 
how we can improve the approaches we take to fulfill the 
important mission given to us by Congress, protecting the lives 
and health of American workers.
    In the four decades since the OSHA Act was enacted, the 
Nation has made dramatic progress in reducing work-related 
deaths and injuries. Since 1970, workplace fatalities have been 
reduced by more than 65 percent. Reported occupational injury 
and illness rates have decreased by over 67 percent since 1973.
    But far too many preventable injuries and fatalities 
continue to occur.
    I am also glad that you chose the important issue of 
construction safety. The safety of construction workers is one 
of OSHA's top concerns. Construction is among the most 
dangerous industries in the country, and construction 
inspections comprise 60 percent of OSHA's total inspections.
    In 2009, preliminary data from the Bureau of Labor 
Statistics indicate that there were 816 fatal, on the job 
injuries to construction workers, more than in any other single 
industry sector, and nearly one out of every five work-related 
deaths.
    But we are talking about much more than just statistics 
here. We hear about these tragedies almost every day in the 
news. Almost every construction worker that dies leaves behind 
a family whose lives are devastated. A breadwinner's serious 
injury can throw a family permanently out of the middle class.
    It is clear that OSHA enforcement and regulations save 
lives, that many workers are alive today because of OSHA's 
activity. Since its creation 40 years ago, OSHA has relied on 
the same basic strategies to ensure the safety of American 
workers. For those many employers who want to do the right 
thing, we offer compliance assistance and cooperative programs. 
For those employers who endanger workers by cutting corners on 
safety, we believe in strong enforcement.
    The ultimate goal of OSHA's enforcement is deterrence. 
Using penalties is one way to change employer behavior, with a 
goal of preventing injuries, illnesses and deaths before they 
occur. Strong enforcement not only benefits workers, but it 
also levels the playing field for the vast majority of 
employers who play by the rules and who make the health and 
safety of their employees a priority.
    Failing to prevent injuries, illnesses and fatalities is a 
major burden on the American economy. Every year, the most 
disabling injuries cost American employers more than $53 
billion, over $1 billion a week in workers compensation costs 
alone. Indirect costs to employers, workers and their families 
can double these costs.
    One of the primary duties that Congress gave OSHA was to 
issue standards to protect workers from these costly injuries 
and deaths. OSHA goes through an extensive public consultation 
process before issuing new standards. We conduct sophisticated 
reviews of the economic impact of proposed regulations. We hold 
stakeholder meetings and online Webinars. And we listen to the 
input of small employers through the Small Business Regulatory 
Enforcement Fairness Act, that is SBREFA panels, for major 
regulations. We then hold public hearings and we solicit 
extensive written comments.
    Finally, all of our significant regulatory proposals and 
final standards are extensively reviewed by the Office of 
Management and Budget. I will go off script here, Mr. Baskin 
referred to a tragedy in Iowa in 2006, where a worker was 
killed in a crane collapse. At that point, OSHA was working on 
a new crane standard, started in 2000. And only last year, in 
November 2010, did our new crane standard finally go into 
effect after all those multiple opportunities for public input. 
We now have a strong crane standard which we know will prevent 
deaths like that from occurring.
    OSHA is a full Service organization. Our strong compliance 
assistance programs operate under the belief that every 
employer should have access to the knowledge he or she needs to 
provide a safe workplace, and every employee should be award of 
their basic rights under the law and the hazards they face. In 
addition to the numerous fact sheets, guidance documents and 
online tutorials that can be found on OSHA's Web site, our 
onsite consultation program provides free workplace safety and 
health evaluations and advice to small businesses that cannot 
afford to hire their own safety and health experts. This 
program is completely separate and independent from OSHA's 
enforcement program.
    Last year, the consultation program conducted over 30,000 
consultation visits, more than 9,000 in small construction 
companies. OSHA also has compliance assistance specialists in 
every area office.
    OSHA's strong commitment to compliance assistance is 
evidenced by the President's request in his fiscal year 2011 
and fiscal year 2012 budgets to increase funding for this 
onsite consultation program.
    Finally, I know this committee is interested in why OSHA 
has temporarily withdrawn its musculoskeletal disorder column 
proposal in order to solicit more comments, and why we withdrew 
our proposed noise reinterpretation in order to take a more 
comprehensive approach to preventing work-related hearing loss. 
In brief, these actions stand as an example of this 
administration's willingness to respond to public concern about 
our programs.
    I will be glad to answer any questions about these actions 
or any other OSHA initiatives. Thank you.
    [The prepared statement of Mr. Michaels follows:]

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    Mr. Jordan. Thank you, Mr. Michaels, and I do want to get 
to that in a few minutes here, on the noise regulation.
    But let me start with Mr. Peck. Mr. Peck, what percent of 
Federal contracts come through your agency? Do you know? And 
what is the overall dollar amount that you award in 
construction contracts? Do you have that data?
    Mr. Peck. I don't have the number or percent of even 
construction projects in the Federal Government. I can tell you 
in a typical year, major construction, depending on how much 
money Congress gives us in our capital program, we are 
somewhere between usually a billion and a billion and a half if 
you include new construction and major alterations.
    Mr. Jordan. Mr. Gordon in his testimony talked about the 
flexibility that the FAR rule has and provides for agencies and 
how that is implemented. Isn't it true that GSA has decided 
that the project labor agreement is an important part of the 
consideration in awarding contracts?
    Mr. Peck. Well, as I said, we have actually run a pilot 
program on 10 of the projects that we had under the Recovery 
Act, that were over $25 million. That is 10 out of 57 projects 
that were only over $25 million. As I said, we are using them 
as a test to see whether and how we should implement PLAs on 
our projects. So that is our record to date, sir.
    Mr. Jordan. And what have you found?
    Mr. Peck. Well, as I said, so far, you have to know that we 
don't have, well, the products that we have awarded on, the one 
that was awarded the first, is a little over a year under 
construction. So we have not completed the project yet. So it 
is hard to make a determination there. What we can tell you is 
that on all of our PLA bids, we got adequate competition, the 
same kind of competition we get on most construction projects.
    Mr. Jordan. How do you weight an encouraging of PLAs? How 
do you weight that and preference that in the bid process?
    Mr. Peck. Again, let me just reiterate, on the 10 projects 
that we have done a pilot on, we included as one of the 
technical factors in our bid considerations a PLA and a 
willingness of a contractor to offer us a contract with a PLA. 
