2001 Conference Proceedings
The two-day conference was held at the Washington Court Hotel in Washington, D.C. on April 26 and 27, 2001. It was cosponsored by the Connecticut State Employees Association, CWA Local 1032 (NJDOT), the Maryland Professional Employees Council (AFT), the Massachusetts Organization of State Employees and Scientists (MOSES), the Michigan Professional Employees Council (SEIU), the Ohio Civil Service Employees Association (AFSCME), Professional Engineers in California Government (PECG), the AFL-CIO Department of Professional Employees, AFSCME, AFT, CWA, IFPTE, and SEIU. In total, there were more than eighty attendees from unions representing transportation departments in Alaska, California, Connecticut, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York (state and city), Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Washington, and Wisconsin, plus representatives of the AFL-CIO, AFSCME, and SEIU.
Jimmy Tarlau of CWA Local 1032 in New Jersey, the overall Conference Coordinator, noted the expanded and broader attendance compared to the previous year. This year the Conference is concentrating on trends and developments, along with the strategy to make improvements. There is a need to focus on legislation – – most attendees are active in their states but less so at the federal level.
In New Jersey, the state administration has proposed to contract out all surveying and lay off state employees, contrary to the public interest. 90% of the funding comes from the federal government. The FHWA has pointed out that federal law encourages the use of the private sector, so the federal government would be on the contractors’ side.
The Building Trades and the transit unions were active, while unions representing state transportation workers were not. Thus, the CWA Local joined a powerful coalition of construction, building trades, and consultants.
This year, on the second day, the convention will address proposed policy statements and a resolution to continue the work of the Conference with a National Committee.
Welcome to Washington
Ed Wytkind, Executive Director of the AFL-CIO Transportation Trades Department, observed that the Department is able to represent the public and the private sectors because the basic issues don’t conflict. He stressed that “politics does matter,” using the ergonomics issue and the different views and actions of Presidents Clinton and Bush as examples. He talked about good jobs, worker protection, bargaining rights, a safe workplace, increasing transportation investment, and fighting privatization as key issues. Privatization is a cancer on the American unions and the workplace, and the attendees at this conference are not alone in fighting it.
President Clinton’s policy from 1993-94 was to give the states and the local agencies choices. President Bush will push privatization on a national level.
Elections aren’t about “who to vote for.” They are about what’s at stake and the issues. President Bush will want “retribution” imposed on labor now that he is in office. He initially selected Linda Chavez, who is strongly anti-union, as his Secretary of Labor. He has already repealed requirements that federal contractors comply with the law, eliminated future federal project labor agreements, repealed bargaining rights for some federal workers, eliminated the Partnership Council of labor and management, and eliminated the ergonomics regulations. On a more positive side, Transportation Committee Chairman Dan Young is a friend of transportation and can achieve bipartisan transportation policy.
The President has been interfering in bargaining, such as his statement that he will stop strikers during the airline negotiations. Unions have to be more informed and more mobilized. We need to speak out to elected officials.
The labor movement isn’t a special interest – – it’s the workers and their representatives. We fight the private interests. The values of the country and the labor movement are the same and they are joined at the hip.
Hearings will begin next year on the 2003 TEA-21 federal transportation funding reauthorization.
Panel on Federal Transportation Issues
Moderator — Dennis Houlihan, AFSCME
Roger Nober is the Chief Counsel for the House Committee on Transportation and Infrastructure. He worked for the former Committee Chairman, Norm Mineta, a Democrat from California. Now, he works for Republican Young and the Committee Republicans.
The Republicans had a rule that no one can be a Committee Chair for more than six years. This resulted in Congressman Young taking over the Chairmanship from Congressman Shuster.
Until 1995, some transportation money went to other programs. Mr. Shuster pushed to change that and in 1998, Congress did so. Now, the actual tax revenues generated by transportation are spent on transportation. Preserving this is the top priority item as the reauthorization bill approaches.
TEA-21 in 1998 lasted for six years and expires in 2003. Other issues include how states build their projects; finding a way to build them cheaper and faster; and expediting a slow and cumbersome environmental process.
State and local agencies know best what they need, not the federal government. Republicans want the states to have broad authority regarding projects and priority setting. There is a common ground on transportation, exemplified by the appointment of Mr. Mineta to the President’s Cabinet.
The philosophy on project labor agreements (by the Republicans) is that the states can decide if they want them and can continue the ones currently in place. The new Executive Order prevents the states from entering into PLAs. Mr. Young feels that it went too far and the decision should be left up to the states. He helped persuade the Administration to agree to leave the existing ones place. It was a “good outcome.”
He noted that Congressional leadership and the Administration didn’t want to reform the trust fund (to provide that all transportation revenue be expended on transportation) but there were enough votes behind it to make it happen.
