The bidding for a major component of the estimated $16 billion Hudson Tunnel project is now the subject of a federal court challenge after a New Jersey contractor alleged that the project’s new Gateway Development Commission labor agreement prevents it from competing for the work.
George Harms Construction Co. filed the lawsuit Nov. 26 in U.S. District Court in Newark, NJ, seeking to stop bidding for the New Jersey surface alignment package and arguing that the settlement approved by the commission on Aug. 20 excludes the company’s union workers represented by the United Steelworkers. Offers expire on December 10th.
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Howell, NJ-based Harms is one of four design-build teams the commission selected Feb. 26 for the contract, which includes tracks, retaining structures, bridges, a wetland viaduct and extensive utility work in the area from Secaucus to North Bergen, NJ.
ENR reviewed council minutes, public comments, meeting transcripts and the full project labor agreement adopted Aug. 20, as well as the complaint filed in federal court.
Documents show the commission did not identify a project labor agreement in its November 2024 request for qualifications or its Feb. 28 request for proposals, but it did raise the concept publicly at the July 28 board meeting. Resolution 0725-04, introduced at that session, authorized General Manager Thomas Prendergast to negotiate a project labor agreement for the surface alignment package.
Objections raised after the public publication of the PLA
Minutes from the July meeting show Commissioner Alicia Glen requested a review that would have required any agreement to be returned to the board for approval before taking effect. The session also drew initial objections from Harms and the United Steelworkers.
In a written comment, the United Steelworkers argued that adopting a project labor agreement excluding the union “would decrease competition for public works and lead to higher costs, to the detriment of taxpayers,” adding that its Local 318 “is a source of skilled labor for the project,” recognized by the New Jersey Department of Labor.
The union also referenced the longstanding “harmony agreement” that allowed the steel industry and the National Association of Construction Unions to “work side by side on the same job projects in New Jersey and avoid jurisdictional disputes.”
Harms CEO Rob Harms told commissioners the company could not bid under a project labor agreement that excluded the Steelworkers union. “We will not be able to make a legal offer,” he said, according to the transcript of the meeting reviewed by ENR.
Despite the objections, commissioners voted unanimously on August 20 to adopt Resolution 0825-01 approving the project’s labor agreement. The 65-page agreement, which is attached as Annex A to the resolution, lists as signatories the Building and Construction Trades Council of Hudson County and its affiliated unions; the Steelworkers are not included.
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The project labor agreement states that it “shall apply in full to any awardee of project work [that] becomes a signatory” and that its terms “supersede any national agreement, local agreement or other collective agreement”, unless specifically exempted.
Public comments at the Aug. 20 meeting again emphasized the exclusion. “Our members have performed heavy duty and road work in New Jersey for decades. There is no reason to exclude them,” United Steelworkers representative Mike Fisher told commissioners, according to the minutes. Harms reiterated that the agreement would prevent a bid from being submitted.
The resolution states that the commission, through an outside consultant, hired a labor consultant whose study found that a project labor agreement would benefit the surface alignment package in terms of cost, schedule and labor harmony.
The study was not included in public materials, and the minutes do not show the commissioners discussing the exclusion of the Steelworkers.
In his lawsuit, Harms argues that the project’s labor agreement violates the Gateway Development Commission Act, which directs the agency to use existing workforces in both states and foster labor harmony.
He also cites the commission’s hiring guidelines that demand the highest level of competence. The lawsuit adds claims under the federal Sherman Act, as well as under the due process and equal protection clauses, alleging that the commission exceeded its authority by adopting a labor agreement that excluded a longtime union that represented heavy and highway workers in New Jersey.
The Gateway Commission responds
When asked for comment on the lawsuit, Molly Beckhardt, senior communications associate for the Gateway Development Commission, told ENR that “all shortlisted bidders for the NJ surface alignment project are qualified and permitted to work on the project. No bidder is excluded.” He said that “Project labor agreements are an important part of ensuring consistent and predictable work rules that benefit workers and support timely project delivery. [The commission] successfully implemented [project labor agreements] in other Hudson Tunnel Project construction packages.”
According to Beckhardt, “any awardee can work on the NJ surface alignment project, regardless of which unions have agreements, as long as those unions agree to the [project labor agreement],” and that the commission “is confident that the procurement of the NJ surface alignment contract has complied with all relevant laws, regulations and internal guidelines.”
Harms filed an internal protest of the bid on Oct. 29 requesting a formal hearing and requesting that the commission extend the Dec. 10 bid deadline. The commission’s designated protest officer responded Nov. 10 that more time was needed to assess the issues, but did not say when a decision would be made or if the deadline would be extended.
On November 11, Harms raised concerns about potential conflicts of interest and renewed his application. His lawsuit claims the commission’s inaction made the protest process “futile,” prompting the federal court filing.
The complaint asks the court to freeze the hiring until it determines whether [project labor agreement] Complies with state and federal law. A ruling could affect the commission’s timetable for awarding the surface alignment contract, one of the largest civil works components of the Hudson Tunnel project. The outcome may also influence upcoming design-build procurements if the commission plans to use similar labor agreement structures in other packages.
United Steelworkers did not respond to ENR’s request for comment before press. The court has not scheduled hearings on Harms’ request for a preliminary injunction.
