The public comment period on the proposed federal rule requiring project labor agreements (PLAs) on federal construction projects valued at or above $35 million has officially opened.
Publication last week by the Federal Acquisition Regulation Council – the Department of Defense (DOD), the Government Services Administration (GSA), and the National Aeronautical and Space Administration (NASA) – of the Notice of Proposed Rulemaking that that would formally implement President Biden’s Executive Order 14063 relating to the PLA requirements has once again stirred controversy within the construction industry. A PLA is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. They are often required on state or federally funded construction projects.
Critics of the proposed rule say PLAs decreases competition and discourages smaller non-union contractors from bidding on the potentially profitable federal projects. Also, they suggest that it drives up costs and can delay projects, rather than save money.
“The Biden administration continues to move forward with its steady drumbeat of burdensome, inflationary and anti-competitive policies that will needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers,” said Ben Brubeck, Associated Builders and Contractors vice president of regulatory, labor and state affairs. “The FAR Council’s proposed rule will hand over construction contracts to powerful special interests at the expense of hardworking taxpayers and the principles of free enterprise and fair and open competition in government contracting.”
Since the original executive order was issued, ABC and more than 1,200 members and a coalition of 19 organizations within the construction industry have opposed the order, arguing that “a fair and open bidding process for federal construction projects would guarantee the best value for hardworking taxpayers located in all geographies and regions across the United States.”
Members of Congress and 18 Republican governors have supported ABC’s stance against the PLA mandate, suggesting that it “will undermine taxpayer investment in billions of dollars of forthcoming public works projects financed by the Infrastructure Investments and Jobs Act of 2021 and additional bipartisan legislation passed by Congress, all of which was signed into law free from language requiring or encouraging the use of PLAs.”
However, as presented, the new rule would not affect state and local government projects, even those that receive federal funding. Specifically, it would not impact state and local government projects that are initiated under the Infrastructure Investment and Jobs Act.
