HomeMy WebLinkAboutMINUTES - 01152002 - D.3 TO: BOARD OF SUPERVISORS Contra
FROM: INTERNAL OPERATIONS COMMITTEE
_ Costa
DATE: JANUARY 15, 2002 e o County
�dsra
SUBJECT: PROJECT LABOR AGREEMENTS
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. DETERMINE the dollar threshold at which County construction projects will be subject
to a policy requiring project labor agreements.
2. ADOPT policy regarding the use of project labor agreements on certain County
construction projects.
BACKGROUND:
On October 9, 2001, the Board of Supervisors referred to the Internal Operations Committee
a draft policy regarding the use of project labor agreements on County construction projects.
Our Committee met with County staff on December 3 and, based on a discussion of the draft
policy, recommends that the draft policy be approved by the Board of Supervisors with the
following modifications: that the Board determine the dollar threshold for projects that will be
subject to the policy, and that the second sentence under Section II be eliminated.
In determining the appropriate dollar threshold at which projects will be subject to the policy, it
is recommended that the Board consider the effects of the threshold on the objectives of other
County programs and policies, such as the Small Business Enterprise and Outreach
programs.
Attached is an annotated copy of the draft policy for the Board's consideration.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
JOHN GIOIA MARK D@SAULNIER
ACTION OF BOARD ON ja615, 2002 APPROVE AS RECOMMENDED OTHER X
See amendment attached
VOTE OF SUPERVISORS 1 HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
=UNANIMOUS(ABSENT urine ) AND ENTERED ON THE MINUTES OF THE
i BOARD OF SUPERVISORS ON THE DATE
AYES: 7'1/ NOES:_ SHOWN.
ABSENT: ABSTAIN: nn,, . �
ATTESTED J tNh(� T,a] �/0 —
CONTACT: SUPERVISOR JOHN GIOIA (510)3743231 JOHN SWEETEN,C1g9K OF THE
BOARD OF SUPERVISORS AND
COUNTY ADMINISTRATOR
CC: COUNTY ADMINISTRATOR
CAPITAL FACILITIES AND DEBT MANAGEMENT DIRECTOR
GENERAL SERVICES DIRECTOR
COUNTY COUNSEL
JULIE ENEA,STAFF TO 10 COMMITTEE /
BY21—kO `� DEPUTY
Policy Regarding the Use of
Project Labor Agreements
on County Construction Projects
I. Summary and Background
A. Certain large, complex County construction projects involve numerous contractors
and employees in different trades, have critical time lines for completion, and
require a skilled and properly-trained workforce to successfully complete the work in
a proper and timely manner. In order to avoid costly delays and additional expense
to the County, it is essential that construction on such projects proceed without the
labor disruptions that can occur on long-term projects both from external labor
relations problems and from the frictions that often arise when a large number of
contractors and their employees work in proximity to one another on a job site.
B. In the private sector, project labor agreements have been used for years on large,
complex construction projects to achieve satisfactory performance and the
economic benefits that result from having a guaranteed source of skilled workers
and from avoiding disruptions in work.
C. In the public sector, project labor agreements have been used successfully by the
County and other public entities in Contra Costa County for hospital, reservoir,
wastewater, and other large, complex construction projects. Such agreements have
been a major factor in producing quality construction work and projects completed
on time, within budget, and without labor strife or disruptions.
D. As a result of the County's successful experience with project labor agreements, the
Board of Supervisors has requested that a uniform policy be developed to cover the
use of such agreements for construction contracts awarded by the Board. This r
policy is intended to provide general guidance for County construction projects,
subject to any modifications or exemptions that may be approved by the Board.
II. Application of Policy
This policy applies to all construction projects with an estimated cost of$ [Board to
determine appropriate amoun4 million or more awarded by the Board of Supervisors.
-1-
III. Required Provisions
Unless the Board of Supervisors by majority vote determines otherwise, for construction
projects that are subject to this policy, as a condition of contract award, the successful
bidder(contractor) shall be required to negotiate and sign a project labor agreement
(PLA) with the Contra Costa Building and Construction Trades Council or other labor
organization(s) or labor union(s) approved by the County. In general, the PLA shall contain
the following provisions:
(a) For the duration of the project, the unions and their members, agents,
representatives, and employees shall not incite, encourage, condone, or participate
in any strike, walkout, sitdown, stay-in, boycott, sympathy strike, picketing,
handbilling, work stoppage, work slowdown, or other labor disruption or unrest.
(b) Violation of the no-strike clause may be enjoined by the contractor or
subcontractor(s) in state or federal court at the election of the contractor or
subcontractor(s).
(c) During the term of the PLA, the contractor shall endeavor to facilitate harmonious
relations between the subcontractors and the unions.
(d) The unions and their members shall continue work on the project despite the
expiration of applicable collective bargaining agreements.
(e) The contractor, the subcontractors, and the unions agree to use a final and binding
grievance and arbitration procedure to prevent disruptions and delays of the project
arising from internal/external labor relations disputes, including jurisdictional
disputes.
(f) The PLA shall be effective only for the project in question.
(g) The PLA covers all new construction work awarded to and performed by the
contractor during the term of the project at the project site.
(h) The contractor shall require all subcontractors, as condition of working on the
project, to become parties to the PLA.
(i) The contractor and subcontractors agree to use the union hiring hall for any new
hires beyond their own core work force (defined as persons on the contractor's or
subcontractor's active payroll for 60 of the preceding 100 days).
(j) The contractor and subcontractors are allowed to use their own work force before
resorting to the union hiring hall.
-2-
(k) The PLA does not affect the contractor's or subcontractor's parent companies,
subsidiaries, or affiliates.
(1) The PLA does not apply to the contractor's or subcontractor's managerial,
supervisorial, executive, or clerical employees.
(m) The contractor and subcontractors are acting on their own behalf and have no
authority, whether express, implied, actual, apparent, or ostensible, to bind the
County.
(n) The County has the right at all times to perform and/or subcontract any portions of
the construction and related work on the project not contracted to the signatory
contractor.
(o) The County, the contractor, and the subcontractors have the right to purchase
material and equipment from any source, and the craftsmen will handle and install
such material and equipment.
