Labor-Management Relations:

Construction Agreement at DOE's Idaho Laboratory Needs Reassessing

GGD-91-80BR: Published: May 23, 1991. Publicly Released: Jun 24, 1991.

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Nancy R. Kingsbury
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Pursuant to a congressional request, GAO reviewed a site stabilization agreement between a labor union and organizations within the Department of Energy's (DOE) Idaho National Engineering Laboratory (INEL), focusing on whether: (1) nonunion contractors had access to DOE Idaho Operations Office (DOE-ID) construction contracts; (2) the agreement's wage rates were higher than typical rates; and (3) the requirements that nonunion contractors use union hiring halls resulted in double benefit payments.

GAO found that: (1) bidding policies and procedures for DOE-ID construction contracts showed that any contractor could submit bids on INEL construction projects, but was required to sign the agreement if awarded a contract; (2) from October 1, 1986, through December 31, 1990, nonunion contractors successfully bid on 86 of the 286 DOE-ID contracts awarded, receiving 8 percent of the total value of the contracts; (3) 8 of 11 surveyed nonunion contractors would not bid on DOE work because they did not want to sign the agreement; (4) the composite wage rate under the agreement was 17 percent higher than the same rate under the Davis-Bacon Act, largely due to a commuting allowance for construction workers; (5) nonunion contractors disliked the provision requiring them to hire new or replacement workers through union hiring halls, since it caused the break-up of regular work crews; and (6) the agreement could require nonunion contractors to pay twice for health and pension benefits for their permanent workers, once through their own plan and once through the union's plan.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOE concluded that use of the Site Stabilization Agreement at INEL has proven to be beneficial to the conduct of work there and that DOE must continue to support its purpose. DOE added that the application of the Agreement to future contracts, if any, at INEL will be decided on a case-by-case basis in accordance with Executive Order 12836.

    Recommendation: The Secretary of Energy should determine whether provisions in the agreement, as discussed in this report, remain desirable from a public policy perspective.

    Agency Affected: Department of Energy


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