Ward McCarragher is the Chief Democratic Counsel for the House Committee on Transportation and Infrastructure. He works for Congressman James Oberstar and the Democrats on the Committee.
It is an “extremely bipartisan” committee on transportation issues. With seventy-five members, it is the largest committee in the House of Representatives.
Mr. Oberstar has a strong labor background and is concerned with safety, health, and fair wages for the workers. Many contracting out proposals have been reduced to just studies.
When TEA-21 passed, a 40% increase in federal spending was expected. Changes in revenue have generated an additional $9 billion. “We have to ensure that that money is being well spent.” Mr. McCarragher sought the help of conference participants and wants to hear concerns on transportation projects.
Based on history, the reauthorization bill may miss its September 2003 deadline but eventually agreement will be reached. Major issues include ensuring that transportation funding is spent on transportation and the protection of existing labor laws.
The first four months of the Bush Administration have seen an almost continuous attack on working people. On his inauguration day, the President declared a moratorium on worker safety and other regulations. In February, he issued rules on union membership. He repealed the ergonomics regulations, said that there would not be strikes on airlines in order to help the companies, and contractor responsibility regulations were rescinded. Unions need to be active with their Congressmen.
Phyllis Scheinberg is the Director of Transportation Issues for the U.S. General Accounting Office. In 1993, GAO staffing was cut from 5,300 to 3,000 but workload remained the same. There was a five-year hiring freeze until three years ago.
The Controller General heads the GAO. It is a fifteen year appointment by the President and confirmed by Congress. David Walker has served in that post since 1998. Transportation was one of thirty issues addressed by the office; now, it’s part of physical infrastructure, which is one of eleven “teams.”
GAO studies are publicized. So far, eleven have been completed on TEA-21. The studies are mandated by law or are requested by Congress.
The federal government funds transportation with $50 billion each year, with states and local agencies providing another $90 billion. The GAO conducts unbiased, fact-based evaluations of projects.
During a question and answer session, the point that Congress doesn’t want to tell the states what to do unless there is a national problem was reemphasized. States are having difficulty in hiring enough people to do the work. Contracting out construction inspection is costly and results in more change orders. There was a discussion regarding how many states have to have a problem before it becomes a national one. One problem with design build is that it shuts out participation by civil service employees. It was reported that the GAO doesn’t have engineers on staff but uses “consultants” from FHWA as needed. Ms. Scheinberg reported that the GAO has told federal agencies that where federal money is involved, there is a need for more oversight, citing the Los Angeles subway, the big dig in Boston, and other problems.
Congressional Keynote Speakers
Congressman Elijah Cummings, Democrat from Maryland, is a member of the House Committee on Transportation and Infrastructure. He discussed the role of unions in bringing people together and standing up for the little guy.
The best argument to oppose contracting out is to emphasize that taxpayer money must be spent effectively and efficiently. That statement is supported by members of both parties. Contracting out is implemented without knowing whether or not it is cost effective. Government still doesn’t have comparable wages with the private sector. We should all work to build bridges to the future for others who will follow.
Congressman Robert Filner, Democrat from California, is also a member of the House Committee on Transportation and Infrastructure. He was introduced by Pam Suszko, President of Professional Engineers in California Government, who has worked on his campaigns as a volunteer in the past.
Congressman Filner said that transportation infrastructure is a “key issue with me.” He needs unions to be involved, most importantly, back home. The Bush Administration is trying to roll back protections for working people, bargaining rights, expansion of health care, environmental protection, ergonomics, etc.
The Administration’s proposed tax cut will provide nothing to most people. A middle class taxpayer will benefit by a few hundred dollars. However, someone who makes a million dollars will get a $55,000 tax break. The federal budget sets the agenda. The Administration proposes many cuts, particularly in the second and third years.
There is a myth that privatization is better than public service. Republicans want to privatize not just transportation, but Social Security, Medicare, schools (through vouchers), the Post Office, air traffic control, etc.
Government is all of us working together, to do what we can’t do individually and to provide services to all. The wealthy want a tax cut and privatization of services because they don’t care about services being provided to everyone. They care about profits. Privatization means a decline in quality, accountability, and access. It involves huge costs that aren’t normally calculated.
Newt Gingrich and others made government, welfare, and other terms appear to be negative terms. He took away the language and the courage to defend these words and ideas. We haven’t fought hard enough. Congress needs to hear directly from you, but the die is cast here in Washington for most of us. The majority in Congress will vote for privatization.
The political environment must be changed. This means public opinion. Unions need to change it. You’re “real people” with jobs. You need to talk to your PTA, your Board of Education, the Rotary Club, church groups, etc. However you communicate with a politician in private, also do it in public. For example, if you send a letter to a politician, also send it as a letter to the editor, put it in your church newsletter, etc.
