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President’s Executive Order to Require PLAs on Certain Federal Contracts

Fri, February 04, 2022 12:26 PM | Anonymous

President Biden is set to sign an Executive Order (E.O.), that will require use of Project Labor Agreements (PLAs) on certain direct federal contracts.  The order will cover federal construction projects costing more than $35 million, which are estimated to affect approximately $265 billion in total federal construction contracting meeting the targeted criteria.  More specifically, the E.O.’s PLAs requirement will only apply to provisions in the recently passed $1.2 trillion “Bipartisan Infrastructure Law” that are direct federal procurements; meaning projects funded by grants to non-federal agencies are excluded. Once signed today (02/04/22), the Order will go into effect immediately.

The Executive Order has been criticized for MANDATING or requiring the PLAs in all federal contracts meeting the criteria, without regard to the larger picture as to the impacts it will have on competition, costs to the projects (increasing them 12-20% according to a Beacon-Hill Institute study), and workforce displacements – especially when the economy is facing workforce shortages due to other federal policies and initiatives. [CIRT is not opposed to the use of PLA’s when the parties find it to be appropriate to their needs, but the Round Table has consistently opposed mandating or requiring it on contracts with a “single size fits all” approach as reflected in the new Biden E.O.]  In addition, the Order once again circumvents Congress, where members of the design/construction community have urged U.S. House and Senate lawmakers to cosponsor the “Fair and Open Competition Act” (H.R. 1284/S. 403), which would prevent the federal government from mandating PLAs as a condition of winning federal or federally assisted construction contracts.

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