You cannot get ahead of the New York State Department of Transportation, and I suggest you not even try.
Take for example the current case of trying to rebuild an interchange on Route 17 in Orange County. The DOT is bound and determined to lock that job up for the construction trade unions, and if you offer to do the job cheaper than the unions can do it, even paying the same wages, the DOT will commission a study absolutely proving that 3 plus 4 equals the square root of a loaf of bread and the moon is made of cotton candy.
They can do it.
Last year the DOT put that Route 17 job out to bid, and the low bid came in at $67.8 million, which was fine except that in the middle of the process they had added a requirement that work be restricted to the trade unions, through a so-called Project Labor Agreement, and the low bidder, Lancaster Development of Schoharie County, was not a union shop.
So the DOT disqualified Lancaster and gave the job to the second lowest bidder, Servidone/B. Anthony Construction of Castleton, a union shop that had bid $72.3 million, meaning an added cost of $4.5 million to us taxpayers.
Lancaster sued, and lo, state Supreme Court agreed — the DOT’s claim of lower cost with a Project Labor Agreement was flawed. (Obviously it was flawed. We had the bids in front of us.)
Several million dollars worth of work had already been done on the job, but work had to stop and the process had to start over.
But did the DOT surrender? Did it hang its head in shame? No, ladies and gentlemen, it commissioned another study to satisfy the “due diligence” requirement, and the second study reached the same counter-evidentiary conclusion as the first one. It concluded that the state would save anywhere from $1.8 million to $2.4 million by employing a Project Labor Agreement.
So this summer the DOT put the job back out to bid with the same union-only requirement. The other day the bids were opened, and the lowest one came from the same Servidone/B. Anthony. It was in the amount of $68.4 million, which sounded about right, considering that the company had already done some $4 million worth of work, so about $68.4 million worth would remain to be done, per its cost schedule. But please note that that amount is still $600,000 higher than Lancaster had bid for the entire job, before any clearing or site preparation had been undertaken.
So you see what I mean, how you can’t get ahead of them. Twice the actual bidding has shown that a Project Labor Agreement increases the cost of a job, and twice the DOT has looked heavenward and said the bald opposite.
How could it be cheaper to limit competition and lock out non-union shops anyway, just on the basis of common sense?
The New Jersey construction management firm of Hill International, on assignment for Bergmann Associates in Albany, had the answers.
• The winning contractor would employ an Alternative Dispute Resolution mechanism to decide which trade (like laborers or carpenters) had jurisdiction over which jobs (like pushing a wheelbarrow or lifting a ladder), for a savings of $319,596 to $958,788.
• Only six holidays would be recognized, as opposed to the 10 that some unions recognized, for a savings of $204,114.
• Wages would be frozen for two years, for a savings of $868,127.
• Only 5 percent “shift differential” would be paid for night work rather than some higher amount.
• Workers would not strike, for a savings that cannot be computed but with the note that administrative costs for the project will be $7,403 a day, it being understood that those costs would continue in the event of a strike — and that’s always my favorite benefit from these agreements, the extortionary promise not to strike.
Anyway, Mark Galasso, the head of Lancaster Construction, points out to me that most of this stuff is bogus. The dispute resolution applies only to union workers, since non-union workers don’t have rigid rules about who can do which job in the first place.
The same with holidays. Lancaster only recognizes six holidays. The concession applies only to certain trade unions.
The same with extra pay for night work. Non-union shops don’t pay that. It’s a concession only for the unions.
As for wages being frozen, he doesn’t know how that would work and neither do I, since union and non-union shops alike are bound by the state’s prevailing wage law.
The DOT’s due diligence study, bending over backwards to justify hiring union-only labor, asserts that 80 to 85 percent of the heavy and highway workforce in Orange County is union but offers no documentation. It may or may not be true. But Galasso says he printed out every bid result in DOT files for Orange County for the past seven years and found that non-union contractors accounted for 66 percent of the dollar value of those jobs.
He then looked at jobs worth $25 million or more, which is the threshold under President Obama for requiring that a Project Labor Agreement be considered, and found that all of those big jobs had been won by non-union shops. All of them, even though union shops had bid on all of them. Which might possibly have something to do with why the DOT last year caved to the unions. In level-playing field competition in Orange County the trade unions were getting beaten every time. So, new rule: only union shops can compete. Simple as that.
Well, Lancaster is suing again to stop this process, alleging that the study does not justify the DOT’s action, and I wish the company the best of luck, even though I’m not betting on anything.
Carl Strock is a freelance columnist. Opinions expressed in his column are his own and not necessarily the newspaper's. Reach him at firstname.lastname@example.org.