(p) The PLA does not apply to any work performed on or near or leading to or into the
project site by federal, state, city, district, or other governmental entities or their
contractor(s), or by utilities or their contractor(s), and/or by the County or its
contractor(s) for work which is not part of the project nor the fabrication or
manufacture of any component, equipment, or materials offsite, for use or
installation at the project site.
(q) The PLA does not limit or restrict the choice of materials or the full use and
installation of equipment, machinery, package units, factory pre coat, prefabricated
or preassembled materials, tools, or other labor-saving devices.
(r) After the installation is completed by the contractor or subcontractor(s), the County,
the contractor, and the subcontractor(s) reserve the right to perform start-up,
operation, repair, maintenance, or revision of equipment or systems with persons of
the County's, the contractor's, or the subcontractor's(s') choice.
(s) If required, the service representative may make a final check to protect the terms
of a manufacturer's guarantee or warranty prior to start-up of a piece of equipment.
(t) The PLA is binding only on the signatory parties (the contractor, the sucontractors,
and the unions).
(u) The contractor alone is liable and responsible for the contractor's own individual
acts and conduct and for any breach of or alleged breach of the PLA.
-3-
(v) The contractor, the subcontractors, and the unions shall abide by a substance
abuse policy as may be required by the County or the contractor.
(w) All employees shall comply with the security procedures established by the
contractor and the County.
(x) The PLA shall be subject to approval as to form by the County Counsel.
III. Miscellaneous
For individual projects, the PLA requirements will be set forth in detail in the project
specifications and may vary from the provisions listed above, as determined by the County
Administrator. The requirement for a PLA does not exclude any contractor(union or non-
union) from bidding on the project. The PLA must be negotiated within 14 days after the
apparent lowest, responsible bidder is notified by the County. If the contractor and the
unions are unable to agree upon the terms of the PLA within that time, the matter shall be
submitted to final, binding arbitration within 10 days.
H'NKA Wiry revised 12-2"i..od
-4-
ADDENDUM
D.3
JANUARY 15, 2002
On this day, the Board considered adoption of a policy regarding the use of Project Labor
Agreements (PLA) on certain County construction projects and to establish a dollar
threshold at which County construction projects would be subject to a policy.
The Board discussed the history of the issue and Supervisor Uilkema requested more
details on a default position that the Board might want to consider in the event an
agreement cannot be reached upon the terms of the project labor agreement (PLA), before
the time designated for the matter to be submitted to final binding arbitration.
Supervisor Gerber requested the Board be notified of any wage and hour violations by the
contractor or sub-contractor under the PLA.
The Chair invited comment from the public. The following persons addressed the Board:
Greg Feere, Building Trades Council, 935 Alhambra Avenue, Martinez
Dale Peterson, IBEW 302, 3428 Bluejay Drive, Antioch
John Wolfe, Contra Costa Taxpayers Association, 600 Las Juntas Street,Martinez
James Conway, Bay Area Sheet Metal Contractors, 7677 Oakport Road, #1100, Oakland
Aram Hodess,Plumbers/Steamfitters 159, 1308 Roman Way, Martinez
Jim Ward, SANSAC Corporation, 422 Whitney Street, San Leandro,
Mike Sonnikson, 915 Vista Del Diablo, Martinez
John Dalrymple, Executive Director, Central Labor Council, 1333 Pine Street,Martinez
Kevin Dayton, Associated Builders and Contractors, Golden Gate Chapter, 11875
Dublin Boulevard, Suite C-258, Dublin
Rich Hevener, Jr. 3891 Martha Drive, Martinez
Bruce Edrington, 220 Oak Park Lane, Pleasant Hill
Kelly Anshutz, U.A. Local 159, 1308 Roman Way, Martinez
Todd Bales, B &B Grading and Paving, 2490 Vista Del Monte, Concord
Jim Smuck, Bay City Mechanical, 543 Sooth 31s` Street, Richmond
Robert Hanson, Sheet Metal Workers, Local 100, 1720 Marina Boulevard, San Leandro
Kevia VanBuskirk, SMW Local 104, 1720 Marina Boulevard, San Leandro
Derek Daymond, Sierra Bay Contractors (no address given)
Eric Christen, CFEC, 2320 Leverage Drive, Fairfield
Pat Leiser, California Contractors Alliance, 1408 Harris Court, Antioch
Jim Hein, Hein Lighting and Electric, 5030 Blum Road,Martinez
Bill Hanna, AGC of California, 1390 Willow Pass Road, Suitel030, Concord
Tom Baca, Vice-President, Central Labor Council,President, Boilermakers Union,
213 Midway Drive, Martinez
Following discussions, the Board took the following actions:
SET a threshold of $1 million at which County construction projects will be
subject to a policy requiring project labor agreements(PLA)
ADOPTED the policy regarding the use of project labor agreements (PLA) on
certain County construction projects
DIRECTED the County Administrator to prepare an annual evaluation report of
the PLA program for the Internal Operations Committee. Said report to include:
Engineer estimates vs. actual bids on PLA projects, wage and hourly-wage
violations reported on any project involving a project labor agreement (PLA), and
any other pertinent information the County Administrator deems necessary;
and DIRECTED that there be discussion on the coordination of the PLA process
with the Outreach Program.
