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




 
   H.R. 735, AND PROJECT LABOR AGREEMENTS, RESTORING COMPETITION AND 
                 NEUTRALITY TO GOVERNMENT CONSTRUCTION

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

                                HEARING

                               before the

                SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
                POLICY, INTERGOVERNMENTAL RELATIONS AND
                           PROCUREMENT REFORM

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                                H.R. 735

TO PRESERVE OPEN COMPETITION AND FEDERAL GOVERNMENT NEUTRALITY TOWARDS 
 THE LABOR RELATIONS OF FEDERAL GOVERNMENT CONTRACTORS ON FEDERAL AND 
                 FEDERALLY FUNDED CONSTRUCTION PROJECTS

                               __________

                              JUNE 3, 2011

                               __________

                           Serial No. 112-60

                               __________

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 Technology, Information Policy, Intergovernmental 
                    Relations and Procurement Reform

                   JAMES LANKFORD, Oklahoma, Chairman
MIKE KELLY, Pennsylvania, Vice       GERALD E. CONNOLLY, Virginia, 
    Chairman                             Ranking Minority Member
JASON CHAFFETZ, Utah                 CHRISTOPHER S. MURPHY, Connecticut
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
PATRICK MEEHAN, Pennsylvania
BLAKE FARENTHOLD, Texas


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 3, 2011.....................................     1
Text of H.R. 735.................................................     3
Statement of:
    Baskin, Maurice, counsel, Associated Builders and 
      Contractors, Inc.; David Tuerk, professor and chairman, 
      Suffolk University and Beacon Hill Institute; Kirby Wu, 
      president, Wu & Associates; and Mike Kennedy, counsel, the 
      Associated General Contractors of America..................    53
        Baskin, Maurice..........................................    53
        Kennedy, Mike............................................    85
        Tuerk, David.............................................    59
        Wu, Kirby................................................    75
    Gordon, Daniel, Administrator, Office of Federal Procurement 
      Policy, Office of Management and Budget; and Susan Brita, 
      Deputy Administrator, General Services Administration......    19
        Brita, Susan.............................................    29
        Gordon, Daniel...........................................    19
    Sullivan, Hon. John, a Representative in Congress from the 
      State of Oklahoma..........................................    11
Letters, statements, etc., submitted for the record by:
    Baskin, Maurice, counsel, Associated Builders and 
      Contractors, Inc., prepared statement of...................    55
    Brita, Susan, Deputy Administrator, General Services 
      Administration, prepared statement of......................    31
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland:
        Letter dated June 3, 2011................................    16
        Prepared statement of Mr. Philips........................    42
    Gordon, Daniel, Administrator, Office of Federal Procurement 
      Policy, Office of Management and Budget, prepared statement 
      of.........................................................    22
    Kennedy, Mike, counsel, the Associated General Contractors of 
      America, prepared statement of.............................    88
    Lankford, Hon. James, a Representative in Congress from the 
      State of Oklahoma, letter dated February 25, 2011..........    99
    Tuerk, David, professor and chairman, Suffolk University and 
      Beacon Hill Institute, prepared statement of...............    62
    Wu, Kirby, president, Wu & Associates, prepared statement of.    77


   H.R. 735, AND PROJECT LABOR AGREEMENTS, RESTORING COMPETITION AND 
                 NEUTRALITY TO GOVERNMENT CONSTRUCTION

                              ----------                              


                          FRIDAY, JUNE 3, 2011

                  House of Representatives,
   Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and Procurement Reform,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. James Lankford 
(chairman of the subcommittee) presiding.
    Present: Representatives Lankford, Kelly, Walberg, 
Labrador, Connolly, and Murphy.
    Staff present: John Cuaderes, deputy staff director; 
Richard Beutel, senior counsel; Christopher Hixon, deputy chief 
counsel, oversight; Robert Borden, general counsel; Jeff 
Solsby, senior communications advisor; Ali Ahmad, deputy press 
secretary; Jeff Wease, deputy CIO; Molly Boyl, parliamentarian; 
Adam Fromm, director of Member liaison and floor operations; 
Ryan Little, manager of floor operations; Cheyenne Steel, press 
assistant; Nadia Zahran, staff assistant; Linda Good, chief 
clerk; Laura Rush, deputy chief clerk; Dave Rapallo, minority 
staff director; Suzanne Sachsman Grooms, minority chief 
counsel; Donald Sherman, minority counsel; Ronald Allen, 
minority staff assistant; Lucinda Lessley, minority policy 
director; Ashley Ettienne, minority director of communications; 
Jennifer Hoffman, minority press secretary; Jaron Bourke, 
minority director of administration; and Carla Hultberg, 
minority chief clerk.
    Mr. Lankford. The committee will come to order. This is a 
hearing on H.R. 735, the Project Labor Agreements Restoring 
Competition Neutrality to Government Construction Projects.
    The Oversight Committee mission statement we read at every 
one of our committee meetings, let me just go ahead and read 
it. We exist to secure two fundamental principles: First, 
Americans have a right to know that the money Washington takes 
from them is well spent; and, second, Americans deserve an 
efficient, effective government that works for them. Our duty 
on the oversight and government reform committee is to protect 
these rights. Our solemn responsibility is to hold government 
accountable to taxpayers because taxpayers have a right to know 
what they get from their government. We work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    This is the mission of the Oversight and Government Reform 
Committee.
    I have an opening statement. I am going to submit it for 
the record for the sake of our time today. I will also allow 
any Members to have 7 days to submit opening statements and any 
extraneous material for the record.
    [The text of H.R. 735 follows:]

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    Mr. Lankford. We will now recognize our very first panel. 
This is the Honorable John Sullivan, who represents Oklahoma's 
First District. He is up the turnpike from me personally. He 
introduced H.R. 735, the Government Neutrality and Contracting 
Act in February of this year. I am glad to have you, 
Congressman Sullivan. Thanks for taking time out of your 
schedule to get a chance to do a statement for us today. You 
are given and yielded 5 minutes.

 STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF OKLAHOMA

    Mr. Sullivan. Thank You, Chairman Lankford and Ranking 
Member Connolly, members of the subcommittee. Thank you for 
holding this hearing today.
    Every day of this Congress has brought us face-to-face with 
tough decisions on spending cuts, cost-saving proposals, 
policies that encourage job creation and ways to preserve the 
American Dream for our posterity. It is clear now, more than 
ever, that each fiscal decision that Congress makes has an 
impact on the sustainability of America's prosperity.
    I bring to your attention today H.R. 735, the Government 
Neutrality and Contract Act, which will save jobs, create jobs, 
and prevent the waste of taxpayer dollars on Federal and 
federally assisted construction projects by reestablishing fair 
and open competition.
    To begin, a project labor agreement is a contract that 
typically forces contractors and subcontractors to agree to 
recognize unions as the representatives of their employees on 
that job in order to win a construction contract. PLAs 
typically force contractors to use the union hiring hall and 
pay fringe benefits into union-managed benefit and pension 
benefit programs. PLAs also contain clauses that force 
contractors and employees to obey the restrictive and 
inefficient work rules and job classifications common in union 
and collective bargaining agreements but absent in the standard 
operation of open shop contractors.
    While it is technically true that any contractor is welcome 
to compete on or for projects that require a government-
mandated PLA, both general contractors and subcontractors must 
agree to the terms and conditions of a PLA in order to win a 
contract. The practical effect of these agreements is to 
discourage competition from contractors opposed to the terms of 
the PLA.
    In 2001, President George Bush issued Executive Order 13202 
and 13208 to maintain government neutrality in Federal 
contracting. These Executive orders prohibited the government 
from requiring contractors to adhere to PLAs as a condition of 
winning Federal or federally funded construction contracts. 
Because President Bush's Executive order was about maintaining 
neutrality, a contractor could also voluntarily enter into a 
PLA if they felt it could make their business competitive and 
deliver the best product to the government. However, in 2009, 
President Obama issued Executive Order 13502, encouraging 
Federal agencies to require union-favoring PLAs on Federal 
construction projects exceeding $25 million in total costs. 
While President Obama's Executive order does not mandate PLAs 
on all Federal construction contracts, it does nothing to 
preserve the neutrality that government should maintain. 
Rather, it exposes Federal procurement officials to intense 
political pressure from special interest groups, politicians, 
and political appointees to require PLAs.
    As I and other panelists place the facts before you, you 
will see how this dangerous path--this is a dangerous path. 
Government-mandated PLAs are not only discriminatory, but they 
are also hurtful to a struggling industry that is already 
facing unemployment above 17 percent. For example, yesterday 
The Wall Street Journal reported on a $70 million highway 
construction contract in New York funded at least 80 percent by 
the Federal Highway Administration that has been scrutinized 
for the decision to subject it to a PLA. While 27 percent of 
New York's private construction work force is unionized, that 
means that the employers of 73 percent of New York's 
construction work force who have been facing steep jobs losses 
over the past few years are discouraged from bidding on this 
project. Unfortunately, limiting competition comes at taxpayer 
expense. The article mentions that the PLA cost taxpayers an 
additional $4\1/2\ million because the lowest responsible 
bidder, a merit shop contractor, was thrown off the project in 
favor of a union contractor because the merit shop contractor 
would not sign a PLA.
    Executive Order 13502 states its purpose is to promote 
efficiency. However, there is little evidence to suggest PLAs 
promote efficiency in Federal contributing. There were no 
examples of inefficiencies during the Bush years when PLA 
mandates were restricted. I am aware of anecdotal evidence on 
recent Federal construction projects demonstrating an increase 
in the construction costs that may not provide corresponding 
benefits to taxpayers or construction owners. For instance, the 
U.S. General Service Administration renovation project of 
Lafayette Federal Building in Washington, DC, was awarded to a 
Federal contractor without a PLA at a $52.3 million cost.
    However, after the contractor agreed to a PLA for the 
project by the GSA, the contractor added $3.3 million to the 
cost of the project. The added $3.3 million isn't the result of 
increased material costs, revised blueprints, or a more 
aggressive completion deadline. The contract was awarded to the 
same contractor with the same proposal. And the only difference 
was the PLA. There are just two examples--these are just two 
examples, but there is no doubt that there are many more 
stories reflecting the true colors of government-mandated PLAs.
    When mandated by public officials, these agreements 
unfairly discourage competition from 87 percent of the entire 
U.S. private construction work force, effectually raise the 
employment rate of the industry, cost the government billions 
more in construction costs, and do nothing to increase the 
efficiency of Federal construction projects.
    There is a solution. H.R. 735, the Government Neutrality in 
Contracting Act, will prohibit executive agencies and 
recipients of Federal funds from requiring contractors to agree 
to PLAs as a condition of winning a Federal construction 
contract. Contractors are free to enter into PLAs if they want 
to, but the government is removed from that decisionmaking 
process. If enacted, this bill guarantees that all qualified 
contractors and their skilled work forces, regardless of labor 
affiliation, can compete on a level playing field. This expands 
job opportunities, reduces the costs of government, and 
prevents discrimination based on labor affiliation. All told, 
H.R. 735 will ensure that taxpayers get the best possible 
product at the best possible price.
    Once again, thank you, Chairman Lankford, for all you are 
doing. Thank you, Ranking Member Connolly, and all the members 
of the subcommittee. Thank you very much. I appreciate this 
opportunity to address your committee.
    Mr. Lankford. Thank you, Congressman Sullivan, for taking 
time out of your schedule today to come over and testify.
    Mr. Lankford. Many of you may or may not know that we have 
a vote that is coming very soon, and there is already debate on 
the floor, which was originally unscheduled during this time 
period. So I appreciate you coming over.
    We will take a short recess to allow the clerks to set up 
for the second panel real quick and look forward to get a 
chance to introduce our second witnesses. Thank you.
    [Recess.]
    Mr. Lankford. We will now welcome our second panel. The 
Honorable Daniel Gordon is the administrator for the Federal 
Procurement Policy, the Office and Management and Budget. Very 
grateful to have you here, Mr. Gordon.
    For clarification of everyone that is here, Mr. Gordon and 
I talked 3 days ago actually about his schedule today; that he 
has to get away for a flight by 11. At that time I told him we 
don't have votes scheduled so we should be just fine. Now we 
have votes scheduled this morning. So when votes interrupt us, 
I still will allow Mr. Gordon to catch that flight and get out 
of here. So we are in an accelerated process to get you to that 
quickly.
    Ms. Susan Brita is the Deputy Administrator of the General 
Services Administration.
    Pursuant to the committee rules, all witnesses are sworn in 
before they testify. So if you would please stand and raise 
your right hands.
    [Witnesses sworn.]
    Mr. Lankford. Let the record reflect the witnesses all 
answered in the affirmative.
    Mr. Cummings. Mr. Chairman, I have a parliamentary inquiry.
    Mr. Lankford. Absolutely, sir.
    Mr. Cummings. Mr. Chairman, I, too, want to see Mr. Gordon 
get out of here on time--and I know you will. But my staff has 
informed me that you, Chairman Issa, and other chairmen of this 
committee have adopted a new policy for minority witnesses. 
This policy appears to contradict the rules and the precedent 
of our committee. We received word of this new policy for the 
first time from Chairman Issa's staff in an e-mail on May 25th. 
And here is are what it said: If there is an administration 
witness, then that witness is designated minority witness. It 
is up to the chairman to accept an additional witness, but that 
witness must be recommended within a 24-hour period.
    In other words, if you invite someone from the 
administration, that witness is somehow designated as our 
witness, although we didn't ask for him.
    For this hearing we did not request an administrative 
witness. You did. We requested Dr. Peter Phillips, an expert in 
economics of the construction industry, but you refused to 
allow him to testify. The reason your staff gave was Chairman 
Issa's new policy. They said we couldn't have our witness 
because you already invited administrative witnesses.
    Here's my inquiry. Has the subcommittee or the full 
committee formally adopted this policy?
    Mr. Lankford. That we will have to determine. I will have 
to get with Chairman Issa and get a chance to talk about that 
specifically. Part of the issue is well--and I had this 
conversation with Ranking Member Connolly. Obviously, we have 
seven people on this panel already as well, two of those being 
administration officials. And I recommended to him at that time 
that the minority witness submit something at length for the 
record so we get a chance to include that as well.
    Mr. Cummings. Well, the only reason I am asking is because 
I think it sets a dangerous precedent, because quite often, we 
are opposed to what the administration is doing. And so for 
people to be designated our witnesses, it just creates a major 
problem. So I just wanted to know that. We just wanted to know, 
on what basis did you deny Ranking Member Connolly's request to 
invite Dr. Phillips to today's hearing. What was the basis of 
that?
    Mr. Lankford. The basis was obviously we had seven people 
already, and two of those being administration officials that 
we thought would be very supportive and clear to articulate 
that position as well.
    Mr. Cummings. Second parliamentary inquiry. Mr. Chairman, 
this new policy is not only unfair and unprecedented, but it 
directly contradicts the rules of the House and the rules of 
our committee. Committee rule No. 2 provides for ``Witnesses 
from the minority may request''--and it says not the majority--
the minority--``The same is true in the rules of the House.''
    Mr. Chairman, it is on obvious point but you can't just 
invite people to testify and claim that we invited them. Can 
you show the Members any basis in the rules for this new 
misguided policy?
    Mr. Lankford. Why don't we get a chance to go through this 
in the following days and I will followup and show a previous 
record of how this committee has been handled in the past and 
we will be able to direct that and be able to determine if this 
is consistent with previous actions of the committee.
    Mr. Cummings. Just one other thing. I just want to make it 
clear, because this is a very dangerous precedent and no 
previous chairman has ever designated who the minority 
witnesses would be, regardless of whether they are 
administrative officials or anyone else. Chairman Issa's new 
policy is an extreme edict, and I am aware of no other House or 
Senate committee with a similar policy. This policy also 
undermines the integrity of our committee by impairing the 
ability of minority Members to bring balance and additional 
perspectives to these proceedings. And I ask that you state 
here to our Members that you categorically reject this policy 
immediately.
    Will you do that, Mr. Chairman?
    Mr. Lankford. I will not. I want to able to look at the 
full record of the history of this committee and be able to 
determine that. I understand what you're saying, but I want to 
be able to walk through the history of this committee as well.
    Mr. Cummings. I understand. Mr. Chairman, I have a motion. 
Today, I join all the ranking members of this committee in 
sending a letter to Chairman Issa formally objecting to this 
new policy and calling on him to abandon it. Here's what the 
letter says: Apart from these specific objections, we are 
concerned about the direction of your overall approach. Rather 
than increasing bipartisan cooperation, as you pledged to do 
many times, you have adopted this new policy without 
identifying any legitimate basis or need for it.
    This leads to the unfortunate conclusion that you are more 
interested in holding hearings to advance your own personal 
political agenda rather than objectively gather facts from a 
variety of sources to improve public policy.
    Mr. Chairman, I ask unanimous consent that this letter be 
entered into the record.
    Mr. Lankford. Without objection.
    Mr. Cummings. Thank you.
    [The information referred to follows:]

