ABOUT GOVERNMENT-MANDATED PROJECT LABOR AGREEMENTS ON PUBLIC CONSTRUCTION PROJECTS:

Hardworking taxpayers deserve efficient and effective policies that will encourage all qualified contractors to compete to build long-lasting, quality projects at the best price. Government-mandated project labor agreements discourage quality contractors and the more than 89% of the U.S. construction workforce who are not members of a union from bidding and working on projects in their own communities funded by their tax dollars.

Anti-competitive and costly PLAs are schemes that end open, fair and competitive bidding on public works projects. By preventing more efficient, effective local businesses from bidding on contracts to build roads, bridges, schools and other structures simply because they are unable to abide by the problematic and inflationary terms of the PLA, that guarantees that taxpayers pay 12% to 20% more and the local community benefits less.

Did you know that government-mandated PLAs drive up the cost of construction projects? By unnecessarily limiting bidders and following outdated and inefficient union work rules, researchers have found PLAs consistently and unnecessarily drive up costs on constructions projects. Analysis of numerous academic studies of public construction projects already subject to government-determined prevailing wage laws indicate PLAs increase the cost of construction by 12% to 20% when compared to similar projects not subject to government-mandated PLAs.

TheTruthAboutPLAs.com tracks developments with PLA research here and provides a comprehensive list of PLA studies, research and related blog posts here. BuildAmericaLocal.com also provides a list of relevant studies.

A report by ABC general counsel Maury Baskin, Government-Mandated Project Labor Agreements: The Public Record of Poor Performance (2011 Edition), documents the numerous broken promises and mishaps on government-mandated PLA construction projects, such as the infamous Big Dig in Boston.

Likewise, TheTruthAboutPLAs.com tracks subsequent PLA failures like Seattle's Highway 99 tunnel project and other federal, state and local projects around the country.

Finally, TheTruthAboutPLAs.com has documented in the following linked blog posts, how government-mandated PLAs do not guarantee a safe jobsite, nor do PLA mandates ensure compliance with labor laws or better local hiring outcomes for the construction workforce. Some courts have found PLA mandates violate state and federal competitive bidding laws. In fact, some unions and unionized contractors oppose government-mandated PLAs. It might be why unions have engaged in strikes on PLA projects, calling into question the value of typical PLA promises.

In contrast, merit shop workers do not strike, yet they are discouraged from working on PLA projects because they typically have to pay union dues, join a union and/or have fringe benefits like pension contributions earned during the life of a PLA project forfeited into union plans unless they join a union. This report shows how PLA schemes result in a windfall for union benefit plans and increase the cost of construction for nonunion firms, while subjecting nonunion and union construction workers to wage theft of an estimated 20% of total compensation. An expansion on those findings from a more recent report from 2021 finds that nonunion workers on PLA projects could forfeit up to 34% of their paychecks to union dues and benefit plans.

Government-mandated PLAs remain a scheme to advance the interests of PLA proponents and union bosses at the expense of taxpayers, the contracting community and governments seeking quality construction services.

In contrast, qualified ABC member contractors and their skilled employees safely build world-class taxpayer-funded construction contracts on-time and on-budget without government-mandated PLAs because open competition works. It's the best way to deliver to taxpayers the best possible construction project at the best possible price.

Get the Truth About Government-Mandated Project Labor Agreements here.

Federal government reports, hearings and research on government-mandated project labor agreements (PLAs) can be found at the end of this page at TheTruthAboutPLAs.com.

ABC Opposes Government-Mandated PLAs and PLA Preferences on Federal and Federally Assisted Construction Projects

Hardworking taxpayers deserve efficient and effective policies that will encourage all qualified contractors to compete to build long-lasting, quality projects at the best price. Government-mandated project labor agreements discourage quality contractors and the more than 89% of the U.S. construction industry workforce who do not belong to a union from bidding and working on projects in their own communities paid for by their tax dollars.