(AYES: I, III, IV, V; NOES: II; ABSENT: NONE; ABSTAIN: NONE)
Contra Costa County
Recently Completed, In Construction and Pending Facility Construction Projects
Name of Proiect Pendina in Construction Completed Orin Contract PLA
Contra Costa County Regional Medical Center X $ 52,000,000 yes
Richmond Health Center X 35,000,000
County Administration Center X 35,000,000
Juvenile Hall Expansion X 26,800,000
Public Safety Command Center X 25,000,000
Crime Lab Replacement X 25,000,000
Martinez Health Center X 16,130,000
Family Law Building X 10,200,000 yes
Animal Services Facility,Martinez X 7,284,200
ClinicaltPublic Health Lab X 6,400,000
New Office Building,4549 Delta Fair X 6,097,130
HVAC Improvements,30/40 Muir Road X 6,000,000
Los Madanos Health Center X 4,155,842
Pavers Day Care Center,2730 Maine Ave X 4,100,000
Brentwood Health Clinic X 2,770,000
Remodel 1305 MacDonald Avenue X 2,500,000
T.1. 1650 Cavallo Rd X 2,000,000
Addition/Remodel, 1034 Oak Grove X 1,739,000
Head Start Classroom Expansion,Various X 1,656,968
Animal Services Facility, Pinole X 1,230,000
Remodel, Richmond Administration Bldg X 1,100,000
Laurel Road Park&Balloeld X 923,775
Remodel 50 Douglas,3rd Floor X 695,304
New FSM79, 1423 Lillian St.,Crockett X 673,316
T.I. Phase II, Los Medanos X 666,209
Headstart Expansion,3020 Grant SUFairgrounds X 491,900
Cast Iron Soil Pipe Replacement, LMHS X 327,000
T.I.,2530 Arnold Drive,2nd Floor X 323,000
Parking Lot Expansion,2530 Arnold Drive X 315,710
Remodel,50 Douglas, 3rd Floor, Phase If X 299,500
T.I.2366-A Stanwell Circle X 248,000
Mchen/Cafeteria AC,RMC X 230,172
Security Improvements,640 Ygnacio Valley X 229,200
Parking Lot Expansion,30 Glacier X 221,600
Fire Alarm System, 725 Court Street X 211,988
Security Improvements, 1020 Ward Street X 189,450
Reroof,725 Court St X 148,000
Voice&Data Cabling, 50 Douglas, 1st Floor X 141,066
Fire Alarm System Upgrade,625 Court Street X 139,400
Diagnostic Imaging, LMHS X 131,000
Remodel Holding Cells, Pittsburg X 119,889
T.I.,2366-B Stanwell Circle X 119,200
Fire Alarm System, 1020 Ward X 104,400
HVAC Improvements,Orin Allen Youth Facility X 98,959
Stand Alone Boiler, RMC X 98,623
Site Improvements, LMHS X 96,400
Stone Valley Landscape Mitigation X 79,543
Play Structures-Los Nogales/Los Arbolis X 78,900
Soccer Field,Montalvin Manor, Pinole X 70,477
Sitework Headstart Classroom,Ambrose Park X 70,280
ADA Access,4191 Appian Way X 51,504
$ 279,756,906
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AGC AMEA��a
CALIFORNIA
The VOICE of the Construction Industry
lllllllllllll�
OFFICERS January 14, 2002
Frank Schipper,President
Charles A.Fletcher,Senior Vice President
Doug Duplisea,l ice President
John EMessner,Tmasuner
Cart Bauer,Immediate Past President Supervisor John M Gioia
Thomas Nolsman,Executive Wee President
STATE OFFICE Contra Costa County Board of Supervisors
3095 Beacon Boulevard 651 Pine Street, Rm 106
West Sacramrnto,CA 95691 Martinez CA 94553-1293
(916)371-2422/Fax(916)377.2352
E-maik agcsac1&agc<aorg
REGIONAL OFFICES IE: January 15, 2002 Meeting
Northern California Board of Supervisors Meeting Agenda Item
1390 WBlom Pass Road,Suite 1030 p S S
Concord,CA 94520
(925)827-2422/I=(925)827-4042 Deliberation Item D.3
E-mail:agrnorth®agc<a.org
Southern California
1255 Corporate Center Drive,Suite 100 Dear Supervisor Gioia:
Monterey Park,CA 91754
(323)263-1500/Fax(323)261-8222
E-mail agcsouth®agc<aorg Associated General Contractors of California(AGC)would like to present
DISTRICTS
for the Board's consideration and review certain critical pieces of
Eureka and Shasta
(53 0)24"638/Fax(53 0)547 1772 information regarding your consideration of adopting a policy on
E-mail agcrvdding®age<aorg
Delta Sierra construction project labor agreements for Contra Costa County.
(916)371-2422/Fax(916)371-2352
E-mail.,aguac®agc<a.org
North Bay AGC's Government Mandated Labor Agreement policy states:
(707)5260645/I=(707)526-0809
E-mail:agcnorth®agc<aorg
East Bay To protect construction industry practices,
(925)827-2422/I=
gcnort5 ggc7ca 42
rg AGC of California will engage in earl
E-mall:agrnonh®agc<aorg engage Y
San Frandsen education and discussion of GMLA's with
(475)7762054/Fas(475) gc<amrg public agencies.
E-mail-agrnorth®agc<aoubliIf contractors are excluded
Santa Clam from the process, AGC will oppose GMLA's on
(408)7278)727-756r7
E-mail agcnortb®agcca.og the basis that they prejudice the competitive
San Joaquin and Monterey Bay bidding process and undermine the local
(559)252-6262/rnx(559)252-6294
E-mail ngcfresno@agc<s M prevailing industry labor practices.
Tri-Counties
(805)682-6242/Fac(805)563-6358
E-maikagctrico®agc,caorg If contractors are not able to protect local
LosAngeles prevailing industry labor practices, AGC of
(323)263-1500/Fax(323)261-8222
E-mml.agaoutb®age<a.org California will oppose GMLA's on a case by
Orange County case basis through the initiative and/or legal
(949)453-1480/Fax(949)453-1580
E-maikagcsbo®agc<aorg process in an effort to stop agency intervention
Riverside/San Bernardino to control contractors workforce.
(909)885-7519/FAX(909)3814047
E-maB'agcsbo@qgc<a.org
c O 0.EN(17j`
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T HE ASSOCIATED GENERAL CONT RACTORS OF CALIFORNIA , INC .
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AGC r s
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CALIFORNIA
The VOICE of the Construction Industry
OFFICERS
Frank Schipper,President
Charles A.Fletcher,Senior Vice President
Doug Duphsea,Vice President Page 2
John EMessner,Tmasurer
Cart Bauer,Immediate Past President
Thomas Holsman,Executive Vice President
STATE OFFICE
3095 Beacon Boulevard In adherence to this policy I have enclosed some documentation from AGC
[Pest Sacramento,3795691
(976)371-2422/Fax(916)377-2352 of California, and AGC of America that more succinctly identifies issues
E-mailagaac@agccao g that should be considered in making decisions of this magnitude that effect
REGIONAL OFFICES your constituency of the county regarding project labor agreements.
Northern California
1390 Wi((ou,Pass Road,Suite 1030
Concord,3A 94520
(925)827-2422/lax(925)8274042 If you have any questions regarding this issue please do not hesitate to
E-mailagcnortb®ag"a°,g contact our office at (925) 827-2422 to discuss the matter in more detail.