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    Mr. Connolly. Mr. Chairman.
    Mr. Lankford. By the way, we are very limited in the time 
that we have. If this is a conversation that we can have after 
Mr. Gordon has already testified, it would allow him to be able 
to slip out and be able to hear our witnesses.
    Mr. Connolly. I understand. As the ranking member of the 
subcommittee, I have a further parliamentary inquiry following 
up on Mr. Cummings' inquiry. Was the chairman suggesting that 
he believes there is precedent for the majority dictating to 
the minority who their witnesses would be at a hearing?
    Mr. Lankford. What the chairman is stating is I want to 
walk back through the history of this and be able to discover 
that clearly and so we can all walk through it together and see 
area by area as we've gone back through history to be able to 
determine that together.
    Mr. Connolly. Would the chairman acknowledge that he was 
given verbal objection by this ranking member to this 
proceeding?
    Mr. Lankford. Yes. We discussed that actually prior to your 
arrival.
    Mr. Connolly. I know that since our witnesses are going to 
be under oath, they will testify that I have had no 
communication. The ranking member on the minority of this 
subcommittee did not request Mr. Gordon or Ms. Brita as 
witnesses. Would the chairman be aware of that?
    Mr. Lankford. I would not be. Would you suggest that they 
would not be good witnesses to be able to speak to this issue?
    Mr. Connolly. No. I would suggest they were not my choice, 
and that the minority has a right under the rules of the House 
and the rules of this committee to choose its own witnesses. 
And this hearing is in violation of those rules. And I want to 
protest that publicly.
    I want the administration witnesses to understand that they 
are being used. And I want that on the record.
    Mr. Lankford. Without objection.
    Mr. Gordon, we would very much be greatful to receive your 
testimony for 5 minutes.

 STATEMENTS OF DANIEL GORDON, ADMINISTRATOR, OFFICE OF FEDERAL 
PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET; AND SUSAN 
  BRITA, DEPUTY ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION

                    STATEMENT OF DAN GORDON

    Mr. Gordon. Thank you. I will speak briefly, Mr. Chairman.
    Chairman Lankford, Ranking Member Connolly, members of the 
subcommittee, I appreciate the opportunity to appear before you 
today to discuss issues related to the use of project labor 
agreements in Federal construction contracts. As the chairman 
noted, we talked earlier this week. I do have, unfortunately, a 
very firm travel commitment. I will have to leave at 11 this 
morning. I am very appreciative of the chairman's and the 
subcommittee's understanding in this regard.
    As an administrator for Federal procurement, I am 
responsible for overseeing the development of governmentwide 
contracting rules and policies and ensuring that those rules 
and policies promote economy and efficiency in government 
contracting. This morning I am going to very briefly describe 
the steps that my office has taken to shape the Federal 
acquisition regulation, the FAR rule, that implements executive 
order 13502, which governs the use of PLAs in Federal 
construction contracts.
    Let me first address a possible misperception about what 
the FAR rule says about the use of PLAs. The FAR rule does not 
mandate 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 
promote economy and efficiency in that 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 
FAR. 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 in addition to price. The FAR doesn't dictate 
to our acquisition professionals what choices to make, but it 
gives them the tools to make the choices to tailor a 
procurement to the individual agency's specific requirement. 
That toolkit 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 we spend, whether we are buying lawn 
mowing services for a national park or war planes for the Air 
Force. And our approach to PLAs is no different.
    We have structured the FAR rule to create a process were 
decisions are made on a case-by-case basis. The FAR rules set 
out factors that agencies may decide to consider, but it does 
not dictate those factors or prohibit agencies from considering 
other factors. As with other FAR rules, though, the PLA rule 
sets boundaries. Most significantly, the agency can 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.
    Equally important with respect to the content of any PLA 
created pursuant to the FAR rule, the rule requires that the 
PLA allow all firms to compete for contracts and subcontracts 
without regard to whether they are otherwise parties to 
collective bargaining agreements. That mandate ensures that if 
a agency decides to use a PLA, it is done in a way consistent 
with the principle of open competition, a bedrock of our 
Federal procurement system.
    We appreciate that taxpayers would not benefit from a rule 
that mandated the use of PLAs even if they didn't make sense 
and didn't serve economy and efficiency. However, similarly, 
taxpayers would not benefit from a rule 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, our office, the Office of Federal 
Procurement Policy, intends to work with agencies to facilitate 
the sharing of experiences and best practices for the 
consideration and appropriate use of project labor agreements 
in the Federal marketplace.
    I am very happy to answer any questions when we come to 
question time.
    Thank you, Mr. Chairman.
    Mr. Lankford. Thank you, Mr. Gordon.
    [The prepared statement of Mr. Gordon follows:]

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    Mr. Lankford. Ms. Brita, I would be pleased to be able to 
receive your testimony for 5 minutes.

                    STATEMENT OF SUSAN BRITA

    Ms. Brita. Good morning, Chairman Lankford and Ranking 
Member Connolly, and other members of the subcommittee. Thank 
you for inviting me here today to discuss GSA's measured 
business approach to the implementation of project labor 
agreements in our construction contracts. A PLA is a proven 
tool to help provide structure and stability to any project, 
especially on large, complex projects. The private sector uses 
PLAs for a variety of construction projects similar to those 
that GSA manages. PLAs are also used at the State and local 
levels for an 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 stoppage, increased labor 
availability, and project-specific coordination on work rules. 
PLAs can also include provisions that promote career 
development through valuable job training for construction 
workers.
    GSA only use 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. The 
Executive order does not mandate the agencies, but encourages 
the consideration of PLAs. Our procurement process provides for 
the consideration of PLAs. GSA allows a contractor to submit a 
proposal with a PLA, without a PLA, or you can submit both. We 
evaluate these proposals on a project-by-project basis. If GSA 
accepts 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 a labor organization rather than between GSA and 
a labor organization. For our major construction projects, GSA 
typically selects the proposal representing best value for the 
government by weighing a number of technical factors against 
cost. Our PLA recently has been included as one of these 
technical factors. Proposals with the PLA receive 10 percent of 
the total possible points for evaluation. We award to 
contractors who work with labor organizations as well as 
contractors who do not.
    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 we use principally to help 
modernize and green our federally owned inventory, provided GSA 
the opportunity to conduct a PLA pilot program. By this pilot 
program, GSA selected 10 projects with budgets of over a $100 
million. The selected projects covered seven States and the 
District of Columbia. Of these 10 projects, seven ended up with 
PLAs and three did not. From our comparisons, in most instances 
there has been no to little difference cost difference.
    Our experience in this pilot program has shown us that our 
bidding process has not hindered competition. In all of our 
projects, we receive sufficient bids to ensure adequate 
competition and best value for the American taxpayer. We 
typically receive between three and eight offers for these 
projects. Through the construction of these projects, GSA plans 
to assess the use of PLAs for future implementation of best 
practices and update our policies. This pilot program has 
enabled GSA to obtain real market data regarding the impact of 
PLAs on competition.
    GSA has recently reached out to contractors and union 
officials to hear their feedback on our pilot projects in order 
to develop ways to further improve the PLA procurement process. 
As real estate experts, GSA ensures that we are procuring 
construction goods and services at best value for the American 
government on behalf of the American taxpayer. The 
consideration of PLAs is encouraged because of the benefits 
associated with them. PLAs can provide wage stability for 
workers, establish mechanisms for resolving labor disputes and 
reduce the risk of work strikes and lockouts to ensure projects 
continue on schedule.
    In awarding construction contracts, GSA considers a variety 
of technical factors, including potential benefits of PLA and 
weighs them against cost to help determine the winning 
proposal. By leveraging our experience and expertise, GSA 
ensures high design and construction excellence at best value 
for the American taxpayer.
    Thank you, Chairman Lankford, and I am here to answer any 
questions you may have.
    [The prepared statement of Ms. Brita follows:]

