Sources: Associated Builders and Contractors, Washington, D.C.; CP staff
The U.S. Court of Federal Claims ruled in favor of Associated Builders and Contractors members in their challenge of a Federal Acquisition Regulatory Council rule requiring project labor agreements on federal construction jobs of $35 million or more. The contractors filed 12 bid protests against three federal agencies abiding an FAR rule implementing an earlier White House Executive Order on PLAs. The PLA mandate was widely criticized by the construction industry, taxpayer watchdogs and lawmakers for inflating construction costs and effectively steering contracts to unionized firms and union labor at the expense of taxpayers and federal laws requiring fair and open competition.
“ABC and its federal contractor members are ecstatic that the judicial system has delivered justice for American taxpayers and the 90 percent of the U.S. construction industry workforce that is nonunion,” says ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “ABC members were harmed by former President Biden’s costly executive overreach, which violates federal laws and rewards special interests at the expense of fair and open competition.”
“Damning evidence procured through market research conducted by several federal agencies was raised in the case’s oral argument and corroborated plaintiffs’ complaints and ABC’s long-standing concerns,” he adds. “The findings of federal agencies illustrate how mandating union-favoring project labor agreements stifles competition and raises costs on federal construction contracts nationwide. ABC has testified before Congress that, when mandated by government, PLAs increase construction costs by an estimated 12 percent to 20 percent, reduce competition from qualified contractors and their employees, steal money from the paychecks of token nonunion workers permitted on PLA projects, and exacerbate the construction industry’s worker shortage.”
“Typical PLA mandates discourage competition from some of the best bidders by forcing contractors to sign special union collective bargaining agreements, hire workers from union halls and apprenticeship programs and accept compulsory union representation on behalf of any members of their existing workforces,” Brubeck observes. “This exposes those workers to union wage theft of up to 34 percent of their compensation unless they join a union and vest in union benefits plans.”
Ahead of the January 20 inauguration, ABC and 24 other construction and business groups in the Build America Local coalition requested that President Donald Trump issue an executive order restoring fair and open competition on federal and federally assisted construction projects—a move ABC contends would save taxpayers an estimated $10 billion annually. ABC members won 54 percent of the $205.56 billion in federal contracts worth $35 million or more during fiscal years 2009-2023 and delivered “award-winning projects safely, on time and on budget, without unnecessary government-mandated PLAs.”