Administration’s Plan to Impose PLAs will Harm Federal Construction

A new AGC survey found, among other things, that 73% of federal contractors would not bid on a federal construction contract that includes a government-mandated project labor agreement.

On June 2, the Associated General Contractors of America (AGC) released the results of its survey (AGC Press Release) of AGC member companies asking how government-mandated Project Labor Agreements (PLAs) effects federal construction projects. On Feb. 4, President Biden signed E.O. 14063 and begun the regulatory process which will require federal prime contractors and subcontractors to engage in negotiation or agree to PLAs on federal construction projects valued at $35 million or more. AGC is expecting proposed regulations to be released any day. To inform the federal government and others as to the impact this regulation will have on contractors, AGC conducted a Project Labor Agreement Survey (Survey Results). Some key highlights (Survey Summary) of the survey found that government-mandated PLAs:

  • 73% of federal contractors responded that they are not interested in bidding if there is a government-mandated PLA on a federal construction project, compared to 27% that responded they are still interested in bidding.
  • 67% of firms of contractors that have previously worked under a government-mandated PLA responded that it made it harder to find workers needed to keep their projects on schedule and within budget, compared to 10% responded it would be Easier.
  • 83% of firms that operate under a Collective Bargaining Agreement responded that if E.O. 14063 were required the firm will not have enough union workers to guarantee on time and on budget delivery because the labor unions are facing shortages among their own ranks.
  • 88% responded E.O. 14063 would raise costs, compared to 0% responded it would lower costs.
  • 82% responded E.O. 14063 would be harder to subcontract with small, disadvantaged businesses (e.g. VOSB, SDVOSB, SDB, WOSB, HUBZone), compared to 5% responded it would be easier.
  • 78% responded E.O. 14063 would be harder to find workers and/or subcontractors, compared to 3% responded it would be Easier.
  • 73% responded E.O. 14063 would Lengthen the time to complete projects, compared to 1% responded it would shorten.

AGC’s survey reflects the determinations by many federal agencies that government-mandated PLAs are not in the best interest of the federal construction project. According to an AGC of America analysis of data obtained via a Construction Advocacy Fund-financed lawsuit under the Freedom of Information Act, the Department of Defense federal construction agencies rejected PLA mandates 99.4 percent of the time even when encouraged to do so under the Obama Administration. 

Rest assured, AGC of America will rigorously explore every possible avenue—including legal options—to push back against this EO. The association neither supports nor opposes contractors’ voluntary use of PLAs on government projects or elsewhere but strongly opposes any government mandate for contractors’ use of PLAs. Take action now and tell your members of Congress and President Biden to oppose government-mandated project labor agreements (PLAs).

AGC is committed to free and open competition for publicly funded work. And the association has long maintained that the federal government should not mandate PLAs. The use of government-mandated PLAs hurts union contractorsopen-shop contractors, and fails to promote economy and efficiency in federal procurement.

For more information, contact Jordan Howard at [email protected] or (703) 837-5368.

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