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    Mr. Lankford. Thank you, Ms. Brita. I now yield myself 5 
minutes for initial questioning.
    Mr. Gordon, as I am going through this issue, when a PLA 
agreement is made, does that change the collective bargaining 
rights typical for a union when they are coming in? Do they 
have to set aside some of those rights to enter into a PLA 
agreement?
    Mr. Gordon. Mr. Chairman, unfortunately, I'm not a labor 
lawyer. I'm a procurement guy. And I'm not sure what the impact 
would be on individual collective bargaining agreements.
    Mr. Lankford. When this was made, the shift that occurred 
in the Executive order, was that because PLAs were being 
excluded? There was an Executive order done 2 years ago that 
you said didn't elevate the PLAs, but it encouraged the use of 
PLAs on it. Was that because PLAs were more efficient but they 
weren't being selected? I'm trying to figure out the reason 
that the Executive order is needed. If already PLAs are 
allowed, if already that is in the process, and what we are 
talking about today does not exclude PLAs, and say, No, they 
can't be used, what was the need for the Executive order and 
how is that bearing out?
    Mr. Gordon. Thank you, Mr. Chairman. Under the prior 
administration, the government was prohibited from requiring 
the use of PLAs on Federal construction projects. It is true 
that individual contractors could voluntarily use one. But what 
we have seen is that in both the private sector and in State 
and local governments there are situations where PLAs are 
viewed as helpful. And our view was that same tool should be 
available to the Federal Government just as it is available, 
for example, to Toyota when Toyota used project labor 
agreements and as the Department of Energy has required use of 
project labor agreements for many decades. We wanted that to be 
possible for the entire Federal Government. We weren't 
encouraging their use. We were encouraging agencies to consider 
whether they should be required.
    Mr. Lankford. Is there increased points that are given in 
the benefits for use of a PLA?
    Mr. Gordon. I'm not sure what you mean by increased points.
    Mr. Lankford. In the scoring in trying to determine the 
benefit of how to select what contractor, are there increased 
points that are given if they use a PLA?
    Mr. Gordon. We have given agencies considerable flexibility 
in deciding how to implement the FAR rule. What you heard from 
Ms. Brita was that at GSA, a small percentage of points, it is 
really only on the technical side that you can get 10 percent 
extra points. But technical is only one factor. There is also 
past performance and price. Other agencies aren't taking that 
approach.
    Mr. Lankford. The reason for that would be--the 10 extra 
points was because they saw increased efficiency and such, or 
what was the reason forgiving the extra points for that?
    Mr. Gordon. It would be better to ask Ms. Brita.
    Mr. Lankford. Let me shift.
    Ms. Brita, what was the reason for the extra points on 
that?
    Ms. Brita. GSA chose to enter into the 10 percent 
preference. As you know, the Executive order encourages 
agencies to consider. We are in the construction business and 
always looking for ways to increase competition and obviously 
make things more efficient. In the application of the Executive 
order, we chose to use the 10 percent point system to meet that 
encouragement; to encourage people to participate and get 
involved.
    Mr. Lankford. When you mention the pilot program, is that 
the Rider Levett Bucknall report? When you were talking about 
the pilot program earlier that did the study on PLAs, is that 
the report you're referring to, the company that did the 
report?
    Ms. Brita. The pilot program I'm talking about is the 10 
projects that we identified that we were going to run the PLA 
against and see how the 10 projects stack up. The report is a 
different effort.
    Mr. Lankford. That report, though, you're familiar with 
that report?
    Ms. Brita. I am fairly familiar with it.
    Mr. Lankford. The report I have, I have a draft copy of it, 
the last revision of that looks like it was January 27, 2010. 
Our staff has been trying to request this report, obviously, 
because it is good that you all have done a study. It is the 
right thing to be able to do on it. We've been trying to get a 
copy. We were finally able to get a copy at actually 6 p.m. 
last night. The last draft was actually done January 27, 2010.
    I would like to ask unanimous consent that we submit this 
report for the record.
    So agreed.
    Mr. Lankford. In this report, there are several statements 
that come out on it in the executive summary even at the 
beginning of it, it talks to these different cities and these 
different locations and, for instance, in Cleveland there is a 
0.1 percent marginal benefit to PLA; a 0.6 percent benefit in 
Honolulu; a 0.3 benefit in San Francisco. But then it walks 
through other cities in the PLA studies and saying in other 
cities, Portland, OR; Nogales, AZ; Denver, CO; Washington, DC, 
all had increased costs by using PLAs--some of them as high as 
12 percent more expensive. So it is not 0.12 but 12 percent on 
the other side. 5.8 more expensive in Colorado. And then there 
is a risk in using PLAs excludes small and minority businesses 
and may exclude capable merit shop contractors and other 
factors related to this.
    This was a very interesting report to go through last 
night. My question is: This has been out here for a year and a 
half and it is still in draft form. At what point is this in 
its final form and will actually be released to everyone?
    Ms. Brita. Chairman Lankford, the agency made a decision 
that we would suspend further work on that report and really 
work toward applying forces market forces----
    Mr. Lankford. Is that because of the findings of this 
report? This report does not support what you're saying on the 
pilot program. This report is fairly discouraging of PLAs. It 
does find like 0.3 percent benefit in certain cities. But it's 
very discouraging on the whole of using PLAs.
    Ms. Brita. Well, the report is a draft and it is not final.
    Mr. Lankford. But it has been draft for a year and a half. 
How long does it take to finish a report that's inconsistent 
with the government policy?
    Ms. Brita. Well, we decided to suspend action on that 
report and move toward the consideration--letting the 
marketplace determine, with the applicability of PLAs, rather 
than rely on a report.
    Mr. Lankford. So the report wasn't consistent with the 
policy, and so the report is set aside. And we've suspended the 
report because the policy was inconsistent with it. I'm trying 
to figure out the why. Was it sloppily done? The findings 
weren't consistent with other reports that were done. Why was 
this suspended?
    Ms. Brita. The report was suspended because we wanted to 
get real market data quickly. And we were moving through our 
recovery projects. So we felt that it would be a better use of 
our time and quite frankly, more efficient to try to get real 
market data quickly by encouraging the use of PLAs in this 
collection of project. These projects were chosen because we 
felt they had large cities, small cities, they were major 
construction. So we thought that would be a better way to 
gather data quickly, quite frankly, than wait for the report. 
So we suspended work on the report and went to the actual 
application of the PLAs in some of our projects.
    Mr. Lankford. I've exceeded my time. I apologize for that. 
I would like to yield to Mr. Connolly, the ranking member.
    Mr. Connolly. Thank you, Mr. Chairman. Ms. Brita, by the 
way, I recognize that accent. Boston?
    Ms. Brita. Yes, sir.
    Mr. Connolly. Where?
    Ms. Brita. Boston, Hyde Park.
    Mr. Connolly. My family lives in West Roxbury. I can talk 
that way if I have to.
    While I've got you, Ms. Brita, who invited you to come to 
this hearing?
    Ms. Brita. The chairman did.
    Mr. Connolly. Did you hear anything from my office or me?
    Ms. Brita. I did not.
    Mr. Connolly. So you were not invited by the minority?
    Ms. Brita. No, sir.
    Mr. Connolly. You don't consider yourself a minority 
witness, therefore.
    Ms. Brita. I received a letter from the chairman and I had 
a conversation with his chief counsel.
    Mr. Connolly. Mr. Gordon, same question. Who invited you 
here?
    Mr. Gordon. Same answer, sir.
    Mr. Connolly. So you did not hear from me or from my 
office?
    Mr. Gordon. We had, as far as I know, no contact with your 
office at all.
    Mr. Connolly. So as far as you know, you were not invited 
here by the minority.
    Mr. Gordon. That's right, sir.
    Mr. Connolly. Let me just say again, sadly, you're both 
being used, in violation of House rule 11 clause 2(j)(1), which 
states explicitly: ``The minority members of the committee 
shall be entitled, upon request, to the chair by a majority of 
them before the completion of the hearing to call witnesses 
selected by the minority to testify with respect to that 
measure or matter.''
    To my knowledge, it's never been customary in the House or 
the Senate for the majority to determine who the minority 
witnesses are, let alone to determine on their behalf, by the 
way, because the administration happens to be of the same 
party, therefore you are our witnesses. I want you to both know 
that at least this ranking member, and perhaps I will be joined 
by the ranking member of the full committee, I'm going to 
advise the administration to decline all requests by the 
majority to testify before this subcommittee and the full 
committee until this matter is resolved. Because for you to 
testify is to be unwittingly complicit in the violation of 
House rules and the committee rules and to tread on the rights 
of the minority. And so I hope you both will take that back to 
your respective agencies.
    I am going to be talking to the White House and to the 
administration government relations officials. And I would hope 
that the administration would cooperate with us in a policy of 
noncooperation until this matter is cleared up. But the 
minority has rights. And if the majority wishes to actually 
join on this issue and dare to tell us who our witnesses will 
be and to designate administration witnesses as our witnesses 
against our wishes, then we are going to advise that 
administration to not cooperate with the Members of the 
majority until our rights are recognized and respected.
    With that, I yield to the my the ranking minority member of 
the full committee.
    Mr. Cummings. I thank the gentleman for yielding. I want to 
associate myself with every syllable of the words of Mr. 
Connolly.
    Administrator Gordon and Deputy Administrator Brita, I 
appreciate your testimony and views you have provided today. As 
I stated at the start of the hearing, it is critical that this 
committee conduct fair and responsible oversight. That is why I 
am particularly disappointed that Chairman Lankford decided to 
deny the minority's request for witness, Dr. Peter Phillips, 
Chair of the Economics Department at the university of Utah, 
citing a misguided and unprecedented committee policy.
    If Dr. Phillips had been allowed to testify in person 
today, I would have asked him to discuss the credibility of the 
2009 study by the Beacon Hill Institute. That study criticizes 
the use of PLAs on Federal construction projects.
    Instead, I directed my staff to put this question to Dr. 
Phillips in writing, and he has graciously responded in 
writing. Had the majority been allowed to bring Dr. Phillips 
forward, he would have told the subcommittee that the Beacon 
Hill Study, ``has not been vetted in any peer-review process 
and would be unlikely to survive a peer review.'' Had Dr. 
Phillips been allowed to present live testimony at this 
hearing, he would have also questioned, using Beacon Hill's 
analysis as a basis for the claim that PLAs raise construction 
costs by reducing competition.
    Dr. Phillips would have noted that ``Beacon Hill's work 
suffers from the basic statistical fallacy of spurious 
correlation.'' And he would go on to say that, Statistically, 
one could easily show that pom-poms stunt teenage growth. All 
you have to do is go to a high school basketball game and put 
all those holding pom-poms on one side of the room and all the 
remaining teenagers, who just happen to be the basketball 
players, on the other. Lo and behold, all those holding pom-
poms have stunted growth compare to the control group. Now this 
is the witness saying this, Dr. Phillips.
    Similarly, Beacon Hill put all the complex jobs on one side 
and all the simple jobs on the other. Lo and behold, because 
the simple jobs did not have PLAs and most of the complex jobs 
did, PLAs cost more money. This sort of simple-minded 
statistics just does not pass muster.''
    I just ask you, Ms. Brita, you said you all changed course. 
Does that have anything to do with, in other words trying, to 
get a better sample of what you so that you had more accurate 
information?
    Ms. Brita. We wanted a better sample but we also wanted 
information quickly, Mr. Cummings, because we were trying to 
evaluate the value, quite frankly, of PLAs. There's a lot of 
academic literature out there and we wanted some real today 
data. We felt we had an opportunity with our recovery projects 
and the application of PLAs to some of these recovery projects. 
So we put together a list that we thought was a representative 
sample of what GSA does in real-time every day and we ran the 
PLAs against these projects. So it was really an effort to gain 
information quickly and to do an evaluation and to really come 
to some conclusion--more conclusions about what the value of 
PLAs in Federal construction projects as related to GSA.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Yield back.
    Mr. Lankford. With that, I yield to Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman. In light of the fact 
that we have these witnesses in front of us, I guess we might 
make best use. So thank you for being here.
    Ms. Brita, your list of PLA, non-PLA projects identified 
the GSA headquarters building as a ``no PLA.'' Wasn't that 
awarded originally as a PLA project? And what happened to the 
PLA?
    Ms. Brita. Yes, sir. It was originally awarded as a PLA 
project. The contractor was unable to finalize the arrangements 
with the various labor units and so the contract was amended to 
take the PLA out of the requirements of the contract. The 
arrangement is between the contractor and the various labor 
unions, not GSA, and when the contract was unable to finalize 
those agreements, we just amended the contract and took it out; 
took that requirement out.
    Mr. Walberg. How much time then did the contractor have to 
waste trying to negotiate PLA with unions on this project at 
GSA's intense instance you allowed the project to go forward on 
a non-PLA basis?
    Ms. Brita. Let me just check. About 45 days, Mr. Walberg.
    Mr. Walberg. Forty-five days.
    Ms. Brita. Yes, sir. That is the standard time to negotiate 
these kinds of things after award.
    Mr. Walberg. That is significant, especially when tax 
dollars are being wasted.
    I would, in deference to the chairman of the committee, 
yield back time.
    Mr. Lankford. Thank you, Mr. Walberg. I just have a quick 
question. I would be honored to be able to yield back if you 
would like to have that time as well.
    The Beacon Hill report that was being referenced by Mr. 
Cummings just a moment ago was not the report I was 
referencing, and I hope I didn't allude to a different report. 
It is your report, the GSA report, is the one that I was 
referencing that was done by Rider Levett Bucknall, but is 
actually a GSA-sponsored report and it's GSA details. So I'm 
not familiar with the report that he was mentioning before on 
that.
    So I wanted to be able to clarify that this is a different 
report. This is specifically a GSA-sponsored report that 
outlines that project labor agreements can cause small and 
minority businesses to be excluded, and that it also shows 
significant cost differences in multiple municipalities.
    Now I would be one to say PLAs should be in the toolbox. 
This is not anti-PLA to say they're in the toolbox. We're just 
questioning why there's an encouragement to use them when the 
GSA's own study says it often causes cost increased, based on 
this study.
    Ms. Brita. Mr. Chairman, I will repeat again, the study is 
still in draft form. It's not finalized. It has never been 
formally presented. It hasn't been finalized and we are relying 
on the real-time data to address those very issues about 
whether it is exclusionary, whether it's inclusionary, whether 
we have minority participation, women participation. We 
believed that getting real-time data with contracts that we are 
currently engaged in was a better approach and, quite frankly, 
better use of time because we will get information quicker.
    Mr. Lankford. Do you have any idea what the cost of this 
report is that has been set aside--of forming a report like 
this?
    Ms. Brita. I can get back to you and submit that 
information for the record.
    Mr. Lankford. Thank you. I would much appreciate that, just 
to be able to know if we suspended report because it wasn't 
consistent with the original Executive order to be able to get 
different sets of data on it, I would be interested to know 
what the cost of this report was that does not support the PLAs 
versus the cost of now finding data that does support PLAs on 
it.
    Ms. Brita. I will submit that for the record.
    Mr. Lankford. Thank you. I yield back my time.
    Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman. Let me ask a question 
again, Ms. Brita. Why did the GSA agree to a $3.3 million 
change order in the Lafayette Building in Washington, DC, just 
to implement the PLA?
    Ms. Brita. Mr. Walberg, the project team, led by the 
contract officer, felt that in order--because it was a complex 
project, multi-phased project, expensive, very difficult 
location, that the implementation of a PLA was in the best use 
of the taxpayer dollars. It would keep the project on schedule, 
provide stable labor force, and the decision was made to amend 
the contract to include the PLA.
    Mr. Walberg. Was this the finding in the consultant study 
that you set aside related not only to the GSA headquarters, 
but also to the Lafayette Building?
    Ms. Brita. I'm unfamiliar with the finding, Mr. Walberg. I 
don't understand. Was there a finding in the report?
    Mr. Walberg. It appears that in the study, you examined the 
issues of the Lafayette Building, the GSA headquarters at 1800 
F Street, the projects, and both had PLA implementation at an 
additional cost. And my concern is here this additional cost 
was taxpayer expenditures based upon change of findings and 
seeing that it would cost more. And you're saying it is only as 
a result of the technology, the ability, the complexity of the 
problem?
    Ms. Brita. Yes, I believe that the project team made the 
decision certainly independent of the report. I'm not even sure 
the project team was aware of the report. They made the 
decision because they felt, given the nature of the project--
and it is a very complex, expensive, multi-phased project--that 
the application of a PLA to this particular project would 
ultimately be in the best interest of the project and serve 
best value for the taxpayer. That was a decision made by the 
project team, led by the contract office.
    Mr. Walberg. I guess I continue to express some of the same 
concern that when we have studies that are showing significant 
problems with PLAs, that we are willing to use the additional 
cost at taxpayers' expense.
    I yield back my time.
    Mr. Lankford. Thank you. I apologize for having some issues 
with the clock. We have reset the clock. That should be about 
5\1/2\ minutes total in that colloquy.
    I recognize Mr. Cummings, the ranking member of the full 
committee.
    Mr. Cummings. Thank you very much. Let me say this to Ms. 
Brita. In my 15, almost 16 years in this Congress, there is one 
agency that I have a tremendous amount of admiration for 
accuracy and doing the job right and doing it independently and 
that is GSA. I don't want any of the employees at GSA looking 
at this and questioning whether we believe in what you do. I 
just want to say that with the strongest words that I can 
muster out of this body. And I want to thank you all for what 
you do every day.
    But I want to go back. I understand what the chairman was 
saying--Chairman Lankford was saying with regard to the Beacon 
Hill report. I know he knows I wasn't trying to imply that. 
This is the very reason why we wanted to have our witness. The 
Beacon Hill report will be discussed extensively within the 
next panel. But we have no way to rebut it because we weren't 
able to call our witness. That is the problem. That is what I 
was trying to get to. So, Mr. Zack, I have to do this. We have 
to do this to try to get our side's opinion in on this hearing.
    Let me go back to regarding H.R. 735, the legislation we 
are considering today. This is what I asked Dr. Phillips; I am 
continuing to ask what he would have testified to. Dr. Phillips 
would have explained with regard to this legislation that we 
just heard about, ``PLAs are precisely the market instrument 
capable of setting and adjusting work rules to the specific 
needs of particular projects. Robbing the government of PLA 
contracts robs the government of the ability to address this 
issue that critics claim is salient.''
    Again, I say to the chairman I am disappointed that we did 
not have the opportunity to hear directly from Dr. Phillips. By 
denying the minority its choice of witnesses you have denied 
the committee, and by that I mean the committee of the whole, 
the balance to conduct meaningful oversight.
    I ask unanimous consent that the letter from Dr. Phillips 
with written responses to my questions be placed in the record.
    Mr. Lankford. Without objection.
    [The information referred to follows:]

