The Naval Facilities Engineering Command (NAVFAC) recently announced a decision not to mandate project labor agreements (PLAs) on billions of dollars worth of construction projects on Guam. NAVFAC, which is responsible for all Guam military construction contract administration for the Department of Defense (DOD), reached this decision after soliciting feedback from the construction industry, including ABC, on the potential use of PLA mandates.   Cheat Sheets

ABC sent a detailed letter in response to NAVFAC’s call for information, stating that PLAs typically restrict competition, increase costs, create delays, discriminate against merit shop employees and place merit shop contractors at a significant disadvantage when competing for federal construction contracts. ABC also pointed out PLAs would exacerbate existing shortages of skilled labor by discouraging Guam’s existing nonunion workforce from building PLA projects. In addition, ABC noted that government-mandated PLAs have never been used on Guam and have rarely been used on the mainland’s federal construction projects during the last decade.   

In an explanation of the decision, NAVFAC officials indicated that PLAs on construction projects on Guam would not meet the goals of increased economy and efficiency in the federal procurement process, as required by President Obama’s pro-PLA Executive Order 13502. Executive Order 13502, issued in February 2009, encourages federal agencies, like NAVFAC, to mandate PLAs on federal projects exceeding $25 million.   

In justifying their opposition to government-mandated PLAs on Guam, NAVFAC listed several key findings:   
  • DOD has executed construction projects in Guam for many decades and has not encountered delays due to labor-management instability.
  • DOD has not seen defective performance or non-compliance with federal and local laws from its construction contractors that has or would jeopardize mission capability.
  • PLAs have not been used before for any DOD construction projects on Guam.
  • There is no precedent for strikes or work stoppages by workers at military construction projects on Guam.  

NAVFAC’s decision to exclude a government-mandated PLA is one of many recent instances where federal agencies have found that a government-mandated PLA will not deliver economy or efficiency to a large federal construction contract.   

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