ARTBA Tells Biden Administration About Drawbacks of Project Labor Agreement Mandate

What happened: In comments filed with the General Services Administration (GSA), ARTBA urged the Biden administration Oct. 18 to withdraw a proposal mandating project labor agreements (PLAs) for direct federal construction projects valued at $35 million or more.

Why it matters: The proposal implements an executive order signed by President Joe Biden earlier this year that revises policies set by the Obama administration in 2009. It requires use of PLAs and union labor on direct federal projects at or above the $35 million threshold. This includes work for the Federal Highway Administration’s Office of Federal Lands, Department of Defense, U.S. Army Corps of Engineers and other agencies. The proposed rule does not apply to federally-assisted contracts – including work done for state departments of transportation.

ARTBA members met with Office of Management and Budget (OMB) officials on June 1 to stress the drawbacks of the proposal, and explained that PLAs can undermine existing collective bargaining agreements and create union jurisdiction issues. PLAs can also compel the use of union labor even if it’s not readily available in the project’s vicinity. The result is that PLAs limit competition among contractors, which can drive up project costs.

The proposed rule did address one ARTBA concern. It allows an exemption from a PLA when it would substantially reduce the number of bidders on a project. ARTBA argued for withdrawing the rule because the exemption is largely subjective.

What’s next: The Biden administration will now consider all comments received and issue a final rule. ARTBA will continue to engage with the administration on this important matter. For more information, contact ARTBA’s Vice President, Regulatory & Legal Issues Nick Goldstein.