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    Mr. Cummings. I might also add that I would have preferred 
to have him here so he could put up his hand and swear to tell 
the truth, too. But this is how we have to do it.
    Deputy Administrator Brita, as a branch of government 
responsible for both levying taxes and authorizing how the 
Federal Government spends American tax dollars, it is incumbent 
upon every Member of Congress to ensure that the American 
people get the maximum value for every tax dollar spent. In 
Commissioner Peck's testimony before the OGR Subcommittee on 
regulatory affairs on this same topic in March, he stated that, 
``GSA only uses PLAs when they promote economy and efficiency 
in Federal procurement: Can you explain the process that GSA 
uses when determining whether or not to use a PLA in a 
construction project?
    Ms. Brita. Yes. Mr. Cummings, when GSA enters into a 
process to acquire a new Federal building, they use a process 
called best value and source selection. And the source 
selection panel is put together that evaluates all proposals, 
generally divided into two sections: The cost piece and a 
technical evaluation piece. The technical evaluation section of 
a proposal has several elements to it--past performance, 
experience, quality of personnel. We've added a PLA. All of 
those are evaluated against cost. First, the technical piece is 
looked at. Every proposal gets a score. Then they match it 
against the cost and they try to determine--the source 
selection panel determines the best value, which is a match of 
cost, plus all the technical qualities that are associated with 
the proposal. That is the process that the agency uses now.
    There is virtually no Federal agency now that goes straight 
to low bid. They have found that is just a waste of taxpayer 
dollars. You're buying junk with taxpayer dollars. You don't 
get best value. You have things that fall apart, whether it's a 
Federal building or an Air Force fighter. You really get what 
you pay for. And we try at the agency, the way we handle our 
procurements now, is to put that panel together, break 
proposals into your technical section and a price section and 
wed the two of them at the end of the evaluation period.
    Mr. Cummings. So does that go to efficiency and 
effectiveness in trying to make sure we get the best value for 
our dollar?
    Ms. Brita. Yes, particularly in real estate. There is an 
old saying in real estate that time wounds all deals. Once you 
start a real estate process, you need to keep it going. Once 
you stall, money, particularly on the part of the developer 
whose borrowed money from a bank, the bank doesn't care. They 
are going to be charging your daily rate on interest on the 
loan that you've incurred to build this project. So it is very 
important that we look for ways to keep projects going. Once 
you make the decision, a lot of work is done prior to actually 
signing that contract. About a third of all the work associated 
with these project is done prior to the contract. We want to 
make sure once it's signed we have a process in place to keep 
that project going forward because it's extremely expensive 
when it stalls.
    And so we are always looking for ways. That is why the PLAs 
are an attractive tool for GSA, because the contractor makes it 
is his responsibility to ensure that the labor is there, to 
make sure that there are no work stoppages, to coordinate--one 
of the big problems is coordinating work schedules; making sure 
that harmonizing the work week--between the various labor 
groups there's a harmonized work week so that everyone is 
working at the same time.
    Mr. Cummings. Ms. Brita, thank you very much. I just want 
you to know that what you just said, the reason for PLAs, seem 
to be pretty consistent with our motto for this committee. 
Every time we meet, the read this: We exist to secure two 
fundamental principles--first, Americans have the right to know 
that the money Washington takes from them is well spent. By the 
way, this is written by Mr. Issa. And second, Americans deserve 
an efficient and effective government that works for them. Our 
duty on the Oversight and Government Reform Committee is to 
protect these rights. I just wanted you know that what you just 
said, the use of PLAs seems to be consistent with the goals of 
this committee. And I want to thank you for your testimony.
    Mr. Lankford. Thank you. I yield 5 minutes to Mr. Kelly.
    Mr. Kelly. Thank you, Mr. Chairman. I would like to thank 
both witnesses for being here. Mr. Gordon, I have been with you 
before, and I appreciate you taking time to be with us. Also 
Ms. Brita. You just said something about real estate. Time 
wounds all deals.
    Ms. Brita. That is a little saying, time wounds all deals. 
When you start a real estate deal, it is very important.
    Mr. Kelly. I understand that. But there is another saying 
that's been out there, and it's: If it ain't broke, don't fix 
it. And I'm trying to understand--and believe me, I'm not 
coming here representing Republicans, and I hope that this 
panel isn't about Republicans versus the Democrats. It's about 
us representing the American people and making sure that as 
stewards of their hard-earned money that we are doing the best 
thing possible.
    I don't see where the PLAs at all fit in. And the troubling 
thing, the RLB report is something that was commissioned by the 
GSA. So I would assume that in your RFP you were very specific 
at to what is that you wanted RLB to find out for you. Having 
come from the private sector, where I have done a lot of RFPs, 
I have to tell you a 10 percent bonus doesn't level the playing 
field. That totally tilts it. As a person who's done many bids, 
to see that in there and say, ``OK. Fine.'' Maybe that would at 
the end of the day make a difference. It's a huge difference.
    I do wonder about these things, just as a representative of 
the taxpayers and the citizens of the United States. Where is 
it that we are going with these programs? I know the President 
came up with this just weeks after being put in office. Is 
there any instance anywhere where there are specific instances 
showing where there are these labor stoppages or abuses or why 
the PLA was installed? I see it as exclusionary. I don't see it 
as increasing the field of bidders. I see it as narrowing it 
down and actually being exclusionary to those 87 percent of 
people who could bid on this project that will not be able to 
do it because they don't back cab union labor. And I have 
nothing against unions, by the way. I represent a lot of union 
people. I have no problem with that. What I have a problem with 
is jobs. And jobs are important to anybody, whether you're a 
union member or you're a private citizen. We've got to get 
people back to work.
    So the PLA and this report is very troublesome to me. It's 
been there for a year and a half. If the RFP was put out by the 
GSA, then your office--maybe not you--your agency--knew exactly 
what it was looking for. It seems to me the information they 
got back is not consistent with what they were looking to find. 
And so if it doesn't match my argument, we'll set it aside and 
say it's irrelevant. You can back-shelf that to say it's still 
in draft form.
    But in a year and a half, I've got to tell you, as an 
automobile dealer, if I had to wait for a year and a half on 
any bid that I put out, I would say the landscape has probably 
changed dramatically in a year and a half. So if you could just 
briefly comment on that, I would appreciate that.
    Ms. Brita. Mr. Kelly, I just wanted to make one point. The 
10 percent is really not a bonus. It's not something that is 
added over and above the 100 points. It is part of the 100 
points.
    Mr. Kelly. Say that again. If you could repeat that.
    Ms. Brita. I think you used the word the 10 percent or the 
10 points is, ``a bonus.'' It's really not in addition to the 
100 points that one would normally----
    Mr. Kelly. Why is it in there?
    Ms. Brita. It's part of the hundred. It's part of the 
technical----
    Mr. Kelly. But it's a 10-point advantage if you----
    Ms. Brita. It's a 10-point preference that the contractor 
can choose to take advantage of or not.
    Mr. Kelly. As a guy that's been out in the real world, 
that's a heavy cover charge. So if that's part of what the 
proposal is, that's not really trying to get to the best price. 
That's changing the scope of who it is that is able to bid.
    Listen, I can tell you--and I mean this sincerely--being in 
the private sector all my life, you set those types of 
parameters, you are setting them to get one type of a bidder to 
get the award. I've watched it happen. I've lost out on too 
many bids where there was exclusionary language in there; and 
it makes it impossible for an independent bidder to sometimes 
get in the door, get their foot in the door. And that's the 
purpose of RFPs. They are supposed to be consistent. This tilts 
it.
    Ms. Brita. Mr. Kelly, one of the reasons that we are doing 
this pilot program is to address those very issues. To date, we 
have not seen a great variance, quite frankly, between those 
that bid and those that don't bit bid when we have the PLA 
involved. But when we finish the report, we will be able to, 
with much more definition, get at those very issues that you 
are talking about. The agency does not believe that PLAs are 
exclusionary. In fact, we think it opens the labor market up 
because it includes union as well as nonunion workers. So we 
take a different--it's a tool that the agency can use and that 
the contractors take advantage of. It's a contractor choice.
    Mr. Kelly. Well, let me ask you this: You say it opens the 
market up. What was excluding the market from being open 
before?
    Ms. Brita. This is just encouraging--nothing was--this just 
makes the process more attractive----
    Mr. Kelly. See, I differ with you there in that. There is 
language set in there that it is exclusionary. That is not 
including a wider universe of bidders. What you are doing is 
you are favoring one bidder over another. Ma'am, please, I have 
done bids all my life. When you put language in a bid that 
gives a 10-point--whether it's out of 100 points or whatever it 
is--advantage, that is exclusionary; and that is discouraging 
all bidders from the entire universe to bid on it. I have been 
involved in it too many times, and I have been excluded because 
I refused to be a partner in that type of thing. So I would 
just suggest to you that while you may be saying that it opens 
the universe to other bidders, it absolutely does not. It is 
exclusionary.
    Mr. Gordon. May I say a couple of words, Mr. Kelly?
    Mr. Kelly. Absolutely.
    Mr. Gordon. We in OMB are watching what agencies are doing. 
We are giving agencies discretion, but we are very sensitive to 
the point you raised. We want to be sure that this is not an 
exclusionary process. We want to be sure that PLAs are viewed 
as only a tool. I think it's noteworthy in the GSA work that 
among the 10, there were instances where the bidder offering a 
PLA won. There were instances where the bidders offering the 
PLAs did not win. This was not tilted one way or another. As I 
understand it--and I don't think the few points--and by the 
way, it's really less than 10, because cost is separate from 
that whole point scheme. I don't think that there are 
instances, at least not many instances, where those few points 
made any difference in who won or who didn't win.
    Mr. Kelly. And I understand where you are coming from. But 
I have to tell you, in the private world, when you are spending 
your own money, that's a huge difference. And only in this time 
do these matters become insignificant. Now you are using the 10 
instances that you looked at. But you refuse to look at the 
report that was drafted a year and a half ago in saying, well, 
there's not enough information in there yet.
    However, we did have 10 other studies that we find really 
don't speak to what it is that we are talking about. And I am 
telling you, as a taxpayer and as a person watching taxpayer 
funds, this is not the right road to go on.
    Mr. Walberg [presiding]. I thank the gentleman. The time 
has expired and I would ask deference from Mr. Gordon and Mr. 
Brita, if you would be able to stay around a little longer. Our 
chairman has left to vote. He will be back to continue the 
hearing. We have 9 seconds to get to our vote right now, and 
then we will come back.
    Mr. Gordon. We will stay until 11 o'clock. Thank you, sir.
    Mr. Walberg. Thank you. We will stand in recess.
    [Recess.]
    Mr. Lankford [presiding]. Thank you for allowing us in the 
quick recess there to be able to go and vote.
    Mr. Gordon, we are going to make your time after all. I 
would like to be able to yield 5 minutes to Mr. Murphy.
    Mr. Murphy. Thank you very much, Mr. Chairman, and I thank 
the witnesses for coming back to join us for just another 
brief--a few brief questions.
    Let me just begin by associating myself with the remarks of 
Ranking Member Connolly on the subcommittee and Ranking Member 
Cummings. I get that this committee has often been used over 
the years to advance the majority party's political purposes 
and their agenda. I think we've gone too far here, I think, in 
violating House rules, in violating basic concepts of fairness, 
across the line. And I think what you have seen across the 
country is an unfortunate willingness on behalf of those who 
would try to use their new-found political power to try to 
undermine organized labor and collective bargaining rights, to 
unfortunately cross that line over again, and over again, 
whether it's in Wisconsin with the collective bargaining law 
that was ruled unconstitutional by the courts, or here today.
    And I hope in the future that, though committee is 
certainly going to be used occasionally to advance the 
political imperatives of the majority party, that the other 
side gets a chance to put their best evidence on.
    Mr. Lankford. Would the gentleman yield?
    Mr. Murphy. I would yield.
    Mr. Lankford. If we are able to provide for the record 
moments in the past when this committee only had administration 
