Tuesday, April 23, 2013

Competition Still Works

Senator Mark Obenshain

This shouldn't be news, but competition still works.

Bids recently came in for the largest of the three design-build packages for Phase 2 of the Silver Line Metrorail Extension, and they're well under budget. How often does that happen?

The project remains expensive, but the low bid for roughly half of Phase 2 came in at $1,178,000,000, suggesting that Phase 2 could come in $400 million under budget. As Jim Bacon wrote, "Perhaps the most notable aspect of the bid is that [the low bidder] is an open-shop enterprise. Had MWAA imposed a Project Labor Agreement (PLA) requirement on the job, non-union companies might have been discouraged from bidding, making the process significantly less competitive."

In 2012, I carried legislation prohibiting the state from requiring union-only PLAs, limiting competition and sidelining Virginia's open shops.

When Virginia conditioned funding of Metrorail extension on jettisoning the unfair and anti-competitive PLA provision, the Metropolitan Washington Airports Authority (MWAA) relented. That decision is beginning to pay off. Greater competition kept costs in check.

The other half of the project remains to be bid, but this round delivered two bids under $1.2 billion where MWAA had projected costs of $1.4 - $1.6 billion. Competition works.

Even for those who oppose it. Democrats voted in lockstep against the PLA ban. That includes Senator Mark Herring, a Democratic candidate for Attorney General who represents Loudoun County, which stands to benefit the most from these savings — particularly when it comes to Dulles Toll Road rates.

Project Labor Agreements were designed as an end-round of Virginia's Right to Work laws, and these bids are a helpful reminder of why those laws are so important.

There's a good chance that Right to Work laws will be the next big battle with the federal government. As your next Attorney General, you can count on me to defend Virginia's Right to Work law to the hilt. Because, put simply, Right to Work works.