The House of Representatives Labor Committee this week released a hotly contested bill that would require project labor agreements (PLAs), a type of collective bargaining agreement, for any school construction or renovation project exceeding $5 million.
Supporters say PLAs protect workers, ensure equal opportunities, set expectations, and increase efficiency by establishing clear work rules before construction begins.
“Senate Bill 272 is a worker-centric initiative,” said State Rep. Edward S. Osienski (D-Newark), the chair of the House Labor Committee and the prime House sponsor of the bill, who testified on its behalf at Wednesday’s hearing. “PLA projects give a level of stability and structure that is difficult to replicate in an all non-union workplace.”
He added that “the PLA requirement in Senate Bill 272 will not prevent merit shops (non-union companies) from bidding or winning these contracts,” adding that the mandate “would not raise construction costs.”
However, other testimony offered at the hearing took issue with the proposal.
Brian Maxwell, the Director of the Delaware Office of Management and Budget, said the state has not approved any new state-funded school construction projects in nearly three years because of a lack of available resources, a situation that SB 272 would exacerbate. “Mandating a PLA introduces additional preconditions that may discourage otherwise qualified contractors and subcontractors from participating,” he said.
Mr. Maxwell also indicated that adding requirements to the state procurement process would pose a significant risk for increasing project costs. “Based on the research that I’ve seen, economic analyses have found the cost per square foot for school construction projects is approximately 30% higher for PLA projects.”
A 2020 study by the Beacon Hill Institute, a free-market economic think tank based in Massachusetts, examined public school construction projects in Connecticut and found that mandating PLAs increased costs by nearly 20%.
The bill’s sponsors maintain that since Delaware requires “prevailing wage,” a minimum wage scale based on occupation that is applied to all state-funded projects, there should not be any meaningful difference in labor costs between unionized and non-union contractors.
However, multiple witnesses before the committee noted that unionized contractors in Delaware account for only about 10% of all construction companies.
Sussex Technical School District Superintendent Dr. Kevin Carson, who is currently involved in the state’s most expensive school construction project, told the committee that the PLA bill would significantly reduce the pool of available contractors, not only limiting competition but potentially forcing school districts to seek out-of-state companies—all factors that could drive labor costs higher than Delaware’s prevailing wage rates.
Carmen Robledo, a Latina contractor based in Sussex County, said PLAs will exclude many non-union Delaware workers and create more barriers for small businesses. “We all want workers to be safe, treated fairly, and paid well,” she testified. “I don’t think anyone in this room disagrees with that goal, but this is already happening…The people I know aren’t asking for special treatment. They are simply asking for a fair shot to compete and to grow.”
A fiscal note on the bill prepared by the Office of the Controller General concluded the cost of implementing the legislation was “indeterminable,” citing numerous unknown factors that could not be established well enough to provide a projection.
The bill was released from committee solely on the votes of House Democrats, who hold a majority of the committee’s seats. Without a cost estimate, the measure can bypass the House Appropriations Committee. It has been placed on the House Ready List and is eligible for consideration by the chamber.
