ABC Opposes Government-Mandated PLAs and PLA Preferences on Federal and Federally Assisted Construction Projects
On Feb. 6, 2009, President Obama issued Executive Order 13502
, which encourages federal agencies, on a case-by-case basis, to require project labor agreements
(PLAs) on federal construction contracts exceeding $25 million in total cost. Since 2009, ABC has executed a successful campaign against Executive Order 13502 and government-mandated PLAs in federal contracting through effective legislative, political, legal and public relations strategies.
Learn why ABC is still winning the fight against government-mandated PLAs.
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 nonunion employees are the victims of discrimination.
It’s important for lawmakers to support the Fair and Open Competition Act (H.R. 1552
) and/or other legislative measures that would restore fairness and neutrality in government contracting and put an end to President Obama’s costly crony contracting schemes advanced by Executive Order 13502.
Ask your lawmakers to cosponsor this important legislation via the ABC Action Center
ABC’s one-pager on Government-Mandated Project Labor Agreements
On February 6, 2009, President Obama signed Executive Order 13502
, Use of Project Labor Agreements for Federal Construction Projects
The order encourages federal agencies, on a project-by-project basis, to
mandate PLAs on federal construction projects exceeding $25 million in
total cost. In addition, the order's regulations permit (it does not require
) private, state and local recipients of federal assistance to mandate PLAs. The order also repealed President George W. Bush's Executive Orders 13202 and 13208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.
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 Decision-Making Process
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 FBO.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.
Federally Assisted Projects
In addition to an increase in 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, a calendar year 2009 to December 2015 U.S. Department of Transportation (DOT) Federal Highway
Administration (FHWA) report
indicated FHWA funding recipients mandated
PLAs on 323 contracts in six states worth an estimated $8.126 billion
and 51 contracts in Chicago worth $769 million.
While the order does not require recipients of federal assistance to mandate PLAs
, federal agencies 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 this 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
). 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, it may be confusing to stakeholders why two different agencies within the U.S. DOT have different requirements when approving local/state PLAs on projects receiving assistance from the DOT..
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.
A July 12, 2012, TruthAboutPLAs.com
blog post, Understanding Government-Mandated Project Labor Agreements and the Law
, provides an overview of important PLA-related legal cases such as Boston Harbor
(1993) and Allbaugh
During President Obama’s first term, federal contractors (with
assistance from ABC) filed five bid protests with the Government
Accountability Office (GAO) 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 January 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.
for detailed information and talking points
about government-mandated projects labor agreements (PLAs).
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