Biden Order Requires Union Labor on Federal Construction

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President Joe Biden signed an executive order Friday that requires union workers on federal construction projects above $35 million, including those under the new $1 trillion infrastructure law.

Construction industry groups are lining up against it.

Biden’s executive order requires project labor agreements (PLAs) on $35 million-plus federal contract construction projects as a way to improve timeliness, lower costs and increase quality, he says. The agreements set up collective bargaining between unions and contractors for such things as wages, benefits and how to resolve labor disputes.

Groups such as the Associated General Contractors and the Associated Builders and Contractors oppose the order and are calling for action by Congress to stop it. They say it will make the labor shortage worse, increase costs and be anti-competitive for non-union contractors and workers.

What Biden says

Biden’s executive order could affect $262 billion in federal government construction contracting and nearly 200,000 workers.

Biden says the executive order requires PLAs to make it easier to manage multi-million-dollar projects, including coordinating multiple contractors and subcontractors and their employees and preventing disputes between subs.

They will raise quality standards by weeding out contractors that pay low wages and have not properly trained their workers. To be eligible for the project, such contractors would have to raise their standards.

The agreements create more certainty for workers as to what they will be paid and their benefits.

The executive order also calls for increased training of the federal contracting workforce through the Defense and Labor departments. That workforce consists of nearly 40,000 workers.

Biden also says the agreements will keep projects on schedule and save taxpayers.

His executive order is also receiving support from labor unions.

The president of North America’s Building and Trades Union, Sean McGarvey, said the executive order is good for all workers, not just union members.

“The PLA benefits for workforce development are unparalleled,” he says. “PLAs support well-paying job creation, increase apprenticeship and improve local hiring goals to transition more workers into construction careers. Moreover, pre-apprenticeship requirements in PLAs help avail thousands of women, people of color and veterans access to construction career pathways.”

“As a result,” he adds, “these agreements are proven to boost local economies, address inequities and uplift marginalized communities, and achieve substantial, direct cost savings by standardizing contract terms among various crafts.”

What opponents say

Stephen Sandherr, AGC CEO, says a PLA “discriminates against the more than 85 percent of construction workers who choose not to belong to a union. That is because open shop firms that are subjected to a project labor agreement are required to pay both their employees’ benefits and those of the unions involved in the agreement. Since few firms can be competitive while paying two sets of benefits, the order effectively locks out most workers from participating in federal construction projects.”

Sandherr also says PLAs undermine collective bargaining agreements already made in local areas between unions and contractors.

“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,” he said. “These imposed PLAs undercut the benefits of the collective bargaining 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.”

The ABC is calling for passage of legislation for open competition on federal construction projects instead of PLAs.

“President Biden’s new policy will not help America ‘Build Back Better’; instead, it will exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs and reduce opportunities for local contractors and skilled tradespeople,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects.”

The National Utility Contractors Association fears the executive order could affect projects being funded by the infrastructure law and those who bid on them.

“PLA requirements restrict the majority of construction firms who traditionally bid on contracts that include federal financing assistance,” NUCA says. “State and local governments who might be interested in contracting with qualified merit-shop contractors who provide quality services could find these companies and their employees excluded because of this policy.”