Legal Update

Design-Build Remains Labor Neutral, For Both Trades and Public Employee

By Tom Porter, J.D., DBIA

Labor policy is a contentious subject and it is natural to wonder whether design-build favors the union or non-union model. Design-build projects and legislation can sometimes be held hostage while the competing forces carry on the debate. In truth, design-build is labor neutral. It creates great opportunities for union and open-shop firms alike. Workers have delivered successful design-build projects without regard to whether they are covered by right-to-work laws, prevailing wage laws, collective bargaining agreements or project labor agreements.

If anything, design-build helps promote sound labor policy by keeping both union and open-shop advocates true to their stated principles. Design-build projects are often awarded through best-value selection, in which both price and non-price factors are balanced in the decision. If the competition is managed fairly, the firm with the best-value labor solution will have a strong leg up.

• Union contractors should be happy to compete on best value. The unions contend that their training and apprenticeship programs produce improved quality and safety. If so, the union contractors should have advantages in a best-value competition, even if the workers’ pay or benefits are somewhat higher. Non-price factors such as quality and safety can be considered in selecting a design-build contractor, whereas they are essentially ignored in traditional bidding.
• Open-shop contractors should also welcome best-value selection. They criticize unions for having archaic work rules and jurisdictional barriers that hamper productivity. If open-shop trades can in fact deliver appreciably better productivity without sacrificing safety or quality, they should have a solid chance to prevail in the competition for a design-build project.

A different kind of labor issue related to design-build has arisen in California, where the design of highway projects has been handled by unionized public engineers. Their labor organization, Professional Engineers in California Government (PECG), has objected to expanded use of design-build on grounds that include the concern that this delivery model will take jobs from public employee union members and transfer them to more expensive non-union engineers in the private sector.

It seems ironic for a union to be complaining that non-union workers will cost more than the union workers, but that is one of the arguments PECG is making to support its contention that taxpayer dollars will be wasted under design-build. The American Council of Engineering Companies, California Chapter, disputes the PECG cost comparison, but even if it were correct, it does not mean the total project cost is higher. Design-build invites innovation, promotes value management, expedites schedules and minimizes disputes, all of which conserve public funds.

Research sponsored by the University of Southern California determined that design-build does not cause public owners to shed jobs. Scholars Doug Gransberg and Keith Molenaar were co-authors of the 2007 study “The Impacts of Design-Build on the Public Workforce”  (www.usc.edu/schools/sppd/ keston/research/index.html). After studying the use of design-build by departments of transportation in 40 states and the District of Columbia, the authors found: “Implementing design-build contracting does not shift public professional engineering jobs from state agencies to the private sector.” While the public workers may take on different roles, the study determined that “design-build has the potential to be more efficient than the traditional design-bid-build method without negatively impacting the public workforce.”
If design-build is done right, it doesn’t harm union or non-union workers. The design-build delivery model gives each side a fair opportunity to demonstrate the merit of its philosophy.