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.
Visit abc.org/BidenPLAFAQs to learn more about the ABC-opposed 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 March 28, 2024, ABC and its Florida First Coast chapter filed a lawsuit in the U.S. District Court for the Middle District of Florida in Jacksonville against the final rule. April 26, ABC filed a motion for preliminary injunction, and expects the courts to rule as early as June on the merits of the case.
On June 27, ABC National staff and an ABC member testified at the U.S. House Oversight and Accountability Committee’s subcommittee hearing on President Biden’s controversial policies promoting and mandating PLAs on federal and federally assisted projects. The hearing gave ABC an important platform to shed light on the Biden administration’s anti-competitive pro-PLA policies.
Prior to the lawsuit and hearing, ABC attacked the FAR Council's Dec. 18 final rule in this Fox Business op-ed and ABC press release.
Likewise, ABC slammed the Biden executive order in a Feb. 3, 2022, statement picked up in dozens of publications nationwide:
“This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects.”
A Feb. 9, 2022, ABC op-ed in The Wall Street Journal laid out arguments against the Biden administration’s policy and concluded:
“Taxpayers would be best served by the adoption of inclusive, win-win policies that help America’s construction realize the potential of the Infrastructure Investment and Jobs Act of 2021. We can’t rebuild our nation’scrumbling infrastructure effectively, increase accountability and reduce waste with PLAs.
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 a federal 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.537) introduced 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, 2024, 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 180 federal contracts valued at $16 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:
- Jan. 4, 2024, coalition letter supporting FOCA and opposing Biden’s pro-PLA final rule.
- Dec. 18, 2023, ABC press release in response to the Biden White House announcement of the FAR Council’s final rule and OMB memo implementing EO 14063.
- Oct. 30, 2023, construction industry coalition comments to IRS opposing PLA schemes on IRA clean energy construction project tax incentives (see ABC’s Oct. 30, comments).
- July 12, 2023, ABC press release applauding passage of FOCA out of the House Committee on Oversight and Accountability.
- July 11, 2023, coalition letter to the House Committee on Oversight and Accountability supporting the passage of the Fair and Open Competition Act.
- March 22, 2023, coalition letter of support for the Fair and Open Competition Act signed by taxpayer advocates and government watchdogs.
- March.7, 2023, coalition letter to U.S. Department of Commerce opposing pro-PLA policies in CHIPS Act NOFO.
- Feb. 28, 2023, Fair and Open Competition Act introduction press release from U.S. Senator Todd Young (R-Ind.) and press release from U.S. Rep. James Comer (R-Ky.).
- Feb. 28, 2023, ABC press release ABC Applauds Introduction of Legislation to Promote Fair and Open Competition and Combat Anti-Competitive and Inflationary Project Labor Agreement Mandates
- Feb. 7, 2023, coalition letter signed by 23 groups supporting the Fair and Open Competition Act.
- Oct.19, 2022, ABC news release on opposition to FAR Council’s proposed rule, including links to comments from members of Congress, governors and industry stakeholders opposing Biden administration PLA policies.
- Oct.18, 2022, ABC comments on FAR Council’s proposed rule mandating PLAs
- Sept. 28, 2022, ABC membership survey on government-mandated PLAs and Biden administration pro-PLA policies.
- Aug. 18, 2022, ABC press release opposing FAR Council’s proposed rule implementing President Biden’s pro-PLA EO 14063.
- April 26, 2022, letter signed by almost 20 governors to the White House opposing the Biden administration’s pro-PLA policies.
- April 6, 2022, letter signed by nearly 1,200 ABC member companies and chapters opposed to the Biden administration’s pro-PLA policies.
- March, 8, 2022, letter signed by 59 U.S. House of Representatives to White House opposing its pro-PLA policies.
- March 7, 2022, letter signed by 43 U.S. Senators to White House opposing its pro-PLA policies
- Feb. 23, 2022, coalition letter in support of FOCA following President Biden’s pro-PLA EO 14063.
- Feb. 3, 2022, ABC press release opposing Biden Executive Order 14063, which mandates PLAs on federal construction projects of $35 million or more.
- ABC’s priority issue brief on Government-Mandated Project Labor Agreements.
- Write your lawmakers in support of FOCA through the ABC Action grassroots advocacy tool.
- Visit the ABC-led coalition website at BuildAmericaLocal.com.
Visit abc.org/BidenPLAFAQs to 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 a federal coalition website at BuildAmericaLocal.com.
On March 28, 2024, ABC and its Florida First Coast chapter filed a lawsuit in the U.S. District Court for the Middle District of Florida in Jacksonville against the final rule. April 26, ABC filed a motion for preliminary injunction, and expects the courts to rule as early as June on the merits of the case. 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.
Biden Rule Replaces Obama Rule
Effective Jan. 22, 2024, the Biden PLA rule replaces 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. ABC estimates the final Biden proposal will affect as many as 180 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 repealed President George W. Bush's Executive Orders 13202 and 13208, which prohibited PLA mandates on more than $147 billion worth of federal and hundreds of billions of dollars worth of federally assisted construction projects from 2001-to 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 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 resulted 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
On March 28, 2024, ABC and its Florida First Coast chapter filed a lawsuit in the U.S. District Court for the Middle District of Florida in Jacksonville against the final rule. April 26, ABC filed a motion for preliminary injunction, and expects the courts to rule as early as June on the merits of the case.
A Feb. 17, 2021, TruthAboutPLAs.com blog post, 2021 Update: Courts Rule in Favor of #NoPLAs Laws Promoting Fair and Open Competition, provides an overview of important PLA-related legal cases such as Boston Harbor (1993) and Allbaugh (2002), as well as unsuccessful challenges to ABC-supported state FOCA laws restricting government-mandated PLAs.
During President Obama’s first term, federal contractors (with assistance from ABC) filed five bid protests with the Government Accountability Office against PLAs mandated by federal agencies. Each bid protest resulted in the federal agency removing the PLA mandate in the face of the protest. A Jan. 22, 2013, TruthaboutPLAs.com blog post, Legal Challenges Against Federal Government-Mandated Project Labor Agreements During President Obama's First Term, summarizes these legal tactics to fight government-mandated PLAs and President Obama's Executive Order 13502.