Delaware’s construction industry needs less government, not more

Senate Bill 272 is not a pro-worker measure; it is not a pro-economy measure. And it is not a pro-Delaware taxpayer measure. SB 272 would do real harm to Delaware’s construction industry, its employees, the local schools and the taxpayers who fund public projects.

SB 272 would require major state-funded school construction projects to operate under a project labor agreement with the Delaware Building and Construction Trades Council, with only limited exceptions. That is not a minor procurement change; it is a sweeping, intrusive government mandate that would force a single labor model – one which the vast, vast majority of Delaware tradesmen and small businesses have rejected – onto a diverse industry that is doing just fine without this latest legislative interference.

The problem is straightforward: nearly 90% of Delaware’s construction workforce, along with small and mid-sized businesses that perform most of the state’s work, operates in the merit shop, free-market system. SB 272 does not simply set rules for union contractors; it imposes a union-centered model on a local industry that is already functioning well and delivering results.

That is bad for workers, and bad for fairness.

Delaware construction employees are already building public projects successfully under the system we have now – and they are earning top-dollar prevailing wage rates while doing so. They should be judged on skill, safety, performance and cost, not on whether they fit one politically preferred labor arrangement. A truly fair bidding system welcomes all qualified Delaware contractors and craftsmen. SB 272 does the opposite.

Supporters suggest this mandate is needed to ensure better training or better performance. But where is the evidence? There is none.

Delaware’s public record already shows that major state-funded projects, including school construction projects worth well over $100 million, are regularly completed on time, under budget and under close engineering and architectural oversight. Delaware’s craftsmen have earned more trust than this bill gives them.

In other words, this legislation is not responding to failure; it is looking for a reason to exist.

When an industry is performing successfully and satisfactorily for the taxpayers of Delaware, the General Assembly should not feel compelled to bedevil and harass it with one more costly mandate.

There is another hard truth the sponsors of SB 272 ignore: in several specialty trades, Delaware simply does not have enough in-state union labor to meet demand. In some cases, union contractors would have to rely on out-of-state labor halls, including Philadelphia, to staff Delaware jobs.

Anyone who knows this industry understands what that means. When larger projects in the Philadelphia region need workers, Delaware risks getting whoever is left over. That is not a strategy for strengthening Delaware’s workforce. It is a strategy for sidelining it.

The better question is this: Who should build Delaware’s public projects – Delaware tradesmen/taxpayers/stakeholders – or out-of-state labor pools? For anyone who believes Delaware public dollars should support Delaware workers first, the answer is obvious.

Small, emerging companies will be particularly disadvantaged by this government interference. That is especially true for minority-owned and women-owned emerging businesses, which often recruit from communities of color and do not have the staff or administrative budget to absorb new compliance costs.

An emerging business’s most effective competitive weapon is the ability to compete on price and administrative nimbleness. The introduction of third-party middlemen and adversarial labor complications into daily operations is onerous for any firm, large or small. But it does not take much imagination to see who may benefit from this bill: large out-of-state firms with large legal and compliance teams, firms that have heretofore left this sector of Delaware construction to the locals.

The bitter irony is a bill sold as helping Delaware workers may end up helping outside companies elbow Delaware firms aside.

SB 272 is bad for the Delaware taxpayer because it discourages competition. Delaware should want the largest possible pool of qualified bidders on public projects. Competition is what helps keep prices down and standards high. When the government narrows the field by legislative fiat before bids are even submitted, taxpayers lose.

And the people most likely to feel the pain are those who are served by the local school districts.

The bill’s sponsors seem to recognize the political problem, since SB 272 is a revamp of last month’s SB 241. The costly scheme has now been shifted from all state-funded building projects to school projects. As so often happens, local school districts are being tasked with absorbing the damage from legislative experimentation. 

Delaware’s budget is already under serious strain; a gap of roughly $400 million in the coming fiscal year was largely closed on the backs of the local public schools. About $200 million in deferred maintenance and needed new school construction – due to overcrowding – has once again been pushed down the road, even as districts are told to cut spending while doing more with less. The best place to start would be cutting legislative and executive mandates that have no proven record of improving student outcomes. Instead, this bill adds yet another burden.

If anyone wants to know why Delaware’s per capita education costs are so high, they need look no further than measures like SB 272: fewer projects for more money.

SB 272 would reduce competition, drive costs skyward, burden our local small- and medium-sized Delaware job creators, and limit flexibility for Delaware job holders. Delaware must reject this bill and preserve free, open and competitive public bidding.