Executive Order on Use of Project Labor Agreements for Federal Construction Projects
On February 4, 2022, President Biden signed an executive order affecting federal contractors involved in “large-scale construction contracts.” The Executive Order on Use of Project Labor Agreements For Federal Construction Projects requires that project labor agreements (PLA) be in place before being awarded a contract by the federal government that are estimated at $35 million or more.
Though effective immediately, implementation and enforcement cannot begin until the Federal Acquisition Regulatory Council proposes regulations. The Regulatory Council has until June 4, 2022, to provide such regulation. Further, the Director of the Office of Management and Budget must also issue related guidance surrounding the new PLA requirements.
Distinctively, the Order does not require that construction companies unionize or already be in a union. Instead, it only binds federal construction contractors’ employees to the terms of a PLA. As many federal contractors are aware, there are four key provisions a PLA must include to be valid:
1. Guarantees against strikes, lockouts, and similar actions.
2. Mutually binding procedures for resolving labor disputes.
3. Mechanisms to promote labor-management cooperation on “matters of mutual interest and concern, including productivity, quality of work, safety, and health;”
4. Terms that fully conform to federal law, regulations, and other executive orders.
The Order will not be enforced on projects controlled by state and/or local governments, even if such projects receive federal funding. The PLA requirement for large-scale construction projects also has three limited exemption scenarios. The EO will not apply if it would:
1. Substantially reduce potential bidders for a project,
2. Otherwise, be inconsistent with federal law, or
3. Result in inefficiencies, such as short-term projects, simple projects without complexity, projects involving one craft or trade, or projects of a particularly specialized nature.
More updates on the specific regulations created by this EO are expected mid-year. Keep an eye on our updates for more in the coming months!
If you need support, just ask us!