Obama’s Executive Orders Suck No. 3

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With all the attention by the media on the economy, the corruption, the spendulous, budget crisis, Obama, Turbo Tax Cheat Geithner, and billions of taxpayer money being wasted, there is very little time to absorb much more of the information that we are all bombarded with daily.  However, behind the scenes much is always going on that Obama does not want you to hear about.  It is patently obvious that Obama’s plan is to dazzle you with his television appearances rather than you actually think about what is going on.  This post is about one more of Obama’s Executive Orders.  I expect he will provide me many more topics.  Trust me, when you read through this you will likely be upset.  Again, at the end of the post I will strongly encourage you to contact your Congressional Representatives and ask them to do something about it.  They can, if they’re forced to by you.

Project Labor Agreements for Federal Construction Projects.

images-4On February 9, 2009 Obama gave us his Executive Order (EO) concerning “labor agreements” in Federal Construction Agreements.  Not a topic on the surface that sounds real exciting or sexy I admit.  However, there are plenty of stinking fish laying around to offend your nose and draw your  attention if you’re looking.  At first you might think it doesn’t matter to the average taxpayer but I say you should pay attention here and I think you will care.   No matter what it looks like on the surface, the overall goal of this EO is to quietly mandate that companies involved with federal construction projects use union labor.  For whom did the Union members vote for in the last Presidential election?  It may have been Obama.  This EO is Obama’s way of saying, “Hey, Unions, thank you for your support!”  I’ll do my best to lay it out for you.  There are some large differences between the typical wages a union worker makes and the same trade worker who is not a member of a union.  Take for example, a union glass worker in Las Vegas earns $57.00 per hour (including caulking some windows) but a non-union worker would typically do the job for $15.00 per hour.1 If a construction company has to use a union for any particular construction project or for an individual component of the project, that company is necessarily going to have to pay a substantial premium for the labor compared to the non-union wages it would otherwise pay.   The obvious effect of this is that the client/customer will have to pay more for the overall cost of the project.  If you own the construction company and your customer is the federal government then you necessarily may conclude that the customer will be able to complete fewer projects with a limited amount of construction funds available.  On the other hand, if your construction company can use non-union labor the overall construction costs will be less and thus the federal government can do more projects with the same amount of taxpayer funds available.  Are you beginning to see where this is going?

The Pre-Obama Free Market History:

constructioncoIn February 2001, President George W. Bush signed Executive Order No. 13202 which was entitled: Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects The purpose of this EO was to make sure that federal agencies maintained a neutrality towards union and non-union workers on federally funded construction projects and the private enterprises that bid on federally funded or assisted construction projects.  This EO mandated that:

neither the awarding Government authority nor any construction manager acting on behalf of the Government shall, in its bid specifications, project agreements, or other controlling documents:

(a)  Require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or other related construction project(s); or

(b)  Otherwise discriminate against bidders, offerors, contractors, or subcontractors for becoming or refusing to become or remain signatories or otherwise to adhere to agreements with one or more labor organizations, on the same or other related construction project(s).
(c) Nothing in this section shall prohibit contractors or subcontractors from voluntarily entering into agreements described in subsection (a).1

BushThe effect of this EO was to allow federally funded construction projects to move forward with or without burdensome labor agreements between a construction company and a labor union.  From an economic prospective, and thus very important for us to take note today is that construction projects involving federal taxpayer funds during the last eight years likely cost far less than under the requirements of the Obama EO, notwithstanding inflation indices or other market influences.  I will explain further.  In any event, there is also no doubt that there was an opportunity for the federal government to fund more infrastructure construction projects than it otherwise could have without the Bush EO.   From a political perspective, Bush made no friends within Union leadership by signing EO 13202.  Good for taxpayers but not good for union construction workers.

Enter President Obama:

Almost exactly eight years later to the week, Obama revokes the Bush EO No. 13202.  Why you might ask?  Undoubtedly, Obama thought about the fact that someone outside the government might ask why so he front loaded his EO with several paragraphs of “conclusive arguments” to build his case before slamming the hammer down on free market competition in this arena.   Given the fact that the government is spending billions of dollars on construction projects in the near future under the guise of “stimulus spending,” there is much at stake here for union workers and of course for union leadership as well.  It is absolutely no coincidence that Obama revoked No. 13202 to put his own agenda in place prior to federally funded construction projects being put out for bid or specifically funded.  The timing was designed and perfect.  Obama did not reveal his plan in a blatantly clear manner to the general public but it is certainly clear enough when one takes a little time to read his EO and do a little research.  What caught my eye was that Obama signed an EO so early in his administration that has such a bland “ho-hum” title.   The EO title; Project Labor Agreements for Federal Construction Projects, does not scream at you nor tell you anything of substance.   This is why I read it; I wanted to know more about the topic and why this deserved the Obama attention when the state of the union is in such a chaos.  We all know his time is extremely limited especially in light of all the television appearances he has had to make in order to campaign for his completely socialistic agenda.

