Background
ABC has long promoted that federal and federally assisted construction projects should be awarded through a fair and competitive bidding process that allows all qualified contractors to compete on a level playing field based on merit, experience, quality and health and safety to deliver the highest-quality projects at the best cost.
Yet since former President Joe Biden’s Use of Project Labor Agreements for Federal Construction Projects final rule became effective on Jan. 22, 2024, federal construction projects over $35 million have required the use of project labor agreement and defied fair and open competition. This mandate forces contractors to sign union agreements in order to win federal work and discourages competition from quality nonunion contractors and their employees, who comprise a record-high 89.7% of the private U.S. construction industry workforce.
To comply with the PLA mandate, contractors are required to agree to recognize unions as the representatives of their employees on a covered project, use the union hiring hall to obtain most or all construction labor, hire apprentices from union-affiliated apprenticeship programs, follow union work rules and pay into union benefit and multiemployer pension plans that nonunion employees cannot access. This requirement essentially forces contractors to accept union representation for their employees during the project in an attempt to win federally funded construction projects or sideline their existing employees to hire union workers from elsewhere.
ABC member contractors have argued that projects solicited with the PLA requirements violate federal competition law, promoting full and open competition. Notably, the U.S. Court of Federal Claims found in the 12 bid protest cases against the U.S. Department of Defense and General Services Administration that PLA mandates violated the Competition in Contracting Act.
On June 12, the Trump administration’s Office of Management and Budget announced that it would continue to enforce this anti-competitive policy. It is unfortunate that the OMB guidance states that maintaining Biden’s PLA mandate final rule is necessary because the Trump administration “supports the use of PLAs when those agreements are practicable and cost-effective.” ABC believes the Trump administration’s decision cannot be reconciled with the president’s philosophies of merit, fairness and nondiscrimination because it inhibits fair and open competition and prioritizes special interests over taxpayers and workers.
Fair and open competition works because it not only preserves worker choice but also gives contractors the freedom to choose to enter or not enter into a PLA. At the end of the day, it is based on merit and nondiscrimination. Every qualified contractor should have the opportunity to build America.
Desired Outcome
The Trump administration should rescind the PLA executive order immediately. ABC will continue to fight the illegal and anti-competitive PLA mandate in court and support our federal contractor members in opposing PLA mandates on any project where they are implemented.
In addition, ABC calls on all members of Congress to co-sponsor and advance the Fair and Open Competition Act. FOCA would prohibit government-mandated PLAs on federal and federally assisted construction projects yet still allow for federal agencies to award contracts to businesses that voluntarily enter a PLA before or after a fair and open competitive bidding process.
A total of 25 states have already passed measures similar to the Fair and Open Competition Act in order to curb waste and favoritism in the procurement of construction projects and ensure taxpayer dollars are spent responsibly by letting the market determine if a PLA is appropriate.