Learn more about the Federal Acquisition Regulatory Council’s Dec. 22, 2023, final rule––and the related Dec. 18, 2023, White House Office of Management and Budget Memo––implementing President Biden’s Feb. 4, 2022, Executive Order 14063, which requires PLAs on federal contracts of $35 million or more

On Oct. 18, 2022, ABC filed extensive formal comments in response to the FAR Council’s ABC-opposed Aug. 19, 2022, proposal.

ABC’s opposition to the FAR Council’s proposed rule was shared by more than 50 members of the U.S. House and Senate, 19 Republican governors and a diverse coalition of construction industry, small business and taxpayer advocates urging the administration to withdraw its proposed rule and other Biden administration schemes pushing government-mandated PLAs on state and local government construction projects receiving federal assistance via $260 billion via federal agency infrastructure grant programs (visit abc.org/PLAGrants to learn more). Learn more about government-mandated PLAs and Biden administration pro-PLA policies via ABC’s 2024 FAQ document and coalition website at BuildAmericaLocal.com.

According to a September 2022 survey of ABC contractor members (learn more) , 98% oppose this proposed rule. Additionally, 97% said a construction contract that required a PLA would be more expensive compared to a contract procured via fair and open competition, 99% said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions and 97% of respondents said that government-mandated PLAs decrease economy and efficiency in government contracting.

Fight these discriminatory and costly policies by urging lawmakers via this ABC grassroots campaign to cosponsor federal legislation, the Fair and Open Competition Act (H.R.1209/S.537introduced in the 118th Congress by Rep. James Comer, R-KY., and Sen. Todd Young R-Ind, which prohibits government-mandated PLAs on federal and federally assisted projects and helps taxpayers get the best possible product at the best possible price.

Effective Jan. 22, 2023, the Biden final rule replaced President Obama’s Feb. 2, 2009, Executive Order 13502, which encouraged federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. 

According to government data, of the nearly 3,200 large-scale federal construction contracts $25 million or more procured from FY 2009 to FY 2023 subject to President Obama’s pro-PLA policy, valued at more than $238 billion, federal agency contracting officers chose to require PLAs on just 12 large-scale federal construction contracts. There were no reports of widespread cost overruns, delays, labor unrest or poor-quality construction on $237.2 billion worth of non-PLA projects during this time period, indicating that PLA mandates are not needed to ensure economy and efficiency in government contracting. On an annual basis, ABC estimates the final Biden proposal will affect as many as 120 federal contracts valued at $10 billion, which is approximately 40% of the value of federal construction put in place in FY 2023.

ABC supports fair and open competition and opposes government-mandated PLAs on federal and federally assisted projects because taxpayers deserve more. We need more accountability, not less. We need more competition, not less. We need more value for the dollar, not less.

Learn how ABC has been successfully fighting federal government-mandated PLAs since 2009

However, the fight against PLA mandates and PLA preferences on direct federal contracts is a costly endeavor negatively impacting taxpayers, federal agencies and the contracting community. Unfortunately, when state and local recipients of federal money and assistance mandate PLAs on projects in your community, taxpayers are getting less construction projects for more money and qualified contractors and their skilled employees are the victims of discrimination if they cannot compete under a typical PLA.

It is important for lawmakers to support the Fair and Open Competition Act (H.R. 1209/S.537), which would prevent the federal government from mandating PLAs as a condition of winning federal or federally assisted construction contracts. It received 79 original co-sponsors in the House and 23 in the Senate in the 118th Congress and was reported favorably out of the House Committee on Oversight and Accountability in July 2023. ABC members are encouraged to visit the ABC Action Center and urge their members of Congress to support FOCA.

ABC’s priority issue brief on Government-Mandated Project Labor Agreements.

 

ABC urges lawmakers to support the Fair and Open Competition Act (H.R.1209/S.537), introduced by Rep. James Comer, R-Ky., and Sen. Todd Young, R-Ind., which prevents federal agencies and recipients of federal funding from requiring contractors to sign controversial government-mandated project labor agreements as a condition of winning federal or federally assisted construction contracts. These bills will ensure that taxpayers get the best possible construction project at the best possible price. If signed into law, it will ensure robust competition on taxpayer-funded construction projects, create more opportunities for small and disadvantaged businesses and create construction industry jobs for all Americans.

