As a response to a Biden administration final ruling on December 18th implementing an executive order by President Joe Biden that requires the use of project labor agreements (PLAs) on all federal construction projects valued over $35 million, several industry associations issued statements:
NECA:
The Biden Administration promulgated a final rule requiring the use of Project Labor Agreements (PLAs) on federal construction projects above $35 million. David Long, Chief Executive Officer of the National Electrical Contractors Association, made the following statement following the Order:
We appreciate the Administration for finalizing this rule, which implements Executive Order 14063 requiring project labor agreements (PLAs) for most large-scale federal construction projects. This order prioritizes safety, value, quality, and on-time delivery of our federal projects, built with a highly skilled and trained workforce—all areas in which NECA contractors exceed their competitors.
Many private owners across America utilize PLAs, and federal agencies have seen the value that these agreements provide, bringing success to construction projects across the U.S. This ensures American tax dollars are going toward federal construction projects that will be completed at the highest standard.
As the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act continue to be implemented, nothing is more important than directly impacting and repairing our nation’s infrastructure for the safety and well-being of our citizens and our communities.
AGC:
The Chief Executive Officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release today of a new Biden administration rule imposing government-mandated project labor agreements on federal construction projects valued at $35 million or more:
“The president’s new and unlawful mandate to impose government-mandated project labor agreements for the vast majority of federal construction projects is another example of this administration doing everything in its power to undermine its infrastructure goals, including helping workers.
“Government-mandated project labor agreements undermine the collective bargaining process by imposing a separate agreement in a specific region that applies only to a limited number of construction firms and unions. These imposed PLAs undercut the benefits of the collective bargaining agreements that were negotiated in good faith between employers and labor union and will likely prompt many firms to think twice about participating in the bargaining process in the future.
The new measure also discriminates against contractors and workers by essentially only allowing firms that employ union workers to compete for federal projects. In addition, surveys have found that government-mandated project labor agreements make it harder for firms to hire minority and women owned subcontractors.
“By excluding most firms from competing for federal construction projects, the measure will needlessly inflate the cost of federal construction projects by limiting competition. It will also undermine the collective bargaining agreements of the union construction firms the measure seeks to favor. And it will force taxpayers to pay more and wait longer to see new federal projects built.
Career civil servants also do not see the benefits of imposing these kinds of agreements. A recent analysis of federal construction procurement decisions by the Department of Defense during the Obama administration that we obtained via a Freedom of Information Act request – during a time when federal officials were being pressured by a similar executive order – found that in 99.4 percent of construction projects where a PLA could have been imposed, nonpartisan federal officials found no benefit to taxpayers from imposing one.
“The president seems committed to undermining one of his signature accomplishments, investing in federal infrastructure. He is doing this despite the lack of constitutional authority to impose such a discriminatory measure. We plan to challenge this rule in court so our members can continue to build infrastructure, diversify their ranks and give taxpayers the best possible value.”
Click here to view AGC’s PLA resource page for additional information.
IEC:
The following is a statement by the Independent Electrical Contractors (IEC) objecting to today’s release of the Biden administration’s final rules implementing the executive order that requires the use of project labor agreements (PLAs) on federal construction projects valued over $35 million.
“Limiting federal construction projects to unionized contractors is the wrong approach to providing the taxpayer the best value for their hard-earned dollars,” said Thayer Long, IEC Executive Director. “During a time of significant inflation and ongoing worker shortages, the last thing the administration should be doing is restricting competition and discriminating against the 88 percent of the industry that chooses not to join a union.”
In response, IEC calls on Congress to immediately pass the Fair and Open Competition Act (H.R.1209/ S.537), which would eliminate all mandates and preferences for project labor agreements on federal construction projects.
IEC is committed to advocating on behalf of the merit shop electrical contracting industry before Congress and the executive branch. Learn more about IEC’s initiatives at ieci.org/advocacy.
ABC:
Associated Builders and Contractors today released the following statement in response to the announcement of a Biden administration final rule, Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects, implementing President Joe Biden’s Executive Order 14063, which requires federal construction contracts of $35 million or more to be subjected to controversial project labor agreements. PLAs steer taxpayer-funded public works contracts to union-signatory contractors, granting union workers a monopoly to build these projects.
