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Building Better: A Look at Best Practices for the Design of Project Labor Agreements

Project labor agreements (PLAs) are a type of contract used in the construction industry to set the terms and conditions of employment on large projects of long duration and design complexity. PLAs allow the expeditious resolution of disputes that can arise in the course of the project, thereby helping to ensure that the project is delivered on time and that quality standards are maintained. Recently, PLAs have begun to include provisions that seek to improve conditions on the worksite and provide benefits to the community by including jobs and training opportunities for disadvantaged workers and carve-outs for small or minority-owned businesses.

This report hopes to move the PLA discussion beyond a debate about whether PLAs are good or bad and toward a more constructive discussion regarding how to create PLAs that help deliver better projects for owners, contractors, workers, and communities. It explains how PLAs increase project efficiency, timeliness, and innovation; provides two case studies of PLA provisions and outcomes of employment of disadvantaged communities; and reviews safety and health provisions and best practices to demonstrate how PLAs can improve safety performance on construction sites. It also discusses how PLAs can improve dispute settlements, which may lead to potential cost savings.

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Dale Belman, Michigan State University, and Matthew M. Bodadah, University of Rhode Island; Economic Policy Institute, Aug. 2010