Friday, March 5, 2021
Hawai'i Free Press

Current Articles | Archives

Saturday, June 6, 2020
Repeal Bill 40, Honolulu's discriminatory builder contracting law
By Joe Kent @ 9:56 PM :: 1489 Views :: Honolulu County, Labor, Small Business

Consider repealing county’s discriminatory builder contracting law

by Joe Kent, Grassroot Institute, June 4, 2020

The following testimony was submitted by the Grassroot Institute of Hawaii to the Honolulu City Council on June 3, 2020, 10:00 a.m.

  *   *   *   *   *

Regular Meeting, Honolulu City Council

City Council Chamber

To: Ikaika Anderson, Chair

Ann Kobayashi, Vice Chair

From: Joe Kent, Grassroot Institute of Hawaii Executive Vice President

RE: Bill 40 (2020) — RELATING TO COMMUNITY WORKFORCE AGREEMENTS.[1]

Aloha, Chair Anderson, Vice Chair Kobayahsi and other members of the Honolulu City Council.

While the changes proposed in Bill 40 would mitigate some of the problems with the existing law on community workforce agreements, the Grassroot Institute of Hawaii continues to have concerns regarding the effect of this policy on both the local construction industry and Honolulu taxpayers.

The proposed bill represents an attempt to “correct” Ordinance 19-24 by softening language that previously made CWAs mandatory for city projects in excess of $2 million.

In testimony on Bill 37, which became Ordinance 19-24, the Grassroot Institute of Hawaii noted that use of CWAs, also known as project labor agreements, would drastically limit the use of nonunion employees on public projects, thereby reducing competition among bidding contractors and increasing costs for Honolulu taxpayers.

Unfortunately, the changes proposed in Bill 40 are not sufficient to allay these concerns. In fact, given the economic devastation facing Hawaii’s small businesses in the wake of the state and county coronavirus lockdowns, the council could most help the city’s contractors and builders by repealing Ordinance 19-24 altogether.

In testimony on the original ordinance, Jonathan Young, president of the Associated Builders & Contractors, Hawaii chapter, noted that about two-thirds of Hawaii’s approximately 4,500 licensed contractors are non-union, and Bill 37 effectively excluded them from bidding on the county’s smaller construction projects.[2]

Unfortunately, the small changes proposed in Bill 40 do not adequately address the harm to local contractors caused by the city’s CWA guidelines. Nor will it be effective in reducing the cost and delay issues that have led many cities on the mainland to abandon CWAs entirely.

Nationwide, states and municipalities have been removing CWA requirements. Last year, Kentucky became the 25th state to welcome all qualified bidders to compete for state construction contracts, since studies have shown that CWAs tend to increase the cost of government projects.

The Beacon Hill Institute found that CWAs increased construction costs per square foot of Ohio schools by 13%.[3] A National University System Institute for Policy Research study found similar results, 13-15%, for new school construction in California.[4]

West Virginia,[5] Massachusetts[6] and New Hampshire[7],[8] found that the removal of CWA requirements resulted in larger pools of bidders and lower final bids. In New Hampshire, a public project that removed its PLA requirements not only lowered its costs, but elicited lower bids from union contractors.[9]

Making the use of CWAs non-mandatory is not sufficient to address the problem of increased costs, as can be seen in the Hawaii state policy that “encourages” CWAs for public projects worth at least $25 million.[10] Though more rational than the $2 million threshold of this bill, the state CWA policy still increases the costs of government contracts across the board.

Consider, for example, the cost overruns and delays on the Honolulu rail project or the delays that plagued the University of Hawaii at Hilo College of Pharmacy Building, both of which are CWA projects.

Though the rationale for CWAs is phrased in terms of promoting a skilled local workforce and achieving construction efficiency,[11] there is little evidence that it would have the desired effect. The experience with CWA requirements both in Hawaii and nationwide demonstrates that they are associated with rising costs and delays. Nothing in the experience of CWA projects in Hawaii suggests that they are superior in performance and efficiency than non-CWA projects.

With other states abandoning CWAs and PLAs because of their association with noncompetitive bidding, cost overruns and delays, Bill 40 is simply an attempt to “fix” an ordinance that should never have been enacted.

Honolulu took a step in the wrong direction by embracing CWAs for smaller public projects. Rather than trying to amend the law into a less harmful form, the council should consider repealing Ordinance 19-24.

With economists warning that recovery from the coronavirus recession will take years, the council should be looking for ways to save taxpayer funds while promoting local business. Eliminating CWAs/PLAs would help forward both of these objectives.

Thank you for your consideration.

Aloha,

Joe Kent

Executive vice president

Grassroot Institute of Hawaii

Link: Footnotes

No Bill 40 PLA: Contractors Demand Full Repeal of Union Preference Ordinance

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT