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Construction procurement policies that address health insurance: a cost analysis.

May DC; Waddoups CJ
Silver Spring, MD: The Center to Protect Workers' Rights, 2010 Apr; :1-36
Responsible Contractor Policies (RCPs) are policies adopted by municipalities, school districts, or other entities that set certain minimum employment standards for bidding on construction work. RCPs have been suggested as a potential remedy for bidding practices that drive down wages, reduce health insurance and retirement security, discourage job skill training and competent safety programs, and inhibit community workforce inclusion. Although carefully controlled statistical studies do not exist on the impact of RCPs, critics assert that they add significantly to construction costs. Proponents counter that there is a real cost to taxpayers and communities and to construction quality for a failure to maintain such responsible contracting policies. This study seeks to add empirical evidence to address the debate on this issue. Of specific focus during this study were procurement policies that sought to ensure workers on RCP-covered projects have a health insurance benefit. The construction costs of elementary schools built in Ohio from 1997 to 2008 were obtained from F.W. Dodge data. Regression models of construction costs were developed using cost data, certain building characteristics, and whether the local school board had an RCP. The data set contained a total of 321 projects, 19 percent of which were built by a school board with an RCP. Our results indicate that once variation in school characteristics and geographic location of schools are accounted for, RCPs generally have no statistically significant impact on final bid costs. In general, results suggest that RCPs tend to be found in metropolitan areas where construction costs are relatively more expensive than in suburban or rural areas, regardless of the adopted bidding policies. Thus it is likely that market conditions in the location generally drive costs rather than the presence of RCPs. Therefore, our study supports the idea that the benefits of adopting RCPs for school construction may be obtained without significantly raising costs for taxpayers.
Construction; Construction-industry; Construction-workers; Safety-measures; Safety-practices; Work-environment; Work-practices; Worker-health; Standards; Regulations; Training; Protective-measures; Administration; Work-analysis; Job-analysis; Quality-standards; Statistical-analysis; Mathematical-models
Building and Construction Trades Dept., AFL-CIO: CPWR, Suite 1000, 8484 Georgia Ave., Silver Spring, MD 20910
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Construction; Cooperative Agreement
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Construction procurement policies that address health insurance: a cost analysis
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CPWR-The Center for Construction Research and Training, Silver Spring, Maryland
Page last reviewed: May 11, 2023
Content source: National Institute for Occupational Safety and Health Education and Information Division