witnesses, when the roles were reversed and the Republicans 
were in the minority and were only allowed administration 
officials under the Bush administration, would that be 
acceptable?
    Mr. Murphy. If you would like to put that on the record?
    Mr. Lankford. We will submit that for the record in the 
days to come. Thank you.
    Mr. Murphy. Let me direct a question to Mr. Gordon. Mr. 
Gordon, in October of last year, myself and dozens of other 
Members of Congress sent a letter to you requesting information 
on the Executive order that we're talking about today. In 
particular, we were interested in some direction that you had 
sent to agencies to report back on how the Executive order had 
been complied with, how many agencies had used PLAs, and to do 
so on a quarterly basis. We sent this letter over in October 
and have not gotten a response since.
    But I would be interested to know from you as to the 
feedback and response you've gotten from agencies in now the 
year or so since the Executive order and then the guidance 
requiring the quarterly reports back was issued.
    Mr. Gordon. Congressman Murphy, thank you for the question. 
I apologize that you haven't yet gotten a response. My 
understanding is the response is close to being on its way to 
you. I will tell you that for the most part, we have seen few 
instances of PLAs being used in construction projects. That is 
consistent with our guidance. What we've said to agencies is, 
you need to do this carefully. You need to be sure that the use 
of a PLA in a particular project and those specific facts will 
serve economy and efficiency.
    It is not unusual in the procurement system, as I'm sure 
you know, that when we have a new tool available--and this is 
essentially a new tool for our contracting officer--it takes a 
while for us to figure out where it makes the most sense, how 
to use it. I think that a cautious, balanced approach makes 
sense.
    The fact is that there are lots of academic studies out 
there. Some indicate that PLAs save you money, some indicate 
that you don't. Part of the beauty of what GSA has done is you 
have real examples, not academic studies, of what's actually 
happened, and I think that's helpful.
    Mr. Murphy. Have you received reports back? You asked for 
data on a quarterly basis. Are you receiving that information 
back?
    Mr. Gordon. We are. And as I said, the numbers of PLAs 
being used is quite low.
    Mr. Murphy. I would appreciate that response as quickly as 
possible. This was from a group of Republicans and Democrats to 
show that there is bipartisan support for the use of PLAs, when 
appropriate. And I think it could be useful for us to have that 
data shared back.
    Mr. Gordon. I will ensure that comes to you expeditiously.
    Mr. Murphy. Let me ask one other question to both of you. I 
think one of the points that will be made likely by the second 
panel is that nonunion contractors are discriminated against 
when a PLA is required. Though they can go out and sign 
collective bargaining agreement after they are assigned the 
award, that puts them at a disadvantage versus contractors who 
are initially union contractors.
    Can you talk about that critique? Again, we won't have the 
opportunity to ask this of any minority witness on the second 
panel, and I imagine it will be one of the primary criticisms 
on the second panel. So I would pose it to both of you as to 
whether or not you have seen a discriminatory nature against 
nonunion contractors when PLAs have been used.
    Mr. Gordon. I could say a few words, and then Ms. Brita is 
welcome to supplement them. As you know, the Federal 
Acquisition Regulation rules says that this is not to be used 
in a discriminatory fashion. We are trying to increase 
competition. I'm confident that we can do this in a way that 
will not discriminate.
    The fact is that even when project labor agreements are 
used, very often the subcontractors, for example, are open 
shops that are not unionized in their work forces, as we noted 
in the preamble to the Federal Register notice in the rule. But 
in any event, if a company--if a company feels that an agency 
is conducting a competition in a way that excludes them and 
makes it impossible for them to compete, they have an avenue 
available. They can file a bid protest and they will get an 
independent review, whether by the Court of Federal Claims or 
GAO, to consider whether in fact they are being excluded or 
unfairly discriminated against in that competition.
    Ms. Brita. Mr. Murphy, in the preliminary data that we 
have, we have not found that there has been any discrimination 
between union and nonunion workers. And that's based on our 
just preliminary--these 10 projects, the handful of projects 
that we are looking at. But the preliminary indications are 
that it's not there.
    Mr. Murphy. Thank you. Thank you, Mr. Chairman.
    Mr. Lankford. Thank you. I yield 5 minutes to Mr. Labrador.
    Mr. Labrador. Mr. Chairman, I yield back.
    Mr. Lankford. Thanks, Mr. Labrador.
    Let me ask you a few questions. Ms. Brita, you referred to 
the new report that you all are doing, you said it is in a 
preliminary form. Is it in a draft form as well right now? Is 
it complete? Is it something that we could have?
    Ms. Brita. Are you talking about the 10 projects?
    Mr. Lankford. Yes, ma'am.
    Ms. Brita. We are looking at these 10 projects 
individually. The individual contracts have been signed by for 
each one of these projects. And I would expect at the end of 
the contract period--because we want to see how this flows out 
over the next 3 years as the contract gets put into place.
    Mr. Lankford. Right. But that report, will that be a 
complete report? It is currently in draft form? There are 10 
isolated pieces.
    Ms. Brita. Right now we are gathering data. I don't know 
whether we'll do a comprehensive report or whether we'll do 10 
individual reports or whether we'll put it all together. But 
we're gathering data and the form that the final sort of 
summary or report, as we call it, will take, but we haven't 
decided how that's going to look. But it will be some sort of 
summary data and evaluation of the worth of PLAs.
    Mr. Lankford. When that gets into a draft form that is 
available to be able to be sent to our committee, I would very 
much like to request a copy of that. And that would be sent 
over to us so that draft report could be added to this draft 
report that's already completed, and get a chance to do a side 
by side on that.
    Mr. Gordon, we're getting very close to your time. I 
understand that well. In the past, were you aware--and I know 
that you are not familiar with the very earliest days, 
obviously, of the Obama administration and some of the 
transition. I don't believe you were right there, right at the 
very beginning when the Executive order--do you know if that 
Executive order was done and was implemented based on the fact 
that during previous administrations, PLAs were blocked and 
were not able to be used?
    Mr. Gordon. Mr. Chairman, you are quite correct in that I 
was not in the administration at the time. You probably know I 
was in the Office of General Counsel at the Government 
Accountability Office, GAO, and joined the administration only 
in November 2009 so I'm not in a position to know what 
happened.
    Mr. Lankford. I've been trying to process through because, 
obviously, we want to use PLAs. And I want to reiterate this 
conversation is not about excluding PLAs; it's just trying to 
determine why there is an encouragement to use them, other than 
just that's best competition, to try to provide that neutral 
playing field to say--my question is, has there been a tendency 
in the agencies that they didn't want to use PLAs and so there 
needs to be an aggressive approach to say, no, we encourage you 
to use them?
    Mr. Gordon. Now I understand the question, and I can speak 
to that, Mr. Chairman. Under the prior administration there was 
an Executive order that prohibited agencies from saying in this 
particular project, we need to have a PLA in place. That, they 
were not allowed to do.
    What we wanted to do was say, agencies should be allowed to 
look project by project and say, here is a project where it 
would not serve efficiency to have a PLA, but here is a project 
where it would serve it. That's what we're trying to do. We 
want that to be available, not to dictate it.
    And I should be careful in the words. We are not 
encouraging the use of PLAs. We are encouraging agencies to 
consider whether in fact they need to require PLAs in a 
particular project.
    Mr. Lankford. But by increasing the point scale on them, as 
we talked about before, it gives them an immediate advantage to 
be able to engage and say, we may be a little higher in price, 
but we're greater in value because there can't be a strike 
during this time. We're going to offset our collective 
bargaining agreement with this, that we won't fulfill that to 
be able to get this project. So it does skewer somewhat, and it 
concerns me when this draft summary, one of the statements in 
it says that there is a risk that PLAs will exclude. But having 
PLA in it, that excludes small and minority businesses.
    Mr. Gordon. I understand. And I will be happy to let Ms. 
Brita speak about GSA. But as a governmentwide matter, I will 
tell you that there are many factors. I have been dealing with 
solicitations and procurements for over 20 years now. There are 
many, many factors that get far more than 10 percent of the 
points on the technical side: your past performance, your 
technical approach, your use of small businesses. All right? 
The amount that you commit to subcontract to small businesses 
is frequently a factor, and it can frequently have more than 10 
percent of the points.
    So that in the mix of things, what you are capturing--and 
there are different ways to do this. GSA has taken one approach 
and we're evaluating how well that works. But it seems to me 
you can appreciate that in a best-value context where you may 
get efficiencies through the use of a project labor agreement, 
you will want to capture that, just as you typically get more 
than 10 points for having a good track record, good past 
performance.
    Mr. Lankford. I absolutely understand that. And again, 
there may be great location for a PLA to be the perfect tool, 
to be able to use that in that toolbox on it. But the last 
thing we would want to do is to be able to try to put out the 
word and say this group gets a higher score based on the fact 
that they are unionized, and discourage other people from 
engaging in a competitive environment. We want to be able to 
have a level playing field and a competitive environment so we 
are getting best value, and as many contractors as possible are 
bidding for our projects to get the best possible price.
    If we are pushing in such a way as to say there is a 
possibility someone will be excluded, that's what I am 
beginning to question; and to say, if this report is 
questioning that from GSA, then I'm also saying, OK, what was 
the evidence to make the shift when a year after the shift was 
made, or 2 years after the shift was made, there was an 
immediate look to say, OK, maybe there is a problem here.
    Mr. Gordon. If I could, Mr. Chairman, I would point out 
that when GAO, my former employer, looked at project labor 
agreements, I think in 1998, they reported that there was a 
wide range of views. Some people said they were very helpful. 
Some people said they were more efficient. They saved costs. 
They cost costs. The beauty of what GSA has done is it's gotten 
us real examples; real examples, not theoretical, not 
hypothetical.
    Mr. Lankford. Great. I would like to yield one moment for 
Mr. Murphy.
    Mr. Murphy. Thank you. Just a followup question. The 
chairman was talking about point-scoring systems in which a PLA 
bidder may get more points. Just to clarify, the individual 
decisions about how bids are structured is up to individual 
agencies; is that correct?
    Mr. Gordon. Absolutely.
    Mr. Murphy. And some agencies may choose to incorporate an 
increased point system for PLA bids, but that is not required 
by this Executive order, nor is it required by any other 
direction from the administration.
    Mr. Gordon. You are absolutely correct. What we are doing 
at this point is letting agencies take different approaches. We 
may down the road, as we listen to what the agencies are doing, 
we may come up with best practices. That's what we frequently 
do, whether we're dealing with the ways of handling 
organizational conflicts of interest, best value, past 
performance. We let agencies try different approaches with some 
guidance. And then as we learn more, we can give more specific 
guidance.
    Mr. Murphy. Thank you very much.
    Mr. Lankford. Mr. Gordon and Ms. Brita, thank you so much 
for joining us here. You are excused and you are going to make 
your flight on time.
    Mr. Gordon. I am very grateful, Mr. Chairman.
    Mr. Lankford. I am grateful that you all were able to be 
here. Thank you. We will take a brief moment to be able to 
recess--to reset for the next panel.
    [Recess.]
    Mr. Lankford. I would like to welcome our third panel. Mr. 
Maurice Baskin is a partner with the law firm of Venable LLP 
and represents the Associated Builders and Contractors. 
Professor David Tuerk is the executive director of the Beacon 
Hill Institute at Suffolk University. Mr. Kirby Wu is the 
president at Wu & Associates. And Mr. Mike Kennedy is the 
general counsel of the Associated General Contractors of 
America. Pursuant to committee rules, all witnesses are sworn 
in before they testify. Please rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Lankford. Let the record reflect the witnesses answered 
in the affirmative. You may be seated.
    In order to allow time for discussion, I would like you to 
limit your testimony to 5 minutes. Obviously we'd have mercy if 
you go a little over on that so we would allow for your 
testimony. But we have received your written testimony already 
and that will be made part of the record.
    Mr. Baskin, I want to be able to recognize you for 5 
minutes.

