Shutting out small firms


Clark County Commissioner Chris Giunchigliani announced this week she'd like to see the county enter project labor agreements for every public works project estimated to cost $100,000 or more, despite the fact that former state Sen. Warren Hardy (wearing his full-time hat as a representative of a local builders group) warned taking such a step would drive up the county's public works costs by 20 percent, at a time when the county is supposedly looking to save money anywhere it can.

Because all workers on such projects already have to be paid "prevailing wage" -- a legal euphemism for wages already 40 percent higher than those that actually prevail on private-sector jobs -- the question here isn't whether backhoe operators and traffic signal installers will make a decent wage, but whether unionized contractors will receive preference for all such jobs.

Entering into such PLAs would limit bidding access for small and start-up construction firms, which are more likely to be minority owned.

Under the court precedent known as Associated Builders and Contractors vs. Southern Nevada Water Authority, the county would have to show some public benefit in exchange for these added costs. The benefit usually cited is "labor peace." That is to say, the county Aviation Department may enter into a PLA for a major air terminal under the theory that a strike during construction could block access to tourists, harming the local economy overall.

But even the airport does not enter into PLAs for relatively minor work, because there is no equivalent benefit for the added cost.

Meantime, couldn't a blanket order to enter PLAs for all county public works jobs bring lawsuits from the smaller, female- and minority-owned businesses that would thus be shut out of the bidding process?

"No question," replies Mr. Hardy. "The reason I think there's been no outcry so far is that this is used just on larger projects. But if you do it on a smaller project, these smaller firms will learn that to bid you've got to agree to pay all these extra benefits, you can't use your own workers, you bet they're going to feel shut out."

Ms. Giunchigliani's fellow commissioners reacted cautiously to the proposal this week. Commissioner Larry Brown asked why the county should shift away from a system that's been in place for decades.

"We have competitive bidding," Brown said. "That system has worked pretty darned well."

In the end, commissioners told county staff to form a panel made up equally of contractors and labor representatives who will spend a month working on a compromise to bring before the commission.

But any compromise with an expensive bad idea is bound to be -- at best -- a slightly less expensive bad idea.

Commissioner Brown had it right, in the first place. The commissioners are elected by and expected to represent the taxpayers, not the construction unions. Their first duty is to carefully steward the public's increasingly scarce funds. Why embrace this costly union pipe dream, now of all times?

 

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