MWAA Plays Chicken with McDonnell over PLAs

Train wreck. Photo credit: Washington Metropolitan Area Transit Authority.

by James A. Bacon

The Metropolitan Washington Airports Authority (MWAA) board pressed ahead yesterday in its bid to preserve the $2.8 billion Phase 2 of the Rail-to-Dulles project as a union job.

First, under pressure from Republican legislators, the board retracted a previous decision mandating that Phase 2 be subject to a Project Labor Agreement (PLA). Instead of requiring the prime contractor to hire workers from a union hiring hall, the board substituted a 10-percent scoring bonus for bidders whose proposals contain a PLA. That bonus gives companies using a union workforce a significant advantage in the bidding process expected to take place later this year, and it could be sufficient to even deter many non-union contractors from submitting bids.

MWAA’s action appears to be designed to skirt bills passed by House of Delegates and the state Senate that would prohibit mandatory PLAs for any project receiving state funds. If the MWAA board had kept its PLA mandate, it would have put into jeopardy a contribution of $150 in state funds that was critical to a delicate restructuring of the project financing worked out under the auspices of U.S. Transportation Secretary Ray LaHood.

The PLA is a top priority of Dennis Martire, vice president of the Laborers International Union (LiUNA), which between its national and Mid-Atlantic offices has contributed $1.1 million to political candidates since 2008, overwhelmingly to Democrats. The MWAA board is comprised mainly of appointees by Democratic officials, and Democrats in the General Assembly have opposed Republican-sponsored bills to hold the MWAA board accountable.

Second, the board heard a presentation by a consultant who warned that rates for the Dulles Toll Road could double starting next year if, in the words of the Washington Post’s Dana Hedgpeth, “Virginia doesn’t deliver on a promise to contribute $150 million for the second phase of Metrorail’s new Silver Line.”  The not-too-subtle message: If Governor Bob McDonnell refuses to hand over the $150 million, he’s to blame for toll rates going up.

Under the financing arrangement agreed to by the funding parties, Loudoun County, Fairfax County, MWAA and the Commonwealth of Virginia will pay fixed sums. Any additional costs — such as a winning bid higher than the official $2.8 billion cost projection — will be covered by Dulles Toll Road commuters, who will pay higher tolls.  Writes Hedgpeth:

Tolls for a one-way trip that now costs $2.25 could increase to $4.50, according to a consultant’s report prepared for the Metropolitan Washington Airports Authority and presented during a board meeting Wednesday. If the state money comes through, tolls for the same trip could still rise to $2.75.

The MWAA board appears to be playing a game of chicken with the McDonnell administration. If the governor refuses to hand over the $150 million, MWAA may have no alternative but to jack up rates on Dulles Roll Road commuters, many of whom live in Loudoun County. If that happens, Loudoun County might drop out. Is McDonnell willing to see the Rail-to-Dulles financing run off the rails because he won’t cough up the state’s promised share?

McDonnell may have no choice but to withhold the funds. HB 33, whose lead sponsor was Del. Barbara Comstock, R-McLean, not only prohibits mandated PLAs, but it seeks to ensure that “neither the state agency nor any construction manager acting on behalf of the state agency … discriminate against bidders [not adhering] to agreements with one or more labor organizations.” Arguably, MWAA’s 10-percent bonus for PLAs would discriminate against non-union contractors.

Northern Virginia needs mass transit to accommodate its transportation needs in an age of ever-increasing congestion and gasoline prices. But the process of building heavy rail is so polluted by special interest maneuvering — labor unions, big construction firms, real estate owners — that costs mount inexorably and financing becomes a game of the politically strong shifting costs onto the weak. As Old Dominion enters an era of ever tighter fiscal constraints on state and local government, we need to find a cost model for mass transit that Virginians can afford and a political process that doesn’t leave citizens feeling like they’ve been raped.

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15 responses to “MWAA Plays Chicken with McDonnell over PLAs”

  1. DJRippert Avatar

    I have never heard anybody explain why a mandatory PLA is beneficial. I’ve heard many people complain that it’s just the result of “bought and paid for” politicians, etc, etc.

    Can anybody who supports mandatory PLAs please provide the basis for that support?

  2. they are clearly union-friendly critters. but they’ve been around a long time and it’s only in the last few years that things have blown up.

    just like teacher or auto unions… taken for granted for decades and now under heavy assault.

  3. Well it’s pretty simple really. MWAA is in the driver’s seat. McD is left sitting in the caboose.

    Regardless of what Virginia thinks, MWAA is Fed, with the power of Congress and the President behind it. Withhold the money, let the lawsuits begin and state transportation federal funds be cut. This is a clear case where Principal trumps principle.

  4. well.. if folks are so worked up over it…take away the Fed/State funding and let them do what they want without “interference”.

    The justification for the Feds and State to showers millions of dollars on NoVa for a subway system?

