Masters Theses

Date of Award

5-1996

Degree Type

Thesis

Degree Name

Master of Science

Major

Civil Engineering

Major Professor

James H. Deatherage

Committee Members

Terry L. Miller, John N. Snider

Abstract

This research was conducted to determine the impact of the Oak Ridge project labor agreement (OR-PLA) at the Department of Energy. Oak Ridge Operations work locations on the costs, productivity, and quality of construction. Prior to October 1, 1990, fixed price construction work was accomplished using "open shop" labor, utilizing Davis-Bacon prevailing wage rates. Beginning October 1, 1990, the Department of Energy (DOE) contracted with MK-Ferguson of Oak Ridge Company (MK-F) to manage construction. MK-F and the Knoxville Building and Construction Trades Council (KBCTC) signed a project labor agreement which required subcontractors to obtain workers through a referral system operated by the KBCTC. Questionnaires were sent to contractors, DOE officials, MK-F officials, and KBCTC officers to gather pertinent data to assess the impacts. Additional interviews were conducted to capture data from affected parties on a wide spectrum of impacted business areas and groups of individuals. Davis-Bacon wage rates were compared to project agreement wage rates. Available information on project labor agreements was researched for comparison to the DOE-ORO project labor agreement requirements. Research revealed construction costs have increased, worker productivity has decreased, and work quality has remained the same as a result of the OR-PLA Construction costs have increased approximately 15%. Additionally, the cost of processing personnel obtained through the referral system has increased. Productivity has decreased, primarily due to work rules imposed by the OR-PLA. Work quality has not improved appreciably, thus negating a major advantage typically claimed by union labor. The project agreement does provide a pool of skilled workers available to contractors on an immediate basis. However, contractors are dissatisfied with the referral system. They prefer to employ workers of their choosing. During the five years the agreement has been effect, there have been no labor disputes to disrupt construction activities. The trend in the construction industry is toward open shop construction. Open shop construction promotes reduced construction costs and increased bidding competition. This thesis substantiated the claim that project labor agreements are costly. Cost savings resulting from open shop construction far outweigh the advantages of a project agreement. Contractors should be allowed to totally manage their work, including the ability to hire employees of their choosing. The substantial increase in cost following implementation of the OR-PLA is cause for serious consideration for a return to open shop construction.

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