Training Proposal for:

PCL Industrial Services, Inc. Agreement Number: ET14-0148 Panel Meeting of: August 23, 2013 ETP Regional Office: North Hollywood

Analyst: M. Webb

PROJECT PROFILE Contract HUA Attributes: Priority Rate Job Creation Initiative SET

Counties Served:

Yes

Construction

Priority Industry: Repeat Contractor:

Kern

Union(s):

Industry Sector(s):

Yes

Yes

No

No

No

Number of Employees in:

CA: 1,224

U.S.:4,289

Turnover Rate:

33%

See Project Details Section

Managers/Supervisors:

0%

(% of total trainees)

Worldwide: 10,789

FUNDING DETAIL Program Costs

-

$475,200

In-Kind Contribution:

ETP 130 - Single (08/16/12)

(Substantial Contribution)

(High Earner Reduction)

$0

$0

100% of Total ETP Funding Required

=

Total ETP Funding $475,200

$538,565

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TRAINING PLAN TABLE Job No. 1

2

Job Description

Type of Training

Range of Estimated Hours No. of Trainees Class / CBT Lab

Retrainee HUA SET Priority Rate

Business Skills, Commercial Skills

200

Retrainee Job Creation Initiative SET HUA

Business Skills, Commercial Skills

30

24-240

0

Average PostCost per Retention Trainee Wage $1,656

$14.69

$4,800

$12.02

Weighted Avg: 92 24-240

0

Weighted Avg.: 240

Minimum Wage by County: The ETP Minimum Wage requirement $14.69 per hour for trainees in Job Number 1 and $12.02 per hour for trainees in Job Number 2 for Kern County. Health Benefits: Yes medical, dental, vision.

No

This is employer share of cost for healthcare premiums –

Used to meet the Post-Retention Wage?:

Yes

No

Maybe

Job Number 1: $2.69 per hour may be used to meet the Post-Retention Wage. Job Number 2: $0.02 per hour may be used to meet the Post-Retention Wage.

Wage Range by Occupation Occupation Titles Customer Service/Administrative Staff Forklift Operator Pipefitter Rigger Shop Welder

Wage Range

Estimated # of Trainees 70 30 30 50 50

INTRODUCTION PCL Industrial Services, Inc. (PCL) (www.pcl.com) was founded in 1906 and is wholly-owned by PCL Constructors, Inc. headquartered in Edmonton, Canada. PCL is a construction company that provides services to the oil, mining, and gas transmission/compression industries. Located on a 13-acre site, PCL is equipped to support vessel fabrication and repair, steel structuring, and piping for construction projects. In the last 4-5 years, PCL has been unable to staff construction projects with skilled workers. Welders are not able to come in and work as rig welders because it takes specific skills to be proficient, skills that will require extensive training to obtain. In 2010, PCL hired a total of 341 new employees. The company continued the hiring process in 2011 and added an additional 825 employees to staff 2 new construction projects. The Company had to also hire 100 skilled laborers from out-of-state to finish the projects. These hirings of new, unskilled workers were ETP 130 - Single (08/16/12)

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the main contributing factor to the high turnover because they tend to not stay on the job for long. In an effort to reduce turnover, the Company will provide training through its welding and piping program to help improve skill set and career development. PCL is investing approximately $500,000 in training materials and equipment to fund a welding/rigging program to try and correct the high turnover and lack of skilled workers. The Company also hopes to create a new learning environment for employees. A new welding lab is being provided to employees located at a nearby training facility operated by a trade association, Associated Builders and Contractors (ABC). Training provided at the lab will help develop new skill sets necessary prior to performing work at the PCL Shop. This will be the second agreement between ETP and PCL. This Company is eligible for Panel funding under the Special Employment Training provisions for companies lacking out-of-state competition.

PROJECT DETAILS PCL is accredited by the National Center for Construction Education and Research (NCCER) as a training and assessment center. The curriculum is job specific and is based on NCCER materials. This training, offered to Company employees at the ABC facility, has doubled from 2011 to 2012. Apprenticeship There is an apprenticeship program in Kern County that includes training for Plumbing, Pipefitter, and Refrigeration/Air Conditioning Mechanic JATC. This is a 60 month program as compared to 10 courses specific to pipefitting, in the proposed curriculum for PCL. Although the pipefitter training in this proposal may include similar courses, it does not displace training under the above referenced apprenticeship program.

Training Plan Training will be delivered by PCL instructors and staff. Business Skills (17%) - Training will be offered to all Customer Service Representatives to ensure they are able to meet the needs of clientele. Commercial Skills (83%) - Training will be offered to Forklift Operators, Riggers, Pipefitters, and Shop Welders. Trainees will receive necessary training to equip them with the knowledge and skill sets required in the trade. SET/HUA This proposal will be funded under Special Employment Training. This requires all trainees to meet the State Average Hourly Wage requirement; however, all trainees in Job Numbers 1 and 2 work in a High Unemployment Area (HUA), a region with unemployment exceeding the state average by 15% which means that the standard ETP minimum wage applies. PCL is not requesting an HUA wage modification.

