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What you need to know for 01/23/2018

DOT slapped down for union deal

DOT slapped down for union deal

When the state Department of Transportation last year decided that a construction project down in Or

Well, I never. I mean, when the state Department of Transportation last year decided that a construction project down in Orange County should be reserved for union labor, in deference to the Hudson Valley Building and Construction Trades Council, and when the state comptroller, after some initial reservations, upheld the arrangement, I never suspected that someday a court would overturn it.

I knew that the low bidder on the project, Lancaster Development of Schoharie, was going to sue, having been beaten out of the job by A. Servidone of Castleton, who was going to charge the state $4.5 million more than he was, but I had no idea that Judge Joseph Teresi of state Supreme Court in Albany would uphold the suit and actually invalidate the contract for the job after it had already been let and work had begun.

But that’s what has happened. Judge Teresi ruled the other day that the union-only deal is “void” and the contract containing it is a “nullity.”

“The project must be rebid,” he declared.

His vigorously worded decision left no doubt that he considered the DOT process a sham. He noted that the DOT added the union-only provision, known as a “project labor agreement,” in response to a study that was contradictory and inconclusive. Further, that a revision to the study done in response to the comptroller’s concerns contained no new information and that therefore its “conclusion cannot be relied on.”

This makes it look very much like the fix was in. The DOT simply caved to union pressure and adopted the “project labor agreement,” or PLA, “after considering a proposed PLA the DOT received from the Hudson Valley Building and Construction Trades Council.” Which, if I may translate, means the DOT in all likelihood just rubber stamped an agreement handed to it by the trade unions.

The project labor agreement had to be justified by a “due diligence” study, because one of the sops President Obama handed the unions when he took office was a requirement that highway jobs receiving federal money, as almost all do, had to be considered for the suitability of a “project labor agreement.”

How can a government agency justify freezing out non-union workers? Only by claiming that the taxpaying public will save money. You might think that wouldn’t be easy since under another law, all contractors, whether union or non-union, have to pay the same high union wages.

How could you save money one way or the other?

If you are a regular reader of these columns, you know the answer, but for newcomers I will supply it again.

The unions can save the public money by guaranteeing “labor peace.” If they get the work exclusively they won’t strike — thank you very much — and they won’t picket the worksite either. Whereas — and this part is implied — if non-workers get the job, anything could happen.

Call it extortion if you like, but that is the long and the short of it. “Avoidance of strikes, lockouts and picketing,” is the official terminology.

The study for the DOT was done by Arace and Company Consulting, run by a former vice president of Empire State Development Corp., Edward L. Arace.

I caught up with Mr. Arace while he was out jogging or walking the other day, and he said he hadn’t seen the judge’s decision so could not comment but in any case he was not involved in the court action, which of course he was not. He, or a subordinate, just wrote and then respun a study for the DOT. Respun, is basically what the judge said — submitted a revised study with a new slant but no new facts.

“A second draft,” Arace told me.

The construction job we’re talking about is not small. It involves the reconfiguration of an exit on Route 17, and the contract awarded for it is to the tune of $72.3 million.

Lancaster had bid $67.8 million but was disqualified after the DOT added the union-only provision.

The disparity in bids of course rendered ridiculous the DOT’s claim that the union-only rule would save taxpayers money. Right on the face of it, it would cost $4.5 million more.

My understanding is that work has already begun and something like $5 million has already been paid to A. Servidone (which is a joint enterprise with B. Anthony Construction Corp., under the same ownership. One is union, the other non-union, so they can go either way, as the wind blows.)

Mark Galasso, head of Lancaster Development, tells me it’s not a huge problem as far as rebidding goes, since the early stages of work, like clearing the site, will be the same anyway. If the job gets rebid, a new contractor, if any, would simply pick up where the other left off.

Whether the DOT will put the job back out to bid or will appeal the decision, I don’t know. I couldn’t get a call back in response to my inquiry. Maybe they were all hunkered down with the leaders of the Building and Construction Trades Council, trying to figure out their next move, and were too busy to answer.

But anyway I am heartened that at least one branch of government has dared to blow the whistle on this “project labor agreement” scam. The idea of barring law-abiding, tax-paying workers from construction jobs because they are among the majority who do not belong to trade unions seems to me poisonous.

And it’s not done because anyone believes it’s good policy. It’s just because the trade unions have political clout, that’s all.


As regards the “rolling contracts” now enjoyed by some school superintendents as well as the head of public housing in Saratoga Springs, I should have made clear that the relevant board of directors has to pay the employee off for the remaining years on his contract only if it wants to get rid of him.

Of course, as a retired superintendent pointed out in a letter to the editor, it can decline to extend the contract if it doesn’t want him anymore and then keep him around for another two, three or four years. That is indeed a theoretical possibility.

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