Southern CallJornia
1255 Corporate Center Drive,Suite 100
Monterey Park,CA 91754
023)263-1500/Fax(323)261.8222 Thank you for your consideration and review of this material.
E-mail.agcsoutb®agcca.mg
DISTRICTS
Respectfully submitted,
Eureka and Shasta
(530)2468638/Fax(530)5474772
E-mall*agcreddinggagcca.org \ /�
(910371-242211=016)377-2352 '�Je`J)•t1Y1\�x)w�M+-- \
E-ma it agaac®agcca.org
North Bay
(707)526x645/Fax(707)526x809 William LHanna
E-mail:agcnortb®agccaorg
East Bay Regional and East Bay District Manager
(925)827-2422/Fax(925)8274042 Associated General Contractors of California
E-mail.agcnorth®agcca org
San Francisco
(415)7762054/Fax(415)7765592
E-mail agcnortb®agcc mg
Santa Caro Enclosures: Government Mandated Labor Agreement , Position Paper
(408)727-3318/Fax(408)727-7567
E-mailagcnortbfagccaorg AGC of California
San Joaquin and Monterey Bay GMLA In Public Construction, AGC of America
(559)252-6262/Fax(559)252-6294
E-mail agcjresno®ago ,M GMLA Brochure, AGC of America
Tri-Counties
(805)682-6242/Fax(805)563-6358
E-mail agctrico®agccaorg
Los Angeles
(323)263-1500/Far(323)261-8222
E-mail agcsoutb®agcca org
Orange County
(949)453-1480/Fax(949)453-1580
E-mail agcsbo®agcca org
Riverside/San Bernardino
(909)885-7519/FAX(909)3814047
E-mail agabo®agcca.org
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T H E A S S 0 C I A T E D GENERAL CONTRACTORS OF CALIFORNIA , INC .
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AGC � S
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CALIFORNIA
The VOICE of de Cm fion Udmty Government Mandated Labor
Agreements
The Position of
AGC of California
AGC of California
The Associated General Contractors of California (AGC) represents over 1,100
construction and construction related firms throughout California. One of our
primary service functions is to provide labor relations assistance to our members.
As a result, of our size and diverse membership,we have demonstrated the ability to
negotiate labor agreements throughout California that are responsive to the market
places in which our members work. Our expertise in the area of advocating
contractors on labor issues spans more than 50 years.
Government Mandated Labor Agreements
To protect construction industry practices, AGC of California will engage in early
education and discussion of GMLA's with public agencies. If contractors are excluded
from the process, AGC will oppose GMLA's on the basis that they prejudice the
competitive bidding process and undermine the local prevailing industry labor practices.
If contractors are not able to protect local prevailing industry labor practices, AGC of
California will oppose GMLA's, on a case by case basis, through the initiative and/or
legal process in the effort to stop agency intervention to control contractors workforce.
AGC's Opposition
• Project labor agreements negotiated between government agencies
and labor unions erode the competitive bidding process.
• GMLA's reduce the bidders on the project when capable
companies do not engage such projects because they do not chose to
sign the mandated agreement.
• GMLA's restrict competitive control of workforce and work
assignments
• Strict craft jurisdictions will raise the costs because the contractor
will be required to hire workers whose skills and productivity are
unknown.
• Promises of"no-strike" and "no lockout" are already
longstanding provisions in the Collective Bargaining Agreements that
the industry works under today.
Government Mandated Labor Agreements are NOT the Same as Project Labor
Agreements. Parties to the Agreements:
• Project labor agreements are negotiated and signed by the local
unions and the performing contractors.
• Government Mandated Labor Agreements are negotiated by the
Agency and Building Trades Councils and signed by the International
Presidents and the Agency's Representative.
Project Labor Agreements
Such agreements are negotiated between contractors and the appropriate unions to
address special circumstances of a particular project.
• Examples of such circumstances, among many, are:
— accelerated schedule
— special work shifts
— environmental restraints
— community inconvenience
— public emergency
Seldom Addressed
• Safety
• Uniform Drug Testing
•Uniform Work Rules
• Local Work Practices
• Composite Crew Make up
•Representation
Issues Introduced That Are NOt Covered By Collective Bargaining Agreements
• Expansion of Coverage Beyond the Site of Construction
— Offsite Trucking
— Fabrication
— Delivery of Materialsa®�£
AGO
CALIFORNIA
— Work Breaks
— Quality Assurance/Quality Control
Contractor Control
• Contractors have developed their competitiveness by controlling
their entire operations
• Economy and efficiency of operation comes from knowing and
controlling one's own workforce
Without such control, contingencies must be built into the bids
Local Control
• Project Labor Agreements have local jurisdictional assignments
and provisions and disputes are settled through the local agreements.
Government Mandated Labor Agreements do not honor local
assignments and are settled through the National Plan for the
Settlement of Jurisdictional Disputes in the Construction Industry.
Competitive bidding,prevailing wage regulations and local collective bargaining
agreements have served public works construction well for many years. These standards
and laws, when properly enforced, should provide the assurances agencies require. When
contractors are allowed to control their own workforce, they are more competitive.
Requirements beyond the proven industry practices, only raises the cost to the public.
We should always remember, we are dealing with the public's money.
mw
AGCY
CALIFORNIA
GENEgq�
A Cs�
ANC �FAMEP�Ga
CALIFORNIA
The VOICE of the Comftuction Industry
AGC's GMLA POLICY
Adopted May 11, 2000
To protect construction industry practices,
AGC of California will engage in early
education and discussion of GMLA's with
public agencies. If contractors are excluded
from the process, AGC will oppose GMLA's on
the basis that they prejudice the competitive
bidding process and undermine the local
prevailing industry labor practices.