    I’m sure Tidewater/VB would love to have that money for their very own boondoggles, eh?

  5. I don’t think you can go over the bid on a No-Bid contract. You charge pretty much whatever the heck you want.

    It is pretty clear who is holding all the cards in this game. Ya wanna drive on MWAAs toll road, then shut up and pay. Don’t like the tolls, then whine to your elected people, they can make it better.

    If you don’t like what they do, that’s your problem not MWAAs.

    Thanks exgov Timmy, good getting traction for your campaign in NOVA.

  6. Ashburner Avatar

    PLA’s are anything you want them to be. For example the can say you must have 10% labor from Loudoun and 35% from Fairfax or 85% local. The will dictate the labor rate, training, % night construction.

    Company’s on large projects like these because the rate and labor conditions STAYS THE SAME throughout the project making it easier to project costs and stay on budget.

    1. Ashburner is right. Labor unions argue exactly this point: PLAs guarantee wage and labor stability. Some corporations like that. That’s why it would be foolhardy to ban PLAs.

      The point, of course, is that no one in Virginia advocates banning PLAs…. only not making them mandatory. Sound public policy would encourage corporations with union-based business models and corporations with non-union business models to participate in the bidding process. Let the best corporation and business model win.

      Unfortunately, the MWAA board doesn’t see it that way. The board is eager to restrict competition to companies with union-based business models, contrary to the best interests of the people who would end up paying for a higher bid — Dulles Toll Road commuters.

  7. Read the article in today’s Washington Examiner. “Axis Mamie” Reilly’s PLA for Phase I has more Maryland residents than Virginia residents working on Dulles Rail.

  8. In my opinion, this is merely a deliberate diversion, just like the Dulles Airport above-ground/below-ground game was a deliberate diversion. It is intended to keep the argument all about how that awful MWAA is soooo bad (which it is), instead of looking at the bloated item costs and the bad financial planning for Phase II. And the whole solution will be to push the bloated costs onto the taxpayers.

    In my opinon, this was the plan all along: string the voting taxpayers along, saying that hey, the federal government and the business tax districts and those pesky toll road drivers will pay for it. (Pay no attention to those federal taxes.) Then the tolls went up years ago by 25 cents… no big deal… and the voting taxpayers went back to sleep, forgetting that the tolls were set to keep increasing for years. And meanwhile, the costs of Dulles Rail ballooned, so it turns out, surprise surprise, that the tolls will go up a LOT.

    And now, the trap is about to slam shut. “Oh, well didn’t you KNOW? And Phase II will only raise them a little more… well yeah, a lot more. But never mind what we said about mostly the airport workers using the Dulles Airport station, we need RAIL to DULLES, etc, etc, etc.”

    Worse yet, we find that the costs of Phase II are unjustifiably high, and that the projected toll road collections were badly predicted (way on the high side, what a surprise).

    Hence the diversionary tactics. That way, THEY control the focus.

    I say call their bluff, and show how they are wasting much more than the $150 million that they claim would fix everything (well, not everything, but delay the onset of the high tolls), and demand to know why they and their staffs didn’t see those overcosts much earlier, given that they are constantly quoted saying that they are looking at ways to reduce the costs of this mess.

    I’m pretty sure that the plan is simply to push the excessive cost off the toll road and into our taxes, and to leave the costs massively excessive, and to leave a few people laughing all the way to the bank. And just FYI, my article comments are being deleted in the newspaper that purports to be against the Dulles Rail boondoggle, isn’t that interesting. ‘Nuff said.

    1. Bob, I’m not sure I buy into the “deliberate diversion” argument. First of all, as a journalist, I am dubious about attributing conspiratorial motives to people without actually talking to them or at least talking to people who have talked to them. There are just too many alternative explanations for what a board like the MWAA is doing.

      Second, I’m skeptical that there would be a “plan all along” to string voting taxpayers along. For what purpose? To whose gain? You’ll have a hard time convincing me that the MWAA board is screwing NoVa commuters and taxpayers as a matter of policy, as opposed to treating them as collateral damage resulting from their grandiose ideas.

      The common thread that I see in MWAA actions — the PLA, the Dulles Metro station, the bloated costs that you uncovered — is a simple disregard for costs and an indifference to Virginia commuters/taxpayers. One reason they are indifferent is the way the board is structured with representation stacked by Maryland, D.C., and presidential appointees, with no oversight or accountability. A second reason is the fact that nearly all board members are liberal Democrats, and liberal Democrats (a) will do anything to help out their friends in Big Labor, and (b) are entirely comfortable with the idea of spending Other Peoples’ Money. No need to suggest any conspiracies. These guys are just blundering along, doing what liberal Democrats do naturally, making one bad decision after another, and never asking tough questions of the experts who are designing the rail system.