And we balance that, we take that as 10 points out a 100 on the 
technical factor and balance that----
    Mr. Jordan. So 10 percent----
    Mr. Peck. No, sir, and balance that against the price that 
we are offered. So in essence, we are trying to let the market 
tell us how it values the use of a PLA.
    Mr. Jordan. I guess I am not following. You are weighting 
it 10 percent? It seems to me you are saying, you are weighting 
it 10 percent but we are not.
    Mr. Peck. That is correct.
    Mr. Jordan. Explain that, then. Maybe that is why I am 
confused.
    Mr. Peck. Someone on the first panel suggested that if 
someone bids $100, we are taking 10 percent off the top of that 
for a PLA bid. And that is absolutely not true.
    Mr. Jordan. Well, then, how is the 10 percent defined?
    Mr. Peck. I will tell you. The Government does it on 
construction projects. Some time ago we all realized that just 
going low bid, while it sounds good, hardly any of us buy 
things that way. And the Government, when we used to do what we 
called low bid, we would often find ourselves with a low bidder 
who couldn't carry out the project for that low bid, and we 
ended up often not getting that value. And we would end up 
having to take the project to someone else, or they would file 
delay----
    Mr. Jordan. Well, let me ask it this way, then. Someone who 
was not willing to enter into a PLA, how can they make up for 
the 10 percent you weight for those who are willing to enter 
into a PLA?
    Mr. Peck. Well, in fact, on 10 of the pilots that we have 
run, of the 10, three came, we have awarded three of them 
without PLAs. So it seems quite clear that you can, under our 
process, come in with a non-PLA bid and win it.
    Mr. Jordan. Well, that brings me to the question I asked 
the last panel. According to Mr. Biagas, and I understand there 
is a variation in size, and some union contractors are bigger, 
and there is a size component when you are doing this 
evaluation project this large, I get that. But he indicated 6 
percent of construction companies in Virginia are union. And 
yet you are telling me 70 percent of the, so 94 percent aren't. 
And you are telling me 70 percent of the 10 you have studied 
were awarded to the 6 percent out there, is that right?
    Mr. Peck. Well, but there is a----
    Mr. Jordan. Is that right?
    Mr. Peck. No, sir. No, that is not correct. Because we did 
not award, awarding a PLA does not mean you are awarding a 
contract to a union construction company, to a closed shop 
company. We are awarding the PLAs to open----
    Mr. Jordan. In the majority of cases, I would assume in 
most cases it does, based on Mr. Baskin's testimony in the last 
panel.
    Mr. Baskin. That is not, well, that is----
    Mr. Jordan. He said most of his members won't enter into a 
PLA because of what it means for their work force.
    Mr. Peck. Well, I couldn't quite tell what he was talking 
about. I can just tell you that we have the facts of who we 
have awarded to. And in this market----
    Mr. Jordan. You just told me that 70 percent were PLA-
awarded projects.
    Mr. Peck. Yes, sir, in this market.
    Mr. Jordan. OK, so of this 70 percent, how many were union, 
how many were non-union? Do you have that fact?
    Mr. Peck. I don't, but I can----
    Mr. Jordan. That would be helpful based on what you are 
telling me.
    Mr. Peck. I can tell you, of the two that have been awarded 
in this market, they were both to firms that, three, I am 
sorry, all three were to firms that are not union contractors. 
This area does not have very many closed, if any closed shops, 
any more.
    Mr. Jordan. Well, we knew that. Mr. Biagas told us that in 
the first panel.
    Mr. Peck. That is right. So we awarded contracts with PLAs 
to non-union contractors. Awarding a PLA does not mean you are 
awarding a contract to a union contractor.
    Mr. Jordan. Let me ask you one more, and I do want to get 
the ranking member, and I apologize. We will give the ranking 
member an additional minute as well.
    On your list of PLA/non-PLA projects, it identifies the GSA 
headquarters building as a no-PLA. Wasn't this originally 
awarded as a PLA project?
    Mr. Peck. Yes, it was.
    Mr. Jordan. And so what happened?
    Mr. Peck. Well, as I said, we allow, we ask, we awarded to 
the contractor who said he could get a PLA. In the end, after 
we awarded, he was not able to reach agreement with the union. 
So we issued a notice to proceed without the PLA. I think it 
shows our flexibility. We are not hell-bent for----
    Mr. Jordan. But it also raises the question, did it 
discriminate, because you initially awarded it, and you said he 
could be, enter into a PLA agreement, and his competitor 
bidding, who is not willing to enter into a PLA agreement, 
i.e., a non-union construction firm, did they get prejudiced in 
the bid process, because now obviously the one who said he was 
going to do it and is not doing it still has the contract? That 
is probably an important question that the taxpayers want to 
know the answer to.
    Mr. Peck. That is a fair question, and I would be happy to 
provide for you in the record an analysis of who bid how on 
that project. I don't believe in this case you will find that 
to be the--I don't think you will find that to be the case in 
the instance of our building.
    Mr. Jordan. OK, that would be very helpful for the 
committee.
    The ranking member is recognized.
    Mr. Kucinich. Thank you very much, Mr. Chairman.
    Listening to Mr. Peck's testimony and your questions, where 
it is clear that PLAs are used for jobs that involve unions and 
some that are not unions, Linda Figg, who was a witness on the 
previous panel, I guess was somehow involved in creating this 
beautiful brochure about the new I-35 bridge. And as I asked 
her in the questions, she responded that this was a project 
labor agreement.
    Mr. Peck. Yes.
    Mr. Kucinich. I didn't ask her if it was union or not, just 
said it was a project labor agreement, she said yes.
    So Commissioner Peck, as you know, in awarding a public 
contract, it is of the upmost importance that taxpayers are 
getting the best value for their investment. In fact, in your 
written testimony, you state that in selecting a contractor for 
award, GSA uses the best value method of award, which takes 
into consideration both cost and technical qualifications.
    Can you elaborate on the best value method?
    Mr. Peck. Yes, thank you. As I said, it is not a low bid 
method, because it allows us to take quality into account. I 
always say to people, if cost was the only factor, we would all 
be driving Yugos. People take quality into account.
    And what this allows us to do is that we have a panel of 
Government experts who take a look at the submissions that 
contractors make. And they are required to submit such 
technical factors as their past performance on Government and 
other projects, the key personnel they are putting on a 
project, their plan for performance on the project, which as I 
said could include a small business plan, and we then decide 
who on technical factors is the best.
