Union-only PLAs drive up the cost of construction by reducing competition and effectively exclude merit shop contractors from working on projects paid for by their own tax dollars.
A union-only PLA is a pre-hire contract that requires projects be awarded only to contractors and subcontractors that agree to:
- recognize unions as the representatives of their employees on that job
- use the union hiring hall to obtain workers
- obtain apprentices exclusively from union apprenticeship programs
- pay into underfunded and mismanaged union benefit plans
- obey costly, restrictive and inefficient union work rules
Learn more about why ABC opposes union-only PLAs
Visit www.thetruthaboutplas.com for the latest news, facts, studies and current information about PLAs.
On February 6, 2009, President Barack Obama issued
Executive Order 13502, which repeals
Executive Order 13202 and encourages federal agencies to require PLAs on federal and federally funded construction projects in excess of $25 million. Executive Order 13202 prohibited federal agencies and recipients of federal financial assistance from requiring wasteful and discriminatory union-only PLAs on federal and federally funded construction projects. Construction contracts subject to union-only PLAs are usually awarded to unionized contractors and their all-union workforces.
Additionally, the Office of Management and Budget (OMB) on July 10 issued a
policy memorandum encouraging federal agencies to consider utilizing PLAs on a project-by-project basis and require PLAs in “appropriate circumstances.” This memorandum came in advance of the
Federal Acquisition Regulation (FAR) Council’s proposed rule implementing President Obama’s Executive Order 13502.
Between 2001 and 2008, Executive Order 13202 ensured that at least
$147.1 billion worth of federal construction projects was bid without discriminatory and wasteful government-mandated PLAs. The actual value of construction projects protected by Executive Order 13202 is exponentially larger, as the above figure does not include local construction spending that received federal funding or assistance protected by the executive order. Free and open competition saved American taxpayers an estimated 10 percent to 20 percent on federal construction spending and provided women, minorities and other qualified craft professionals the opportunity to work in their communities.
Learn more about President Obama's Executive Order 13502 and the history of PLAs on federal construction projects.
The construction industry is still waiting for the federal government to issue a final rule on regulations that promote project labor agreements (PLAs) on federal construction projects exceeding $25 million.
With one exception, federal agencies and procurement officials have not implemented government-mandated PLAs, partially because they are waiting for the final rule from the Federal Acquisition Regulation (FAR) Council, and partially because PLAs are bad public policy. These special interest giveaways increase the cost of construction, are a form of government corruption and discriminate against nonunion contractors and employees.
The exception to this government-wide hesitation in implementing PLAs was a PLA mandated by the U.S. Department of Labor (DOL) on a Job Corps Center in Manchester, N.H. After a protest was filed against the PLA with the Government Accountability Office (GAO) by an ABC member, with ABC support and representation, the U.S. DOL cancelled its solicitation to construct the project.
The U.S. General Services Administration (GSA) is also evaluating the use of PLAs on about $1.25 billion worth of American Recovery and Reinvestment Act-funded construction projects in seven states and Washington, D.C. To date, none of these projects has been awarded with a PLA, although there are indications that many of these projects will require contractors to submit two price proposals — one that is subject to a PLA requirement and one that is not.
Finally, there has been no movement on Section 7 of Executive Order 13502, which requires the Director of the Office of Management and Budget, in consultation with the Secretary of Labor and with other officials as appropriate, to provide the President recommendations about whether broader use of PLAs, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance within 180 days of E.O. 13502 being issued Please note the order was issued Feb. 6; 180 days sets deadline at Aug. 5.
At the close of the extended public comment period regarding E.O. 13502 and federally-mandated PLAs to Federal Acquisition Regulatory (FAR) Council, more than 900 ABC member companies and employees expressed opposition to a proposed rule that would, for the first time, establish a policy of “encouraging” federal agencies to consider imposing union-only PLAs on federal construction projects whose total costs exceed $25 million.
In its own comments to the FAR Council, ABC stated that neither Executive Order 13502 nor the proposed rule provided support for the assertion that PLAs promote economy and efficiency in federal procurement. In addition, ABC’s comments argued that PLAs will dramatically reduce competition and increase costs on federal construction projects, discouraging bids from small businesses, including minority firms.
Read MoreSeveral states have taken action to either restrict or encourage the use of project labor agreements on public construction.
Read more on state action to encourage or prohibit PLAs on state construction projects Visit
www.thetruthaboutplas.com for more information on specific efforts to protect fair and open competition at the state and local levels.