If contractors are not able to protect local
prevailing industry labor practices, AGC of
California will oppose GMLA's on a case by
case basis through the initiative and/or legal
process in an effort to stop agency
intervention to control contractors workforce.
ree
ECONOMIC BENEFITS DERIVED FROM
UNION PROJECT AGREEMENTS
SUMMARY OF BENEFITS
INDUSTRIAL PEACE
BETTER TRAINED WORKERS
EXPERIENCED WORKERS
QUALITY WORKMANSHIP
oJob Right the First Time
oEliminates Re-Work
oReduces Call Backs
A MORE SAFE WORKER
oReduces Loss of Time
oReduces Insurance Premiums
oReduces Property Damage
GREATER PRODUCTIVITY
oLowers Labor Costs
oAllows for Completion of Job On Time
STRUCTURED LABOR MARKET
oReduces Recruiting Costs
LESS LABOR TURNOVER AND ABSENTEE PROBLEMS
LESS NEED FOR OVERTIME
SOCIAL-ECONOMIC BENEFIT
There are a number of economic benefits that can be realized
from a project agreement by users of construction and or by project
owners. The fact that union project agreements provide for
industrial peace and worker harmony on the job is .generally well
understood. Indeed, there are a number of other very significant
benefits that result from a building and construction project being
performed by union labor and contractors working under collective
bargaining agreements.
Traditionally, union craft workers have been better trained.
A very large portion of union craft workers have completed formal
apprenticeship training programs. These programs coupled with on-
the-job proper supervision and work experience have clearly
resulted in the unionized construction trades having better trained
workers. Labor unions in this industry take particular pride in
their apprenticeship and journeyman programs.
Practically every union electrical craft worker at the
journeyman level has completed a four or five year formal training
program, or they have been qualified by examination linked with
experience. Similar situations exist among other unionized trades.
In fact, the IBEW and the National Electrical Contractors
Association spend $34 million per year to train electrical workers
in one trade as opposed to the $4 . 5 to 6 million spent by the non-
union sector in their entire training programs for all their
trades. Again, we believe that comparable situations exist among
the other unionized trades in terms of monies spent on training by
them as opposed to expenditures by the non-union sector. The 15
building trades unions and their contractors spend over $300
million to assure a first-class training system on both the
national and local level -2 Less than 10 percent of all funds now
going into construction craft training is directed toward open shop
training.; Likewise less than 10 percent of those individuals
completing construction craft training are in open shop programs.4
iThe Learning Industry; Education For Adult Workers, p. 106;
The Carnegie Foundation for the Advancement of Teaching 1990; Nell
P. Eurich.
2The Unionized Construction Industry; Myth vs Reality;
Presented by Construction Industry Labor - Management 1990's
Committee.
3The Business Roundtable; Training Problems In Open Shop
Construction; A Construction Industry Cost Effectiveness Project
Report; Report D-4, p. 1; Sept. 1982 .
6Ibid.
1
Quality training results in high quality workmanship, a more
productive worker, a more competent worker, and a more safe worker.
Each of these attributes contribute to or translate into economic
benefits. Well-trained craftsmen producing high quality work means
that over the long run there will be considerably less need for re-
work and call backs. Putting construction work in place right-the-
first-time is not only cost effective and thus produces savings but
is also essential to putting a job in on time. According to users
(of construction) overcoming skill shortages on large projects was
an area where union contractors have a particular advantage.S
Further, union strengths include a high degree of organizational
efficiency as well as extensive construction knowledge and
experience on the part of contractors, supervisors, and labor.6
These are very significant economic considerations when large
construction projects are put in place which clearly are intended
to operate efficiently for long periods of time. In other words,
construction users or project owners give very serious
consideration to life cycle cost: That is, the cost of annual
maintenance, future expansion and modifications, and overall
operational efficiencies must be evaluated when undertaking the
assignment of a project for construction. Assessing life cycle
costs requires both quantitative and qualitative analyses. In
other words, construction consideration and decisions must be based
on factors other than just a focus on initial cost.
While in new construction the bidding process evolves around
initial construction costs, most often construction users/owners
will weigh in life cycle costs in terms of materials, machinery and
equipment used and the quality of workmanship used in the
installation ' thereof. Quality workmanship results in economic
savings over the life of a plant or a construction facility. This
has been very clearly documented and is frequently spelled out in
the specifications for the construction project particularly in
terms of the kinds of materials to be used and in the engineering
and design features.
The Marco Consulting Group, MCG, the largest consultant to
multi-employer pension plans in the nation, conducted a survey of
16 of the nation's leading open end real estate funds and six
mortgage real estate funds, which showed that only the Economically
Targeted Investments (ETIs) , i.e. all union constructed, had
positive rates of return in 1991 while also being ranked in the top
tier for the past five and ten year periods. "Quality is one
reason for the success of ETIs, " explained HCG President Jack
Marco. "Union workers, trained through a formal apprenticeship and
5Survey of Construction Service Users; Indiana University -
Institute for the Study of Labor in Society; p. 6; by Jeff Vincent.
6Ibid.
2
journeyman process, performing for stable long-term employers are
likely to produce the type of quality project that does best in a
poor market, " he continued.?
As previously noted, high quality craftsmanship results from
the kind of training and experiences unionized craft workers
receive. Their training and their experience make them highly
competent workers. Competency not only means that they have
mastered their trade, but that they clearly understand the various
building and construction codes pertinent to their work.
Understanding the National Electrical Code as well, as the other
building and construction codes, clearly manifests itself not only
in a job being put in place in accordance with local and state
ordinances but also yields substantial cost savings. Re-work that
results from the improper installation (work does not meet building
codes) can be quite costly. Needless to say, such work can also
result, if uncorrected, in property damage and personal injury.
Project agreements that utilize unionized craft workers have a very
favorable track record in this regard. Contrarily, there have been
a number of construction projects that were attempted to be
constructed by open shop and non-union contractors that experienced
numerous problems in meeting construction time tables, and in
particular, in complying with the codes and or regulations required
by law. A lack of quality in workmanship next to weather
contributes the most to construction delays.°
Every study that makes an effort to measure worker
productivity will generally acknowledge that a better trained
worker is a more productive worker. Obviously, if this were not
true, unions and employers would not invest the huge sums of money
they do in the training of workers. Unionized workers in the
construction industry are highly productive and their productivity
advantage translates into significant cost savings. Whereas in the
open shop and non-union sector there is a hodgepodge of
classifications with many of the workers possessing skills and
abilities of semi-skilled workers. Semi-skilled workers employed
, on building and construction projects, because of the
incompleteness of their training, and lack of experience, are not
as productive as unionized craft workers. Many open shop
contractors do not recognize the improved productivity that can be
realized through the training of their workers.° only a small
rThe Marco Consulting Group, 54 West Hubbard Street, Suite
205, Chicago, I1. 60610; Industry Survey, April 15, 1992 .
sSurvey of Construction Service Users; Indiana University;
p. 6.