    Then we look at the bids that they have given us, and our 
panel makes a decision about whether the, whether, the 
technical factors outweigh the dollar bid or vice versa.
    Mr. Kucinich. But we have heard witnesses here today say 
that PLAs drive up the cost premiums of public projects. And in 
your experience, have you seen that PLAs have a significant 
impact on the cost premium of a specific project?
    Mr. Peck. I can answer this in a, it is a great question.
    Mr. Kucinich. Can you give me a yes or no?
    Mr. Peck. No, sir. Because that would be, it would be 
misleading to give a yes or a no. I hope I will give you a 
straight answer. On a number of our projects, we got PLA and 
non-PLA bids that were exactly the same. On two of our 
projects, we paid more, the bid with the PLA was more than the 
bid without. But on at least, but I have, but I say again, some 
of the selections are made not just on whether there is a PLA 
or not. But as near as we can tell, isolating it, we can tell 
on two products, we paid some kind of, we paid more for the 
PLA. And our panel decided in essence, or we decided that there 
was a value to that.
    Mr. Kucinich. What was the value?
    Mr. Peck. In both cases, we thought that the PLA itself, on 
a project that was a complex, long-term project, and this is 
when people usually find PLAs to be of most value, it was worth 
spending a little more. It is the reason that you will find----
    Mr. Kucinich. That sounds nebulous. Where was the value? Do 
you remember?
    Mr. Peck. Sure. The value, well, the value of a PLA is 
that, particularly where you need highly skilled labor, you 
have a steady source of labor. You know----
    Mr. Kucinich. OK, that is what I want to get at. Get 
specific, OK.
    Mr. Peck. And there are, we definitely are trying to 
guarantee against work stoppages where there are projects on 
which there are lots of different trades involved. Even on 
projects, I have to say this, even on projects that don't have 
PLAs that you might say are awarded to a non-union contract, 
there are trade crafts in which people who work for the non-
union contractor are members of unions. And so it is useful on 
a lot of projects to have an agreement with all the labor 
unions about how they are going to coordinate vacation time, 
hours, overtime, all those sorts of issues. And on those 
projects, as I said, we found that there was value.
    Mr. Kucinich. I want to go over one other point here, Mr. 
Chairman. Mr. Peck, some of the witnesses on the first panel 
expressed concern that the use of PLAs inhibits members of the 
construction industry from competing for Government contracting 
opportunities. Now, in your written testimony, Mr. Peck, you 
state ``By using our optional bidding process, GSA does not 
discriminate against contractors. GSA awards to contractors who 
work with labor organizations, as well as contractors who work 
without such organizations.''
    Have you found that PLAs limit competition for Government 
contracts?
    Mr. Peck. Not that we have seen.
    Mr. Kucinich. Can you elaborate on that, how GSA has found 
that PLA bidding process has not hindered competition?
    Mr. Peck. Yes, sir. On the, as I said, on the 10 pilots 
projects that we have had, we have gotten between three and 
eight bids. And that is about the same number we get typically 
on our large construction projects. Because we can't have mom 
and pop firms as our general contractors. We certainly have 
small firms as subcontractors to those. But that is about the 
competition that we typically get on our construction projects.
    Mr. Kucinich. Thank you, Mr. Chairman.
    Mr. Jordan. I Thank the ranking member.
    We recognize the gentlelady from New York, Ms. Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman, and thank you to our 
members of the panel this afternoon. Thanks for bearing with us 
through the vote.
    Mr. Peck, my first question goes to you, and it is a 
followup to the chairman's question. You mentioned in your 
opening statement that some contracts are awarded to union 
shops and some are not. Now, just to clarify, if my question is 
the same as the chairman's, can you give us a number as to how 
many go to a union shop and how many go to a non-union shop?
    Mr. Peck. Again, of the 10 projects that we have awarded, 
is that what you are talking about?
    Ms. Buerkle. Overall.
    Mr. Peck. That is a number I will have to provide you for 
the record. But as the committee has noted, the vast majority 
of major, of general contractors in this country are not union 
shops.
    Ms. Buerkle. The next question is to Mr. Michaels, and 
welcome. I must say, as I interview and talk to a lot of the 
small businesses and businesses in my district, OSHA tends to 
be one of the impediments and one of the obstacles that they 
are always trying to get around. So I hope that we can flesh 
out some of the issues today. We would like to make you more 
user friendly for our business people. Because they are the job 
creators, and that is what this committee is about.
    You mentioned in your opening statement about compliance 
and the compliance assistance that OSHA offers to businesses. 
Now, my understanding is that OSHA just recently cut the budget 
for the voluntary protection program. And it seems to me that 
would indicate that you are moving away from compliance and 
more to something punitive when it comes to enforcement.
    Mr. Michaels. That is actually not true. There was a 
proposal to do that. But the current administration proposal is 
to maintain the VPP at the same funding levels. And I have made 
a commitment to the program, in fact, I think if you look at my 
particular record, I have a real commitment to the program. I 
ran that VPP program when I was at the Energy Department some 
years ago. So I am doing what I can to make sure that program 
thrives.
    But beyond VPP, because a relatively small number of 
companies, and very few small companies, we are trying to push 
those, the basic concepts that the VPP has embraced, down to 
all employers, especially the small employers. So we have 
tremendous amount of compliance assistance materials, we have a 
Web site that gets 183 million hits a year. We have information 
for employers. And we have this program that we fund through 
the States, an onsite free consultation program. We find that 
many small employers don't know about it. So for example, in 
New York State, it is run by the New York State labor 
department, but it is independent from OSHA, we just fund it.
    So we really like to encourage Members, when they hear from 
their constituents, to say, have you looked at this program to 
get some free help, so you can essentially have your hazards 
abated before OSHA comes in, or before someone is hurt.
    Ms. Buerkle. Thank you.
    Mr. Peck, my last question is for you in the time that I 
have left. Has GSA ever conducted a study that looks at these 
PLA agreements and determines the impact, whether it is price-
wise or any other wise, in the benefit or the not so good PLA 
contracting?
    Mr. Peck. Ms. Buerkle, we have not conducted a study of 
their effectiveness throughout the course of a construction 
project, because these are new to us. We have just begun 
awarding them. We are tracking the projects as they go forward 
to completion. They take a couple of years to complete. At the 
end of that, we hope to have some good data on whether they 
provided us the benefits that we thought they would.
    Ms. Buerkle. So there was never a study done specifically 
on the Lafayette Federal Building, or the Department of 
Homeland Security at St. Elizabeth's campus in Washington?