Resources:

 

Learn more about the Federal Acquisition Regulatory Council’s Dec. 22, 2023, final rule––and the related Dec. 18, 2023, White House Office of Management and Budget Memo––implementing President Biden’s Feb. 4, 2022, Executive Order 14063, which requires PLAs on federal contracts of $35 million or more.

On Oct. 18, 2022, ABC filed extensive formal comments in response to the FAR Council’s ABC-opposed Aug. 19, 2022, proposal. ABC’s opposition to the FAR Council’s proposed rule was shared by more than 50 members of the U.S. House and Senate, 19 Republican governors and a diverse coalition of construction industry, small business and taxpayer advocates urging the administration to withdraw its proposed rule and other Biden administration schemes pushing government-mandated PLAs on state and local government construction projects receiving federal assistance via $260 billion via federal agency infrastructure grant programs (visit abc.org/PLAGrants to learn more).

Learn more about government-mandated PLAs and Biden administration pro-PLA policies via ABC’s 2024 FAQ document and coalition website at BuildAmericaLocal.com.

This Biden final rule violates numerous federal laws, including the Competition in Contracting Act, the Congressional Review Act, the Federal Property Administrative Services Act, the Administrative Procedure Act and the Small Business Act and will expose the Biden administration and federal construction projects to costly litigation in the immediate future.

Biden Rule Replaces Obama Rule

The Biden proposal replaces President Obama’s Feb. 2, 2009, Executive Order 13502, which encourages federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. ABC estimates the final Biden proposal will affect as many as 120 federal contracts valued at $16 billion, which is approximately 44% of the value of federal construction put in place in FY 2023.

The Obama order also repealed President George W. Bush's Executive Orders 13202 and 13208, which prohibited PLA mandates on federal and federally assisted projects from 2001-2009. ABC and other industry groups were critical of a July 10, 2009, White House Office of Management and Budget (OMB) memo M-09-22 to federal agency heads implementing the Obama order in advance of a FAR proposed rule.

July 14, 2009, the federal register published a notice for proposed rulemaking for FAR Case 2009-005, Use of Project Labor Agreements for Federal Construction Projects. ABC and ABC members and employees submitted the following comments to the FAR's proposed rule:

April 12, 2010, the official White House blog posted a piece by Jared Bernstein, Middle Class Task Force Chair and Chief Economic Advisor to the Vice President, called Project Labor Agreements: A Better Deal for All, in defense of President Obama's pro-PLA policies. 

On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule, effective May 13, 2010, implementing President Obama's February 6, 2009, pro-PLA Executive Order 13502, The OMB also issued a memo, Implementation of New Regulatory Coverage on Project Labor Agreements, to federal agency Chief Acquisition Officers and Senior Procurement Executives, encouraging them to use PLAs whenever possible and requesting that they report their agency's PLA activity to the OMB on a quarterly basis.

On April 21, 2010, ABC National released, The Final Rule Implementing the PLA Executive Order: Why It Should Be Challenged, by ABC general counsel Maurice Baskin. This document lays out ABC's arguments that the regulations violate federal procurement laws; discriminate against the vast majority of the private construction workforce and many small and large businesses; and harm taxpayers. Many of these arguments echo comments ABC, ABC members and other industry groups made during the proposed rulemaking process.

Since the FAR's final rule was finalized, federal agencies procuring direct federal contracts have issued the following specific guidance memos and policies implementing the final rule into their agency procurement policies:

U.S. Army Corps of Engineers (USACE)

Naval Facilities Engineering Command (NAVFAC)

Department of Veterans Affairs

General Services Administration

The GSA has instituted a discriminatory blanket pro-PLA policy that allows firms to submit a PLA offer, a non-PLA offer, or both with their bid. However, firms that submit a PLA offer receive extra credit (usually 10%) from the GSA in the technical evaluation factor section of their offer via the best value procurement process the GSA uses to award contracts. Contractors have complained to Congress this is a de facto PLA mandate in many markets and is reducing competition and increasing costs. The GSA's pro-PLA policy has led to delays, increased costs, and poor local hiring outcomes. Learn more here and below are various versions of GSA's PLA policy.

