[Congressional Record Volume 143, Number 59 (Thursday, May 8, 1997)]
[Extensions of Remarks]
[Pages E878-E879]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          OPPOSITION TO CHANGES IN FEDERAL PROCUREMENT POLICY

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                        HON. JOHN J. DUNCAN, JR.

                              of tennessee

                    in the house of representatives

                         Thursday, May 8, 1997

  Mr. DUNCAN. Mr. Speaker, I would like to call to the attention of my 
colleagues and to the readers of the Record a letter that was sent to 
me by one of my constituents, Bob Affel. Bob is the president of Sun 
Electric Co. in Knoxville, TN.
  As many of you may know, President Clinton recently created a huge 
controversy when he announced that his administration would be changing 
the Federal procurement policy. The proposed changes could be used to 
unfairly discriminate against businesses that operate without a union. 
In addition, the changes could cost taxpayers billions of dollars.
  Bob is uniquely aware, from a businessman's perspective, of exactly 
how the current regulations work. Since he has read through and tried 
to comply with these illogical bureaucratic requirements, his letter 
gives an excellent discussion of the issues surrounding President 
Clinton's latest proposal.
  In addition to Bob's comments, I would personally add that I have 
seen estimates that the proposed policy would end up raising the cost 
of Federal Government construction spending by $4.8 billion annually or 
reduce the amount of construction by 30 percent. With our Nation more 
than $5.5 trillion in debt, we should not be encouraging this sort of 
wasteful spending.

[[Page E879]]

  I request that a copy of the attached letter be placed in the Record 
at this point. I hope that my colleagues will join me and Bob Affel in 
opposing President Clinton's unfair proposal.

                                             Sun Electric Co.,

                                    Knoxville, TN, April 21, 1997.
     Representative John Duncan,
     Rayburn House Office Bldg., Washington, DC.
       Dear Representative Duncan: We oppose the President's 
     project labor agreement executive order. Listed below are 
     some of our reasons.


     how public project labor agreements hurt open shop contractors

       Public project labor agreements exclude open shop 
     contractors from the competition for public work. Labor 
     unions often note that open shop contractors can also sign 
     and work under such agreements but in doing so, the unions 
     conveniently disregard the way the agreements actually work.
       The problem is rarely the wage rates or fringe benefits 
     that the agreements mandate. The Davis-Bacon Act or one of 
     its many counterparts already require open shop and all other 
     contractors to pay prevailing wages and benefits to those 
     working on most public projects. The problem is that the 
     agreements permit open shop firms to use few if any of their 
     current employees. The also require open shop firms to 
     organize their work around the rigid lines that define each 
     union's jurisdiction. Public project labor agreements can 
     require open shop firms to use three or more employees to 
     perform a task that a one multicraft worker would otherwise 
     perform. Open shop contractors can work under public project 
     labor agreements but not without greatly increasing their 
     cost of performing the work.
       Thus, it is true but irrelevant that open shop firms are 
     free to work under such agreements. What matters is that the 
     agreements require open shop contractors to fundamentally 
     change the way they do business that such firms cannot 
     effectively compete.


       How Public Project Labor Agreements Hurt Union Contractors

       As a threshold matter, a public project labor agreement may 
     well increase even a union contractor's cost of constructing 
     a public facility. Such contractors may find that they have 
     to employ the members of new and different unions. Many such 
     contractors have agreement with only two or three unions, 
     while public project labor agreements can involve as many 
     as seventeen.
       More importantly, public project labor agreements disrupt 
     local bargaining for area-wide agreements. They may require 
     wage rates or fringe benefits that exceed the prevailing 
     ones. They often establish new work rules or reinstate old 
     work rules or set other costly or otherwise damaging 
     precedents. Because they typically prohibit lockouts, such 
     agreements may also encourage unions to strike other projects 
     in the area. They certainly undermine the direct face-to-face 
     negotiations that lie at the heart of collective bargaining, 
     as both unions and contractors turn to owners for the 
     concessions that they cannot get from each other.
       In sum, public project labor agreements substitute 
     government bureaucrats for the industry's own negotiators. 
     Whatever their intentions, such bureaucrats lack the 
     experience to advance the construction industry's interests. 
     They are schooled in neither construction nor labor-
     management relations.


                          Quality and Freedom

       To the great extent that they limit the competition for 
     public work, or otherwise increase the cost of improving our 
     schools, hospitals, bridges and other public infrastructures, 
     public project labor agreements threaten everyone's quality 
     of life. They also threaten individual rights and freedoms. 
     They typically include ``union security'' clauses that 
     effectively mandate union membership denying construction 
     workers the right to decide whether to join or otherwise 
     support a labor union.


                         A Dangerous Precedent

       Inevitably, public project labor agreements increase the 
     cost of all construction, including the private work the 
     manufacturers and other industries. The President's plan 
     raises ominous questions about the government's role anywhere 
     in the private sector. Having set the precedent, will the 
     government presume to negotiate collective bargaining 
     agreements for the aerospace and automobile industries? At 
     what point will the federal government dictate the terms of a 
     collective bargaining agreement between Intel and its 
     employees?


                               Conclusion

       While some federal agencies have long used project labor 
     agreements, the proposed executive order takes the threat of 
     such agreements to new and extremely troubling heights. For 
     the reasons already noted, this executive order would have a 
     negative impact on the entire construction industry, 
     including the substantial segment that continues to work with 
     and under collective bargaining agreements.
           Sincerely,
                                                        Bob Affel,
                                  President, Sun Electric Company.

     

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