November 24, 2009City Will Use Nearly $300 Million in Savings over Next Four Years to Restore Dozens of Major Infrastructure Projects and Create 1,800 Construction Jobs
Deal Will Improve Access to Construction Opportunities for Minorities, Women, Veterans and Vulnerable New Yorkers
Mayor Michael R. Bloomberg, Deputy Mayor for Operations Edward Skyler, NYC School Construction Authority President Sharon Greenberger, Department of Design and Construction Commissioner David J. Burney and Building and Construction Trades Council President Gary LaBarbera today announced a deal on four project labor agreements that will cover $5.3 billion in public projects comprising 32,000 construction jobs over the next four years. Collectively, the agreements, which run through the end of fiscal year 2014, will save the City nearly $300 million over the next four years, all of which will be used for infrastructure projects that otherwise would have had to have been cut due to the economic downturn. The restored projects will create 1,800 construction jobs. Mayor Bloomberg, Deputy Mayor Skyler, Deputy Mayor for Education and Community Development Dennis M. Walcott, Gary LaBarbera and Reverend Jacques A. DeGraff of the Minority Business Leadership Council also announced a series of commitments to ensure that minorities, women, returning veterans, and new high school graduates of the City’s public schools have access to construction jobs, increasing the accountability and transparency of existing efforts. Also joining the announcement, held at Chelsea Career and Technical Education High School, were Building Trades Employers’ Association President Louis J. Coletti, Women Builders Council President Sandra Wilkin, Association of Minority Enterprises of New York President James Heyleger, Jamaica Business Resource Center President and CEO Timothy Marshall, Harlem Business Alliance Chairman Walter Edwards, NYC School Construction Authority Equal Employment Opportunity Advisory Board Chairman Bill Howell, 100 Black Men President Philip Banks and Adam Bryant of Iraq and Afghanistan Veterans of America.
“At a time when the public and private sectors throughout the country are struggling to figure out how to move forward with long-term investments, New York City is leading the way,” said Mayor Bloomberg. “By working together with the Building and Construction Trades Council, we’ve arrived at a set of agreements that will save the City nearly $300 million, which we’ll use to fund major projects that otherwise would have been postponed, all while creating 1,800 construction jobs. And, thanks to the leadership of the Building Trades Employers’ Association, the Minority Business Leadership Council and other groups, New York City will do more than ever to ensure that New York City’s diverse communities benefit from those construction opportunities and jobs.”
“The School Construction Authority’s new PLA will ensure that critical capital improvement work in our schools is completed in a cost-effective and efficient manner, and it will help our M/WBE firms and their employees to transition into the union workforce,” said NYC School Construction Authority President Sharon Greenberger.
“These agreements prove that when organized labor and government work together, we can promote good job creation for New York City's middle class, break new ground with opportunities for minority and women owned businesses and save taxpayers millions of dollars,” said Building and Construction Trades Council President Gary LaBarbera. “I commend the leaders of our affiliated unions, and Mayor Bloomberg and his Administration, which has worked so hard over the months of negotiations involved in this process, because these efforts will save thousands of jobs in the building and construction Trades and do it in a fiscally responsible way.”
“This agreement will serve as a major boost to New York City’s economy, providing new business opportunities for contractors, generating badly needed jobs and tax revenue, and resulting in new and rehabilitated public buildings and infrastructure throughout the City,” said Building Trades Employers’ Association President Louis J. Coletti.
“These agreements address more than brick and mortar issues,” said Reverend Jacques A. DeGraff of the Minority Business Leadership Council. “The promise of contracts and job opportunities presented today will be subject to an unprecedented accountability review. This will ensure that all New Yorkers can participate in the economic lifeblood of our city.”
Four Project Labor Agreements Will Generate $299 Million in SavingsBy Easing the City’s Bidding Requirements and Standardizing Work Rules
One of the project labor agreements covers roughly $942 million in projects for the general renovation and rehabilitation of existing City-owned buildings and structures, for which the City is expected to save 10.5 percent of total project costs, or $99 million. Contracts bid out before June 30, 2014 by the following agencies will be covered under this agreement: Department for the Aging, Administration for Children’s Services, Department of Citywide Administrative Services, Department of Corrections, Department of Design and Construction, Fire, Department of Homeless Services, Human Resources Administration, Department of Health and Mental Hygiene, Department of Parks and Recreation, Police Department; and Department of Sanitation. Two additional project labor agreements covering $1.9 billion for eleven large-scale, new construction projects, including the Police Academy and the new branch library in Far Rockaway, are expected to save the City five percent of total project costs, or $99 million. The fourth agreement, between the School Construction Authority and Building and Construction Trades Council, covers up to $2.5 billion of work for the renovation and rehabilitation of schools and is expected to save four percent of total project costs, or $100 million.