The Content of the Obama Executive Order.

Now, remember Obama is a lawyer and has hired many.   No one is better at writing “conclusory arguments” than lawyers.  Even good lawyers do it when it might meet their purpose and they are without other more appropriate tools of persuasion.  A conclusory argument is legalese used to describe a lawyer’s attempt to use one, or more, statements of conclusions in order to persuade a trier of fact where there are little or no facts presented to support the position.  Obama has already become a master of the use of “conclusory arguments” as evidenced by his successful campaign and the use of tele-prompters.  So, if you’re trying to persuade someone to your way of thinking and you find yourself short on facts, then just present a series of statements of conclusion in order set up your position.  Here’s how Obama did just that in his EO.  Below is Section 1.  Here’s where he sets up his purpose by cloaking hyperbole and statements of conclusion under the title of “Policy.”  I have placed his conclusions in italics to make them easier to spot.

Section 1. Policy. (a) Large-scale construction projects pose special challenges to efficient and timely procurement by the Federal Government. Construction employers typically do not have a permanent workforce, which makes it difficult for them to predict labor costs when bidding on contracts and to ensure a steady supply of labor on contracts being performed. Challenges also arise due to the fact that construction projects typically involve multiple employers at a single location. A labor dispute involving one employer can delay the entire project. A lack of coordination among various employers, or uncertainty about the terms and conditions of employment of various groups of workers, can create frictions and disputes in the absence of an agreed-upon resolution mechanism. These problems threaten the efficient and timely completion of construction projects undertaken by Federal contractors. On larger projects, which are generally more complex and of longer duration, these problems tend to be more pronounced.

(b) The use of a project labor agreement (pre-hire collective bargaining agreement with a union) may prevent these problems from developing by providing structure and stability to large-scale construction projects, thereby promoting the efficient and expeditious completion of Federal construction contracts. Accordingly, it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in Federal procurement.

Who were the fact finders here?

factfinderThe statements above contained in Section 1 of the Obama EO should be supported by facts.  It is not far fetched to believe that Obama would want to issue EO’s that mirror his politics and agenda but what is crazy is that he would make policy decisions on the basis of what he wants the facts to be as opposed to what the facts actually are.  The basis for any policy decision should be first based upon the results of an unbiased search for truth, i.e., the facts.  This search for truth or that is to say, a determination of the facts should be made by an independent third party qualified panel of folks which are experts in the field.  What Obama did here is simply provide us the conclusion of (the facts that he wishes were true) he wanted to state in order to justify the provisions contained in Section 3.  Does anyone in Congress notice or even care?  Doubtful.  Let’s look a closer look at a couple of the statements Obama makes in Section 1.  You or I could take a critical look at each statement in sub-sections (a) and (b) and the result would be the same.  There are no facts offered to support the basis for a policy change other than the alleged facts that Obama constructed. 1.   ”Large-scale construction projects pose special challenges to efficient and timely procurement by the Federal Government.”  What are the special challenges?  Who says so?  How was that factual determination made?  Are there in fact “special challenges” that have substantially hindered prior large scale construction projects where non-union labor was used?  Just saying it does not make it so. 2.  ”Construction employers typically do not have a permanent workforce, which makes it difficult for them to predict labor costs when bidding on contracts and to ensure a steady supply of labor on contracts being performed.”  Talking about someone being the master of the obvious.  Construction companies act as General Contractors and take firm bids from all the required sub-contractors necessary to complete a construction project.  Thousands of construction projects are completed all over the country by general contracting firms that do not have many permanent workers.  These firms do not “predict” costs in the manner in which Obama infers, these companies nail their labor costs down by the bidding process.  General Contractors overcome the difficulty of ensuring the sub-contracting labor is there to do the job by performing due diligence on the potential sub-contracting companies they are considering to enter into a contract with.  This is the same due diligence that the federal government is supposed to use in selecting a construction company in the first place.   Can Obama point to any large-scale federally funded project that has failed because the companies were not using union labor?  We don’t know if there are any facts to support his conclusions because he does offer any.  Also, I am quite sure that there was not a panel of experts appointed to determine whether these alleged problems were in fact real.  The government is supposed to consider conclusions reached by a credible body of factual investigators or finders before it cooks up the policy it wants to feed you.  In this case, Obama simply determined that he wants union labor on all federally funded construction projects over $25 million and served you a truck load of garbage as the basis for changing the government policy of free market competition to a more union friendly socialist set of regulations. After making all of the above statements of conclusion and hyperbole, Obama then serves you the meat you’re  going to pay for and eat in Section 3 of the EO.  It provides as follows:

Sec. 3. (a) In awarding any contract in connection with a large-scale construction project ($25 million or more), or obligating funds pursuant to such a contract, executive agencies may, on a project-by-project basis, require the use of a project labor agreement by a contractor where use of such an agreement will (i) advance the Federal Government’s interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters, and (ii) be consistent with law.

