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Trial Court Strikes Down Inclusion Of PLA in State Construction Contract
Source: BNA's Construction Labor Reports: ALBANY, N.Y.—A New York state trial court struck down a highway construction contract March 1, ruling that the state Department of Transportation violated state competitive bidding laws by requiring the inclusion of a project labor agreement in the contract (Lancaster Development Inc. v McDonald, N.Y. Sup. Ct., No. 5133-11, 3/1/12). The state Supreme Court in Albany ordered the state DOT to rebid the contract, which is for reconstruction and bridge replacement of Exit 122 on New York Route 17 in Orange County, N.Y. The court said the state agency's reliance on a revised due diligence impact study as the basis for including a PLA in the contract was unjustified. The court said the revised study reached contradictory conclusions from the original impact study, with no explanation for the differences. Fail to Show How PLA Advances Interests “DOT failed to demonstrate that its PLA decision advances the interests of this state's competitive bidding statutes,” Judge Joseph C. Teresi wrote for the court. The decision is the latest step in the controversial history of the Exit 122 project. DOT awarded the $73 million contract in October 2011, after being held up for months by the state comptroller, who asked the transportation agency for more information regarding why the contract was not awarded to the lowest bidder, an open shop contractor that did not include a project labor agreement in its bid (57 CLR 1085, 10/20/11). Open shop contractor Lancaster Development of Richmondville, N.Y., sued the state to have the contract declared null and void. The court was highly critical of DOT, saying there were “blatant and unexcused record defects’’ in the agency's submissions to the Supreme Court in the case. Court Says State Ignored Original Conclusion The court said the state DOT, in including a PLA provision in the contract, relied on a February 2011 due diligence impact study (DDIS) that was significantly revised from a DDIS issued one month earlier. The court said DOT “simply ignored the [original] DDIS's conclusion’’ that there was insufficient evidence to recommend a PLA. “As such, DOT's reliance was unjustified and fails to show that the purpose or likely effect of this PLA would result in cost savings advantages.’’ The court said it was “similarly unjustified” for the agency to have relied on the revised document, rather than the original, in concluding that a PLA would manage the risks of labor unrest and benefit the state. “Without specifically addressing and explaining the difference between the reports, the revised DDIS finds a ‘distinct probability of labor unrest,’ as compared to the DDIS's ‘estimate [of] a low-to-moderate probability that union labor actions will materially slow, delay, or stop construction of the Exit 122 Project,' ” the court said. “Without new and differentiated information distinguishing the two reports' conclusions, the revised DDIS’ conclusion cannot be relied on.” The decision was applauded by the Associated Builders and Contractors Empire State Chapter. “ When this project goes out to be rebid, I would caution the DOT not to attempt the inclusion of a PLA, as we have just seen an open and fair bidding process is the best way to maximize cost savings on public work projects,” Steve Lefebvre, president of the chapter, said in a statement. “What transpired here is the reason why the state Legislature needs to enact the Public Construction Savings Act (A. 7855, S. 4121), which will guarantee a fair bidding process by insuring that PLAs are never mandatory so that the lowest responsible bidder always gets the work,’’ he said. “We have received the judge's decision and are reviewing our options to maximize taxpayer dollars on a critically important transportation project,” William Reynolds, a spokesman for the state DOT, told Bloomberg BNA. By Gerald B. Silverman
March 07, 2012

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