    Mr. Peck. No, ma'am, I am sorry. We conducted a study, we 
began a study in 2009, I believe it was, to see, that looked 
forward to complying with the Executive order before the FAR 
was done. We started to look, market by market, at the pilot 
areas that we were looking at. For example, we were doing a 
project in Cleveland, we were doing a project in Denver. And we 
did have a contractor look at those labor markets to see if 
they could come up with a formula that would tell us how we 
could, on a project by project basis, evaluate the PLAs.
    Ms. Buerkle. First of all, if you could provide that study 
to the committee, I would appreciate that.
    Mr. Peck. We will do that.
    Ms. Buerkle. But beyond that, can you just disclose what 
the findings of that study showed?
    Mr. Peck. On all the projects?
    Ms. Buerkle. On those two that I cited.
    Mr. Peck. It was Lafayette and?
    Ms. Buerkle. It was Lafayette and Department of Homeland 
Security at St. Elizabeth's campus.
    Mr. Peck. I do not recall on the St. Elizabeth's campus, so 
I will provide that for the record.
    On Lafayette, the study, which, well, we didn't quite 
complete, did question whether a PLA would be valuable on that 
project.
    Ms. Buerkle. Very good, thank you so much.
    Mr. Peck. Yes, ma'am.
    Mr. Jordan. The gentleman from Pennsylvania, Mr. Kelly.
    Mr. Kelly. Thank you, Mr. Chairman.
    My question goes to Dr. Michaels. I am in a private 
business, so I have dealt for years with OSHA. I was a little 
bit confused. In your written testimony, there is a statement 
in there that the fines have not been increased since 1990. Is 
that----
    Mr. Michaels. Yes. Congress limited our fines. The maximum 
level for a fine, for a serious violation, is $7,000. We have 
some discretion within that $7,000 to reduce the level of the 
fine, which we do on the basis of being a small employer, 
history of lack or presence of OSHA violations, and good faith. 
But that $7,000 maximum is not inflation-adjusted and hasn't 
been changed in almost 20 years, actually in 20 years.
    Mr. Kelly. So the figure that I was looking at, the average 
OSHA fine for a serious violation in 2010 was only around 
$1,000?
    Mr. Michaels. That is correct. I know, it is shocking, 
isn't it. I sign letters for a fatality investigation where the 
fine is $2,400. In fact, the average fine last year, in 2010, 
for a fatality, for a violation in connection to a fatality, 
was $4,000. It is quite small.
    Mr. Kelly. I am trying to understand, though, who defines 
what is serious and not serious?
    Mr. Michaels. Serious, we have an extensive field 
operations manual. Serious is that the hazard could result in 
death or serious bodily harm. So certain violations are not 
serious, and if a serious violation where someone could be 
killed or hurt could get up to a $7,000 fine. Although it is 
very rare that we for any violation issue a $7,000 fine.
    Mr. Kelly. So part of the determination, did I hear you 
say, the history of the company, its safety record, and the 
size?
    Mr. Michaels. We always discount for a small employer, yes.
    Mr. Kelly. And the other thing, if I heard you correctly, 
did you tell me that the voluntary protection program is still 
in effect, and is not going to be cut?
    Mr. Michaels. It hasn't, in our fiscal year 2010 budget, it 
is protected. We are now in the continuing resolution, where we 
continue at our 2010 levels. In the President's 2012 proposed 
budget, it is maintained at that level as well. And we actually 
asked for an increase in the funds for consultation for small 
employers.
    Mr. Kelly. OK, well, I hope you continue that. Being a 
small employer myself, it is nice to be involved. I don't think 
there is anybody out there who runs a business who thinks, you 
know what? I am going to operate unsafely and maybe make a 
couple extra dollars but put my people at risk. I don't know of 
anybody in business who does that. I have worked for years with 
OSHA on a lot of different things. While we may not think it is 
burdensome and over-regulating, I have to tell you, from the 
guy that has to write the check, sometimes it makes no sense to 
me.
    I have a body shop. OSHA came in, and made me put a railing 
around the top of the paint room. And my question was, how in 
the world would anybody even get up there? And they said, that 
is not the problem. There is enough space between the top of 
your paint room and the ceiling that somebody could get up 
there and possibly fall.
    So I think the intention of all this is to do a good job. 
It is the unintended consequences of some of this. And 
depending on who it is that comes to your store, they don't all 
look through the same lens as maybe you think they do. I 
appreciate your being here today and thank you.
    I yield back my time, Mr. Chairman.
    Mr. Jordan. I thank the gentleman from Pennsylvania.
    We will now go to the ranking member, the gentleman from 
Maryland, Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman. I 
appreciate your calling this hearing today, and part of the 
title of the hearing, as we were understanding it, was to 
address the OSHA standards.
    On the first panel, we had an industry representatives, 
some of which the on the record identified OSHA standards as 
being impediments to job creation and business. But a little 
bit earlier, Ms. Speier submitted for the record a letter from 
a woman named Tammy Miser. I would like to use my time to make 
sure that her voice is heard.
    I would like to read excerpts from a statement submitted by 
her, Ms. Miser of Kentucky, who lost her brother in a factory 
explosion. I just want to read this because it is very 
chilling, particularly with the gentleman just talking about 
OSHA.
    It says, ``My brother, Shawn Boone, worked at the Hayes 
Lemmertz plant in Huntington, Indiana, where they made aluminum 
wheels. The plant had a history of fires, but workers were told 
not to call the fire department. My brother and a couple of co-
workers went in to relight a chip melt furnace. They decided to 
stick around a few minutes to make sure everything was OK, and 
then went back to gather tools. Shawn's back was toward the 
furnace when the first explosion occurred. Someone said that 
Shawn got up and started walking toward the doors when there 
was a second and more intense blast. The heat from the blast 
was hot enough to melt copper piping.
    Shawn did not die instantly. He lay on the floor smoldering 
while the aluminum dust continued to burn through his flesh and 
muscle tissue. The breaths that he took burned his internal 
organs and the blast took his eyesight. Shawn was still 
conscious and asking for help when the ambulance took him away. 
We drove 5 hours to Indiana, wondering if it really was Shawn, 
hoping and praying that it wasn't. This still brings about 
guilt, because I would not wish this feeling on anyone. We 
arrived only to be told that Shawn was being kept alive for us. 
The onsite pastor stopped us and told us to prepare ourselves, 
adding that he had not seen anything like this since the war. 
