On Wednesday, Rep. John Sullivan (R-OK) introduced a bill designed to reverse President Obama’s Executive Order 13502. That EO, one of four issued during the President’s first month in office in 2009, allows federal executive agencies to require contractors on large-scale government construction projects to enter into a project labor agreement as a condition of being awarded a contract. A “project labor agreement” (PLA) is a pre-hire collective-bargaining agreement – often involving multiple employers and multiple unions – designed to systemize labor relations at a construction site.
Rep. Sullivan’s Government Neutrality in Contracting Act (H.R. 735) and a similar bill (S. 119) would largely invalidate the President’s Order in the absence of special circumstances. Section (a) of the bill states:
- (1) GENERAL RULE- The head of each executive agency that awards any construction contract after the date of enactment of this Act, or that obligates funds pursuant to such a contract, shall ensure that the agency, and any construction manager acting on behalf of the Federal Government with respect to such contract, in its bid specifications, project agreements, or other controlling documents does not–
- (A) require or prohibit a bidder, offeror, contractor, or subcontractor from entering into, or adhering to, agreements with 1 or more labor organizations, with respect to that construction project or another related construction project; or
- (B) otherwise discriminate against or give preference to a bidder, offeror, contractor, or subcontractor because such bidder, offeror, contractor, or subcontractor–
- (i) becomes a signatory, or otherwise adheres to, an agreement with 1 or more labor organizations with respect to that construction project or another related construction project; or
- (ii) refuses to become a signatory, or otherwise adhere to, an agreement with 1 or more labor organizations with respect to that construction project or another related construction project.
President Obama’s EO 13502 encouraged federal agencies to use PLAs on any construction project worth more than $25 million, but did not require them. It did also require the O.M.B. to investigate expansion of the use of PLAs on federal construction projects. The White House’s related statement of policy explained the goals of the EO as follows:
The use of a project labor agreement may prevent these problems from developing by providing structure and stability to large-scale construction projects, thereby promoting the efficient and expeditious completion of Federal construction contracts. Accordingly, it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in Federal procurement.
Law360 reports that Rep. Sullivan sent out a letter to his colleagues earlier this week describing the Executive Order as an “’anti-competitive and costly measure encouraging federal agencies to mandate union favoring” agreements that raise construction costs from 12 to 18 percent":
“In short, government-mandated PLAs are nothing more than schemes to repay big labor bosses for political support by steering lucrative federal construction contracts to unionized companies and their unionized workforces,” Sullivan said.
“Instead of pandering to special interests, Congress should be doing all it can to ensure fair and open competition on federal construction contracts, and help deliver to taxpayers the best possible construction project at the lowest possible price,” he said.
The House bill has 23 co-sponsors. Committee hearings are expected on the bills soon.
More resources and commentary:
- MLA Government Contracts Advisory, “President Obama Signs Executive Order Allowing Agencies to Require Project Labor Agreements (PLA’s) on Large Construction Projects,” Feb. 10, 2009.
- Federal Acquisition Regulation council (FAR) Final Rules implementing EO 13502
- Brett McMahon of the Association of Builders and Contractors (ABC) discussing EO 13502 on Fox News
- "Project Labor Agreements: A Better Deal For All" — The White House Middle Class Task Force
- Labor Relations Today‘s Project Labor Agreements tag