Anti-competitive project labor agreements (PLAs) are special interest schemes that end open, fair and competitive bidding on public works projects. PLAs drive up the cost of construction by reducing competition and effectively excluding merit shop contractors and their skilled employees from building projects paid for by their own tax dollars.
Typical PLAs are pre-hire contracts that require 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
In the end, government-mandated PLAs prevent taxpayers from getting the best possible product at the best possible price.
Learn more about why ABC opposes government-mandated 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 had 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.
On March 13, 2010, the Federal Acquisition Regulation (FAR) Council released the final rule to implement President Obama’s Executive Order 13502. The release of this final rule represents the culmination of a process that began in July 2009 with the FAR Council’s release of a proposed rule to implement the content of Executive Order 13502 into federal procurement regulations.
Even before the release of the final rule to implement Executive Order 13502, the Obama Administration signaled its desire for federal agencies to begin mandating PLAs. 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
FAR Council’s proposed rule implementing 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.
On April 13, 2010, the Federal Acquisition Regulation (FAR) Council released a final rule implementing President Obama’s Executive Order 13502, which encourages federal agencies to use PLAs on federal construction costing more than $25 million.
This final rule represents the culmination of a regulatory process that began in July 2009 with the FAR Council’s release of a proposed rule to implement the content of Executive Order 13502 into federal procurement regulations.
The contentious proposed rule was subject to two 30-day public comment periods. The first comment period closed Aug. 14, 2009; it was reopened on Aug. 24 and closed again on Sept. 23. Nearly 1,000 supporters of fair and open competition on taxpayer-funded construction projects submitted comments to the FAR Council opposing the proposed rule. ABC National’s comments are available at www.abc.org/plastudies, all comments submitted to the FAR Council are available via Regulations.gov.
Initial points of interest on the final rule implementing Executive Order 13502 into federal procurement regulations:
- Applies to federal construction projects costing more than $25 million and does not specifically address smaller-scale federal projects.
- Does not mandate the use of PLAs and allows federal agencies flexibility in developing individual agency PLA policies that that can be applied to federal projects on a case-by-case basis.
- Allows federal agencies several options when they can require contractors to submit a PLA during the acquisition process: (1) when the offers are due; (2) prior to award (by apparent successful offeror); or (3) after award. This is a departure from the proposed rule issued in 2009.
- Allows agencies to specify the minimum terms and conditions of a PLA in the project bid solicitation. As a condition of receiving a contract award, federal agencies can require the successful offeror to become a party to a PLA containing a minimum of agency-drafted terms and conditions. This is a departure from proposed rule.
- Prohibits agencies from mandating PLAs on federal projects already underway retroactively. This is a clarification of the proposed rule.
- Gives agencies discretion in addressing the impact of a PLA on small businesses. This is a very modest attempt to address concerns raised by nonunion contractors who perform work on federal contracts under small business requirements and standards.
- The rule does not address federally-assisted projects specifically (Section 7).
On April 21, 2010, ABC National released, "The Final Rule Implementing the PLA Executive Order: Why it Should Be Challenged," by ABC general council Maurice Baskin, Esp., Venable LLP. This document lays out ABC's argument for how the Obama Administration’s actions violate federal procurement laws; discriminate against 85% of the construction industry workforce and many small businesses; and hurt taxpayers.
Read TheTruthAboutPLAs.com's coverage of the release of the final rule here.
At the close of the Federal Acquisition Regulatory (FAR) Council's proposed rule extended public comment period, 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 government-mandated PLAs on federal construction projects costing more than $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: (1) dramatically reduce competition from qualified firms; (2) increase costs on federal construction projects; and (3) discourage 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.