At a time when unemployment among construction workers stands at close to 25 percent, a $400 million Pennsylvania prison project that would have employed 1,400 carpenters, electricians, and others in the trades remains mired in bureaucracy and litigation.

Meanwhile, the state prison system is so crowded that it is shipping 2,000 inmates out of state at a daily cost of $62 per inmate.

Construction on the project, a new 4,100-bed prison next to Graterford Prison in Skippack Township, Montgomery County, was supposed to have started in September.

"We want to get dirt flying by late in 2009," Ed Myslewicz, spokesman for the state Department of General Services, predicted optimistically in February 2009 when the project was announced.

Not only is there no dirt flying, there's not even a bid request for the project.

"I would like nothing better than to award a contract and have Corrections have their needs addressed," said Elizabeth Ann "Liz" O'Reilly, deputy secretary for the state Department of Corrections and the point person for an $865 million statewide prison project that includes the $400 million Montgomery County prison.

"I think they'd rather spend money on their attorneys than on construction."

The Graterford project has been plagued by three problems - a disagreement over how it should be bid, the question of whether the workforce must be union, and the inability to find a bidder able to build the prison envisioned for the money available.

O'Reilly's department had put the project out for bid in the spring. None of the bidders met the price.

The department was in negotiations in July with the lowest bidder, Keating Building Corp., a Philadelphia union contractor. Then nearly four dozen nonunion construction workers and contractors, along with trade associations that represent open shops, filed a lawsuit against the state to stop the project.

The plaintiffs made two requests: an injunction to stop the department from awarding the contract, and not to require a project labor agreement as a bid specification.

Project labor agreements typically require contractors to pay union wages and, in some cases, use union workers. The unions guarantee a trained labor supply and promise there will be no work stoppages.

On Dec. 1, Commonwealth Court Judge Dan Pellegrini refused to grant the request for an injunction; his decision has been appealed to the state Supreme Court.

Pellegrini's 30-page opinion spells out the history of the dispute. It began in 2008, when Gov. Rendell was trying to win labor support for legislation that changed the way construction would be done on major state projects.

In the past, any major project required bids from four types of prime contractors - general, electrical, mechanical, and plumbing.

But the Act 41 legislation the governor signed called for a design/build contract system. The bid would be awarded to one contractor who would let out the rest of the bids as subcontracts. The theory is that type of construction is more efficient.

In return for union support, O'Reilly's department agreed to hire the Keystone Research Center, a union-affiliated economic think tank in Harrisburg, to determine whether a project labor agreement would make sense on a large prison project.

Proponents say the availability of a trouble-free labor supply moves the project along more efficiently. Opponents say legislators insist on the agreements to reward unions for political support, which they say is not fair to nonunion contractors and construction workers.

The Keystone Research Center said a project labor agreement made sense. That was no surprise to the plaintiffs in the suit, although the judge found no indication that Keystone's study was "automatically bad."

Under this agreement, the work could go to union or nonunion bidders, but contractors would have to pay union wages and obtain their workforces through union halls.

One plaintiff, Allan R. Myers, chief executive of American Infrastructure Inc., a civil-construction business in Montgomery County, told the court it would be virtually impossible for his 1,600-employee nonunion business to control time and costs if he had to hire out of a union hall.

"The state shouldn't be allowed to hand out political favors as part of the competitive bidding process," said Jerry Gorski, president of Gorski Engineering Inc. in Collegeville and departing president of a national open-shop construction trade group, Associated Builders & Contractors.

Local chapters of the organization are among the plaintiffs in the Graterford suit.

O'Reilly said the prison project served multiple purposes. "The construction industry is in desperate need," she said. "And we'll get a lot of people to build the prisons, that, oh, by the way, we also desperately need."

The Pennsylvania prison population is 51,403 and prison capacity is 43,503, said Angus Love, executive director of the Pennsylvania Institutional Law Project, a Philadelphia nonprofit that helps people in prisons.

At Graterford, Love said, there are about 3,770 inmates in an institution meant to handle 2,800.

"The system is bursting at the seams," he said. "Now they are transporting 2,000 out of state - 1,000 to Michigan and 1,000 to Virginia."

Because costs are lower in Michigan and Virginia, the state will come out even, despite transportation costs. However, inmates sent out of state have few visitors.

The move to Michigan will save nearly 250 jobs at the prison there in Muskegon, which had been slated to close this year.

Find articles from The Inquirer's Jobs at a Loss series, plus Jane Von Bergen's "Jobbing" blog, at


Contact staff writer Jane M. Von Bergen at 215-854-2769 or