Metropolitan Board Approves Landmark Project Labor Agreement for Construction Contracts

Large-scale PLA will apply to nearly $1 billion of capital projects in next five years, plus construction of Pure Water recycled water project

LOS ANGELES--(BUSINESS WIRE)--The majority of Metropolitan Water District’s construction projects over the next five years will now be covered by a landmark collective bargaining agreement with labor unions and construction contractors – known as a Project Labor Agreement – following a vote today by the agency’s board of directors.

Project Labor Agreements require all contractors – union and non-union – to follow certain labor requirements such as paying prevailing wages, hiring locally, ensuring worker training, using a dispute resolution process, and supporting apprenticeship programs.

“PLAs promote the hiring of skilled, reliable workers and help avoid labor disputes and work stoppages to ensure projects are done on-time, safely and within budget,” Metropolitan General Manager Adel Hagekhalil said.

“This PLA also supports Metropolitan’s long-standing effort to invest in Southern California’s workforce,” he said. “It is a reflection of our commitment to improve communities across the region by providing quality jobs and expanding new opportunities through apprenticeship and training programs, all while helping ensure we’ll provide safe, resilient water supplies long into the future.”

“It does not prevent non-union companies from bidding on our jobs. It just establishes parameters in line with union labor,” he added.

Today’s board action authorizes Hagekhalil to sign the agreement with Southern California trade councils and unions to cover 33 future construction contracts selected from Metropolitan’s Capital Investment Plan. It also would apply to all construction related to the agency’s proposed Pure Water Southern California recycled water project. Metropolitan estimates the agreement would pertain to about 90 percent of Metropolitan’s planned CIP construction expenditures over the next five years, which is estimated to total nearly $1 billion.

The PLA will help strike an important balance – ensuring that a substantial portion of Metropolitan’s construction projects are built with the region’s highly trained workforce, while providing opportunities outside of a PLA for small contractors that typically bid on lower value and less complex construction contracts.

“We want to increase opportunities for under-served communities to benefit from our infrastructure investments,” Chairwoman Gloria D. Gray said. “We’re using the public’s dollars to build these projects, so it is our responsibility to ensure those dollars go toward jobs with fair pay and good working conditions, jobs that can help uplift families and strengthen communities. We also want to make sure women- and minority-owned businesses have equal opportunities and support to compete for our contracts.”

“And beyond just supporting the current workforce, we want to develop tomorrow’s workforce – building a pathway to economic success for young people who want careers in construction, while ensuring we have the skilled local workers we need for future projects,” Gray added. “Through our PLA, Metropolitan and our labor partners have committed to increasing engagement among local workers in pre-apprenticeship and construction careers pipeline programs. We will expand outreach and recruitment efforts, particularly among populations underrepresented in the construction industry.”

The PLA includes a goal of 60 percent employment of local workers – the highest such goal in the region. It also sets a goal of 15 percent transitional worker engagement on Metropolitan’s construction projects – aiming to employ workers who come from potentially at-risk situations due to various circumstances in their backgrounds – also the highest such goal in the region.

During the PLA’s initial five-year term, Metropolitan will assess the impact of the agreement on project costs and on small business participation. The agreement will be administered by Parson Constructors, Inc., which will be responsible for monitoring and compliance and dispute resolution, as well as outreach and training.

“Metropolitan used project-specific PLAs on several major construction projects in the 1990s and 2000s, including Diamond Valley Lake, the Inland Feeder project and Lake Skinner improvement programs. The cooperative approach between the contractor, labor and Metropolitan proved successful and contributed to the stability and positive work environment on these projects,” Hagekhalil said.

The Metropolitan Water District of Southern California is a state-established cooperative that, along with its 26 cities and retail suppliers, provide water for 19 million people in six counties. The district imports water from the Colorado River and Northern California to supplement local supplies, and helps its members to develop increased water conservation, recycling, storage and other resource-management programs.