On February 4, 2022, President Biden signed the Executive Order on Use of Project Labor Agreements for Federal Construction Projects.[i] A major political win for all union construction workers, this single order will shift untold federal resources toward union contractors. The time to begin preparing for this new federal contracting environment is now.
What the Order Says
Federal construction projects of $35,000,000 or more will now require project labor agreements. The order does not require the government to hire union contractors or work with one labor organization in particular, but it will give union contractors an enormous bidding advantage compared to the status quo.
The exceptions allowed by the order include but are not limited to national security concerns, contracts that only involve one trade, and contracts for which too few contractors are likely to bid for a PLA to be feasible. In order to qualify for an exception, a senior official within the contracting agency must specify the basis for the exception in writing no later than the solicitation date.
Large amounts of data concerning the use of PLAs under this order will be reported to the Office of Management and Budget and published. This includes data on the use of PLAs and the exceptions claimed by contracting agencies to avoid the use of PLAs. The published data will give us valuable insights into what work we should be winning and where to escalate government relations or legal pressure if an agency is not using PLAs where they are required.
The Timeline and Process for Implementing the Order
Like many executive orders, this one does not directly change the law immediately or by itself. It directs the Federal Acquisition Regulator Council to create regulations to implement and enforce the order. The FAR Council has 120 days from the date of the order, which falls on June 4, to propose draft regulations. After that, there is a process for the public to make comments before the agency issues its final regulations. This executive order directs the agency to issue a final rule “promptly… to the extent permitted by law.” Federal law usually requires comments to remain open for at least 30 days, but then the agency has flexibility on its time to make a decision. Depending on the proposed rules themselves, the comment period may be longer. As of now, there is no definitive date for when this order will go into effect.
In addition to the FAR Council, the Office of Management and Budget is directed to issue guidance on the implementation of the sections of the order that deal with exceptions and reporting. Within 90 days of the signing of this order, which falls on May 5, the Secretaries of Defense and Labor and the Director of the OMB are required to coordinate to create training for federal contracting officers.
In short, we should know more by this summer what landscape this EO will create for union contractors and the federal contracting officers with whom they work. Prior to the date these new regulations go into effect, contracting officers are encouraged but not required to require PLAs in their contracts.
Conclusion
This executive order will be implemented through federal agencies. The details of interpretation, implementation, training, and enforcement are expected to roll out in the coming months. As always, the Torres Consulting and Law Group is prepared to monitor and advise on this process as it stands to impact our clients’ interests. If you have any questions, please do not hesitate to reach out to our team.
[i] https://www.whitehouse.gov/briefing-room/presidential-actions/2022/02/04/executive-order-on-use-of-project-labor-agreements-for-federal-construction-projects/