Federal Agency PLA Decision-Making Process Under Obama Order

Since President Obama's EO is not a blanket PLA requirement, federal agencies use a variety of tools and policies to determine if a PLA is appropriate on a project exceeding $25 million in total costs. The GSA has a controversial blanket PLA preference policy, while other agencies (USACE, NAVFAC and VA) issue formal surveys to the federal contracting community on Sam.gov to see if a PLA is supported by the contracting community. Some agencies (DOL, VA and GSA) hire expensive consultants to produce studies, while others call federal contractors directly and use this information to inform their final PLA determination. The decision-making process even varies between regional offices in each federal agency and the process requires an excessive investment of time and resources from the federal contracting community.

Of note, no PLAs have been mandated by federal agencies on federal contracts subjected to federal agency PLA surveys during the Obama, Trump and the first three years of the Biden administration, suggesting the marketplace finds limited value in PLA mandates and preferences.

According to government data, of the nearly 3,200 large-scale federal construction contracts of $25 million or more procured from FY2009 to FY2023 subject to President Obama’s pro-PLA policy, valued at more than $238 billion, federal agency contracting officers chose to require PLAs on just 12 large-scale federal construction contracts. There were no reports of widespread cost overruns, delays, labor unrest or poor-quality construction on $237.2 billion worth of non-PLA projects during this time period, indicating that PLA mandates are not needed to ensure economy and efficiency in government contracting. On an annual basis, ABC contractors have taken advantage of a level playing field. ABC member prime contractors won 52% of the value of large-scale federal contracts subject to Obama’s pro-PLA Executive Order 13502. In total, ABC members have won 1,493 contracts valued at $124.47 billion FY2009 to FY2023.

Federally Assisted Projects Exposed to PLA Mandates

In addition to PLA requirements on direct federal contracts, President Obama's Executive Order 13502 has led to PLA mandates on billions of dollars worth of federally assisted projects procured by private entities and state and local governments.

For example, according to a U.S. DOT Federal Highway Administration Feb. 2023 report, state and local lawmakers mandated PLAs on 732 state and local construction projects (totaling an estimated $20.05 billion) that received federal assistance and formal approval from the FHWA.

While the order does not require recipients of federal assistance to mandate PLAs, federal agencies under the Obama administration like the DOT, Housing and Urban Development (HUD), and Department of Energy (DOE) have been inappropriately encouraging their funding recipients to mandate PLAs.

For example, this “Project Labor Agreement Announcement” memo emailed on February 18, 2011, to an unknown number of state and local government agencies from Peter Rogoff, a political appointee of the Obama Administration who serves as the head of the Federal Transportation Administration (FTA) (an agency of the U.S. DOT), strongly encourages the use of PLAs.

However, the FTA issued a document, FTA Guidance – Project Labor Agreements (issued 6/21/10), available here. The FTA Guidance document makes it clear recipients of FTA funding are not required to mandate or enter into PLAs. It also says recipients of FTA money do not have to seek FTA approval of the PLA, should they choose to mandate a PLA.  In contrast, the U.S. DOT FHWA Administrator Victor Mendez issued a May 7, 2010, Interim Guidance on the use of Project Labor Agreements memo (pdf). While it only applies to FHWA projects, the FHWA requires recipients of FHWA assistance to submit the local PLA mandate to FHWA for approval.

In short, stakeholders are confused why two different agencies within the U.S. DOT have different requirements when approving local/state PLAs on projects receiving assistance from the DOT..

Of note, the Biden administration’s DOT announced Feb. 17, 2021, it is encouraging the use of government-mandated PLAs on federally assisted construction projects funded through the FY2021 INFRA grant program administered by the DOT’s Build America Bureau. This was the first of many NOFO’s promoting PLAs on more than $260 billion worth of federal agency grants for federally assisted projects, which can all be found at www.abc.org/PLAgrants.