The doctors refused to treat Shawn, saying even if they took 
his limbs, his internal organs were burned beyond repair. This 
was apparent by the black sludge they were pumping from his 
body.
    I went into the burn unit to see my brother. Maybe someone 
who didn't know Shawn wouldn't have recognized him. But he was 
still my brother. You can't spend a lifetime with someone and 
not know who they are. Shawn's face had been cleaned up. It was 
very swollen and splitting, but he was still my Bub. My family 
immediately started talking about taking Shawn off the life 
support. If we did all agree, I would be ultimately giving up 
on Shawn. I would have taken his last breath, even if there was 
no hope and we weren't to blame. I still had to make that 
decision, to watch them stop the machines and watch my brother 
die before my eyes.
    But we did take him off, and we did stay to see his last 
breath. The two things I remember most are Shawn's last words. 
I'm in a world of hurt, he said, and then he took his last 
breath.
    The U.S. Chemical Safety and Hazard Investigation Board 
said that the explosion that killed Shawn probably originated 
in a dust collector that was not adequately vented or cleaned. 
The dust collector was also too close to the aluminum scrap 
processing area. Hayes Lemmertz management allowed dust to 
accumulate when overhead beams and structures, which caused a 
second, more massive explosion. The CSB concluded that had the 
company adhered to the National Fire Protection Association 
standard for combustible metal dust, the explosion would have 
been minimized or prevented altogether. The CSB warned OSHA in 
2006 about combustible dust hazards. Had the National Fire 
Protection Association standard been implemented as a mandatory 
regulation instead of a voluntary consensus code, my brother 
Shawn and many others would still be here today.''
    A one-sided look at the cost of OSHA rules but excluding 
the benefits does a disservice to workers, responsible 
employers and families and communities. Mr. Michaels, do you 
think that we can have a productive discussion today about the 
impact of OSHA regulations without involving people like Tammy?
    Mr. Michaels. I think it is very important to hear from 
people like Tammy Miser and the families of workers who have 
been hurt. Every day, OSHA saves lives. There was just an OSHA 
inspector in Ohio last week, 2 weeks ago, Rick Burns, who went 
out to, who was called and he was told, there is someone doing 
a trench job, down in a different town. He went out there and 
saw a man in the trench, the trench was 10 feet deep. He said, 
you had better get out of that trench immediately. The man got 
out. Five minutes later, that trench collapsed. If he hadn't 
been there, that man would be dead.
    But we don't hear from his family. We unfortunately hear 
from the people who had employers who didn't follow OSHA 
standards. And there are far too many of those. So what we are 
trying to do is make sure that we can get out there, we can 
have stronger standards to ensure that more people like Tammy 
don't have to----
    Mr. Jordan. Mr. Michaels, was this terrible accident, 
tragedy, was it a result of not having the right standards in 
place, or the company not following the standard that was in 
place?
    Mr. Michaels. Well, in that case, I don't know the specific 
stuff, but most dust explosions, and there have been some 
terrible dust explosions recently, a well-known one in Imperial 
Sugar down in Georgia killed several workers, there was one 
recently in West Virginia, or Virginia. Two different things. 
Generally, the violation of numerous OSHA housekeeping 
standards. What OSHA is now doing is try to essentially put out 
standards that makes much more clear what they have to do. But 
in that case, it is very well known what can be done. In those 
cases----
    Mr. Jordan. Again, it wasn't a failure to have a regulation 
in place that is going to help the safety. It was a failure of 
someone not to follow that. So it wasn't deciding that we need 
more regulation.
    Mr. Michaels. Well, OSHA----
    Mr. Jordan. Yes or no?
    Mr. Michaels. We do need more regulation, because it is 
clearer to employers what they can do. But the obligation 
under----
    Mr. Jordan. Well, let me be clear. Are you saying we need 
clarification or we need more regulation?
    Mr. Michaels. You need more regulation.
    Mr. Jordan. Really?
    Mr. Michaels. Yes. You need clarity. It has to be very, 
employers say, well, what should we do?
    Mr. Jordan. You are saying both things. You are saying 
clarity, you are saying more regulation.
    Mr. Michaels. Well, the regulations give you clarity. 
Without a regulation, the OSHA law says an employer has the 
obligation to provide a workplace free of Recognized serious 
hazards. But then they say, what is----
    Mr. Jordan. Well, let me ask you this, with the indulgence 
of the committee, and we can go a second round quickly with 
everyone if we would like. Let's go to the rule. I talked to 
you before we started today's hearing, or the second half of 
today's hearing, the decision that OSHA made relative to the 
noise regulation, walk me through the process there.
    Mr. Michaels. Sure.
    Mr. Jordan. Let me back up 1 second and preface it by 
saying that we heard from manufacturers, I have been in their 
plants. We heard from an individual in my home county, and she 
runs a very successful business. I have been there, you put the 
ear protection in, everything, but now she is talking about, 
they were going to have to have guards up and barriers up and 
everything else. This is according to a constituent of ours. So 
walk me through it.
    Mr. Michaels. Well, that is an interesting example, because 
that is not actually a change in the regulation. We have a 
noise standard that says, anything above 90 decibels you 
actually have to use engineering controls. We know that ear 
muffs and ear plugs don't always work. But for the last 20 or 
so years, we have said to employers, we are not going to 
enforce our standards. We are going to essentially allow you to 
use, instead of engineering controls, you can use ear muffs.
    But we know ear muffs don't work well enough. There are 
20,000 to 25,000 new cases of hearing loss reported every year, 
and that is a vast underestimate. We know that most 
construction workers develop hearing loss by the time they are 
retired from work. It is very clear. And we want construction 
workers, we want all workers to be able to hear their 
grandchildren, when they are old enough to have grandchildren.
    So we have to do something. What we did was we said we are 
going to enforce our noise standard like we enforce every other 
standard. We proposed that. And we heard from many constituents 
like yours. So we said, OK, that is clearly going to be more 
than we expected. We need to step back and think about other 
ways. Because in the last 20 years, there were a huge number of 
new technologies. There are a lot of very inexpensive things 
employers can do to reduce noise. We are going to work with 
them, work with the National Institute for Occupational Safety 
and Health to get more compliance materials out. Because we 
really do want to reduce noise exposure. But we recognize now 
is not the time to change our enforcement rules.
    Mr. Jordan. Does the ranking member wish additional time 
for questions? You are welcome to, because I think Ms. Buerkle 
does.
