Observers are closely watching what the U.S. Department of Labor will do next after recently canceling a $35 million Job Corps Center project in Manchester, New Hampshire - a project that has been in the planning stages for almost a decade. Many believe the project was canceled due to a bid protest filed by non-union contractor, North Branch Construction, who objected to the requirement that the successful contractor sign a "Project Labor Agreement" (PLA) on the project and have performed on at least three other projects with project labor agreements.
PLAs require the use of union labor on public works projects. Under an Executive Order by President Obama earlier this year, PLAs were encouraged on federal construction projects, a reversal of an eight year prohibition on PLAs by former President George W. Bush.
The New Hampshire Job Corps Center also had a small business set-aside, meaning only contractors with less than $33.5 million in annual revenue would qualify.
The combination of the PLA and small business requirements would have the effect of severely limiting the bidding pool to small union contractors, mostly from out-of-state who have done previous PLA work and who could submit a payment and performance bond for the full $35 million project - somewhat problematic given the revenue restrictions for qualifying as a small business.
Given the size of the project and its location in primarily non-union New Hampshire, the Department of Labor's requirements don't appear to be appropriately guaged to the project, and may be more of a response to political pressures than to effective bidding strategies.
Stay tuned as the Department of Labor decides whether to open up the project for bidding again and whether they will keep the small business set-aside and the PLA requirements.
For an updated article from the New Hampshire Concord-Monitor, click here.
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