On February 4th, 2022, President Biden signed an Executive Order requiring project labor agreements on large scale federal construction projects. Large-scale projects are defined as a “federal construction project within the United States for which the total estimated cost is $35 million or more.” The Order excludes projects funded by grants to non-federal agencies.
The Order is focused on strengthening Union jobs in construction, expanding the federal government’s use of PLAs and ‘will improve timeliness, lower costs and increase quality in federal construction’.
The Order, which will go into effect immediately, states that “Contractors who offer lower wages or hire less qualified workers will need to raise their standards to compete with other high-wage, high-quality companies”.
Section 4 of the Executive Order requires that any project labor agreement reached pursuant to this Executive order shall:
(a) bind all contractors and subcontractors on the construction project ;
(b) allow all contractors and subcontractors on the construction project to compete for
contracts whether or not they are otherwise parties to collective bargaining agreements;
(c) contain guarantees against strikes, lockouts and similar job disruptions;
(d) set forth effective, prompt and mutually binding procedures for resolving labor disputes
arising during the term of the PLA;
(e) provide mechanisms for labor-management cooperation on matters of mutual concern such as productivity,
quality of work, safety, and health; and
(f) fully conform to all statutes, regulations, Executive Orders, and Presidential Memoranda.
Section 5 lists Exceptions to requiring a PLA on a project including factors such as:
- The project is of short duration and lacks operational complexity;
- The project will involve only one craft or trade;
- The project will involve specialized construction work that is available from only a limited number of contractors or subcontractors;
- The project is of such an “unusual and compelling urgency that a PLA would be impracticable;
- Requiring a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition;
- Requiring a PLA would be inconsistent with other statutes, regulations, Executive Orders or Presidential Memoranda.
Within 120 days of the effective date of this Order, regulations implementing the provisions of this Order will be proposed. The OMB shall issue guidance to implement the requirements of Section 5 (Exceptions) and Section 6 (Agency Reporting).
This content was provided by WPCCA professional counsel and is for general informational purposes only. Readers should contact their own professional counsel for company specific matters in the relevant jurisdiction.