Contract Rebidding to Delay Power Plant
Acting after failed talks with a local labor union chief, the Los Angeles Department of Water and Power announced Friday that it will reopen bidding for a power plant in Sun Valley, delaying construction for at least six months.
Brian D’Arcy, head of the union representing 5,500 electrical workers, plumbers and other city employees, challenged the award of the $238-million contract to a nonunion builder. The plant was scheduled to be completed in May 2003.
After two fruitless months of negotiations with D’Arcy, DWP General Manager David H. Wiggs Jr. said Friday that he has decided to bid the contract again.
“You are not happy about any delay, but we hope we can avoid these problems in the future,” Wiggs said. The delay will not affect the DWP’s ability to provide electricity to Los Angeles residents, but could reduce the potential amount of surplus power available for sale to the state.
The decision was immediately controversial, with labor leaders hailing the action but others criticizing the delay. The bidder, the Industrial Co., insisted that it hires strictly on merit. The new plant, to replace the outdated Valley Generating Station, would produce 500 megawatts of electricity, enough for 450,000 homes, at a savings of $50 million annually. Pollution would be significantly reduced from current levels at the 1954-vintage plant.
Wiggs said he believes the DWP followed proper procedures in selecting the Industrial Co. for the job, but the union disagreed. Wiggs said the union has the contractual right to demand arbitration to settle the dispute.
“The time of going through arbitration with them and getting a decision is more than offset by the time to rebid this and do it the way they feel is appropriate,” Wiggs said. “Either way it will be a delay of six months.”
D’Arcy, business manager for the International Brotherhood of Electrical Workers, Local 18, said the city is responsible for any delays because it picked the Industrial Co. despite complaints that the company has failed to hire union workers on another $50-million DWP contract to build a generator in the Harbor area.
Under its contract with the city, the union has the right to approve any contract that involves work that could be done by its members. There were two bidders, officials said, and the Industrial Co. was the only one to meet DWP requirements.
D’Arcy said the company began work on the Harbor project in February. He learned that the firm was not hiring union workers, and notified the DWP of his concerns shortly before the DWP board was scheduled to consider the Industrial Co.’s bid, D’Arcy said. The DWP then put off a decision and started negotiations with the union.
“They should have thought about that when they started this,” D’Arcy said. “They have been playing around for two months. They could have put it back out and turned the first spade of dirt by now.”
The delay concerned others, including Jon Coupal, president of the Howard Jarvis Taxpayers Assn., who said the demand by unions for contractors to sign project-labor agreements “are killing taxpayers.”