STATEMENTS OF MAURICE BASKIN, COUNSEL, ASSOCIATED BUILDERS AND 
CONTRACTORS, INC.; DAVID TUERK, PROFESSOR AND CHAIRMAN, SUFFOLK 
UNIVERSITY AND BEACON HILL INSTITUTE; KIRBY WU, PRESIDENT, WU & 
 ASSOCIATES; AND MIKE KENNEDY, COUNSEL, THE ASSOCIATED GENERAL 
                     CONTRACTORS OF AMERICA

                  STATEMENT OF MAURICE BASKIN

    Mr. Baskin. Good morning, Chairman Lankford, members of the 
subcommittee. My name is Maurice Baskin. I am a partner in the 
Washington, DC, law firm of Venable LLP.
    Mr. Lankford. I'm sorry, Mr. Baskin. Is your microphone on? 
Can you tell if the light is on?
    Mr. Baskin. How's that? Any better?
    Mr. Lankford. That's perfect. Thank you.
    Mr. Baskin. Do I need to start over? I've just said good 
morning.
    I am here representing Associated Builders and Contractors, 
which is the national construction industry trade association 
representing 23,000 merit shop contractors, employing an 
estimated 2 million workers. I have previously testified before 
on the subject of government-mandated PLAs before another 
subcommittee of this committee, and I have resubmitted that 
testimony for the record of this proceeding so that I can focus 
today on the very important bill introduced by Congressman 
Sullivan, H.R. 735.
    This bill is vitally needed to prevent the ongoing waste of 
taxpayer dollars and corruption of the Federal procurement 
system that is being caused by the President's Executive Order 
13502 and the agency rules that have implemented it.
    The President's PLA Executive order discriminates against 
87 percent of construction workers and their contractor 
employers who choose not to belong to or have contracts with 
labor unions. This order was issued as one of the President's 
first acts in February 2009, with no meaningful outreach to the 
construction community, no transparency in its formulation--we 
heard today that the representatives of the administration 
still don't know how it came to be--and no factual 
justification at all for its findings. Most importantly, there 
were no significant labor problems on any Federal construction 
projects during the 8 years governed by President Bush's 
Executive Order 13202, which prevented Federal agencies from 
requiring or prohibiting PLAs on Federal construction projects 
or on federally assisted projects.
    In the absence of any problems and from the manner in which 
the Obama order was put into effect, it is clear that the only 
reason for the PLA Executive order now in place was and is 
politics.
    Having heard or read the testimony of representatives from 
the Office of Management and Budget and the GSA at now two 
congressional hearings, we have yet to hear them identify any 
factual basis in the form of market research or identified 
labor problems previously existing on Federal construction 
projects that justifies the Federal Government's new 
restriction on competition through PLA mandates. We heard today 
that it's a process and that it's open to competition, but as 
the Members rightly pointed out, there is a preference. The 
thumb is on the scale. It is now being tilted, if not mandated, 
in favor of these PLAs; and it is impacting competition. They 
are doing a pilot program, a pilot program that is ongoing in 
nature. Apparently it's continuing to this day on every GSA 
project. That's a peculiar definition of ``pilot,'' while they 
are supposedly gathering market research data which is contrary 
to the way that all other procurements have been done in the 
past. GSA has adopted apparently a ``build first and ask 
questions later'' policy which is contrary to settled 
procurement principles.
    At the same time, many academic studies--and we're going to 
hear more about that later--and research by the government's 
own consultants, as has already been pointed out, have 
established that government-mandated PLAs increase the cost to 
taxpayers, reduce the number of potential bidders, and 
particularly the number of subcontractors to those bidders who 
are merit shop. They do nothing to improve the quality, safety, 
timeliness, or overall efficiency of government construction 
projects.
    Only Congress can effectively stop the political favoritism 
in contract awards that is wasting taxpayer dollars and 
corrupting the Federal procurement process. And that is what 
H.R. 735, the Government Neutrality in Contracting Act, will 
do. H.R. 735 will simply reinforce the existing Federal mandate 
in favor of full and open competition in all Federal 
procurements with specific reference to PLAs. The bill will 
prohibit Federal agencies once and for all from awarding 
construction projects based on the improper consideration of 
whether the contractors are willing to enter into labor 
agreements. Until this Executive order, that had not been the 
rule of law in this country under Federal procurement 
principles.
    As the bill states, agencies shall neither require nor 
prohibit contractors from adopting PLAs as a condition of being 
awarded the work, nor discriminate on that basis.
    The bill is neutral. I can't emphasize that enough. It's 
neutral on the subject of PLAs. It simply keeps the government 
out of the process. It closely tracks the Bush Executive orders 
that were upheld by the Court of Appeals for the D.C. Circuit 
in the Alba case. So there is clearly no basis for a legal 
challenge to H.R. 735, and it avoids interfering with Federal 
labor laws because it specifically says that nothing will be 
construed to prohibit a contractor or a subcontractor from 
voluntarily entering into a PLA on their own. If they're so 
great, let the market show it, and let them come forward and 
prove it, without it being tilted or mandated by the Federal 
Government.
    We applaud your efforts to promote H.R. 735. And I will be 
happy to answer questions after the other speakers.
    Mr. Lankford. Thank you Mr. Baskin.
    [The prepared statement of Mr. Baskin follows:]

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    Mr. Lankford. Mr. Tuerk.

                    STATEMENT OF DAVID TUERK

    Mr. Tuerk. I am David Tuerk, and I am a professor and 
chairman of economics and executive director of the Beacon Hill 
Institute at Suffolk University in Boston, which is a Ph.D.-
granting institution. I would like to thank Chairman Lankford 
and members of the subcommittee for inviting me, and I 
appreciate the opportunity to submit testimony on H.R. 735. My 
comments are my own and do not represent the opinions of 
Suffolk University, nor do they represent my support for any 
organization or private interest that might stand to benefit 
from the passage of H.R. 735, which I heartily endorse.
    I would like to enter into the record studies of project 
labor agreements that the Beacon Hill Institute has performed 
under my direction over the last 8 years. Of course we've 
already heard about those. Among these are studies in which BHI 
estimated the effects of PLAs on construction costs for school 
building projects in Massachusetts, Connecticut, and New York. 
We found that PLAs added 12 to 18 percent to final construction 
costs in Massachusetts and Connecticut, and 20 percent to final 
bids for school construction projects in New York.
    I suppose we'll get into the comments from Dr. Steel in 
question and answer. But since he preempted me, I am going to 
make a point about what he had to say. He accuses us of 
spurious correlation. Well, I have a buzz word that I could use 
about his work which is multi-cullinearity. These are the kinds 
of buzz words that economists typically use when they are 
criticizing each other's work in an academic study. I'm sorry 
that he has decided to conduct this conversation in a way that 
reflects more his outlandish and bizarre characterizations of 
our work than what we actually did, but we can get back to that 
later.
    In another study, we examine the Federal Government's 
experience with the Bush-era ban on government-mandated PLAs. 
This study was aimed at determining how the record of 
construction projects conducted over this period reflects on 
President Obama's Executive order, encouraging PLAs on 
construction projects costing $25 million or more.
    President Obama claimed that the order was needed because, 
``large-scale construction projects posed special challenges to 
efficient and timely procurement by the Federal Government.''
    Our study proceeded on the premise that if President Obama 
is correct about the need to mandate PLAs in order to overcome 
these, ``special challenges,'' then President Bush's ban on 
mandatory PLAs should have produced many instances of the 
delays, strikes, cost overruns, etc., against which PLA 
advocates frequently warn.
    We asked the Associated Builders and Contractors to assist 
us in getting the needed data from the Federal Government. 
Using the Freedom of Information Act, ABC wrote to Federal 
agencies with procurement responsibilities, including OMB and 
GSA, for information relating to any problems caused by the 
absence of government-mandated PLAs over the period of the Bush 
Executive order. The result: No respondent to the ABC letters, 
including the OMB and the GSA, could substantiate the 
occurrence of any delays or cost overruns on Bush-era projects 
costing $25 million or more that were attributable to the 
absence of a PLA.
    This finding should come as no surprise. The real purpose 
of a PLA is not to deal with special challenges but to 
discourage bids from nonunion contractors and to give the PLA 
unions control over the hiring process. PLAs accomplish this 
purpose by requiring contractors to follow onerous work rules, 
to turn away from their own labor force in favor of labor 
provided by union hiring hall and to pay fringe benefits a 
second time that they already provide their workers.
    Consider in this light the fatuous nature of the argument 
for PLAs. The argument presupposes that the work will be 
performed by the very unions that create the conditions under 
which the predicted delays, jurisdictional disputes, and work 
stoppages could occur if a PLA is not adopted. The unions that 
create these conditions are predestined to get work, however, 
only if the PLA is adopted, and then has the intended effect of 
discouraging nonunion contractors from bidding.
    I have read a number of studies, most commissioned by State 
and local government agencies, which purport to show that a PLA 
would save on costs. Typically, however, these studies adopt 
the same tortuous logic that the unions employ in support of a 
PLA. The studies show cost saving by assuming away the 
possibility that a decision not to adopt a PLA might produce 
lower bids from qualified contractors than a decision to adopt 
one would produce. However, the best way to avoid cost overruns 
and delays is to encourage, not to discourage, bids from 
contractors who are not burdened by the collective bargaining 
agreements that hobbled the competitiveness of the PLA union 
workers and their contractors.
    According to government data, the fraction of all 
construction workers who belong to unions fell by 25 percent, 
from 17\1/2\ percent in 2000, to 13.1 percent in 2010. So what 
we have is a state of affairs in which 13 percent of 
construction workers are attempting to protect their jobs 
against the other 87 percent, and then the added cost to 
taxpayers.
    These facts show that the real agenda behind government-
mandated PLAs is to shore up the market share of a dwindling 
minority of construction workers at the expense of the vast 
majority and taxpayers.
    By passing H.R. 735, Congress could take an important step 
toward rejecting the fatuous reading that lies behind PLA 
mandates and ending what amounts to a discriminatory and costly 
handout to a group of special pleaders.
    I conclude by pointing out that H.R. 735 is not anti-labor, 
and in fact it's not even anti-union. I am currently involved 
in a case where a contractor is suing because its union was 
excluded from a New York City PLA. PLAs are only about the 
unions that manage to have the political clout to induce 
government agencies to require them to form a PLA. Nor has this 
legislation stripped government of a useful tool for achieving 
economy in State government. If the tool is a useful one, then 
contractors are free on their own behalf to adopt the PLA. 
Nothing is standing in the way of that.
    Therefore, I believe that H.R. 735 is clearly in the public 
interest. And again, I strongly support its adoption. Thank 
you.
    Mr. Lankford. Thank you Mr. Tuerk.
    [The prepared statement of Mr. Tuerk follows:]

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    Mr. Lankford. Mr. Wu.

                     STATEMENT OF KIRBY WU

    Mr. Wu. Good morning, Chairman Lankford, Ranking Member 
Connolly, and members of the subcommittee. My name is Kirby Wu. 
I am the president of Wu & Associates located in Cherry Hill, 
New Jersey. On behalf of the Associated Builders and 
Contractors and the merit shop contracting community. I would 
like to thank you for the opportunity to testify before you 
today in support of the Government Neutrality and Contracting 
Act, H.R. 735. I hope my testimony sheds some light on how 
government-mandated project labor agreements harm qualified 
contractors and employees that want nothing more than to 
compete on a level playing field to build on-time and on-budget 
construction projects at the best possible price.
    PLA mandates and preferences by Federal agencies result in 
increased costs for contractors and unnecessary procurement 
delays and uncertainty and favoritism in the Federal 
procurement process, and stands as a barrier to growth for 
businesses and job creation in an industry that's already 
suffering an unemployment rate of 17.8 percent.
    This is why the industry supports legislative remedies like 
H.R. 735 which restores fairness in Federal contracting and 
will eliminate waste so the government can build more projects 
and create more construction jobs.
    Wu & Associates is a small-business success story. We have 
grown into an industry-leading, award-winning general 
contractor specializing in design-build projects, lead 
sustainable design, and historic preservation for Federal, 
State, local, and private clients. Our firm's success depends 
on the principles of free enterprise and attracting the most 
qualified, talented personnel and companies for a job, 
regardless of their labor affiliation.
    Over the years we have successfully performed millions of 
dollars worth of Federal, State, local, and private 
construction projects without the need to enter into a PLA. The 
contracting policies of the Federal Government influence the 
growth and success of small businesses like Wu & Associates, as 
well as the economic well-being of our employees and their 
families.
    PLA mandates place merit shop competitors at a disadvantage 
and promotes discrimination based on labor affiliation. PLAs 
have a practical effect of creating jobs exclusively for 
unionized construction trades people by forcing union 
representation or compulsory union membership, inefficient and 
archaic union work rules, payment of union dues, forced 
contributions to union pension and benefit plans, and a host of 
other problems on employees of merit shop contractors like my 
firm's employees that have freely decided not to join a union.
    Injecting PLA mandates into the Federal procurement process 
discourages competition from qualified contractors like my own 
who employ 87 percent of the U.S. construction work force. It 
doesn't take an economic degree to know that less competition 
from a pool of qualified bidders leads to increased costs for 
the government and taxpayers. If members of this subcommittee 
think PLA mandates somehow advance the economy and efficiency 
in government contracting, please take a look at my written 
testimony which describes in great detail my unfortunate 
experience with a Federal PLA mandate that resulted in 
procurement delays, red tape, and needless litigation costs.
    In short, in 2010, U.S. Army Corps of Engineers mandated 
PLA on a project in Camden, New Jersey, in the middle of the 
bidding process. By doing so, the Corps sent a message to 
qualified businesses like mine that we were not welcome to 
build this project unless we agreed to use union labor and 
follow the terms and conditions of a PLA. This is ironic 
because we were previously selected as the prequalified 
contractor to bid this project. After weeks of uncertainty and 
attempts to get the Corps to reverse the PLA, we were left with 
no choice but to file a bid protest with the Government 
Accountability Office against the Corps' illegal and 
discriminatory mandate. Eventually, in the face of a bid 
protest, the Corps abandoned their PLA mandate, but they 
replaced it with an illegal and discriminatory PLA preference 
that enticed contractors to voluntarily submit a PLA offer by 
giving them additional credit in their technical evaluation of 
our offer as part of the best-value procurement process.
    We decided not to pursue this contract further because we 
felt it was not worth investing the additional company 
resources to prepare a bid and compete against contractors 
submitting PLA offers in this distorted playing field. This 
exercise resulted in lost time and money for our small business 
that we could have invested back into our work force and 
company. It also resulted in needless procurement delays, 
exceeding 2 months, as the Corps bid submission deadline was 
extended a number of times to accommodate the PLA controversy. 
Remarkably, the contract was eventually awarded to a merit shop 
general contractor at a bid priced nearly 15 percent below the 
original $16\1/2\ million estimate, without a PLA offer. And 
today the project is reportedly on time and on budget. The 
winning contractor would have been discouraged or eliminated 
from competing if not for our efforts to fight the PLA mandate.
    As a taxpayer it is outrageous that the government is 
wasting tax dollars and denying opportunity to quality 
businesses and their skilled work forces that cater to just 
13.1 percent of the U.S. construction work force.
    I ask that the members of the subcommittee support Mr. 
Sullivan's Government Neutrality in Contracting Act. 
Contractors, and not Federal procurement officials pressured by 
special interests, should be the ones deciding whether a PLA is 
an appropriate tool. Wu & Associates applauds the Oversight and 
Government Reform Committee for its continued interest in the 
issue of government-mandated PLAs.
    Thank you for the opportunity to testify on behalf of small 
businesses and the merit shop contracting community. We deserve 
a fair opportunity to provide the best construction product at 
the best possible price to the taxpayers.
    Mr. Lankford. Thank you, Mr. Wu.
    [The prepared statement of Mr. Wu follows:]

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    Mr. Lankford. Mr. Kennedy, proceed with your testimony for 
5 minutes.