(b) If an executive agency determines under subsection (a) that the use of a project labor agreement will satisfy the criteria in clauses (i) and (ii) of that subsection, the agency may, if appropriate, require that every contractor or subcontractor on the project agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.

Are you reading this?  If any executive agency concludes that a labor agreement will advance the government’s interest in procurement efficiency and economy (because of the conclusory stated dangers outlined in Section 1), the agency may require everyone involved to become a party to a labor agreement with one or more labor unions.  Can you see $57.00 per hour window caulking chewing up a few of your tax dollars?  Do you really believe that any of these executive agencies will not want to “determine” that a labor agreement would not advance the procurement efficiency of the federal government?  Not a chance.  The executive agencies are being directed and controlled by Obama appointees.  Can you imagine the executive in charge of the IRS determining that for a particular subject construction project for that agency that a labor agreement would not advance the interests of the federal procurement process.  Whatever that phrase might mean.   The IRS Commissioner works for Treasury Secretary Geithner, who in turn “serves at the pleasure of’ Obama.  I find it a stretch to believe that the IRS Commissioner for example would have the cojones to determine that labor agreement would not benefit the federal procurement process.  Thus, in my opinion, most if not all of the subject construction projects that the federal government will be involved in will result in a labor agreement covering all parties to the project.  That would necessarily mean that all these projects will cost the tax payer much more than if EO 13202 were still in place because each project will be subject to a union collective bargaining labor agreement.  There will be substantially less projects completed with the billions of stimulus money you’re providing now that King Obama has changed policy to cost you more per project.

A parting thought.

Obama revoked President Bush’s EO 13202 in its entirety.  Bush’s EO mandated that federal agencies not require a labor agreement as a condition of bidding etc. on a federally funded project of any size.  In other words, the IRS Commissioner could not require a contracting company enter into a labor agreement as a pre-condition to receiving the appointment as the general contractor for a federally funded IRS construction project no matter how large or how small.  It was against the law for the IRS Commissioner to do so.  Now, the IRS Commissioner can do that, and will likely do it.  Obama’s EO says that on a construction project costing $25 million or more the agency determines that labor agreement would advance the governments procurement interest on a construction project then all parties must enter into a labor agreement.  What about the federally funded construction projects costing less than $25 million that were heretofore covered by the Bush EO? Under Bush, the agency could not make union labor a requirement–but that EO has been revoked.  May an agency require union labor now on projects costing less than $25 million without having to make a determination that a labor agreement would enhance the efficiency of the federal procurement process.  I think so–and no doubt in my mind that such will happen more so than not.  Obama could have simply amended EO 13202 or otherwise left all of the provisions of EO 13202 in place on all federally funded construction projects costing less than $25 million–but he didn’t!  Hey, taxpayer, how’s it feel to get screwed on the front end and on the back end as well? OMB I love it when I start writing an article and then discover there are other articles out there that support my thinking or are otherwise covering a related topic.  That happened to me today.  For a solid example of how some of this will play out.  Take a look at Union Wage Rule Means Fewer Projects Completed With Stimulus Cash. It’s an article that reveals how the federal agency, the Office of Management and Budget somehow had the authority to include a 1931 law,  the Davis-Bacon provision typically only used on federal highway projects to mandate that union labor be used on all state construction projects using funds from the $787 billion stimulus money you’re providing.  A federal agency has decided that all state contracts will include union labor!  How does this happen?  Where is Congress?  Do they ever show up for work or actually do anything when they do go to work.  We know they don’t have time to read their own bills or amendments to bills but this really sucks as well! Why not get the few email addresses of your federal representatives and ask them a couple of questions. 1.  What is your position on the Obama Executive Order concerning labor agreements on construction projects funded by my money? 2.  What are you going to do about the fact that the OMB has determined to force all state construction contracts to be performed with union labor? Start with those two questions and demand a reply.  Please do me a big favor and send me your Congressional representatives’ responses to me at roland@ballounpost.com.


  1. See, http://www.foxnews.com/politics/first100days/2009/03/16/union-wage-rule-means-fewer-projects-completed-stimulus-cash/
  2. See, 40 U.S.C. 471  Sec 1.

About Roland
Founder and managing editor of Balloun Post. Roland earned his business administration degree with honours from the University of Missouri @ Kansas City and his law degree from Tulane. Roland is a dual citizen of the U.S. and Canada

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