The bill would amend the Fair and Open Competition in Governmental Construction Act to:
-- Rewrite provisions that prohibit governmental units from awarding construction contracts that include certain terms related to collective bargaining agreements.
-- Provide that the Act would not prohibit a governmental unit from awarding a contract, grant, tax abatement, or tax credit to a private owner or contractor who was a party to an agreement with a labor organization, under certain circumstances.
-- Provide that the Act would not prohibit a contractor from voluntarily entering into or complying with an agreement with a labor organization in regard to a contract with a governmental unit or funded from a grant, tax abatement, or tax credit.
-- Allow a governmental unit to exempt a particular project, contract, subcontract, grant, tax abatement, or tax credit from requirements of the Act if it found, after public notice and a hearing, that special circumstances required an exemption to avert an imminent threat to public health or safety.
-- Add a statement of legislative intent.
The Act prohibits a governmental unit from entering into or spending funds under a contract for the construction, repair, remodeling, or demolition of a facility if the contract or a subcontract under it contains either of the following:
-- A term that requires, prohibits, encourages, or discourages bidders, contractors, or subcontractors from entering into or adhering to agreements with a collective bargaining organization (CBO) relating to the construction project or other related projects.
-- A term that discriminates against bidders, contractors, or subcontractors based on the status of a party or nonparty to an agreement with a CBO, or willingness or refusal to enter into such an agreement, relating to the construction project or other related projects.
Also, a governmental unit or a construction manager or other contracting entity acting on its behalf may not place any of the prohibited terms in bid specifications, project agreements, or other controlling documents relating to the construction, repair, remodeling, or demolition of a facility.
The bill would delete all of those provisions. Instead, the bill would prohibit a governmental unit awarding a contract after July 19, 2011 (the Act's effective date), for the construction, repair, remodeling, or demolition of a facility, and any construction manager acting on its behalf, from doing any of the following in bid specifications, project agreements, or other controlling documents:
-- Requiring or prohibiting a bidder, offeror, contractor, or subcontractor from entering into or adhering to an agreement with one or more labor organizations in regard to that project or a related construction project.
-- Otherwise discriminating against a bidder, offeror, contractor, or subcontractor for becoming or remaining or refusing to become or remain a signatory to, or for adhering or refusing to adhere to, an agreement with one or more labor organizations in regard to that or a related construction project.
The bill provides that the Act would not prohibit a governmental unit from awarding a contract, grant, tax abatement, or tax credit to a private owner, bidder, contractor, or subcontractor who entered into or was a party to an agreement with a labor organization, if being or becoming a party or adhering to such an agreement were not a condition for award of the contract, grant, abatement, or credit, and if the governmental unit did not discriminate against a private owner, bidder, contractor, or subcontractor in awarding that contract, grant, abatement, or credit based on the status of being or becoming a party to an agreement with a labor organization, or willingness or refusal to become a party to such an agreement. (Similar provisions currently apply to awarding a grant, tax abatement, or tax credit.)
The bill states, "The legislature intends this act to provide for more economical, nondiscriminatory, neutral, and efficient procurement of construction-related goods and services by this state and political subdivisions of this state as market participants and providing for fair and open competition best effectuates this intent."
The Department of Technology, Management, and Budget (DTMB) states that there would be no fiscal implications for State of Michigan facility projects. The Department's contracts regarding State buildings and facilities already comply with the terms of this bill. The DTMB states that the State's contracts and bidding documents also comply with bill's requirements and that the Department’s facilities contracting documents do not in any way address union or nonunion status. The Department also states that competition for governmental construction is fair and open.
The bill would have an indeterminate fiscal impact on local units of government, school districts, intermediate school districts, community colleges, and public universities receiving appropriations from the State. Depending on the contracts, governmental entities could potentially see cost savings from entering into construction contracts that would have to adhere to the provisions of the bill.
The amount of savings is indeterminate and would depend on the difference in the cost of the contracts among the bidders and on the number of affected governmental units.
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.