                   STATEMENT OF MIKE KENNEDY

    Mr. Kennedy. Good morning, Chairman Lankford and members of 
the subcommittee. My name is Michael Kennedy. I have the 
privilege of serving as the general counsel of the Associated 
General Contractors of America. I am here to express the 
Association's strong support for H.R. 735 and the neutrality 
that this bill seeks to achieve.
    AGC is the leading trade association in the construction 
industry. It has more than 33,000 members in nearly 100 
chapters throughout the United States. Among these members are 
building, highway, industrial, and utility contractors. While 
some of them are quite large, most are small and closely held. 
Many are Federal contractors.
    AGC was founded in 1918 and historically a majority of its 
members have been union contractors. Today such contractors are 
in a minority, but they remain a large and very important 
segment of the Association's membership. To this hearing on 
project labor agreements and H.R. 735, AGC therefore brings a 
broad perspective.
    Before turning to the central subjects of today's hearing, 
I should explain that the labor unions in the construction 
industry are unique. Unlike their industrial counterparts, 
these unions have organized themselves along craft lines. One 
union represents carpenters, another represents operating 
engineers, another represents electricians, and so on down the 
line. Industrial unions represent everyone in the appropriate 
bargaining unit without regard to any differences in their job 
classifications.
    But construction unions are different. No one of them 
represents all of the craft workers on a typical construction 
project. The individual agreements negotiated with each of 
these unions are similarly limited. Each agreement covers a 
separate and single craft, but, on the other hand, the typical 
agreement applies to all of the work that the craft performs in 
a particular area.
    PLAs differ from these area-wide agreements in two ways. 
PLAs are typically negotiated with several unions and therefore 
cover several crafts. And as the name suggests, PLAs are 
limited to individual projects and are not area-wide.
    The historical purpose of PLAs, dating back to a time when 
unions represented nearly 90 percent of all construction 
workers, was to eliminate inconsistencies in these area-wide 
agreements that would otherwise apply to particular projects, 
such as differences in work rules and expiration dates. Then 
and now, PLAs typically supersede such area-wide agreements.
    Over the last 60 years, as the percentage of construction 
workers that unions represent has fallen below 14 percent, 
project labor agreements have become less and less relevant. A 
large majority of today's work is not subject to any agreement 
with any labor union, and the need to address differences 
between and among labor agreements has greatly diminished. Open 
shop contractors are free to coordinate their employment 
practices entirely on their own initiative and without changing 
or superseding any prior agreements with labor unions.
    In this new environment, union contractors are more likely 
to seek PLAs for the purpose of meeting their open shop 
competition. Without seeking to open or reopen their area-wide 
agreements, such contractors can seek the more favorable terms 
or conditions they may need to compete for individual projects.
    AGC neither supports nor opposes PLAs per se. The 
Association takes the position that such agreements are just 
another of the many tools that contractors--not owners, but 
contractors--should have at their disposal as they seek to meet 
their clients' needs.
    At the same time, AGC strongly opposes government mandates 
for PLAs or area-wide agreements or any other labor agreements 
for publicly funded construction projects. The National Labor 
Relations Act commits such matters to the discretion of 
construction employers and their employees. And for a host of 
reasons, AGC believes that government contracting agencies 
should follow suit.
    As we have already heard, government mandates for PLAs 
discourage competition. They typically require open shop 
contractors to make fundamental changes in the way they would 
approach an upcoming project and to incur costs that such 
contractors would not otherwise incur.
    Such mandates may also trouble union contractors. They also 
may require union contractors to make significant changes in 
the way they would approach a project. Indeed, their typical 
purpose and effect is to deprive union contractors of the 
opportunity to work under the area-wide agreements that these 
contractors have already negotiated.
    Government mandates can also disrupt the bargaining over 
area-wide agreements. They invite the construction unions to 
bypass the contractors for whom their members work and seek to 
negotiate with what may be inexperienced public officials. They 
also give unions the leverage to make demands that the unions 
could not otherwise make.
    Beyond that, it remains clear that construction contractors 
are in the best position to determine whether and, if so, when 
a PLA will help them meet the government's legitimate interest 
in having its projects constructed on time, within budget, and 
to all specifications.
    Federal construction contractors have to post performance 
bonds and to provide a host of contractual guarantees that they 
will meet their obligations. It follows that these contractors 
already have ample incentive to consider any PLA or other labor 
agreement that would make it easier or less expensive for them 
to perform their work.
    In sum, AGC supports H.R. 735. AGC would suggest that the 
committee make a technical amendment to section 3(d) where the 
bill authorizes an exemption from its substantive provisions 
under special circumstances. As currently written, this 
provision actually tilts the scale against union contractors. 
But AGC believes that the problem is inadvertent and can be 
quite easily corrected.
    Thank you again. Let me simply repeat that AGC opposes 
Federal mandates for project labor agreements and supports H.R. 
735. Thank you.
    Mr. Kelly [presiding]. Thank you.
    [The prepared statement of Mr. Kennedy follows:]

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    Mr. Kelly [presiding.] I want to thank all the witnesses 
for being here.
    Mr. Wu, it's good to see somebody who has spent a little 
bit of time in Pittsburgh in the room besides myself. I saw 
your time at Carnegie Mellon.
    And Professor Tuerk, I think your background kind of speaks 
for itself. I don't know that anybody could question what 
you've done.
    Mr. Tuerk. Thank you Congressman. I wonder if I could make 
a correction, though. I inadvertently said Dr. Steel and I 
meant Dr. Phillips. I have no idea why I said that, but I would 
like to get the name right.
    Mr. Kelly. OK. That's fine. We will note that.
    I recognize myself for 5 minutes. And I think this is 
critical because this hearing today is not about unions or 
nonunions. It's not about who gets the bid or doesn't get the 
bid. It's about fairness. And certainly if the President's 
Executive order is based on something that he thought was 
unfair--anybody in the panel, is there any instance anywhere 
that would have caused the President to issue this Executive 
order? I can't find anything in any of the testimony on any of 
the witnesses that would suggest that there was a problems that 
existed in the bidding process. And having done many RFPs 
myself and looking at it, I tend to feel the other way; that it 
is extremely exclusionary and it does tilt the playing field.
    So if anybody--and Mr. Baskin, Mr. Tuerk, Mr. Wu, Mr. 
Kennedy, if anybody could offer anything that would perhaps 
shed some light on why this is in fact issued and why does it 
have any importance as to what is it we are trying to do if 
it's about fairness?
    Mr. Baskin. If I can respond first, I may also speak to it. 
But as indicated and as we've heard from the witnesses earlier, 
they have no specific labor problems on previous contracts 
procured under the Bush order. There was no problem. I think 
it's been referred to as a solution in search of a problem. The 
only justification for it has to be political because of the 
way it was implemented, with no outreach and with no identified 
real-world circumstances in which problems had arisen without 
PLAs being mandated by the government. It's just totally 
unnecessary, and contrary to decades of law as well as the 
Competition in Contracting Act that requires full and open 
competition on Federal projects.
    Mr. Kelly. Professor.
    Mr. Tuerk. We did all we could to find out if there were 
any contracts under the Bush administration that suffered for a 
lack of a PLA and simply couldn't come up with one. It was not 
only the FOIA letters that ABC sent out, we combed through 
government data bases, looked over survey results from a 
national survey, everything we could to find out if there were 
any, and there simply were not.
    And I do remember a campaign speech that President Obama 
made in which he promised project labor agreements. So again I 
think that's probably the best explanation for the Executive 
order.
    Mr. Wu. Well, Wu & Associates, frankly, we would not bid a 
project that would have a project labor agreement on it. The 
previous testimony where the GSA procurement officer stated 
that there was a 10-point system built into their RFP process 
would certainly raise our eyebrows in our office as we look for 
fair bidding opportunities in the Federal public and State 
sectors. That would be something that would jump out right 
away, and it would probably be a project that we would not 
pursue; because I would agree with you, Mr. Kelly, that on the 
private-sector side, every dollar matters. To put together a 
bid in the millions of dollars takes a tremendous amount of 
time and resources for our company. And if there is the 
slightest disadvantage going in, it would strongly discourage 
us from bidding the project.
    Mr. Kelly. Mr. Kennedy.
    Mr. Kennedy. I'm not aware of any systemic problems that 
the Federal Government suffered during the Bush administration 
as a result of its Executive order. That Executive order made 
it abundantly clear that construction contractors were free to 
pursue project labor agreements where contractors, knowing the 
work they had to do, knowing the commitments that they had to 
make, believed that a PLA would be in their interest. With that 
said, I believe we had an era of very open competition. It was 
healthy for all sides of the industry.
    Mr. Kelly. Mr. Wu, just following up on this, because I 
have done the same thing you have. And when you get these RFPs, 
you can be excluded from your--your bid can be thrown out if 
you don't dot all the I's and cross all the T's.
    And what has always bothered me, since getting here 5 
months ago, is we have a continual parade of people who have 
actually never done what it is that they're regulating and 
people who have never actually had to have their own skin in 
the game, determining how these bids are going to be structured 
and how they're going to be awarded. And I find that completely 
troublesome.
    Just so the general public knows--because not all of us 
have the opportunity to do this. When you do submit a bid, 10 
points. Critical? Not critical?
    Mr. Wu. It's absolutely critical. When we are investing 
thousands and thousands of dollars of our own overhead, project 
managers, estimators, support staff to put a bid together, a 
multimillion-dollar bid could take 3 or 4 weeks for our office 
to put together, working along with our subcontractors as well. 
We can't afford to invest that time and money into an RFP 
process where we feel like there's any chance that we would be 
at a disadvantage because there are other opportunities out 
there with a disadvantage not present. I could go bid another 
project.
    Mr. Kelly. So the addition of this language does not 
encourage a wider universe of bidders. It actually does limit 
those who would take the time. I have friends that it cost them 
$50,000 to prepare a bid. This is private industry. I can't 
imagine the hoops they would have to jump through here to get 
it ready, and knowing at the end of the day if they don't 
include the PLA language, they're at a 10-point disadvantage 
right off the bat. So I thank you.
    Mr. Lankford [presiding]. I recognize Mr. Murphy for 5 
minutes of questions.
    Mr. Murphy. Thank you very much, Mr. Chairman. Mr. 
Chairman, I would like to submit a letter to the record from 
the president of Toyota, and in it he says this: Toyota has 
used and required project labor agreements on many of their 
biggest and most important projects. He says that Toyota has 
consistently employed project labor agreements for our major 
construction projects, and we could not have been more pleased 
with the results. To date, approximately 45 million man hours 
have been invested in the construction of nine automobile truck 
and component plants in the United States. In each and every 
instance, these projects were completed on time and on budget 
and with an exemplary safety record.
    Toyota, as well as major American and international 
companies like Boeing and Wal-Mart, have made the decision to 
require project labor agreements because they think it's the 
best business practice for them.
    So let me ask this question to each of the panel members. 
And I just need a yes or no answer. I have only got 5 minutes 
here. Do you think we should pass legislation as a Congress 
that would prohibit the requirement of PLAs in private sector 
construction work? I just need a yes or no answer to that 
question.
    Mr. Baskin. No. Nobody is asking for that--well, I'm not.
    Mr. Murphy. I'm asking, would you--would you support that?
    Mr. Baskin. No.
    Mr. Murphy. Would you support that legislation?
    Mr. Tuerk. Certainly not.
    Mr. Wu. No, I would not.
    Mr. Kennedy. Where a private owner is backing a decision to 
require a PLA with its own resources and has the flexibility to 
use delivery systems that are not available in the public 
sector, I see no reason why the government should step in and 
interfere with that.
    Mr. Murphy. Thank you, Mr. Kennedy.
    So I hear a lot of talk from my Republican friends and from 
my conservative friends about how the government should run 
more like a business. But what you are proposing to do here, 
even in an act that has some nice words about neutrality, is to 
take away from the Federal Government a tool that a lot of 
private companies use, which is a decision that they make that 
a requirement that PLAs be used in construction projects is 
good for their particular project.
    What we're asking here today is for that to be taken away 
from the Federal Government. And as we've heard over and over 
and over again, there's nothing mandating that this be used 
project by project. All the Federal Government does is just 
encourage a look at whether a PLA would be worthwhile, as many 
private companies have. So I'm searching here for why we have a 
double standard, and we're all searching for why we have a 
panel with only witnesses that are critical of PLAs. So I look 
to the underlying political motives here.
    Mr. Tuerk, you said in your testimony that you are not here 
out of an anti-union bias, that this isn't about union; this is 
about the best use of taxpayer dollars.
    But Mr. Tuerk, just about 2 months ago, you wrote a piece 
entitled ``Let's Put an End to all Collective Bargaining.'' And 
in it you wrote, referring to what was going on in Wisconsin, 
``The Wisconsin episode is, therefore, just a leading edge of a 
political movement that could, if conducted skillfully, make it 
possible to unravel public support for the unions in so 
dramatic a fashion as to change the face of American politics. 
This would indeed be a wonderful thing to behold.''
    So let me ask you this. Do you stand by this blog post, 
this article that you wrote in which you called for an end to 
all collective bargaining?
    Mr. Tuerk. Well, I most certainly do. But I want to make a 
distinction here. I am here limiting my remarks to this 
particular piece of legislation. And the committee is of course 
free to evaluate my remarks here on the basis of things that I 
have said elsewhere, like this, for example. But what I'm 
presenting here are opinions based on research, not just my 
broader opinions about how collective bargaining fits into 21st 
century America.
    So yes, I think that we're finding out in State after State 
the harm that collective bargaining has done when it's allowed 
between government workers and their governments. Even 
Massachusetts has faced up to the reality and has done 
something about the excesses of union power within the--among 
government workers. And yes, I think that collective bargaining 
is a tool whose time has passed.
    Mr. Murphy. Thank you. And so I'm asking that question 
because your work hasn't just been criticized by the one author 
that we cited here. It's been criticized over and over. So I'm 
trying to figure out why not only we have a panel that seems to 
be rigged in favor of the legislation that we're debating, but 
also why we seem to have studies put before us that aren't 
based in good empirical and statistical requirements. And I 
look at your public record. I look at the agenda you clearly 
have to end collective bargaining at large in this country. And 
I put it together with what seems to be a systemic approach on 
behalf of the Republican majority and on behalf of proponents 
of organized labor across this country, whether it be in this 
committee or in State legislatures across the country, to take 
away from individuals the ability to collectively bargain and 
to take away from government the very tool that private 
companies use on a regular basis; which is, if they believe 
that it is in the best interest of that particular bid to 
require a project labor agreement--that's all the Executive 
order does--and because this seems to be a hearing that is much 
to do about nothing, I bring to the table a political agenda 
which seems hidden but incredibly relevant.
    With that, I will yield back the balance of my time.
    Mr. Tuerk. May I respond?
    Mr. Lankford. Just a moment. I do want to accept, without 
objection, the Toyota letter into the record that you mentioned 
earlier, that you requested to have in the record.
    [The information referred to follows:]