    Mr. Kucinich. Actually, if it please the chair, I do have a 
followup with Dr. Michaels. Would that be OK?
    Mr. Jordan. Certainly.
    Mr. Kucinich. Dr. Michaels, I want to go back to the 
testimony of Tammy Miser that was discussed earlier. Through 
testimony, Ms. Miser illustrates that OSHA regulations not only 
save lives, but they save businesses, too. She gives the 
example of the 2009 ConAgra plant explosion in North Carolina. 
The explosion occurred because a contractor was purging natural 
gas into the indoor work environment. There is currently, as 
you know, no OSHA regulation for natural gas purging. Three 
workers were killed, 71 workers were injured.
    Now, before the explosion, 700 people worked at the 
factory. Today the factor is shutting down, 700 lost jobs 
because of a workplace disaster. Seven hundred people would be 
working, and three families who would not have been torn apart, 
had there been more regulation.
    Now Ms. Miser also gives the sample of the 2007 explosion 
of a Jacksonville, Florida gasoline additive factory. The 
explosion killed 4, injured 32 including 28 at surrounding 
businesses. Pieces of the building were found a mile away.
    A subsequent investigation revealed that the explosion 
could have been prevented if OSHA's process safety management 
standard covered reactive hazards. So three businesses that 
were adjacent to the factory were forced to relocate, a fourth 
was forced to completely shut down.
    We talk about lives that would have been saved and jobs 
that would have been preserved had there been regulation. Dr. 
Michaels, do you agree with Ms. Miser that OSHA regulations not 
only can save lives but also can save businesses as well?
    Mr. Michaels. Yes, I do.
    Mr. Kucinich. I know that you touched on this in your 
written testimony, but would you elaborate, when you look back, 
do you see a history of OSHA regulations being overly 
burdensome to industry?
    Mr. Michaels. There have been studies on this. The Office 
of Technology Assessment was a branch of Congress that actually 
studied eight OSHA regulations in 1995. The study is very 
valid, there have been very few OSHA regulations since then. 
They went back and they looked and they found for the most 
part, there was one exception that was questionable, but the 
other seven, the companies were able to meet those regulations 
without hurting their own profitability, without hurting their 
productivity. And in fact, there are some very clear examples 
where the OSHA regulations which were opposed by industry ended 
up saving jobs and saving money.
    The best example is vinyl chloride. Vinyl is a product, 
widely used. In 1974, it was discovered to be a carcinogen. 
OSHA said, we have to essentially protect workers from those 
exposures. Industry said more than a million jobs would be 
lost. But OSHA went ahead, they issued a standard saying they 
essentially had to fully control exposure in these major 
facilities.
    The industry very quickly figured out how to do that. Not a 
single job was lost, as far as I can tell. The headlines in the 
business papers were, vinyl industry celebrates in triumph, 
they were able to enclose the materials, save money and move 
forward.
    So we always hear, and it is understandable, every industry 
says, it is going to cost us too much money, because they don't 
try. So we want to work with industry to try, to say, we can 
save you money, we can save jobs. Look at the Clean Energy 
explosion, last Super Bowl Sunday, which killed six workers, 
injured 50. It destroyed a billion dollar natural gas power 
plant that has to be rebuilt from scratch.
    Mr. Kucinich. I thank the gentleman.
    Mr. Jordan. Let me just ask the gentleman, you said earlier 
when I was questioning that you think we need more regulation.
    Mr. Michaels. There are areas that we don't have regulation 
that we need regulation on.
    Mr. Jordan. So the gentleman's testimony is, you think we 
need more regulation.
    Mr. Michaels. Yes.
    Mr. Jordan. And you would also argue, I understand the 
example you talked about, where science had discovered that 
this element, then OSHA rules put forward and actually was 
helpful and beneficial. But you also would, I assume, say that 
there is a compliance cost for business owners relative to 
regulation?
    Mr. Michaels. Yes.
    Mr. Jordan. OK. Need more regulation, there is a compliance 
cost.
    Mr. Michaels. Yes. And we have to balance those out, 
obviously. We have to think about both of those things.
    Mr. Jordan. The gentlelady from New York.
    Ms. Buerkle. Thank you, Mr. Chairman.
    I think that the goal here for this hearing today is 
really, we want a win-win situation, where we have safety in 
the workplace and we don't deter economic growth and hurt job 
creation. I want to just go back to a statement you just made, 
because I want to make sure I heard it correctly. In 1995, you 
said a study was done on seven regulations?
    Mr. Michaels. I believe it was eight.
    Ms. Buerkle. Eight, OK. And did you say there haven't been 
many more regulations added to that?
    Mr. Michaels. There have been very few major regulations in 
the last 15 years that OSHA has put out. It takes OSHA a long 
time to put out a regulation. There were a number of years in 
the George W. Bush administration where OSHA really had no 
interest in putting out any regulations. So the only health 
standard that OSHA put out during that period was on another 
carcinogen, hexavalent chromium, that the Federal court said, 
you must put it out.
    So it is hard to look at new regulations, because there 
haven't been new regulations to look at. We have issued a new 
standard on cranes, that is our first big one, and we have a 
couple more important ones coming out.
    Mr. Buerkle. Thank you, Dr. Michaels.
    I want to just talk to you a little bit about this I2P2 
regulation that you are proposing. If you could just briefly 
explain what that regulation will entail.
    Mr. Michaels. This is a very different sort of regulation 
where OSHA has a regulation about cranes, it is about how to 
operate your crane or what to do about fall protection. This is 
telling employers, we don't want to tell you how to do it, but 
we want you to think about your hazards and address them. Mr. 
Biagas was on the first panel here. His Web site talks about 
how my company, it says, Bay Electric develops a detailed and 
specific safety plan for each project we perform. We expect 
that of all employers, to figure out what your hazards are. If 
it is not a serious hazard, then do whatever is appropriate. 
But if you have a serious hazard, then you have to address it.
    So this approach, which is actually what VPP is, 
essentially says, you have to think about your hazards in a 
systematic way. Now, we are very early in the process. We are 
still considering it, we haven't started the Small Business 
Regulatory Enforcement Fairness Act process. So there will be 
lots of opportunity for people to have input and talk to us 
about it. But we think this will be more effective than trying 
to do standards on every specific hazard. Because we can't have 
a standard on every hazard. There are so many different things 
out there.