Conclusion

The regulations implementing President Obama's pro-PLA Executive Order 13502 has led to increased costs, reduced competition, discrimination, delays, litigation, construction defects and poor local hiring outcomes on billions of dollars of direct federal construction contracts and federally assisted contracts. This bad public policy results in taxpayers receiving four schools, roads, bridges and hospitals for the price of five. Fair and open competition is the only way to ensure taxpayers get the best possible product at the best possible price. The Biden administration’s final rule will be even more detrimental to taxpayers and construction industry stakeholders

 

Visit TheTruthAboutPLAs.com for detailed information and talking points about government-mandated projects labor agreements (PLAs).

    BuildAmericaLocal.com.
  1. Visit ABC’s Free Enterprise Alliance website to learn more and Donate to support our fight against government-mandated PLAs.

To stay up to date on legislative, regulatory and media alerts and developments in our fight against government-mandated PLAs "Like" our Facebook page at Facebook.com/TheTruthAboutPLAs and follow us on Twitter at Twitter.com/TruthAboutPLAs (@TruthAboutPLAs) and https://twitter.com/abcgovaffairs (@ABCGovAffairs).

Action Center

On Feb. 27, Rep. James Comer, R-Ky., and Sen. Todd Young, R-Ind. introduced H.R. 1209/S. 537 the Fair and Open Competition Act. The Fair and Open Competition Act protects federal and federally assisted construction contracts from government-mandated PLAs. The ABC-priority FOCA bill is key to ensuring that ABC contractors are able to build America’s infrastructure through fair and open competition. Tell Congress to support FOCA and oppose the Biden administration's costly policies pushing PLA mandates and preferences today!

Project Labor Agreements
Not What We Need, Not What We Deserve
Learn more about project labor agreements (PLAs) by clicking on the video or viewing the PLA fact sheet.

A total of 25 states have enacted legislation and/or executive orders that increase competition and guarantee fair treatment of all contractors and their employees on taxpayer-funded construction projects. These measures prohibit governments from mandating PLA requirements and preferences on state and state-assisted construction projects, but permit firms to voluntarily enter into PLAs after they have won contracts via a fair competitive bidding process.

In response to the threat of President Obama's anti-competitive and discriminatory pro-PLA Executive Order 13502, 29 states have enacted legislation or executive orders restoring government-neutrality in contracting since 2011.

It is estimated ABC’s efforts to enact state FOCA laws prevented government-mandated PLAs on $1.08 trillion worth of construction capital outlay through the end of 2022.

Unfortunately, some of these states have rolled back common-sense FOCA measures following democratic party takeovers of state government, bringing the total number of current states with active pro-taxpayer FOCA measures to 25.


Finally, a number of local governments have instituted policies restricting and encouraging government-mandated PLAs.

ABC’s 68 chapters will continue to implement effective legislative, legal and regulatory strategies complemented by communications and grassroots campaigns to educate state and local procurement officials, lawmakers, industry stakeholders, the media and hardworking taxpayers about the harmful effects of special interest PLA schemes.

ABC will continue to fight for federal, state, and local policies that create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and spread the job-creating benefits of taxpayer- funded contracts throughout the entire construction industry.

ABC strongly opposes government-mandated project labor agreements (PLAs) on public construction projects 

Anti-competitive government-mandated project labor agreements are special interest schemes that end open, fair and competitive bidding on public works projects. When mandated by government, PLAs drive up the cost of construction by 12% to 20% by reducing competition and effectively excluding merit shop contractors and their skilled employees from building projects paid for by their own tax dollars.

Typical government-mandated 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 most or all construction of their construction workforce
  • Obtain apprentices exclusively from union apprenticeship programs
  • Pay into underfunded and mismanaged union benefit plans
  • Obey costly, restrictive and inefficient union work rules

In addition:

In the end, government-mandated PLAs prevent taxpayers from getting the best possible product at the best possible price.

ABC supports fair and open competition and opposes government-mandated PLAs on federal and federally assisted projects because taxpayers deserve more efficient and effective policies that will encourage all qualified contractors and their skilled workforce to compete to build long-lasting, quality projects at the best price

Learn why ABC and a coalition of construction industry stakeholders oppose government-mandated project labor agreements at BuildAmericaLocal.com and TheTruthAboutPLAs.com.

 

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