Every politician can be defeated for reelection by a determined group of people. This new federal budget will harm all of us for many years to come. You (unions) have power. You can influence the political process, so do it.
During a question and answer session, Congressman Filner agreed to propose legislation, work for it, and be a leader. He committed to work with the Conference to draft legislation and introduce it. He suggested a standard amendment requiring cost effectiveness on all bills relating to contracting out.
Art Duffy of PECG reported. The group identified principles including customer satisfaction; employee empowerment; examination of the process of problem solving; structured problem-solving before developing solutions; data-based decision-making; and continuous improvement. Lessons learned in labor management committees including maintaining bargaining rights; beware of labor relations management personnel; be a strong advocate; complexity means more opportunities to be involved; communicate with the members or lose control; get paid release time for participants; and educate participants on the skills needed for the process.
State Legislative Action
Jack Schutzius of SEIU reported. There is a need for communicating a positive message about the workers, along with horror stories on privatization. In Connecticut, regarding public services, the Accountability Act requires improving the savings, protecting whistleblowers, etc. In California, proposed legislation would require justification of contracting based on cost and quality. In New Jersey, there is a bill to mandate cost analysis. Washington legislation would let public employees compete. Oregon seeks to get members more active politically. Other states also had various programs and suggestions.
Ned Statchen of Connecticut reported. In Connecticut, a study showed 18% savings when construction inspection was performed in-house and 29% savings for design, as compared to contracting out. The state Department of Transportation wanted the work brought back in-house but the new Governor supports contracting out. They have found that the overhead for consultants is 127%, compared to 71% for the state. Consultants pay employees 14% to 65% more.
New York City found that it is cheaper to perform the work in-house but is contracting out anyway. There are similar stories elsewhere. There is a need for a public relations campaign, following the money from political contributions.
Obstacles to having more work performed in-house include difficulty in hiring, the image of public service, and the aging workforce. Member education is the key. Getting management support, developing allies, lobbying, and bargaining are also important.
Pam Suszko of PECG reported. There is an awareness hotline for reporting fraud at 1-800-424-9071. Callers can be anonymous or speak confidentially. Contractors who have been barred or suspended are listed on the web page at www.gsa.gov. The federal Inspector General can provide fraud awareness training. Common fraud schemes include false billing, bid rigging, price fixing, bribery, kickbacks, gratuities, and false claims. Design build is particularly open to fraud.
A Frank Discussion with the Federal Highway Administration
Bob Reilly of Connecticut reported. The Washington, D.C. office of the FHWA sets policy. Field offices handle the money. Regarding issues for the reauthorization bill, the FHWA is considering a 100% “match” as compared to the current 80/20 and 90/10 arrangements. Gas tax revenue is a potential problem as mileage improves and alternative fuels are introduced. Ideas being considered include a mileage tax or a vehicle license fee.
Some federal money goes straight to local agencies. Environmental streamlining and intelligent traffic systems are issues being considered.
Panel Discussions: Round-up From the States
Frank Spica of Michigan (SEIU) was the moderator.
Bruce Blanning of PECG (California) traced the decline in the public’s view of government, nationally and in California, from the 1950s to date. New freeways were blocked by environmental and other concerns as transportation departments and their workers were getting a bad public image.
Contracting out of transportation engineering began in California in the 1980s because a Republican Governor didn’t want additional state employees on the payroll by the time he left office. This was the beginning of the battle over contracting out in California. His successor as Governor, Pete Wilson, sought to contract out at least half of the Caltrans work and implemented a layoff of Caltrans employees in 1995. PECG’s lawsuit resulted in a successful California Supreme Court ruling in 1997 limiting the circumstances under which work can be contracted out but a consultant-devised ballot measure last November overturned that ruling. Labor was divided, with the Operating Engineers supporting the contracting out of state engineering work.
Currently, PECG is pursuing three avenues – – legislation to change the contracting process so that cost comparisons and justification would be mandatory; legislation to specify a maximum percentage of work which could be contracted out; or a lawsuit alleging that the current contracting out process violates new provisions of the state Constitution.
The media, the Legislature, and the public must be convinced. Cost is an important issue. Ineffective work by some consultants is another. There is a constant need to educate and involve the members of the union.
Mary Richards of MOSES (Massachusetts) referred to the “long siege” on employee issues resulting from ten years of Republican governors.
Hiring is a problem, with some engineering spots being filled with unqualified individuals. Another problem is that resident engineers are being told to sign off on work they weren’t involved in or responsible for.
Ms. Richards discussed a twenty-one mile private highway which has encountered numerous problems as a result of the design build process. The “big dig” fiasco in Boston resulted in the feds capping funding for highways in the state; funding being cut under the reauthorization act; and the lack of oversight being an embarrassment for the federal government. They are currently waiting for indictments. She referred to reports showing the errors and flaws in contracting prepared by the Massachusetts Inspector General.