    So this is telling employers, you figure it out. We trust 
you, you know more about it than anybody else. But you have to 
figure it out, you have to think about it. And we hope you will 
support that and ask us more about it later on.
    Ms. Buerkle. When we see it, we will consider it.
    With I2P2, what are the penalties that you are talking 
about for a violation of that?
    Mr. Michaels. We haven't gotten anywhere near that yet. We 
are so early in the process. I know that one thing that 
industry is concerned about is sort of the double penalty. We 
want to make sure, we are not trying to make this an onerous 
requirement. We want to work with employers to make sure they 
see the purpose of this and they see it is really separate.
    We still have all of our rules that issue penalties for 
violations of different standards, or just not providing a safe 
workplace. This really is very different.
    Ms. Buerkle. So what are the employers hearing or seeing, 
if this is so new in development, what are they hearing or 
seeing that they are concerned about a double penalty?
    Mr. Michaels. Well, frankly, it is hard for me to tell. I 
know that a couple of big trade organizations that oppose 
everything OSHA ever does, they came out and they opposed it. 
But I think that is to raise money from their constituents. 
Because I hear from employers every day who say, this is 
obvious, of course, we do this every day. Every employer does 
this, and we will support you.
    So we will have to see. Obviously some are concerned. But I 
think some just like to raise red flags. We are asking them to 
work with us, bring your concerns to us, don't announce you are 
opposed to it before you even see it. Because that is what I am 
hearing, that there are some people who are saying, well, we 
are opposed to it. I don't think that is right.
    Ms. Buerkle. And with this I2P2 regulation, do you think 
that is going to take us away from the compliance assistance 
and more to the punitive? Or do you think it is going to be 
more user friendly?
    Mr. Michaels. We do both. That is the thing. For employers 
who want to do the right thing, who want to do this, we will 
give them all the help we can. But there are always going to be 
some who don't. We are going to do both. It is not one or the 
other.
    Ms. Buerkle. How do you know what is right, though? Some of 
these, like what we heard earlier, these are subjective, 
subjective criteria that when you have someone going into the 
work site, he may have a different standard or a different 
vision than you have. How are we going to ensure a fair and 
equitable distribution of these regulations?
    Mr. Michaels. Are you asking specifically about I2P2 or the 
general balance?
    Ms. Buerkle. I2P2 is what we are talking about.
    Mr. Michaels. Well, California has had an I2P2 standard for 
almost 20 years. And employers there are very comfortable with 
it. We actually are having conversations with stakeholders 
around the country. We have had five big meetings. But also 
talking directly to the OSHA offices in California, saying, how 
do you do this, how do you make sure you have that right 
balance.
    Ms. Buerkle. But again, I will just go back to my concern, 
and that would be a fair application of the law, and the 
interpretation of the law.
    Mr. Michaels. I certainly appreciate that.
    Mr. Jordan. The gentleman from Maryland.
    Mr. Cummings. I would certainly agree with the gentlelady. 
I think a fair application of the law is so very important. And 
I will tell my story until I die. As a young boy in high 
school, working at Bethlehem Steel. And after you would blow 
your nose, after being on the property for an hour, when you 
blew your nose, the mucus was black. A lot of the men who 
worked with me died early. I just worked there for a summer. 
Some of them worked there for years. And they would breathe it 
in and breathe it out, breathe in, and I am sure their lungs 
got covered with that stuff.
    So I think, and I was just wondering, Mr. Michaels, how 
important is enforcement with regard to OSHA regulations? And 
are inspections a part of that process?
    Mr. Michaels. Our basic view of this is, we have to, it is 
deterrence. We have to do everything we can to make sure 
employers do the right thing. The law is about employers, they 
have to apply the right standards, they have to protect 
workers. So we do enforcement, and when we do enforcement and 
it is a significant case, we also try to publicize it and we 
try to reach out to the industry and say, look, you can do the 
right thing, you can get the compliance assistance program. But 
at the same time, if we go there and we find a hazard, we are 
going to give you a fine. And in many cases, we are going to 
put it in a press release so people so it. So we know that we 
want to do everything we can to encourage the right behavior.
    We are a small agency, so we do as much enforcement as we 
can. We have about 2,200 inspectors for the whole country, to 
cover 130 million workplaces, 7 million workplaces, 130 million 
workers.
    Mr. Cummings. How many inspectors do you have?
    Mr. Michaels. Right now, about 2,200.
    Mr. Cummings. With the budget cuts, how many will you have? 
Do you know?
    Mr. Michaels. The budget cuts will take us down, in terms 
of the number of inspectors, to the number of inspectors we had 
in the 1970's, with a work force that is pretty much twice as 
big. If those cuts go through permanently. If the cuts go 
through in the short run, if the CR is passed immediately, we 
would probably have to lay off or furlough almost all the 
enforcement personnel we have, because the cuts are really 
focused on our enforcement program. And it so late in the year, 
that a 20 percent cut on the agency, focused on enforcement, 
will have a very, very big impact.
    Mr. Cummings. So we don't have to do away with the 
regulations, we just stop people, we just fire people or 
furlough them, and they won't be able to do their job, is that 
right?
    Mr. Michaels. That is right.
    Mr. Cummings. One of the most interesting articles I have 
ever read was by Ezra Klein, it says how House GOP spending 
cuts would add up to more spending later. Basically it is a 
very interesting article, because what he talks about is March 
14th of this year. He talks about how we are doing all this 
cutting, cutting, cutting. But it is an issue of whether you 
are doing a lot of damage in the process. And what you are 
talking about there, if this Congress continues to cut, cut, 
cut all of our enforcement people and our inspectors, you don't 
have to worry about the regulations, because you take the guts 
out of the regulations by doing that. Am I right?
    Mr. Michaels. That is right. We know, the thing that drives 
compliance assistance, the reason employers go and get the free 
consultation, a big reason is they fear an OSHA inspection. 
That is reality. It is unfortunate. A lot will do it because 
they want to do the right thing. But they also think, well, I 
had better do this, because I don't want to get a fine. So if 
our inspections disappear, it would have a big impact. I don't 
think people would use compliance assistance much, either, 
frankly.
    Mr. Cummings. There is another thing that kind of bothered 
me about this whole idea of costs, regulations that might cost 
jobs, job-killing regulations or whatever you call it. And this 
is my statement, this is not you, this is me. Nothing 
guarantees that even if they got rid of the regulations and 
even if they saved the money that would relate to more jobs. It 
might just, you don't have to comment on this, it might just be 
more profit.
