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.
On February 17, 2001, President George W. Bush signed Executive Order No. 13202, “Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects.”
This Executive Order declares that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on government construction projects.
On April 6, 2001, the Bush Administration amended Executive Order No. 13202 with Executive Order No. 13208, which exempts any project which has had at least one contract awarded with a PLA from Executive Order 13202.
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 from 2001-2008 that received federal funding or assistance that was protected by Executive Order 13202. It is estimated that free and open competition saved American taxpayers between 10 percent and 20 percent on federal construction spending and provided women, minorities and other qualified craft professionals the opportunity to work in their communities.
Unfortunately, on Feb. 6, 2009, President Barack Obama fulfilled his campaign promise to repeal Executive Order 13202. In a September 16, 2008 letter to the International Brotherhood of Electrical Workers (IBEW) union, Obama wrote, “We need to make sure the government uses project labor agreements to encourage completion of projects on time and on budget. One of the first things George Bush did when he got into office was to ban PLAs. One of the first things I’ll do as President is repeal that ban."
President Obama's Executive Order 13502: Use of Project Labor Agreements for Federal Construction Projects repealed President Bush's Executive Orders No. 13202 and 13208 and encourages federal agencies to require PLAs on federal construction projects in excess of $25 million. While PLAs are not mandated on all federal construction projects in excess of $25 million and the order does not extend to state and local projects over the $25 million threshold that receive federal financial assistance, Section 7 of the Executive Order directs the Secretary of Labor and OMB director to make "recommendations about whether broader use of PLAs, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help tp promote the economical, eficient, and timely completion of such projects" within 180 days of Feb. 6, 2009.
In short, the policy of the federal government encourages PLAs on federal construction projects over $25 million and will likely encourgage or require the use of PLAs on federally assisted construction projects over $25 million depending on the results of activities related to Section 7 and the regulatory process.
Please visit www.TheTruthAboutPLAs.com and www.abc.org/pla for regulatory, legal and legislative updates on Executive Order 13502.
July 2008 Construction Executive Washington Update column, "Future of PLA Requirements on Federal Construction Uncertain" (click on July issue and see page 8&9 to read an analysis of the 2008 elections on the federal government's policy regarding union-only PLAs).
President Clinton's Feb. 1, 1993 Executive Order 12836 Rescinding George H.W. Bush's Executive Order 12818
On July 10, the Office of Management and Budget (OMB) issued a policy memorandum informing all federal department and agency heads that rules prohibiting PLAs on federal and federally funded construction had been revoked. Additionally, the policy memorandum encouraged 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 on President Obama’s Executive Order 13502, which encourages the use of PLAs on construction projects costing more than $25 million. The proposed rule was issued in the July 14 Federal Register and the FAR Council accepted comments through August 13. ABC has serious concerns with the proposed rule's impact statement, the absence of any meaningful criteria for agencies to use in deciding whether to impose PLAs, and the absence of any empirical justification for PLAs on federal projects.
Open Competition Legislation Concerning Federal or Federally Funded or Assisted Construction
112th Congress
The Government Neutrality in Contracting Act (S. 119/H.R. 735), introduced Jan. 25, 2011 by Sen. David Vitter (R-LA.) and Feb. 16, 2011 by Rep. John Sullivan (R-Okla.), would prohibit federal agencies from requiring anti-competitive and costly government-mandated PLAs and/or favoring contractors submitting a PLA bid on federal and federally assisted construction projects. This legislation essentially codifies into law President Bush's Executive Orders 13202 and 13208. ABC and a diverse coalition of construction industry and employer groups support this legislation.
Feb. 18, 2011, Congressman Frank Guinta (R-N.H.) offered amendment #166 to H.R. 1, which would prevent FY 2011 money from funding construction projects subject to government-mandated PLAs. The amendment failed 210-210.
The Government Neutrality in Contracting Act (S.90/H.R. 983), introduced Jan. 6 by Sen. David Vitter (R-LA.) and Feb. 11 by Rep. John Sullivan (R-Okla.), would prohibit federal agencies from requiring costly and discriminatory government mandated PLAs on federal and federally funded construction projects. This legislation essentially codifies into law President Bush's Feb. 17, 2001 Executive Order 13202. ABC stongly supports this legislation.
Contact your senators and representative to co-sponsor the Government Neutrality in Contracting Act (S.90/H.R. 983) via ABC's Grassroots Action Center.
Documents and links of interest concerning the Government Neutrality in Contracting Act.