ABC-NJ: Murphy’s Last-Minute Law Decries His Own Promise for a “Stronger and Fairer” Economy for Minority and Women-Owned Businesses

TRENTON – On Tuesday, January 20, Governor Phil Murphy signed A-5967 / S-4864 into law, a sweeping expansion of Project Labor Agreement (PLA) authority that significantly alters New Jersey’s public contracting framework and puts local workers and minority and women-owned businesses at a significant disadvantaged.

This legislation permits local governments, counties, school districts, and fire districts to enter into Project Labor Agreements on public works projects below the $5 million threshold. In practical terms, the bill authorizes local entities to reduce the PLA threshold down to as little as one cent, effectively eliminating any meaningful limitation on when PLAs may be imposed.

“This last-minute law is a slap in the face to New Jersey’s minority- and women-owned contractors who are already being left behind, according to Governor Murphy’s own Disparity Study,” said Samantha Roman, President of Associated Builders and Contractors New Jersey (ABC-NJ). “PLAs on small public projects would effectively shut out 98 percent of minority-owned firms, as well as 84 percent of all New Jersey firms that are non-union. It’s a huge step backward for equity, diversity, and fair access to public work. Governor Murphy effectively broke his own promise to provide a ‘stronger and fairer’ economy for minority and women-owned businesses.”

New Jersey already operates under the lowest PLA threshold in the nation at $5 million. This law goes even further, opening the door for PLA mandates on small, routine, and purely local construction projects that have historically been delivered efficiently through open and competitive bidding.

As enacted, A-5967 / S-4864 will:

· Expand PLA mandates to projects of any size, regardless of scope or complexity

· Reduce competition and limit bidder participation, particularly among qualified local contractors

· Disadvantage merit shop contractors and their workforce, excluding many skilled workers from public projects

· Increase construction costs and project delays. The only study ever published by the N.J. Commissioner of Labor (despite being statutorily required to perform one every year) found PLAs on school construction projects were 30% more expensive and had an average construction schedule duration of 100 weeks compared to 78 weeks for non-PLA projects. Both statistics can be tied directly to costly rules in union labor contracts, and both will now fall to an even greater degree on the shoulders of the state’s taxpayers. A parting gift that costs taxpayers in what is already the most heavily taxed state in the country goes beyond mere patronage. When many New Jersey families are struggling to make ends meet, throwing an expensive bone to New Jersey unions is a tone-deaf abuse of power.

Last week a broad coalition of contractors, small businesses, union representatives, minority- and women-owned businesses, and community leaders called on New Jersey lawmakers to reject the legislation that would disproportionately harm workers, employers, and minority and women-owned businesses and will increase the cost of taxpayer-funded public works projects.

The coalition, representing hundreds of thousands of New Jersey employers and workers, includes the African American Chamber of Commerce of New Jersey, United Steel Workers 318, NFIB NJ, NJ Independent Electrical Contractors Association, and the United Service Workers Union.