9The Business Roundtable ; Training Problems In open Shop
Construction; p. 17.
3
percentage of open shop contractors in any area make any effort to
involve themselves or contribute financially toward the development
and training of craft manpower: 10
Another very important factor, in the overall cost of a
construction project, is that regarding the safety aspects of the
work environment and workers involved in the construction project.
When a construction project is being put in place by workers that
have received training in safe work practices, and thus, are safety
minded, they are involved in fewer accidents on the job: This
results in less lost-work-time, lower insurance costs (workmen's
compensation, liability, etc. ) and less cost in terms of personal
injuries and other human tragedies. Construction workers' safety
performance is significantly related to union membership. 11 From
an economic perspective, it is also important to note that not only
does a cost savings accrue from a reduction in loss of work time
due to personal injuries; but that accidents that could have been
avoided by a safe worker result in material and equipment damage
that can be quite consequential in monetary value and result in
construction delays. Where building and construction work takes
place under a project agreement there is a harmonious relationship
among the workers on the job and 'greater attention is usually paid
to the safety aspects of the work environment and to the welfare of
fellow workers on the job. This clearly results in benefits to all
parties involved in the construction project.
We believe the record is rather well established with regard
to the responsibleness of union workers and construction employers
working under a collective bargaining agreement in their concerns
for a safe work place. They have established safety committees,
they have safety meetings, and they assign a very high priority to
the conduct of safe work practices. Because unionized workers are
more likely to exercise their rights under OSHA, the agency
enforces standards at unionized construction workplaces more
stringently than at comparable nonunion workplaces. 12
Specifically, union construction workers receive formal and on-
going training on health and safety risks as well as their rights
under OSHA. 13 This indeed results in a cost savings not just to
toIbid. , p. 18.
11Safety Performance Among Union and Nonunion Workers in the
Construction Industry; Drs. Nicole Dedobbeleer and Pearl German;
American College of Occupational Medicine; p. 1101:
"Building Safety: The Role of Construction Unions in the
Enforcement of OSHA. Journal of Labor Research - 1992 ; pp. 121-
122 ; David Weil ; Boston, University.
13Ibid. , p. 122 .
4
the contractors; but a cost savings that is passed on to the
construction user/owner.
In 1979, Dr. Steven G. Allen; Professor of Economics at North
Carolina State University, in his study of productivity. of
construction workers, found that unionized construction workers
were at least 29 percent more productive than non-unionized
construction workers.14 Professor Allen noted that unions are
concerned not only with wages and employment opportunities; but
also with physical conditions of the work place, the systems used
to assign workers to jobs; the provisions of training, and the
availability of channels to settle disputes between workers and the
employer, along with a host of other facets of the employment
relationship. All of which can and do have positive effects upon
worker productivity.
In this study he used an econometric approach developed by
Charles Brown of the University of Maryland, and James Medoff of
Harvard University, to estimate the effects of unions on
productivity in the construction industry. Brown and Medoff found
that the output per man hour . (productivity) was 24 percent greater
in unionized establishments in the manufacturing sector. Professor
Allen further noted that craft unions have played an active role in
training new workers and reducing job search costs for both
contractors and members, which serves to increase productivity
perhaps even to a greater extent, in the construction industry.
The study found that output per employee is at least 29 percent
greater in unionized establishments in construction. Furthermore;
' data in his study revealed that if all of the extra productivity
measured had been entirely attributed to the labor component of
production - then union workers are at least 38 percent more
productive than non=union workers in construction.
The study goes on to note that there are two factors which are
likely to increase the productivity of union workers in
construction. First, union workers are more likely to have
received better training. This results in part from their tendency
to be tied to a craft rather than a firm. Superior training also
results from the active role unions take in developing
apprenticeship programs. Secondly, union hiring halls reduce
recruiting and screening costs to contractors. This thereby
results in an economic savings being passed onto the construction
user/owner. 15 The study by Professor Allen was substantiated by
findings from an Indiana University survey of construction service
14Unionized Construction Workers Are More Productive: Professor
Steven G. Allen, North Carolina State University; November 1979;
P. ii.
15Ibid. , p. 5.
5
users. This study found that organized apprenticeship programs and
a centralized labor source produce significant economies of scale
in the supply of labor. 16
In the case of project agreements in which a prevailing law
applies, the productivity advantage that union workers would enjoy
over non-union workers `should convey rather substantial cost
savings to the construction user/owner. Simply put, if we hold
wage and fringe benefit costs constant for both the union
construction workers and the non-union workers, since these
projects require that prevailing wages and benefits be paid, we see
readily that the union contractors have a significant cost
advantage due to the productivity advantage. In fact, one could
argue since union workers are at least 29 percent more productive
than the non-union workers that that can and does allow for not
only a cost savings but also gives advantage to them in meeting
prescribed time tables for completion of the project avoiding cost
over-runs.
In a 1986 paper titled; "Can Union Labor Ever Cost Less?" prepared by
Professor Steven Allen, he examined the effect of unions on
efficiency (cost competitiveness) of union labor on three different
sets of construction projects. Financial support for that paper
was provided by the National Bureau of Economic Research, a private
non-profit, non-partisan organization engaged in research; The U.
S. Department of Labor; and the National Science Foundation. A
principal finding of his work in this paper revealed that union
contractors benefit from dconomies of scale. His data support his
conclusion that economies of the scale for union contractors give
them a cost advantage in large commercial buildings.17
By extension, it could be argued effectively that the same
factors that come into play and give union labor - union
contractors a cost competitive advantage in large commercial
buildings would also apply in construction of other facilities that
employ significant amounts of craft labor. In a competitive
environment cost savings to contractors generally translate into
cost savings for construction users/owners. In his paper Professor
Allen again noted that the building trades unions also have
beneficial effects on productivity mainly through the effects on
training via apprenticeship, search and screening costs via hiring
16Survey of Construction Service Users; Indiana University;
p. 6.
17Can Union Labor Ever Cost Less? Dr. Steven G. Allen; National
Bureau of Economic Research, Inc. ; Working Paper No. 2019 ; p. 1.