ETP 130 - Single (08/16/12)

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Retrainee - Job Creation The Panel offers incentives to companies that commit to hiring new employees. Training for newly-hired employees will be reimbursed at a higher rate and trainees will be subject to a lower post-retention wage. In this proposal, PCL has committed to hiring 30 new employees (Job Number 2). To be eligible for reimbursement, trainees must be hired within the three-month period prior to Panel approval or during the term of contract. Commitment to Training PCL Industrial Services currently spends over $1 million dollars a year in training. The Company plans to continue providing safety training, computer-based training, and on-the-job training in Welding. All training is job specific and is delivered company-wide. Training Hours Limitation Retraining hours are capped at 200 per-trainee. However, PCL is asking for a modification of the cap to 240 hours. Industry standards suggest trainees receive up to 720 hours of training in specialized Commercial Skills training when entering the Construction Trade for Welders and Riggers. Incumbent workers will also require more than 200 hours of training to become Riggers. According to the contract representative, all trainees will receive up to 880 hours of training under this program. Trainees will gain new skills in a trade as well as have the opportunity to earn certifications from the NCCER. These certifications or credentials include transcripts, certificates and wallet cards that are tracked through NCCER’s National Registry and stay with the employee even if they leave PCL. The NCCER curriculum has 4 levels of training with performance verifications. PCL plans to teach the pipefitting and basic rigger curriculum. This curriculum will require 22 weeks to complete. Despite the complexity of the training program, the Company is confident that it will perform well, as evidenced by its previous Agreement. Turnover Rate The ETP program is designed to fund training for stable, secure jobs. Thus, the employer’s turnover rate cannot exceed 20% annually for the facility where training is requested. The Panel may accept a higher turnover rate if the employer provides evidence that the proposed training will significantly decrease the turnover, or if the employer experienced a singular reduction in workforce, or if industry data supports a higher turnover rate. If the Panel chooses to impose a turnover penalty, failure to stay under a maximum rate will trigger forfeiture of 25% of the amount earned for each trainee. The trigger rate is typically 20%, as measured by turnover during the 12-month period preceding termination of the ETP Agreement. PCL asking the Panel to accept the high turnover rate of 33%, because it is a characteristic of construction work in the oil/gas/mining sector. According to the Company, 40% of its workforce is unskilled and transient. As a result, the Company experiences high turnover on a continuous basis. However, when workers receive training and obtain a skill, they tend to stay. In the previous Agreement, the Company greatly improved its turnover rate, from 39% in 2006 (year ETP 130 - Single (08/16/12)

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before ETP training) to 11% in 2009 when training ended. Under this agreement, PCL would like to provide skill sets to workers in hopes that they will start a career with the company. Staff recommends accepting the high turnover rate, provided that the final 25% progress payment for each trainee will be earned only if PCL achieves an average turnover rate of 30% or less for the last 12 months of the Agreement. A report of the turnover rate shall be submitted with the final Agreement closeout invoice.

RECOMMENDATION Staff recommends approval of this proposal and the acceptance of the high turnover rate.

PRIOR PROJECTS The following table summarizes performance by PCL under an ETP Agreement that was completed within the last five years: Agreement No.

Location (City)

Term

Approved Amount

Payment Earned $ %

ET08-0220

Bakersfield

10/01/0709/30/09

$172,800

$172,800 (100%)

DEVELOPMENT SERVICES N/A

ADMINISTRATIVE SERVICES N/A

TRAINING VENDORS N/A

ETP 130 - Single (08/16/12)

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Exhibit B: Menu Curriculum Class/Lab Hours 24-240

Trainees may receive any of the following: BUSINESS SKILLS  Solution Providers – Customer Service Training COMMERCIAL SKILLS  Forklift Training  Loading and Off-Loading of Materials  Refueling Vehicles  Securing Materials for Lifting  Working Alone  Flammable and Combustible Liquid Storage and Handling  Flagging and Barricading  Rough Terrain  Hands on Training  Practical Examination  Rigger Training  Rigging Equipment  Rigging Practices  ASME Hand Signals  Pipefitting Training  Orientation to the Trade  Pipefitting Hand Tools  Pipefitting Power Tools  Oxyfuel Cutting  Ladders and Scaffolds  Motorized Equipment  Piping Systems  Drawings and Detail Sheets  Identifying and Installing Valves  Pipefitting Trade Math  Threaded Pipe Fabrication  Socket Weld Pipe Fabrication  Butt Weld Pipe Fabrication  Excavations  Underground Pipe Installation  Welding Training  Oxyfuel Cutting  Base Metal Preparation  SMAW – Equipment and Setup  Shielded Metal Arc Electrodes  SMAW – Beads and Fillet Welds  Joint Fit-Up and Alignment  SMAW – Groove Welds with Backing  SMAW – Open V-Groove Welds

ETP 100 Exhibit B Menu Curriculum (02/13/12)

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           

Welding Symbos Air Carbon Arc Cutting and Gouging Physical Characteristics and Mechanical Properties of Metals Preheating and Postheating of Metals GMAW and FCAW – Equipment and Filler Metals GTAW Plate GTAW – Equipment and Filler Materials GMAW – Pipe Reading Welding Detail Drawings Pipefitting Trade Math Advanced Trade Math Weld Quality

Note: Reimbursement for retraining is capped at 240 total hours per-trainee, regardless of method of delivery.

ETP 100 Exhibit B Menu Curriculum (02/13/12)

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