Bruce Wyngaard of OCSEA/AFSCME (Ohio) discussed organizational self-assessment and capacity. Politics is the name of the game and the Governor and Legislature control the policies of state Departments of Transportation.
The Ohio DOT has dropped from 7,200 employees to less than 6,000. The Governor wants to continue to cut the staff. The Legislature just wants new construction in their districts.
Ohio developed seven criteria for evaluating an organization’s effectiveness. These include leadership, strategic planning, customer focus, information and analysis, human resource focus, process management, and business results.
The union wants to improve Ohio DOT capacity, not just administer contracts. Organizational assessment by auditors addresses results, leadership, objectives, etc. For example, is the objective to do the work, or to cause it to happen through contracting out?
Mr. Wyngaard distributed a handout and discussed some of its elements. He noted that in Ohio, it has been decreed that a district’s costs can’t grow by more than 2% per year. As employees are receiving a 4% pay raise, this means that positions would have to be eliminated. OCSEA is trying to redefine its role as a union, noting that decisions will be determined through the political process.
Ned Statchen, Connecticut State Employees Association, reported that the Governor is pushing contracting out. The areas for battle include cost analysis, which shows that it costs less to perform the work in-house; the Public Service Accountability Act; and contract arbitration.
The union looked at 43 projects for construction inspection and concluded that the savings would be 16% by doing the work in-house. Management looked at 653 design and 396 construction projects and reluctantly concluded that the savings for using in-house staff would be 29% and 18% respectively. They also found that health insurance costs for state employees are less than for the private sector. It costs 14% more for a consultant working-level engineer and 65% more for lead engineers.
Next, the information must be used for legislation. The Public Service Accountability Act was introduced last year and was stopped. This year, it is SB 1036 which requires a cost analysis of contracting out versus using agency employees. Privatization must save at least 10% and last no longer than five years. Other provisions include the right of the Attorney General to prosecute violations and conflict of interest provisions.
There is a Democratic majority in both houses of their Legislature, but a tough fight is coming up. The bill doesn’t oppose contracting out, but simply requires cost effectiveness. Similar legislation has passed in Massachusetts and Maine in recent years.
In bargaining, they seek to allow employees to work overtime if they want to. They propose that the union must be notified of an intent to contract out and employees must be offered overtime before that occurs. The amount of work contracted out has risen to more than 50% and they are losing people through attrition. Now, they even have consultants administering contracts with other consultants.
Mark Gronso, Oregon Public Employees Union/SEIU, said 60% of the public employees in Oregon are unionized, compared to 16% overall and 13% nationally. In 1995, 10,000 of the 16,000 employees in Oregon struck and conducted a march.
Their labor contract includes contracting out provisions. They won in arbitration on contracting out the state work because it costs much more. Management tried contracting out again and the union won at their Employee Relations Board. They got the positions back.
The state employees cost $36 per hour, while contractors cost $63 per hour. Entry level maintenance work in Oregon qualifies for food stamps. The State Transportation Commission says that there will be a flat budget for the Oregon DOT for two biennial periods.
Comments from the audience included the statement that for some government work, contracting out can be cheaper. We need to emphasize quality of work. Engineering work can be done overseas at less cost. When a contract is issued, compare the quality and qualifications of the consultants versus state employees. There is a need to educate the members, who can affect others as well. There was a suggestion to try to organize private sector engineers with consultants, following those who leave the Department of Transportation for other jobs.
LaVan Griffith, Assistant National Contract Fraud Coordinator for the U.S. Department of Transportation Office of the Inspector General, was introduced by Mary Richards of MOSES. He stated the need for more and improved oversight. It is people who make oversight happen. There is a brain drain in state DOTs, in part because the private sector provides better compensation. This creates an oversight dilemma. The expectation for production is the same, but workforces grow smaller. This affects morale as people are asked to do more with less.
The solution includes conferences such as this one. This allows presenting issues in a unified way.
Oversight is achieved through cooperation and coordination with various professions. Roles have changed. Currently, oversight includes auditors, prosecutors, and others with different perspectives. However, there is a common oversight goal.
Something must be done about fraud. The Office of Inspector General’s mission is to flush out waste, fraud and abuse. They can offer training to state transportation departments. They will investigate waste if there is sufficient evidence that contracting out costs more.
Where Do We Go From Here?
Bruce Blanning of PECG, as moderator, noted that the Organizing Committee put together four resolutions which, if adopted, would be the policy of the Conference. Attendees and others would be encouraged to pursue these policies with the media, in legislation, and in other forums during the upcoming year. Similarly, a continuation program was outlined. During the Conference, Resolution and Continuation Committees were formed, met, and worked on the documents. In addition, a fifth resolution has been proposed.
Frank Spica, Michigan Public Employees/SEIU, presented the four resolutions. They were approved with modifications.