6
halls, and management. Ali of these factors shift the cost
function of labor downward:18
Furthermore, he goes on to say, a most important factor is
that unions can lower the cost of larger projects through their
ability to structure what would otherwise be a casual iabor
market. 19 On the other hand open shop contractors can operate at
a disadvantage in the labor market, particularly in the areas of
recruitment and training.20Because of the unions ' long experience
with referral services and apprenticeship programs union
contractors can better adjust to changing manpower needs.41 Union
hiring halls can provide large supplies of skilled labor on
relatively short notice. This is a function a single contractor
most likely would be unable to accomplish on his own.
Additionally, Professor Allen's paper states that labor unions also
have a role in reducing the cost of labor turnover and absenteeism,
since replacements can be quickly provided.22 Moreover, in its
study of absenteeism and labor turnover, the Business Roundtable
acknowledges that lower turnover offers a broad range of
productivity gains.23
Indeed, under a project agreement all of these elements would
come into play and be reflected in cost savings to the project
owner. Professor Allen goes on to point out that union hiring
halls reduce uncertainty about the quantity of available labor.
This essential factor contributes to the benefits of the economies
of scale. Consequently, management can plan large projects in a
more efficient fashion and on a tighter schedule; this reduces the
cost of maintaining material inventories and renting capital
equipment. These kinds of benefits often allow unionized
contractors to obtain favorable financing terms to meet their
capital needs which, in turn, can be passed onto the project owner.
IsIbid. , pp. 5-6.
"Ibid., p. 6.
20Open Shop Construction Revisited; Professor Herbert R.
Northrup; University of Pennsylvania, Industrial Research Unit;
1984 ; p. 57.
21Ibid.
22Can Union Labor Ever Cost Less? Dr. Steven G. Allen; p. 6.
23The Business Roundtable; Absenteeism and Turnover; A
Construction Industry Cost Effectiveness Project Report; Report C-
6; p. 1.
7
Another factor which Professor Allen states that may give
union contractors an advantage over non-union competition on large
projects is experience.24 value is implicit in experience.
Certainly, the record of union construction is very clear in this
regard.
Another important item discussed in Professor Allen' s study is
that of overtime ratios between union and non-union contractors.
He points out that, especially for non-union contractors, the usage
of overtime increases substantially as projects become larger. He
notes that non-union contractors use 75 percent more overtime in
the construction of larger schools and 366 percent more overtime in
larger office buildings.25 In other words, in the construction of
larger office buildings non-union contractors used more than 3 . 5
times the hours of overtime used by union contractors on equivalent
structures. As construction projects increase in size and require
greater usage of overtime for non-union contractors, this mandates
either working those hours of overtime and paying premium
compensation or incurring delays in meeting the construction time
table for the project or a combination of both which can result in
construction cost over-runs. Furthermore, as noted in a Business
Roundtable Report, productivity can be adversely affected by the
extension of hours of work through scheduled overtime operations.26
Prevailing Hours Wage Requirements Enforcement
Project agreements, especially "all union" project agreements
can yield economic benefits on public work jobs in that there will
undoubtedly be less compliance problems with regard to the State or
Federal prevailing wage laws. The workers employed under this
arrangement are assured the enforcement of the terms and conditions
of this agreement through their union representatives. The payment
of their fringe benefits is held in trust accounts subject to the
Federal Taft-Hartley provisions. These trusts are jointly
administered by labor and management trustees who, through their
administrators, accountants, auditors, and attorneys, assure that
the fringe payments are both correct and paid in a timely fashion.
Many times they have their own bond requirements to guarantee
payments. If a problem is discovered, they take the time, expense,
and proper action to resolve the issue. The enforcement agencies
are very rarely involved in an economic dispute involving
prevailing wage payments from union contractors.
24Can Union Labor Ever Cost Less? Dr. Steven G. Allen; p. 7.
2SIbid. , p. 17 .
26A Business Roundtable Report; Scheduled overtime Effect on
Construction Projects; p. 5.
g
On the other hand, with the absence of a collective bargaining
agreement and a union representative to advocate their rights, non-
union workers employed on prevailing wage projects frequently don't
know their rights and are not familiar with exactly what are the
prevailing wage rates and benefits. Non-union contractors
frequently abuse their responsibility to pay the required wage and
benefit package. This is either through contractor's ignorance or
the calculated probability of the risk of being caught.
The methods of abuse are many and varied, among which are:
incorrect hourly rate; fringe calculations omitted; incorrect
classification for types of work performed, including apprentices;
wage kickbacks; incorrect hours reported, splitting time with a
substandard wage adjustment on other concurrent private work; bogus
fringe deductions; false front fringe administrator programs;
required tool usage rental payments, etc, to name a few. The
enforcement action by government to correct these abuses cost
money. Additionally, the government is also deprived of tax
revenues from both wages lost and the resultant economic multiplier
due to hour and wage violations.27
An entire section of Government Compliance Programs are
assigned to enforcement of the prevailing wage law, most of which
will deal with the "merit", i.e. , non-union, contractors. With the
use of this Union Building Trades project agreement, the government
is virtually relieved of the expense of monitoring, investigation,
hearings, court costs, collection, etc. , that could be anticipated
in projects of size, if subsequently secured by open shop
contractors and subcontractors.
Socio-Economic Impact
With projects of size, owners and builders can act prudently
to mitigate the adverse socio-economic impacts usually experienced
by local communities in and around large construction projects.
In-migration of construction personnel for large projects has
been shown to disrupt the budgeted resources of city and public
services through increased demand on limited affordable housing,
exceeding capacity limits on schools, drawing on sewer and water
resources, non-participation in roadway maintenance and
construction, etc. The inherent system-wide constraints of a
community are exceeded by the in-migrant's failure to not fully
contribute to the services they use which results in budgeting
shortfalls, the burden of which reverts to the normal tax-paying
27"Revenue Enhancement With No New Taxes" , Ileavy and Highway News,
Vol. 8 , No. 2 , June 1992 ; National Joint Heavy and Highway
Construction Committee, 111 Massachusetts Ave. , NW, Washington, DC.
9
residents of the area . (Ref: County of Santa Barbara, California,
Department of Regional Programs, "Tri-County Socio-Economic
Monitoring and Mitigation Program") .28
By implementing a local Union Building Trades project
agreement, local communities are assured that their residents will
be employed on this project, thereby mitigating significant adverse
economic impacts to their region which would have been required
with out-of-th'e' -area contractors and workers being brought in to
work on these projects. This can be a positive action for the
owner in the permit process.
