If major construction project permitting, workforce and procurement challenges were not enough, the Federal Acquisition Regulatory Council has injected additional complications by making good on a White House directive requiring Project Labor Agreements on 100-plus contracts annually where federal funds exceed $35 million. Administration officials argue that PLAs promote economy and efficiency by eliminating the risk of delay associated with labor unrest; ensure parties agree to dispute resolution procedures for labor-management cooperation; and, promote competition by allowing all contractors, union and nonunion alike, to bid on contracts that require PLAs.
Merit shop and union contractors’ top national representatives counter those claims and anticipate challenges to the Council’s final rule, Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects. PLAs steer taxpayer-funded public works contracts to union-signatory contractors, granting union workers a monopoly on jobs bound by rule, the Associated Builders and Contractors contends. “The burdensome, inflationary and anti-competitive PLA mandate will needlessly raise costs,” Vice President of Regulatory, Labor and State Affairs Ben Brubeck noted in response to the final rule, announced in late December. “Absent a successful legal challenge, this executive overreach will reward powerful special interests at the expense of taxpayers and the principles of fair and open competition in government procurement. ABC will continue to fight on behalf of quality, experienced contractors harmed by this rule and the 88.3 percent of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects.”
The Associated General Contractors of America questions the rule’s interference in National Labor Relations Act-compliant processes and cites surveys indicating how government-mandated PLAs hamper minority- or women-owned subcontractor hiring. “Government-mandated project labor agreements undermine the collective bargaining process by imposing a separate agreement in a specific region that applies only to a limited number of construction firms and unions,” AGC CEO Stephen Sandherr observed in response to the Council action. “[They] undercut the benefits of agreements that were negotiated in good faith between employers and labor union, and will likely prompt many firms to think twice about participating in the bargaining process in the future. We plan to challenge this rule in court so our members can continue to build infrastructure, diversify their ranks, and give taxpayers the best possible value.”
The associations reinforced their positions with metrics from the records of recent PLA-bound federal projects. Of nearly 2,500 large-scale jobs booked from FY 2009 to FY 2023 and subject to an earlier White House executive order promoting PLAs, federal agency contracting officers chose to require PLAs on just 12 of the contracts, ABC noted, adding, “There were no reports of widespread cost overruns, delays, labor unrest or poor-quality construction on $164.4 billion worth of non-PLA projects, indicating that PLA mandates are not needed to ensure economy and efficiency in government contracting.” In a parallel finding from a Department of Defense analysis of federal construction projects where a White House-encouraged PLA could have been imposed, AGC reported that more than 99 percent involved “nonpartisan federal officials [finding] no benefit to taxpayers from imposing one.”
ABC and AGC officers and individual members were among thousands of stakeholders who voiced opposition to the proposed PLA rule during a 2022 public comment period. The White House should have heeded their position and ordered federal agencies to pursue every option for expediting project starts as Infrastructure Investment and Jobs Act and Inflation Reduction Act funding levels swell.