State Engineers’ Measure Divides Allies, Unites Foes

A small but determined labor union of state highway engineers is seeking to parlay a series of courtroom victories over Gov. Pete Wilson into a broader political triumph in the June 2 election.

The union wants to make it tougher for the Department of Transportation and other state and local government entities to contract privately for engineering and design work that the union believes can be done better and cheaper by state employees.

To that end, the 6,000-member Professional Engineers in California Government union is sponsoring Proposition 224, which it says would save taxpayers millions of dollars and result in safer, higher quality structures.

“The politicians have been wasting hundreds of millions of our taxpayers’ dollars on overpriced, no-bid contracts,” contends Proposition 224 spokesman Bruce Blanning.

But the union is facing opposition from private engineers, big business and the state Republican Party, which traditionally have supported the concept of privatization.

What is unexpected is that Proposition 224 also has split the labor movement in California--pitting most public employee unions against their counterparts in the AFL-CIO construction trades and against the state Democratic Party, as well.

Organized labor fears that locking up work almost exclusively with government engineers would jeopardize the jobs of other union members, those who work for private employers and who also do engineering and design work.

In response, state engineers accuse opponents of spreading inflammatory misinformation to keep the status quo and protect their economic turf.

For more than a dozen years, state agencies have purchased the services of outside contractors for design and engineering work. State officials say such contracting produces savings in time and costs.

Although costs vary from year to year, the legislative analyst’s office estimates that the state has spent an average of $150 million annually on private, pre-construction contracts.

Under Proposition 224, that amount probably would decrease substantially.

The initiative would abolish the current practice of negotiating the price of no-bid contracts and replace it with a system of competitive bidding for contracts exceeding $50,000.

The proposal also would require the state controller to compare and analyze the cost of doing a job between private bidders and civil servants before a contract could be awarded.

If the controller decided that an outside engineering firm could do the job cheaper than state employees, the company would get the contract and vice versa.

Hundreds of millions of taxpayer dollars are at stake, chiefly at Caltrans, where typically 10% of the $1-billion to $1.5-billion annual budget is spent on engineering, design, environmental impact reporting and other pre-construction work.

The union pushing Proposition 224 is composed mostly of Caltrans engineers. In its battles with Wilson, the union has accused the governor in court of abusing the state law on outside contracting.

While the union has won various court fights on this point--including a decision by the state Supreme Court--the contracting-out issue remains tied up in litigation. The union says that it has turned to Proposition 224 as a way of getting a definitive victory.

“The court action was to stop them from contracting out. This initiative says, ‘Earn it,’ ” Blanning said.

By law, contracts for construction of highways and other public works such as parks, hospitals and water facilities have been subject to competitive bidding. Exempted, however, have been pre-construction functions such as engineering, design and environmental studies.

The cost of the pre-construction contracts are negotiated between the government and the contractors. The engineers union claims that Wilson’s political backers have benefited from the system and obtained overpriced state contracts, a charge long denied by state officials.

The union claims that companies who received no-bid Caltrans contracts contributed $491,403 to Wilson from 1990 through 1997, but it says that it does not know the total value of the contracts that the contributors received.

Proposition 224’s supporters assert that the initiative would inject a healthy dose of competition into the system. But opponents claim that the state engineers union wrote the initiative in such a way as to ensure themselves virtually all future engineering and design work.

“The trick in this initiative is a rigged-bidding comparison which permits the state’s costs to appear artificially low by allowing existing salaries, utilities and rents to be ignored,” charged Larry McCarthy, president of the business-oriented California Taxpayers Assn. “Private firms get no such break.”

Blanning, executive director of the pro-Proposition 224 campaign, insisted that the proposed bidding system “cannot be rigged.”

He said private contractors can bid whatever they want, “but they have to be the same as or less than the state’s cost to get the work.”

Elizabeth Hill, the nonpartisan legislative analyst who studied Proposition 224, cited “uncertainties” in the initiative that left her unable to estimate its financial effect on taxpayers.

She said, for example, that the question of whether government costs would be higher or lower depends on whether all of the state expenses are included in an “‘apples to apples” cost comparison with those of private contractors.

Hill said Proposition 224 would apply to state-financed local projects, ranging from roads and parks to schools.

The engineers union, however, disputes whether local school construction would be affected. It cites an analysis of the initiative by Controller Kathleen Connell that makes no mention of school districts, and says that only a relatively few local projects would be affected.

“It was our belief . . . that schools [would be] exempt from Proposition 224. Connell resolved that,” Blanning said.

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But the No on Proposition 224 campaign says that is why school districts oppose the measure.

“Today, [school districts] choose who designs their projects. They have control over them. Under the initiative, bureaucrats in Sacramento would run their local projects,” said Al Lundeen of the No on Proposition 224 campaign.

The final arbitrator on the schools dispute may be the courts, should the initiative win voter approval.

The engineers union insists that the initiative would result in large savings to taxpayers and provide improved safety to highways and other public works that are vulnerable to earthquakes.

But one opponent, Los Angeles County Director of Public Works Harry W. Stone, recently warned that the initiative could cause construction delays. He said such delays would “impede the county’s earthquake recovery program for many years.”

What is clear is that Proposition 224 has united traditional enemies and divided allies.

Both the state Democratic and Republican parties are lined up against it. As expected, the state GOP voted in February to oppose Proposition 224. But last month, the Democratic Party rejected its leaders’ recommendation to stay neutral and voted to oppose the initiative.

In doing so, the Democratic convention responded to the appeals of labor leaders in the AFL-CIO construction trades and turned away the pleas of their counterparts in the public employee unions.

Sources said major construction company employers urged trade union officials to oppose Proposition 224, citing possible employment losses if the measure were to pass.

“For the AFL-CIO, it’s a job-loss factor,” Lundeen said. “If you slow down design and engineering, you slow down construction and you jeopardize jobs.”

Opponents of the initiative chalked up a big win last month when the politically powerful California Teachers Assn. split with other public employee unions and came out against Proposition 224.

In deciding to oppose the measure, the teachers association sided with other education interests, including administrators and the California PTA, in expressing concern that the measure could lead to delays in school construction.

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Proposition 224

What it does: Would abolish no-bid private contracting by state and local governments on contracts more than $50,000 used in pre-construction engineering, design and environmental impact reporting work. Would create a competitive bidding system between private contractors and state employees and base contract awards on “the lowest cost to taxpayers” as judged by the state controller’s office.

Arguments for: Improves safety of state highways, enhances financial responsibility of contractors, eliminates system that initiative supporters claim favors Gov. Pete Wilson’s campaign contributors.

Supporters: Professional Engineers in California Government, California Correctional Peace Officers Assn., California State Employees Assn., Hispanic Contractors Assn., Congress of California Seniors

Arguments against: Proposed competitive bidding and cost comparison procedures are tilted in favor of state government engineers against private contractors.

Opponents: American Consulting Engineers Council, California Chamber of Commerce, California Council of American Institute of Architects, League of California Cities, California School Boards Assn., California Federation of Labor, AFL-CIO, California Teachers Assn.