Biden Administration Orders Greater Use of Project Labor Agreements

What happened: President Joe Biden signed a Feb. 4 executive order requiring the use of project labor agreements (PLAs) on direct federal construction projects valued at $35 million or more.

Why it matters: The Biden order 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, such as work for the Department of Defense, U.S. Army Corps of Engineers and other agencies. The new order does not apply to federally-assisted contracts, including work done for state departments of transportation.

Specifically, the White House noted: ‘The Order will only apply to provisions in the Bipartisan Infrastructure Law [also known as the Infrastructure Investment and Jobs Act] that are direct federal procurement, which excludes construction projects financed through grant dollars to non-federal entities.’

As with the Obama administration, we can expect to see current federal officials encourage use of PLAs on federal-aid transportation projects. However, because the state or local contracting agency must be a party to the PLA, the U.S. Department of Transportation cannot require their use.

ARTBA has consistently opposed mandatory PLAs on direct federal and federal-aid projects. Among other shortcomings, these agreements can undermine existing collective bargaining agreements and create union jurisdiction issues. They can also compel the use of union labor where it is not readily available. These ramifications can result in limiting competition among contractors, which may drive up project costs.

What’s next: The Federal Acquisition Regulatory Council will issue a rulemaking within 120 days to implement the new order. If you have questions, please contact ARTBA’s Nick Goldstein.