Searching for Answers: Fair and Open Bids Optimize Cost

etween March 8 and March 15, the chancellor’s office in the State Center Community College District conducted a survey of 290 people in the construction industry and found that 54 percent of respondents would not bid on a district PLA project.

More than 200 or roughly two-thirds of those surveyed said they would be interested in bidding on future construction projects. More than 50 percent reported they had been awarded contracts for the district previously.

The results of the survey were presented before the board at a special meeting on March 17.

Prior to the discussion, current practice had been to use fair and open bidding practices, awarding contracts to the lowest bidder, according to Nicole Goehring, the community relations director of the Northern California Chapter of Associated Builders and Contractors, Inc.

“Under fair and open competition,” Goehring said, “you have all of your contractors in your community able to participate, whether they are a union or a non-union contractor.”

The premise behind fair and open bidding is that the more bidders participating, the lower the cost of the project.

Members of the building trades and carpenters’ unions presented a case study of modernization projects for College of Marin. In the study of seven construction projects, four non-PLA and three PLA, there were a total of 38 bidders and 22 bidders, respectively.

“All of the case studies I have show that bidding goes down,” Goehring said. “It decreases competition and increases cost.”

Not only are the number of bidders often restricted, but who can work on the project is limited as well.

The PLA for Fresno County outlines a maximum number of core workers a construction firm can use.

The order of hiring for a construction allows for the first employee to be from the construction firm, then a member from a union, then another core worker and then a worker from a referral system.

The process continues until the firm has hired no more than five core workers and after that, all workers must come from their respective craft hiring halls, according to the PLA outline of the Transformative Climate Communities agreement.

This fact seems to be well known.

Sixty-four percent of respondents in the SCCCD survey claimed they were “well aware of the pros and cons of PLAs and [community benefits agreements] CBAs,” and 72 percent said that PLAs add cost to projects.

Many PLAs also add collective bargaining agreements to projects to standardize workers benefits.

According to Chuck Riojas, union representative from the International Brotherhood of Electrical Workers Local 100, this includes working dues, union dues, healthcare and pensions.

While working under PLAs with collective bargaining stipulations, workers must adhere to union rules, and at the same time, they get access to most of the benefits.

After 90 days on the job, workers become vested and get access to union healthcare for them and their families, if the job lasts that long. Likewise, it takes five years before someone paying into a union pension gets that benefit.

“The language under a PLA that is absolutely required is for all health and welfare payments are to be paid into the master union trust fund,” Goehring said. “If there is a non-union worker who is working on the project, all of their pension benefits are required to be paid into the union trust fund.”

The other argument opponents of PLAs cite is that a local hiring requirement is not reserved to PLAs.

“Lowest bidder contracts have provisions they hire local but the district has never exercised that authority,” Miguel Arias, trustee for the State Center Community College District, said.

The difference is that the bidding specifications outline a goal for bidders to meet. Additionally, hourly pay is determined by prevailing wage rates in counties as required by state law.

“What State Center needs to do is put something in the bid specifications that says to hire state center students for construction projects,” Goehring said. “You can just put it in the bid specs; you don’t need a PLA.”