    And so I just think, I just hope that we keep sight of 
this. This OSHA thing, the reason why I cited my example is 
because I will never forget how those older men at Bethlehem 
Steel would beg me to stay in school. Although they were making 
a lot of money, they said, stay in school. You know why? 
Because they knew that I would die early, like they would.
    I yield back.
    Mr. Jordan. Mr. Michaels, would you agree that the vast 
majority of employers care deeply about the well-being of their 
employees?
    Mr. Michaels. I think so. I don't have evidence, but that 
is my feeling as well.
    Mr. Jordan. Particularly in the high tech world we live in 
today, where there is so much investment in their employees, 
they put so much money at stake, and they want their employees 
there, because that is what keeps their business profitable in 
this high tech international marketplace we are in. I would 
venture to say the vast, vast majority of employers care deeply 
about their employees.
    Mr. Michaels. I would like to agree with you.
    Mr. Jordan. Well, let me ask you this. Do you think you 
care more about their employees than the employer who employs 
them? Is that what you are insinuating?
    Mr. Michaels. I am not suggesting that at all.
    Mr. Jordan. Do you think a bureaucrat in the Federal 
Government cares more about the employees at Mike Kelly's 
business than he does?
    Mr. Michaels. I would never suggest that.
    Mr. Jordan. Well, that is what you were saying when I 
asked, do you think the vast majority of employers do not care 
passionately and deeply about the well-being of their 
employees. I just think that is the norm.
    Mr. Michaels. Well, I think you are right.
    Mr. Jordan. Well, why did you say that when I asked you the 
question?
    Mr. Michaels. I think I did say that.
    Mr. Jordan. I don't think you did. You said, I would like 
to think that.
    Mr. Michaels. No, I said I think that, excuse me. But I 
think it is also clear that we see employers who, with----
    Mr. Jordan. And you have also said you think we need more 
regulation.
    Mr. Michaels. Yes.
    Mr. Jordan. You have also admitted that there is a 
compliance cost with that regulation. And if you remember the 
first panel that was in front of the full committee that 
Chairman Issa had, he had witnesses, he had small business 
owners here. And the question was asked by a freshman member, 
if you knew then what you know now, would you have started your 
business, relative to regulation. Do you know what the answer 
was from most of those witnesses?
    Mr. Michaels. No, I don't.
    Mr. Jordan. They said, no, they would not have started 
their business. If they knew then all the regulations, all the 
things they were going to have to deal with with government, 
they would not have started their business. These are 
profitable businesses, employing lots of people. One was from 
our district. I know how big of an influence he is in this 
community that he comes from.
    So that is what we are also trying to get at.
    Mr. Michaels. I think what we said before is we are looking 
for the right balance between enforcement, because we have to 
be cognizant of the fact that if we are not there, and OSHA, 
the employer says, well, this time, that man who is going on 
the scaffold today, he doesn't have the time, I am going to 
tell him to skip the safety harness and that scoffold goes 
down. Instead of the photograph in the newspaper of the worker 
just hanging there being saved, he is on the ground dead. We 
see it too often. So we need that balance.
    Mr. Jordan. I want to thank the witnesses.
    Mr. Kelly wanted additional time. Then we will stop here 
after this. I apologize for going so long.
    Mr. Kelly. Thank you, Mr. Chairman. I have to tell you, I 
think all of us are trying to do the right thing. The question 
becomes, then, how do you get to the right thing. And I have to 
tell you, I am a private business person. I understand how 
difficult it is. I have friends that work at Armco Steel, I 
have friends that worked at Pullman Standard. I have people 
that work in my shop.
    You know the biggest problem employers have is workers that 
won't use the safety. When I go out in the shop, my guys are 
supposed to wear a hard hat when they have a car up in the air. 
They are supposed to wear goggles when they have a car up in 
the air. They are supposed to wear goggles when they use a 
grinding wheel.
    What people are supposed to do, whether there is a 
regulation or not, is kind of secondary. I know this is purely 
anecdotal, but everything in these hearings is anecdotal. 
Because we all know a guy who knows a guy who knew a guy. But 
the question of the hearings were, at some point, is the cost 
of regulation reaching a level where we can't legislate 
complete safety? It is just impossible, because people's nature 
is to take the easy way out of everything. I am talking about 
people that work in the job. I have friends that are hurt every 
day in the steel mills because they don't follow the safety 
standards.
    So are we going to get to a regulation where we have to 
have somebody who walks with these guys to make sure they do 
the right thing all the time? And I think the question becomes 
where is the end game with regulation? Because you say we need 
more regulations. The chairman says, are you talking about more 
regulations or more clear regulations. And I ask you this. Is 
there any penalty put on a worker, other than by his employer, 
not to follow safety standards by OSHA?
    Mr. Michaels. No. The OSHA Act is written only giving OSHA 
authority to do something about the employers.
    Mr. Kelly. Right. That is my point. Because you cannot 
legislate people using common sense. Don't I wish. Don't I 
wish. It is like a dog chasing its tail. We keep coming up with 
new regulations every day to protect people from doing dumb 
things that they do themselves. I wish there were an answer to 
all this. I do appreciate your coming here today. But I have to 
tell you, from a guy who has lived it, who has paid more in 
training and equipment, and I see the same things being done by 
the same people who just got hurt the week before and say, what 
are you thinking about.
    So I am not putting down what you do, by gosh, we all want 
everybody to come to work and get through the day healthy and 
go back home. I want to see everybody get to be a grandfather. 
I am a grandfather. I also want to see my business survive, and 
I don't want it to get to the point where I am regulated out of 
business because of something that I can't possibly watch 24 
hours a day. It just is impossible.
    Thank you.
    Mr. Kelly. The vice chairman has asked for 15 seconds, then 
we will adjourn.
    Ms. Buerkle. Thank you, Mr. Chairman.
    I just wanted to comment, Dr. Michaels, when you were 
talking about businesses fearing an OSHA inspection. I think 
that is what we are troubled with. OSHA should be working with 
businesses so we all get to that win-win where we have a safe 
workplace and we keep jobs and the economy going.
    Thank you.
    Mr. Jordan. Again, let me thank our witnesses. We 
appreciate it. Mr. Gordon, we didn't get you many questions 
today, but thank you nonetheless for your testimony and for 
spending time with us this afternoon. We are adjourned.
    [Whereupon, at 5:12 p.m., the committee was adjourned.]
    [Additional information submitted for the hearing record 
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