Biden Administration Releases Proposed Rule for Project Labor Agreements

What happened: The Biden administration Aug. 19 released a proposed rule requiring the use of project labor agreements (PLAs) on 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 and 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 proposed rule does not apply to federally-assisted contracts, including work done for state departments of transportation.

ARTBA has consistently opposed mandatory PLAs on direct federal and federal-aid projects. ARTBA members met with Office of Management and Budget (OMB) officials June 1 to stress the drawbacks of mandatory PLA use on construction projects, warning that these mandates can undermine existing collective bargaining agreements and create union jurisdiction issues. PLAs can also compel the use of union labor where it is not readily available. Among other drawbacks, PLAs can result in limiting competition among contractors, which may drive up project costs.

The proposed rule does address a key issue raised by ARTBA with administration officials. It would allow federal agencies to request an exemption from requiring a PLA when such a mandate would substantially reduce the number of bidders on a project ‘to such a degree that adequate competition at a fair and reasonable price cannot be achieved.’

What’s next: The proposed rule is open for comment through Oct. 18. ARTBA will be submitting comments expanding on the issues we previously raised with OMB, and also consider additional options opposing the mandate. ARTBA members and chapters are encouraged to submit their own comments as well. Please contact ARTBA’s Nick Goldstein with any questions or if you need additional information.

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