A new deal on project labor agreements will save the City over $347 million and create opportunities for women and minority firms to get a bigger share of major construction projects.
Mayor Bill de Blasio, Counsel to Mayor and M/WBE Director Maya Wiley, Contract Services Director Lisette Camilo, Senior Advisor to the Mayor Bill Goldstein, and School Construction Authority President Lorraine Grillo, announced the deal with the Building and Construction Trades Council of Greater New York (BCTC) that will cover an estimated $8 billion of construction projects throughout the term of the agreements.
This amount includes an estimated savings of over $70 million related to citywide renovation work, over $84 million related to Department of Environmental Protection renovation work, and over $195 million related to School Construction Authority work.
The Health and Hospitals Corporation is also analyzing whether to enter into a PLA that will yield additional savings.
“We are using every tool we have to reduce inequality in this city, and today’s agreement will ensure that the City will create good-paying jobs while managing our City projects in a cost-effective and fiscally responsible manner,” said Mayor de Blasio.
“And for the first time ever, the City has negotiated provisions to open doors of economic opportunities for minority and women-owned businesses and create new pathways to good jobs for New Yorkers.”
Maya Wiley, Counsel to Mayor and M/WBE Director said “everybody wins” under the new deal.
And Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, said, “These PLAs truly are a representation of what we can accomplish when government works with private industry and organized labor to produce results for taxpayers and working families alike.”
The citywide renovation and DEP PLAs will increase opportunities for Minority and Women-Owned Business Enterprises (M/WBE) in City contracting:
By increasing the dollar threshold for PLA applicability on prime contracts from $100,000 to $250,000, the City will be able to support increased M/WBE utilization as prime contractors on smaller projects.
The PLA establishes a carve-out from PLA applicability for prime contracts under $1 million that are bid out to M/WBE pre-qualified lists.
City-certified M/WBE firms will continue to be allowed to utilize specific “bring-along” provisions for contracts under $1 million and to use up to half of their own workforce to perform trade work on PLA contracts – allowing more of the M/WBE firm’s employees to work on these contracts.
The City’s Memorandum of Understanding with the BCTC will create new pathways for good jobs for New Yorkers:
The MOU expands apprenticeship goals, requiring 55 percent of new apprenticeship slots to be filled by graduates of New York City public high schools who have completed pre-apprenticeship training provided by The Edward J. Malloy Initiative for Construction Skills, returning veterans referred by New York City Helmets to Hardhats, women graduates of Nontraditional Employment for Women, NYCHA and Section 8 residents and employees of certain certified M/WBEs.
The MOU re-establishes the Mayor’s Commission for Construction Opportunity to ensure that the City is at the forefront of creating job and contracting opportunities and to ensure accountability for those goals.
The newly negotiated PLAs focus on general renovation and rehabilitation of existing City-owned buildings as well as new construction, and generate their savings from exemption from Wicks Law requirements, standardization of union work rules and terms, and project stability through labor peace.
In order to reduce costs, streamline projects, and expedite project completion, construction projects subject to the new PLAs will be exempt from the Wicks Law requirements, which increase the City’s construction costs and delay the completion of important projects.
The Wicks Law requires public contracts for construction and alteration of buildings in excess of $3 million to have separate specifications and bidding for various types of work, including plumbing and gas fitting, steam heating and hot water, ventilating and air conditioning, and electrical work and general contracting – requiring the coordination of multiple contractors.
These PLAs create direct labor cost savings through the standardization of various work rules and terms found in the collective bargaining agreements of the individual trades.
The agreed upon work rules and terms include: an overtime cap placed on work performed on specific days and no restrictions on a contractor’s ability to schedule overtime when dealing with deadlines; elimination of duplicate staffing of trades for temporary services provided on job sites (heat, water, power and light); regulation of pay to employees who have reported to work, but are unable to perform due to unforeseen work-related circumstances;
Flexibility of scheduling across all trades, including agreement on an eight-hour workday and forty-hour work week, flexible start times, nine standard holidays, and coordinated lunch periods; and contractor discretion regarding the number and qualifications of employees, as well as the selection of materials, techniques, and methods.
The new PLAs include prohibition of strikes on jobs covered by the new PLAs, regardless of broader work stoppages due to labor disputes outside of the City’s control and an expedited arbitration process to resolve disputes arising during a project, including disputes between unions regarding jurisdiction of work.
“By incorporating inclusive goals and criteria in a Municipal Project Labor Agreement, both the Mayor and organized labor through the BCTC, have shown that with a little creativity all sides can sometimes benefit from a complicated agreement. Of course, the level of benefits to all sides is in the details,” said construction attorney Michael K. De Chiara, of Zetlin & De Chiara LLP.
“However, as more people understand the benefits of Project Labor Agreements and their potential benefits for both owners and labor, their expanded use should be the basis for improved economies as well as increased minority and women’s participation in larger more sophisticated construction projects. This is a great accomplishment which allows organized labor a path to be more cost competitive in the increasingly challenging construction labor market.”