President Biden Signs Executive Order Requiring Project Labor Agreements on Federal Projects
On February 4, 2022, President Biden signed an Executive Order on the Use of Project Labor Agreements for Federal Construction Projects (“Executive Order”). The Executive Order requires the use of project labor agreements (“PLA”) on federal construction projects valued over $35 million.
PLAs are contracts between contractors and labor organizations, most commonly building trades councils, that prohibit work stoppages and lockouts and establish uniform standards for wages, hours, and working conditions on a construction project or multiple construction projects. PLAs help enforce strong health and safety standards, secure good wages and working conditions, and ensure projects are completed on time with the highest degree of quality and efficiency. In 2017, a comprehensive case study conducted by the UC Berkeley Labor Center found that PLAs do not reduce the number of bidders or raise costs on projects.
The Executive Order is estimated to affect $263 billion in federal government construction contracting and improve job quality for nearly 200,000 workers. The Executive Order also directs the departments of Defense and Labor, along with the Office of Management and Budget, to lead a training strategy for contracting officers employed at federal agencies regarding how to effectively implement the Executive Order.
Although the Executive Order is effective immediately, the Federal Acquisition Regulatory Council is tasked with implementing the Executive Order and will issue a final rule within 120 days.
The Executive Order does not require a PLA if doing so would 1) substantially reduce potential bidders, 2) otherwise be inconsistent with federal law, or 3) result in inefficiency.
The Executive Order follows the Bipartisan Infrastructure Law which authorized $550 billion in new federal investment in America’s infrastructure and will create an estimated 2 million jobs per year over the course of the decade. The Executive Order will ensure that the many new construction jobs created by the Bipartisan Infrastructure Law will be on projects covered by a PLA.