“The Biden administration’s burdensome, inflationary and anti-competitive PLA mandate rule will needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Absent a successful legal challenge, this executive overreach will reward powerful special interests with government construction contracts at the expense of taxpayers and the principles of free enterprise and fair and open competition in government procurement.
“When mandated by governments, PLAs increase construction costs to taxpayers by 12% to 20%, reduce opportunities for qualified contractors and their skilled craft professionals and exacerbate the construction industry’s worker shortage of more than half a million people in 2023,” said Brubeck. “ABC will continue to fight on behalf of quality, experienced contractors harmed by this rule and the 88.3% of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects––but cannot do so because of PLA schemes.
“In addition, ABC condemns Biden administration policies independent of this rulemaking that push PLAs on competitive grant programs administered by federal agencies affecting nearly $260 billion worth of federally assisted infrastructure projects procured by state and local governments as well as schemes by the Biden administration to coerce private developers of hundreds of billions of dollars’ worth of clean energy and domestic microchip manufacturing projects to mandate PLAs. Biden’s PLA policies circumvent congressional intent as none of these policies were passed in funding legislation.
“ABC plans to challenge this Biden administration scheme in the courts on behalf of taxpayers and the majority of the construction industry,” said Brubeck. “In the interim, ABC will continue to oppose its special interest-favoring policy using all tools in our advocacy and legal toolbox while educating stakeholders about the negative impact of government-mandated PLAs on federal and federally assisted projects.”
Background on President Biden’s Executive Order 14063
On Feb. 4, 2022, President Biden signed EO 14063, requiring federal construction contracts greater than $35 million to be subjected to PLAs. ABC blasted the EO, calling it anti-competitive for small businesses and costly for taxpayers.
On Aug. 19, 2022, the Federal Acquisition Regulatory Council issued its proposed rule implementing EO 14063.
In October 2022, ABC submitted more than 40 pages of comments to the Federal Acquisition Regulatory Council, calling on the Biden administration to withdraw its controversial proposed rule.
ABC’s opposition was shared by more than 50 members of the U.S. Senate and U.S. House of Representatives, 19 Republican governors and a diverse coalition of construction industry, small business and taxpayer advocates urging the administration to withdraw its proposal and additional policies promoting PLA mandates on federal and federally assisted construction projects.
At least 8,000 stakeholders across the country––including 2,500 ABC member contractors––submitted comments opposed to this proposed rule during the 60-day comment period. According to a September 2022 survey of ABC contractor members, 98% oppose this proposed rule. Additionally, 97% said a construction contract that required a PLA would be more expensive compared to a contract procured via fair and open competition.
The new Biden administration policy replaces President Barack Obama’s 2009 Executive Order 13502, which encouraged, but did not require, federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis.
According to government data, of the 2,499 large-scale federal construction contracts valued at $165.6 billion procured from FY 2009 to FY 2023 subject to President Obama’s pro-PLA policy, federal agency contracting officers chose to require PLAs on just 12 large-scale federal construction contracts. There were no reports of widespread cost overruns, delays, labor unrest or poor-quality construction on $164.4 billion worth of non-PLA projects during this time period, indicating that PLA mandates are not needed to ensure economy and efficiency in government contracting.
The Biden administration expects its mandatory PLA rule to affect about 120 federal contracts valued at $10 to $14 billion per year, in total.
ABC and a diverse construction industry coalition strongly support the Fair and Open Competition Act (H.R. 1209/S. 537)––reintroduced in the 118th Congress by Sen. Todd Young, R-Ind., and Rep. James Comer, R-Ky.––which prohibits government-mandated PLAs on federal and federally assisted projects and helps taxpayers get the best possible product at the best possible price.
Members of the U.S. House and Senate supportive of the Fair and Open Competition Act have written letters to the White House in opposition to anti-competitive, pro-PLA policies championed by the Biden administration.
Currently, 25 states restrict government-mandated PLAs on state, state-assisted and local construction projects to some degree. Governors also filed comments with the FAR Council and, in April 2022, expressed disappointment in White House efforts to push government-mandated PLAs on federally assisted construction projects through infrastructure grant programs administered by federal agencies.
To learn more about how corrupt government-mandated PLAs rig the competitive bidding process, hurt taxpayers and endanger plans to rebuild America’s infrastructure, visit BuildAmericaLocal.com.
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