Federal and State governments also have a concern over access
to employment opportunities for minorities and women into the work
force, particularly construction. Entering into an agreement with
the area Building Trades will compliment the governments
affirmative action efforts in that area. These groups are under
represented in this industry. This cannot be corrected by a mass
hiring practice due to the requirement of skill development. ' The
major avenue of access is through apprenticeship training programs .
The following example illustrates how the unionized building and
contruction trades promote affirmative action efforts. In the
Boston area the minority share of total employment was 24 . 1% in
1987 compared to 23 . 3$ in construction. In 1988 13 . 3% of the
Boston based apprentices were minorities and 4 . 9% were women. The
non-union ABC sponsored training programs had a participation rate
at this time of 3% minorities and 2 . 2% women. In a three year
survey of minorities and women in the industry, the union had a 97$
retention rate compared to the non-union rate of 65%. This
demonstrates that both access and retention of minorities and women
into the industry is enhanced by union craft utilization, thereby
providing secondary advantages for responsible builders and owners
to utilize a union project agreement.
-9
28Reprint from COASTAL ZONE 191, Proceedings of the 7th
Symposium on Coastal & Ocean Management, ASCE/ Long Beach, Ca. July
8-12,1991. "Monitoring and Mitigating the Socioeconomic Impacts of
Coastal oil and Gas Development" by Michael G. Powers (Deputy
Director Planning, Santa Barbara County Association of Governments,
Suite 11, 222 E. Anapamu St. , Santa Barbara, CA. 93101) .
Mark Erlich, "Labor at the Ballot Box, The Massachusetts
Prevailing Wage Campaign of 1988" (Philadelphia, Pa. , Temple
University Press, 1990) pp. 107-110.
10
4
THE LOS ANGELES UN FIE®
SCHOOL DISTRICT'S
P ®P. BB
PROJECT LA► R AGREEMENT,
A $600 MILLION LESSON .I
CONSTRUCTION MADNESS
a J3
Prepared by the Coalition. for Fair Employment
in Construction
November 30, 2001
y
On August 24 of 1999, the LAUSD Board of Education approved, behind closed
doors, a Project Labor Agreement that guaranteed the $2.4 billion Proposition BB
school-repair and construction work to union members on/v.
This sweetheart deal was signed between the LAUSD and two major labor
construction groups, the Los Angeles County Building and Trades Council and the
Southern California-Nevada Regional Council of Carpenters. By requiring all
contractors and workers to effectively have to join a union in order to work on
the job the agreement effectively shut out over 80% of the construction
industry, thereby guaranteeing increased costs, waste and non-accountability.
Some of what was said at the time included:
There is no way this thing(PLA) is going to be efficient and cost effective."
Eric Christen, Coalition for Fair Employment in Construction
The Daily News(Los Angeles)
"I'm in favor of anything that will save us money and get schools built. "
Steve Soboroff, former member of Prop. BB oversight
committee who supported the PLA
"This PLA is a clear-cut example of poliUcal cronyism. It reeks of ineptitude and
deceit Moreover, this PLA decision was made within a culture[that]defies
common sense, avoids accountability, and protects bad judgment."
Kevin Dayton, Associated Builders and Contractors in letter
to Don Mullinax, Director of the LAUSD O>fice of Internal
Audit and Special Investigations
"The purpose of this Agreement(PLA) is to reduce construction costs to the
district(and hence the public) by ensuring that the work on a covered project
will be completed efficiently, cooperatively, economically and without
interruption. "
LAUSD summary of why the PLA was needed
Now, 2 1/2 years later, the district has just released what the cost of their
journey into construction and fiscal madness has been: $600 million. On
November 28, 2001, LAUSD officials admitted that they "botched" spending the
$2.4 billion Proposition BB bond issue and now face a $600'million shortfall!
They were warned.
Now, once again, it's .the taxpayers anq
children who will pay for such insanity,
JAN-14-2002 17:06 MIRANT 925 947 3002 P.02
Mirant California,LLC
1350 Treat Boulevard,Suite 500,Walnut Creek,CA 94596
T 925 287 3100 F 925 947 3002
7D'
(
January.14, 2002
Contra Costa Board of Supervisors
651 Pine Street M I R A N T"
Martinez, California 94553
Subject: Project and Maintenance Labor Agreements (PLA &MLA)
Dear Supervisors,
In January of 2001,Mirant entered into agreements with the County of Contra Costa and
State of California Building and Construction Trades Councils. A Project Labor Agreement
(PLA) for construction of a new 540 megawatt combined cycle power plant at our Contra
Costa site near Antioch and a Maintenance Labor Agreement(MLA) to cover peak
maintenance for 30 years were agreed upon.
Construction of the new unit has begun and is proceeding as planned. The PLA assures
Mirant that the workforce necessary to physically construct the unit is available to the
contractors and the work is performed in a safe,efficient, and cost effective manner.
Trades personnel are experienced in all aspects of power plant construction and
maintenance. We take comfort in the fact that the trades personnel are not just performing
work as instructed, they have the ability to proactively share their experience with the
contractor resulting in a better product.
The Business Representatives from the various unions work closely with the contractors to
assure the jobs are progressing smoothly. Any problems associated with safety or
productivity have been dealt with in a timely and professional manner.
Again, these agreements assure Mirant has access to a workforce that understands our
business and often are asked to report to work at a moments notice.
Please feel free to contact me if you have any questions.
Sincerely,c
Mark Gouveia
VP and Chief Operating Officer
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& ASSOCIATES
Labor Consultants to Management H.SANFORD RUDNICK J.D.
DATE: 1-15-02
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FAX: 9231:56-0980
PR: 925!256-0660
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Facsimile Transmission Sheet
PLEASE DELIVER THE FOLLOWING PAGES TO:
E. GREG FF-ERE JOHN GI01A
CONTRA COSTA BUILDING AND CONSTRUCTION TRADES COUNCIL
FIPM: CONTRA COSTA ..BOA.IW OF SUPERVISORS
FAX#: 925 335 1913 925 372 7414
FROM: H. SANFORD RUDNICK,J.D. Tota]#of Pages
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CONSTRUCTION EMPLOYERS ARE SEEMNG 103 RELIEF AGAINST
THE CONTRA COSTA BOARD OF SUPERVISORS AND THE CONTRA
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