Why is the federal General Services Administration, the government’s purchasing agent and landlord, sending millions of tax dollars to unions?
Last week, 19 members of Congress, including incoming House oversight committee Chairman Darrell Issa, R-Vista, sent a letter to Martha Johnson, administrator of the GSA, asking why it is forcing contractors that are refurbishing federal buildings to accept project labor agreements. Such a pact mandates the use of union labor on government construction projects, which translates to inflated costs, delays and inflexible work rules.
The congressional letter was spurred after The Examiner’s Mark Hemingway reported that the GSA had awarded a $52 million stimulus contract to renovate a Department of Veterans Affairs building only to turn around and require the winning contractor to sign a labor agreement that adds at least $3.3 million more to the project’s cost.
The agency, which received $6.6 billion in stimulus funds for construction projects, imposed the stipulation on the contractor after changing its policy from favoring low bidders to preferring contractors who will sign labor agreements. This is a sop for a favored constituency of President Barack Obama’s because only 14 percent of all construction workers are unionized. The unionized 14 percent now have what is probably an unconstitutional leg up on the nonunion 86 percent.
This labor agreement policy comes straight from the top. Obama signed Executive Order 13502 just 16 days after taking office, mandating labor agreements whenever possible on government projects of $25 million or more. The Beacon Hill Institute, a Suffolk University-based free market-oriented think tank, reported that on average labor agreements make construction projects 12 to 18 percent more expensive.
When you consider the stimulus bill had an estimated $180 billion in funding for construction projects, that is a big favor for Big Labor. So is the requirement that stimulus-funded contracts comply with the Davis-Bacon law, which mandates that union-scale wages be paid. Heritage Foundation expert James Sherk estimated that about $17 billion could be saved if the Davis-Bacon requirement is lifted.
The GSA decision indicates that it has been Christmas for the union bosses ever since Obama took office. He bailed out the moribund UAW, gutted Labor Department regulations requiring transparency of union finances and now is using labor agreements to milk taxpayers for more dough to give to his biggest campaign contributors. Also, Obama has stopped meaningful oversight of union corruption.
Under President George W. Bush, the Labor Department prosecuted more than 1,000 union officials, winning at least 929 convictions and $93 million of misspent union funds in restitution for workers. Obama’s Labor Department was supposed to release a report tracking union corruption in January. Nearly a year later, there is no report.
Issa and incoming House Republicans should make oversight of Obama’s cozy relationship with Big Labor a top priority.