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    Mr. Lankford. Mr. Tuerk, it is actually my moment for 
questioning at this time. So, yes, you would be free to be able 
to respond to that.
    Mr. Tuerk. First of all, the quality of our statistical 
work that has nothing to do with anybody's opinions about 
collective bargaining or political issues. I am not responsible 
for the invitations that went out for this meeting. Had I had 
anything to say about it, I would have wanted Dr. Phillips here 
so I could have rebutted his attack on our works, as bizarre as 
it is.
    Finally, the work that we have done has in fact appeared in 
a peer-reviewed journal. Our study of Massachusetts was 
published by an online journal out of Bentley University. So 
the idea that these numbers that we are coming up with are just 
made up out of thin air is itself completely wrong. We have a 
lot at stake. We are a Ph.D.-granting Department of Economics 
that survives and prospers only by virtue of the integrity of 
our work. Our work has been out there for years. And if anybody 
wants to find problems with it, they are free to. Dr. Phillips 
has tried. His attacks, I think, are wrong. Again, those are 
the kinds of things that we could argue in another forum.
    Mr. Lankford. Thank you.
    Mr. Baskin. Mr. Chairman, may I respond to the 
Congressman's question that was unanswered about why all the 
members on the panel said that we don't need legislation to 
prohibit private sector PLAs; and that is because the National 
Labor Relations Act already has protections about them to say 
that they must be voluntarily entered into, not coerced, and 
only by employers in the construction industry. And what we 
have going on here under the Obama order is a mandate. It is 
coercion of contractors to private employers on Federal 
agencies' projects in which the Executive order encourages 
those agencies to in fact mandate or discriminate in favor of 
them. And that is what the current laws prohibit. So that is 
why we don't need a change in those laws.
    Mr. Murphy. Mr. Chairman, the gentleman is responding 
directly to me. Would you yield?
    Mr. Lankford. I would yield 1 minute.
    Mr. Murphy. You've used a lot of words here. You used 
``corruption'' several times in your testimony. You have now 
used ``coercion.'' I think we need to tone down the level of 
rhetoric here when we're talking about an Executive order that 
simply asks individual agencies to consider PLAs when 
appropriate.
    I think by any reading of that it's, A, hard to suggest 
that there's anything that is coercive about that Executive 
order. And certainly in your testimony in which you suggested 
that it corrupted the process, I think those are strong words 
with legal ramifications that you should be very careful about 
using before the U.S. Congress.
    Mr. Baskin. If I may respond.
    Mr. Lankford. Yes, you may.
    Mr. Baskin. They are merited, because we have been seeing 
the Federal procurement process divorced from the rule of law. 
For decades it was established that labor--backing labor 
affiliation was irrelevant to responsibility of contractors. 
And by attaching that to this process, it is rank favoritism. 
It is not permissible under the law. And until it stops, we 
have to say what it is, if anything is to be done about it.
    Mr. Lankford. Mr. Baskin, are you seeking an advantage in 
the contracting process by saying that PLAs are a neutral 
ground? Is that some advantage that you're seeking?
    Mr. Baskin. ``Neutrality'' is the word.
    Mr. Lankford. So at this point, based on your testimony 
before, it is not an issue if you're bidding against someone as 
a PLA or a non-PLA, union shop, non-union shop. That is 
irrelevant to you as long as it's a level playing field when 
you go in to actually do the bidding.
    Mr. Baskin. Yes. ABC has members who have signed union 
contracts; so does AGC; and many more who have not, because 87 
percent of the industry is nonunion. But the merit shop 
philosophy is: Work should be awarded and performed regardless 
of labor affiliation. That should have nothing to do with it. 
May the best, most responsible contractor win, do the best work 
for the best price. That's all we're looking for. And that's 
all the Federal taxpayers should be looking for.
    Mr. Lankford. Thank you.
    Mr. Wu, you had mentioned before that you've actually 
backed out of a contract during the bidding process when you 
saw the direction it was going; that it was really going to 
take a PLA contractor to be able to do that. That is obviously 
anecdotal evidence for you personally. Are there other 
contractors that you've related with to say, I just don't bid 
on Federal contracts when they're over $25 million and I know 
those are the specifications?
    Mr. Wu. I'm sorry; can you repeat that?
    Mr. Lankford. Have you spoken to other contractors as well 
on these contracts that are out there for bid over $25 million 
that had the PLA encouragement in them, that are also saying, 
besides yourself, I'm just not going to do that bid, it's not 
worth the trouble?
    Mr. Wu. Yes. I encounter contractors all the time on a 
general contracting level and a subcontracting level that 
simply will not bid projects if a projects labor agreement is 
part of the RFP process.
    Mr. Lankford. So it is your belief that it is reducing the 
amount of competition in the field.
    Mr. Wu. I'm very convinced of that. I've seen it in the 
bidding process. I've seen the amount of bidders that have 
turned out. I've talked to my own subcontractors as to whether 
or not they're pursuing PLA projects. And many, if not all of 
them, have been discouraged.
    Mr. Lankford. Thank you.
    I would like to honor Mr. Cummings with 5 minutes of 
questions.
    Mr. Cummings. Thank you very much.
    Mr. Baskin, I want to followup on some questions. I just 
want to make a statement with regard to something my colleague, 
Mr. Murphy, said. As a fellow lawyer and one who has 
represented many people who have been accused wrongfully, and 
all of us I think have been trained with regard to certain 
words and the use of them and their legal ramifications, I was 
kind of surprised that you, of all these witnesses, you're the 
only one that talked about corruption.
    I think we have to be kind of careful with those words. I 
really do. And I don't say that--it just kind of surprised me. 
And I don't know the full basis of it. I heard your explanation 
to Mr. Murphy. But I have to tell you that--you're from 
Venable? Is that your firm?
    Mr. Baskin. Yes.
    Mr. Cummings. I just think that we need to be careful with 
those words.
    Last year, the Ninth Circuit rejected claims that a PLA 
entered into by LA and Orange Counties violated the due process 
rights of nonunion contractors. Furthermore, earlier this year 
the U.S. Supreme Court denied certiorari of a case challenging 
the seminal Boston Harbor case, where the court upheld the use 
of PLAs of public projects.
    Mr. Tuerk, I found it very interesting that you helped me 
make my point. You said that you did not like the way Dr. 
Phillips addressed the issues. And, basically, not putting 
words in your mouth, but this is the impression I got; it 
sounds like you're almost wishing he was here so that you could 
look in his face and say, You're inaccurate. I'm sure you would 
have preferred that, would you have not?
    Mr. Tuerk. Yes. I wouldn't embarrass my host. But, yes, if 
I'm going to be accused of economic malpractice by another 
academic, I'd like to have him in the room.
    Mr. Cummings. Certainly. And we would have, too. That's why 
I said you made my very point. That's why we--you heard the 
discussion earlier about how we were concerned on this side 
that we were not able to call him. And he was anxious to see 
you. He was anxious to look you in the face and say what he had 
to say. But we were denied that right.
    I also understand that the majority entered into the record 
instances in which the administration testified, without other 
witnesses. And that is not surprising. In this subcommittee, 
the most recent hearing, Administrator Sunstein testified by 
himself, and the minority did not protest because he was not 
deemed the minority witness by dictate of the majority.
    What is unprecedented is that the minority accept the 
administration's witness as their own, when the majority has 
invited them and invited other private sector witnesses. I 
would like to make that very, very clear. And there are 
instances where this happened in this way, the way this 
happened today; that is, the denial of a witness. Under these 
circumstances, I would like to--I hope the chairman, I know you 
said you're going to be looking into it, and I look forward to 
hearing that from you.
    And I want to make it clear the reason why we are spending 
so much time on this is because all of you I think want 
sunshine. You're talking about a fair process. That's all you 
all have been talking about--fair process. Somebody, I think it 
was you, Mr. Baskin, talked about level playing field. Well, 
guess what? We want a level playing field, too.
    And so, Mr. Chairman--we had extensive testimony, Mr. 
Tuerk, and one of the things--from Dr. Phillips, that is--and I 
hope that one day, since we have now had two hearings on this 
issue, and at the rate we're going, I'm sure we'll have more, 
so perhaps the next time we will have a chance to bring you 
back, Mr. Tuerk. I think, Mr. Baskin, you've done two. You're 
on a roll. And so we will--well, I just want to say one other 
thing to you, Mr. Tuerk. I think somebody over on the other 
side said something; they were picking and choosing from the 
report of the GSA, and one of the things that they did say, and 
they were talking about cost, they said, ``However, these 
studies''--talking about the sunshine study--``did not address 
the cost impact of scope, timing, markets, schedule, or quality 
variables. These variables would contribute to increased cost, 
thereby reducing the level of cost increases that Beacon Hill 
argue are all strictly attributed to PLAs.'' And that is on 
page 4 of the report.
    With that, Mr. Chairman, I would yield back.
    Mr. Baskin. Mr. Chairman, if I may respond to the comment 
that was directed at me about the use of the word 
``corruption,'' because I do want to clarify I'm not accusing 
the President of committing a crime. What I referred to in my 
statement--I just went back and checked it--is corruption of 
the system in the matter of data corrupting a computer system. 
It refers to a messing up of the system. I certainly stand 
behind that. And it does involve the element of coercion, which 
I referred to earlier, when an agency mandates that contractors 
accept these things as a condition of performing the work.
    So I appreciate the opportunity to clarify.
    Mr. Cummings. Mr. Chairman, just 10 seconds.
    Mr. Lankford. Yes, sir.
    Mr. Cummings. I want to thank you for clarifying that 
because it is very, very important. I say it all the time in 
this committee. I hate for people to come in here and say 
things, and then it's like left on a wall, not to be erased 
ever. The press picks that up. The next thing you know, your 
wife is reading a story that you didn't even mean, saying that 
``My husband accused the President of the United States of 
being corrupt.'' I know that's not what you said. That's why I 
want to clear these things up. OK.
    Mr. Baskin. Appreciate the opportunity.
    Mr. Lankford. Thank you. And thank you to all of you for 
coming. Very grateful for your time in your very busy schedules 
and for you being able to be here as part of this conversation.
    With that, this committee stands adjourned.
    [Whereupon, at 11:48 a.m., the subcommittee was adjourned.]

                                 
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