      (By the way, I’m not singling out liberal Democrats. Install a board consisting of conservative Republicans, and the board probably would go charging off in another direction — sensitive to the interests of taxpayers and commuters, perhaps, but oblivious to the interests of a different group of stakeholders. Root problem: There is no accountability for the board.)

  9. the most important thing about MWAA in my view is the apathy of Fairfax voters even in the face of their electeds’ Complicit behavior.

    Who is defending the drivers of the DTR if not the elected ?

    Who among the elected is demanding that MWAA operate in the open and operate in accordance with the wishes of the local jurisdictions?

    it looks to me (and I could be totally wrong) that MWAA is operating as the proverbial loose cannon … and it’s just fine with the elected in NoVa.


  10. I might believe that the MWAA board just didn’t know what elements of such a job should cost. Aside from the fact that they -should- have had, and supposedly DID have competent consultants, the MWAA Board is an assortment of political appointees, not rail construction experts.

    But how could the FTA and USDOT have missed the massive overcosts of Dulles Rail Phase II? I submit that the FTA even managed, in their White Paper of July 3, 2011, to wrongly report the Rt 28 station cost as $136 million – having included the $53 million parking garage cost in it, when the same garage cost was included in a separate line item in that same report, along with all of the other Dulles Rail Phase II parking garages.

    It truly strains credulity that the FTA would be so careless, and clueless, that they would overlook the massive cost excesses. The only thing that suggests that it was merely incompetent carelessness, is that the FTA also bungled the Rt 28 station cost report on top of that, in the same report.

    But then, every media source managed to completely miss that $53 million dollar blunder. I searched diligently, and found only one article that even HINTED that the blunder had happened. Yet Fairfax County government knew.

    And when I questioned Fairfax County BOS Chair Sharon Bulova’s assistant about the $53 million blunder, back in the first days of August 2011, I copied every reporter and news source I could find that had reported on Dulles Rail – and not ONE of them picked up on it, or mentioned it at all, to this day.

    I find that… well, incredible. But I suppose it might be interesting to interview them all now, and see what they might have been thinking.

  11. DJRippert Avatar

    Jim Bacon is comical on the MWAA board. He claims there is no accountability and rants about Mame Reiley and Denis Martire. Yet, both of those appointees were made by the Governor of Virginia. The last time I looked, the Governor of Virginia was elected by people just like Jim Bacon.

    The decision to give MWAA responsibility for the Dulles Toll Rd was made as the result of a competitive bid by …. Virginia’s state government. The last time I looked, Virginia’s state government was elected by people just like Jim Bacon.

    Jim demands accountability but seems to struggle with the idea of multi-jurisdictional problems. The Metropolitan Washington Airport Authority serves people in Virginia, Washington and Maryland. That’s why the elected officials from those three jurisdictions (and the federal government) appoint representatives to the MWAA board.

    How else would it work? Have the representatives from Virginia directly elected by the people of Virginia? Unlike the vast majority of states, Virginians don’t even elect their own judges. Everything in Virginia is controlled by Richmond’s political elite – just like the MWAA.

    Bacon is long on complaints but short on alternatives. Which is to say, he is a typical Republican.

    No doubt Jim will regale us with the better run alternatives concocted entirely by his friends among the political elite in Richmond.

    How about the Commonwealth Transportation Board?

    Elected? Of course not! Just like the MWAA, it’s appointed by the governor.

    Accountable? That’s a laugh! The representation, by Virginia transportation region, was set in 1932 and never changed. Not only is the CTB unaccountable, it is unrepresentative as well. At least the MWAA is adding representatives from Virginia to reflect today’s reality. The CTB hasn’t done that since just after World War I.

    Seriously, Jim … you rant and rage at the MWAA but then sit back fat, dumb and happy as your pals in Richmond run a far worse operation in the Commonwealth’s transportation policy.

    To be clear – what would you do?

  12. Jeff Barnett Avatar
    Jeff Barnett

    A key part of the anti-PLA argument is that PLAs require “the prime contractor to hire workers from a union hiring hall.” This is an incorrect statement. Contractors with non-union work forces can bid and win contracts with PLAs.

  13. Jeff, If I’m wrong, please set me straight. In what way was my statement correct? I am happy to stand corrected.

    I understand that there can be all sorts of PLAs. PLAs are contracts, and each contract is negotiated individually. And, yes, it’s true that non-union contractors can bid and win contracts with PLAs. But they have to hire union labor rather than use their own non-union employees. That puts them at a significant disadvantage in the bidding process. Again, please detail where I might be wrong.

    In the instance of Rail-to-Dulles, MWAA proposed to model the Phase 2 PLA on the Phase 1 PLA, with the main difference that Phase 2 would be mandatory while Phase 1 was voluntary. But the whole purpose of the PLA is to ensure a supply of *union* labor. What am I missing?

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