The labor cost savings derived from the three project labor agreements between the City and the Building and Construction Trades Council come from: (i) an exemption under State Labor Law from Wicks Law procurement requirements for projects included under a PLA; and (ii) a package of negotiated work rule changes which allow individual trades to work more efficiently together on job sites.
The Wicks Law requires that, for contracts for the construction, reconstruction or alteration of buildings with an entire cost of more than $3 million, the City must separately bid and award contracts for plumbing and gas fitting; steam heating, hot water heating, ventilating and air conditioning; and electric wiring. Together with the general construction contract, therefore, the City often must award up to four separate contracts for a construction project. These provisions significantly increase the City’s construction costs and create difficulties coordinating multiple contractors, and the agreements announced today will allow the City to avoid those costs.
Savings from the package of work rules come from the standardization and modification of various terms that are otherwise governed by individual collective bargaining agreements for individual trades. The agreed upon terms under the City PLA include the following:
The City and Building and Construction Trades Council are also considering project labor agreements to cover an additional $509 million of work at wastewater treatment plants, housing properties owned and operated by the New York City Department of Housing Preservation and Development, and other new construction sites. Economic studies analyzing cost-savings on these additional projects are currently underway and will be completed in the coming weeks.
Unprecedented Change to Union Hall Hiring Practices WillHelp Make M/WBE Contractors More Competitive
In addition to the demonstrated economic savings of the project labor agreements, the City and Building and Construction Trades Council have also negotiated a significant advancement for minority and women-owned business enterprises (M/WBE). With extensive input from the M/WBE contracting community, the City and the Building and Construction Trades Council have agreed to a fundamental change in the traditional union hiring hall practice for projects covered by the City’s project labor agreements that allows non-union M/WBE contractors to bring more of its own workforce onto jobs they manage. For contracts and subcontracts of less than $1 million managed by non-union M/WBE contractors, the contractor will be allowed to fill as many as fifty percent of the first eight jobs on a project with their own workforce. Under standard practices, only every eighth employee hired is eligible to be hired from outside of the union hiring hall. By allowing contractors to retain key regular employees on the job, non-union M/WBE contractors will be more competitive when bidding on City projects, and more efficient working at job sites.
Expansion of Commitments to Increase Construction Opportunities for aDiverse Array of New Yorkers and New Accountability Measures
Building on the Mayor’s Commission on Construction Opportunity established in 2005, the City, Building and Construction Trades Council and Building Trades Employers’ Association entered into a Memorandum of Understanding (MOU) detailing new commitments to ensure that minorities, women, returning veterans, and new high school graduates of the City’s public schools have access to construction jobs. The MOU sets a goal of 45 percent of apprenticeship slots filled with New Yorkers from these groups, and establishes the NYC Committee on Construction Work Force and Contracting Opportunity – a 16-member committee that will track and report on the targeted participation in the construction industry and work to ensure the 45 percent apprenticeship goal is met.
The committee will meet at least quarterly and will publish for public review an annual report on the status of the goals. One representative designated by the Mayor will serve as chair of the committee and two representatives, one from the Building and Construction Trades Council and one from the Building Trades Employers’ Association, will serve as vice chairs. The Committee will also include representatives appointed by the Speaker of the City Council, the New York City Comptroller, the New York City Housing Authority, School Construction Authority, and the contractor community, including minority and women-owned businesses.
“At a time when the loss of jobs and increase in foreclosures is at an all-time high, it is critical that we institute policies and programs that will not only stem the tide, but also open up new opportunities for minorities and women,” said Jamaica Business Resource Center President and CEO Timothy Marshall. “These new project labor agreements are an important step towards assuring that minorities and women will have access to much-needed construction jobs in New York City. This is a very significant and positive policy from the Bloomberg Administration, and we look forward to working with the Mayor and his team to further increase minority and women business participation in this great city.”
“These agreements greatly expand the opportunities for so many women and minority contractors,” said Women Builders Council President Sandra Wilkin. “It will add greatly to the economic strength of New York City.”
“The Association of Minority enterprises of New York is pleased with the negotiations that have taken place around the new PLAs, and looks forward to working with Mayor Bloomberg in achieving increased minority business opportunities in New York City,” said Association of Minority Enterprises of New York President James Heyleger.