Government agencies are rolling back a mandate of the former Biden administration that contractors on large federal construction projects set labor agreements with unions.
After a judge ruled January 19 that the PLA requirement on construction projects over $35 million violated open-competition regulations and overstepped presidential authority, the Department of Defense and the Department of Veterans Affairs banned the agreements on their contracts. The General Services Administration didn’t go quite as far but has issued an exception to the PLA mandate on a land port of entry project on the U.S. border.
Opponents of PLAs expect other agencies to follow suit.
The changes follow bid protests by contractors that opposed the PLA mandate on projects they had bid on or planned to bid on. The Associated General Contractors worked with the contractors, who are also AGC members, and a law firm to try a different approach to the typical court challenge. The result was a faster ruling in favor of the contractors through the U.S. Court of Federal Claims rather than suing through U.S. District Court. The ruling also ended up being broader than just the individual protests.
“We worked at crafting what we think was a pretty novel approach,” said Brian Turmail, AGC vice president of public affairs and workforce. “We worked with a law firm to craft a bid protest strategy. So it took it through the U.S. Court of Federal Claims, which we figured was going to be a quicker approach and an easier one to get a victory.
“The risk all along was that the judge would just rule in favor of each individual bid, as opposed to issue a more sweeping ruling, and we ended up getting the best possible scenario.”
Judge’s Order
President Joe Biden issued an executive order February 4, 2022, requiring PLAs on federal construction projects over $35 million. At the time, the administration estimated the order could affect $262 billion in federal government construction contracting and nearly 200,000 workers.
Before that, PLAs had bounced back and forth from being banned by Republican administrations and being encouraged by Democratic administrations. Biden’s order went the furthest by issuing a mandate.
“For all intents and purposes, mandating a project labor agreement … essentially limits federal construction procurement to firms that are already partnered with organized labor or willing to partner with organized labor to do the work,” Turmail said. “… It excludes a large portion of the construction market from federal construction, which doesn't make sense in an environment where most firms are struggling to find enough people to hire.”
In April, seven contractors filed bid protests with the Federal Claims Court. Judge Ryan T. Holte ruled January 19 that mandating PLAs violated federal rules requiring “full and open” market competition for government contracts. He also ruled that Biden did not have the authority to mandate PLAs by executive order.
AGC worked with the Fox Rothschild law firm to file the claim on behalf of five contractors, and the Smith Currie Ole law firm represented the sixth company.
Are Federal PLAs Dead?
After the judge’s order, agencies began pulling back on PLA requirements:
- On February 7, the Department of Defense ordered contracting officers to stop requiring PLAs and to amend bid solicitations to remove them.
- On February 12, the General Services Administration issued an exception to the rule for construction of a land port of entry project. It did not ban PLAs outright, instead allowing for exceptions under certain conditions, such as if they prevented adequate competition.
- On February 13, the Department of Veterans Affairs removed the PLA requirement on all of its contracting activities.
AGC believes more agencies will follow suit. “We haven't seen them pull back everywhere, but our expectation is it’s just a question of time,” Turmail said.
He says the AGC has been encouraging other agencies to follow the lead of the Defense Department and VA in rescinding PLAs and has also been in discussion with the Trump administration to repeal the Biden order. “Right now, the departments are essentially declaring an exemption to those mandates because of the court decision, but it'd be a lot cleaner just to get them off the books,” he said
Jacob W. Scott, a partner in the Smith Currie Oles firm that represented one of the contractors, also believes it is only a matter of time before mandatory PLAs are eliminated government-wide.
In a recent blog, he wrote that the DoD and GSA’s actions “likely spell the death of the PLA requirement.”
Seven Contracts with PLAs Rescinded
Since the judge’s ruling, bid solicitations for four of the seven federal construction projects protested have been canceled to accept a new round of bids without PLAs, and three of the bid solicitations have been amended to remove the requirement.
Here’s a rundown of each of those projects and the protesting contractors, as reported in court records:
- Consolidated Rigging Facility, Joint Base Lewis-McChord in Pierce County, Washington. Bid protested by MVL USA. Estimated cost $25 million to $100 million. The U.S. Army Corps of Engineers’ Seattle District has canceled bid solicitations requiring a PLA and will resolicit bids without the requirement.
- Cyber DoD Information Network Facility, Fort Eisenhower near Augusta, Georgia. Bid protest by Environmental Chemical Corp. Estimated cost $100 million to $250 million. The U.S. Army Corps of Engineers’ Savannah District canceled the solicitation with the PLA and removed the PLA requirement.
- USDA-Agricultural Research Service Auburn Lab and Lab Annex Buildings in Alabama. JCCBG2 protested the bid. The bid solicitation is canceled.
- Bridge of the Americas Land of Port Entry Modernization Project in El Paso, Texas, at the Mexican border. Hensel Phelps protested. Estimated cost $500 million to $550 million. The GSA canceled the bid solicitations and will perform market research to assess the PLA agreement. It plans to resolicit bids in the upcoming months.
- Cape Canaveral Space Force Station in Florida. Bid protested by Hensel Phelps. Estimated cost $100 million to $250 million. The Naval Facilities Engineering Systems Command will remove the PLA requirement and reopen solicitations.
- Maintenance/Fuel Cell Hangar for March Air Reserve Base in California. Bid protested by Harper Construction Company. Estimated cost $100 million to $250 million. USACE Louisville, Kentucky, District has extended the due date to March 25 and removed the PLA requirement.
- Consolidated Communication Facility, Patrick Space Force Base in Florida. Bid protested by Hensel Phelps. Estimated cost $25 million to $100 million. The USACE Mobile, Alabama, District removed the PLA requirement and extended the deadline to March 25.
