On February 4, 2022, President Biden signed an Executive Order on Use of Project Labor Agreements for Federal Construction Projects (the “Order”), which requires the federal government to require a project labor agreement (“PLA”) before awarding any “large-scale construction contract,” defined as a contract for which the estimated cost is $35 million or more. The Order’s effective date is immediate, but some delay will necessarily occur before implementation, as the Federal Acquisition Regulatory Council must propose appropriate regulations by June 4, 2022, and the Director of the Office of Management and Budget must issue related guidance.
PLAs control the terms and conditions of employment of workers on specific construction projects, including wages, hours, working conditions, dispute resolution methods, and by banning work stoppages and strikes. PLAs are known as “umbrella” or “uber” collective bargaining agreements, because PLA contracts generally exist on top of any specific union trade agreements. Democrat politicians and unions often hail PLAs as alleviating the interconnected issues that often plague large, complicated construction projects where a work stoppage or dispute by one trade group may significantly impact the entire project. Meanwhile, Republican administrations and construction industry groups usually call for the rescission of PLA usage, citing increased costs and reduced competition amongst contractors.
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