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State Engineers' Measure Divides Allies, Unites Foes

Initiative would make it tougher for governments to contract out some work. It has split labor unions while both political parties are opposed.


SACRAMENTO — 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."

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