News and Events

Why a PLA is Right for Vassar Brothers Medical Center, its Patients and the Future of the Community

BY ROSS J. PEPE and ALAN SEIDMAN

In his season of discontent, Brian Sampson’s comments (Valley Views, July 19, 2015) sound like sour grapes. Mr. Sampson represents a trade group of contractors who inherently do not have in mind the greater interest of the residents, the taxpayers of Dutchess County and the stakeholders of the Vassar Brothers Medical Center.

As a management tool to procure construction labor, the Project Labor Agreement (PLA) is a comprehensive and uniform pre-hire pact that standardizes the contract terms among the many craft trades for the duration of the project. Call it “a jobsite constitution,” call it a binder to a uniform set of work rules, but, whatever you label it, call it correctly: it does not discriminate against non-union companies to compete for work. PLAs allow all contractors and subcontractors to vie for contracts and subcontracts whether or not they are otherwise a party to a collective bargaining agreement. Why companies would not agree to a set of wage and working conditions that are designed for the benefit of the owners of the project such as this begs other questions and suspicions.

PLAs are a planned approach to hiring the right labor on the project so that the owner and its construction project managers can accurately predict labor costs and can schedule production timetables.

Learning that a PLA is now being considered for the Vassar Brothers Medical Center in Dutchess speaks volumes of the care and concern its executives and managers have for the funder and donors, the stakeholders and county residents. When management overlooks the use of a PLA for an upcoming capital program, it does itself, its supporters and the greater community at large a great disservice.

 

Similarly, government entities – such as local development corporations (LDC) and industrial development agencies (IDA) – act responsibly when they encourage the use of PLAs on benefiting projects. PLAs support the local workforce and the many qualified regional companies that manage such work. All large building projects, even those in the private sector that draw public support (in the form of tax relief and other municipal, county or state fiscal considerations to get the project over the fiscal finish line) benefit from the public trust. It’s a fact that cannot be overlooked. PLAs serve to increase the likelihood that public-benefit resources do not flow to other regions of the state or out of state. By incorporating a PLA on this project, VBMC will help provide livelihoods to the very people who live in the area and who will visit the hospital for their medical needs.

The list of private companies, non-profit enterprises and public entities using PLAs over the past eight decades is as long as the Tappan Zee Bridge, which by the way is now being constructed under a PLA with its owner, the New York Thruway Authority. Add to this list IBM, the new Montreign Resort Casino in Sullivan County, Woodbury Common Premium Outlets, St. Luke’s Cornwall Hospital, SUNY New Paltz and the Orange County Government Center. The list of public and private facility owners of all sizes — which also includes the CPV Valley Energy Center power generation project in the Town of Wawayanda, the Carmel High School, the Elizabeth Seton Pediatric Hospital, John A. Coleman School and PepsiCo World Headquarters – goes on and on. Why? Because PLAs create a host of advantages for owners.

The other message revealed here is that private companies incorporate PLAs because of the pact’s intrinsic value of cost savings, productivity and quality results. Private owners not subject to public bidding laws, Wicks Law requirements, or public largess, enter into PLAs with the local Building Trades because it is in their best interest for their shareholders, owners and bottom line – not because of a government mandate to use a PLA as purported.

The advantages are too numerous to list in these few column inches. Suffice it to say, depending upon the size and nature of the project, benefits range from safety (ensuring OSHA compliance of all craft trades and subcontractors) and productivity (establishing wages and standardized workdays for all trades employed on the project) to reduced compensation insurance costs (through Alternative Dispute Resolution and work-injury claims) and jobsite flexibility (no restrictions on tools or materials).

One case study examined by the School of Industrial and Labor Relations at Cornell University noted that the New York City School Construction Authority realized substantial, direct cost savings by standardizing contract terms among various area craft agreements. These cost savings averaged $44 million each year over the life of the program from 2004 to 2009.

In this public debate, we should not be swayed by one-sided views that suggest only the perils of PLAs, expressed by a self-interest portion of the unorganized sector of the building and construction industry. There is overwhelming and irrefutable body of case studies of 80 years across the United States that PLAs deliver cost savings and productivity efficiencies to owners and stakeholders of large capital projects such as the one planned in Poughkeepsie.

Let us all recognize that a large-scale medical center building project is built for the long run. This seminal fact greatly alters the decision-making landscape because the Vassar Brothers Medical Center will be a facility used today and will continue to stand as a legacy for future generations employed there and who will call upon the services of tomorrow.

          About the authors: Ross J. Pepe is president of the Construction Industry Council of Westchester & Hudson Valley, Inc., and the Building Contractors Association of Westchester & Mid-Hudson Region, Inc., based in Tarrytown, NY. Alan Seidman is executive director of the Construction Contractors Association of the Hudson Valley, a 50-year-old trade group based in Newburgh, NY.