Government entities in New Jersey that enter into public-private partnerships to help finance public construction projects are now required to utilize a project labor agreement (PLA) and pay state prevailing wages, among other requirements. Previously, P3s were only available to state and county colleges, but did not contain prevailing wage or PLA mandates.
The new law, Senate Bill 865, allows the state and its subdivisions, including counties, municipalities and school districts, to enter into agreements with private funding sources provided they follow the additional mandates such as abiding by the state’s prevailing wage law and utilizing a union-only PLA for construction of the project.
In 2008, the New Jersey Department of Labor and Workforce Development examined the fiscal impact of PLAs in the state. Examining the cost per square footage of school construction projects, the department noted that “School projects that used a PLA tended to have higher building costs, as measured on a per square footage and per student basis, than those that do not use a PLA.” In fact, they are 30.5 percent higher than non-PLA projects.
